1) What are the major classifications of increases and decreases in expendable fund
resources?
2) Poole Company owns a 90% interest in Solumbra Company. The consolidated
income statement drafted by the controller of Poole Company appeared as follows:
Poole Company and Subsidiary
Consolidated Income Statement
for Year Ended December 31, 2014
Sales$13,800,000
Cost of Sales$9,000,000
Operating Expenses1,800,000 10,800,000
Consolidated Income3,000,000
Less Noncontrolling Interest in Consolidated Income 190,000
Controlling Interest in Consolidated Net Income$2,810,000
During your audit you discover that intercompany sales transactions were not reflected
in the controllers draft of the consolidated income statement. Information relating to
intercompany sales and unrealized intercompany profit is as follows:
Required:
Prepare a corrected consolidated income statement for Poole Company and Slocum
Company for the year ended December 31, 2014.
3) The __________is the functional currency of a foreign subsidiary
that is a direct and integral component or extension of a U.S. parent
company. In such cases, the __________method of translation is used to translate
(remeasure) the accounts into dollars.
4) Blink Company, which uses the FIFO inventory method, had 508,000 units in
inventory at the beginning of the year at a FIFO cost per unit of $20. No purchases were
made during the year. Quarterly sales information and end-of-quarter replacement cost
figures follow:
End-of- Quarter
QuarterUnit SalesReplacement Cost
1200,000$17
260,00018
385,00013
461,00018
The market decline in the first quarter was expected to be nontemporary. Declines in
other quarters were expected to be permanent.
Required:
Determine cost of goods sold for the four quarters and verify the amounts by computing
cost of goods sold using the lower-of-cost-or-market method applied on an annual basis.
5) What is the loss absorption potential?
6) Fund entities may be classified as expendable fund entities, fiduciary fund entities,
and proprietary fund entities. Distinguish among expendable, fiduciary, and proprietary
fund entities.
7) The principal types of partnerships are general partnerships, limited partnerships, and
joint ventures. Describe the characteristics of each type of partnership.
8) Distinguish between internal and external expansion of a firm.
9) What are the minimum disclosure requirements established ASC 270 for interim
financial reports?
10) There are two methods of recording changes in the membership of a partnership the
bonus method and the goodwill method. Describe these two methods of recording
changes in partnership membership.