1) Describe two methods for treating the preacquisition revenue and expense items of a
subsidiary purchased during a fiscal period.
2) The December 31, 2013, balance sheet of the Deng, Danielson, and Gibson
partnership, along with the partners residual profit and loss sharing ratios, is
summarized as follows:
AssetsLiabilities & Equities
Cash$ 150,000Accounts Payable$ 225,000
Receivables300,000Loan from Danielson50,000
Inventories375,000Deng, Capital (20%)250,000
Other Assets475,000Danielson, Capital (30%)400,000
Gibson, Capital (50%) 375,000
Total Assets$1,300,000Total Lia & Equities $1,300,000
The partners agree to liquidate their partnership as soon as possible after January 1,
2014 and to distribute all cash as it becomes available.
Required:
Prepare an advance cash distribution plan to show how cash will be distributed as it
becomes available.
3) Why are adjustments made to the calculation of the noncontrolling interest for the
effects of intercompany profit in upstream but not in down-stream sales?
4) P Company purchased 96,000 shares of the common stock of S Company for
$1,200,000 on January 1, 2010, when Ss stockholders equity consisted of $5 par value,
Common Stock at $600,000 and Retained Earnings of $800,000. The difference
between cost and book value relates to goodwill.
On January 2, 2013, S Company purchased 20,000 of its own shares from
noncontrolling interests for cash of $300,000 to be held as treasury stock. S Companys
retained earnings had increased to $1,000,000 by January 2, 2013. S Company uses the
cost method in regards to its treasury stock and P Company uses the equity method to
account for its investment in S Company.
Required:
Prepare all determinable workpaper entries for the preparation of consolidated
statements on December 31, 2013.
5) How does the firm reconcile the trade-off between financial performance and the
responsibility to its employees?
6) Distinguish between a voluntary and involuntary bankruptcy petition.
7) Describe the methods that might be used to disclose reportable segment information.
8) Why is the SEC, once so reluctant to accept IAS, now very willing to allow firms
using IFRS to is-sue issue securities in the U.S. stock market without reconciling to
U.S. GAAP?
9) The general fund trial balance for Model City held the following balances at June 30,
2014, just before closing entries were made:
Unreserved Fund Balance$ 2,000
Estimated Revenues 33,000
Revenues 27,250
Appropriations 28,000
Expenditures 26,200
Expenditures-Prior Year 1,200
Encumbrances 3,000
Operating Transfers In 6,000
Reserve for Encumbrances 3,000
Reserve for Encumbrances Prior Year 1,500
Required:
Prepare the necessary closing entries.
10) A U.S. firm carried a receivable for 100,000 yen. Assuming that the direct exchange
rate declined from $.009 at the date of the transaction to $.006 insert space at the
balance sheet date, compute the transaction gain or loss. What balance would be
reported for the receivable in the firms balance sheet?