1) as with u.s. gaap, ifrs requires that both direct and indirect costs in self-constructed
assets be capitalized.
2) when accounts receivable decrease during a period, cash-basis revenues are higher
than revenues reported on an accrual basis.
3) the international accounting standards board (iasb) defines revenue to include both
revenues and gains.
4) the stated rate is the same as the coupon rate.
5) the issuance of stock dividends is entered on the cash flow worksheet, but is not
reported in the statement of cash flows.
6) during 2012, vaughn corporation sold merchandise costing $3,000,000 on an
installment basis for $4,000,000. the cash receipts related to these sales were collected
as follows: 2012, $1,600,000; 2013, $1,400,000; 2014, $1,000,000.
what amount would be shown in the december 31, 2013 financial statement for realized
gross profit on 2012 installment sales, and deferred gross profit on 2012 installment
sales, respectively?
a.$350,000 and $750,000
b.$650,000 and $350,000
c.$750,000 and $250,000
d.$350,000 and $250,000
7) the debt to total assets ratio is computed by dividing
a.current liabilities by total assets
b.long-term liabilities by total assets
c.total liabilities by total assets
d.total assets by total liabilities
8) edge companys salaried employees are paid biweekly. occasionally, advances made
to employees are paid back by payroll deductions. information relating to salaries for
the calendar year 2013 is as follows:
at december 31, 2013, what amount should edge report for accrued salaries payable?
a.$180,000
b.$168,000
c.$144,000
d.$50,000
9) morgan manufacturing company has the following account balances at year end:
what amount should morgan report as inventories in its balance sheet?
a.$82,000
b.$86,000
c.$168,000
d.$172,000
10) vargas company has 35 employees who work 8-hour days and are paid hourly. on
january 1, 2011, the company began a program of granting its employees 10 days of
paid vacation each year. vacation days earned in 2011 may first be taken on january 1,
2012. information relative to these employees is as follows:
vargas has chosen to accrue the liability for compensated absences at the current rates
of pay in effect when the compensated time is earned.
what is the amount of expense relative to compensated absences that should be reported
on vargass income statement for 2011?
a.$0
b.$57,400
c.$63,000
d.$60,200
11) which of the following is not a basic assumption underlying the financial
accounting structure?
a.economic entity assumption
b.going concern assumption
c.periodicity assumption
d.historical cost assumption
12) all of the following are key similarities between u.s. gaap and ifrs with respect to
accounting for inventories except
a.guidelines on ownership of goods are similar
b.costs to include in inventories are similar
c.lifo cost flow assumption where appropriate is used by both sets of standards
d.fair value valuation of inventories is prohibited by both sets of standards
13) worthington chandler company purchased equipment for $12,000. sales tax on the
purchase was $800. other costs incurred were freight charges of $200, repairs of $350
for damage during installation, and installation costs of $225. what is the cost of the
equipment?
a.$12,000
b.$12,800
c.$13,225
d.$13,575
14) transactions for the month of june were:
assuming that perpetual inventory records are kept in units only, the ending inventory
on a lifo basis is
a.$6,165
b.$6,240
c.$6,435
d.$6,705
15) (a)describe a deferred tax asset.
(b)when should a deferred tax asset be reduced by a valuation allowance?
16) briefly describe some of the similarities and differences between u.s. gaap and ifrs
with respect to the accounting for property, plant, and equipment.
17) the earning of revenue by a business is recognized for accounting purposes when
the transaction is recorded. revenue is often recognized at time of sale.
instructions
at what times, other than at time of sale, may it be appropriate to recognize revenue?
explain and justify each of these times.
18) crone co. has machinery that cost $90,000. it is to be leased for 15 years with rent
received at the beginning of each year. crone wants a return of 10%. compute the
amount of the annual rent.
19) on april 7, 2012, kegin corporation sold a $3,000,000, twenty-year, 8 percent bond
issue for $3,180,000. each $1,000 bond has two detachable warrants, each of which
permits the purchase of one share of the corporation’s common stock for $30. the stock
has a par value of $25 per share. immediately after the sale of the bonds, the
corporation’s securities had the following market values:
what accounts should kegin credit to record the sale of the bonds?
20) a record of transactions for the month of may was as follows:
assuming that perpetual inventory records are kept in dollars, determine the inventory
using lifo.
21) selected financial statement information and additional data for johnston enterprises
is presented below. prepare a statement of cash flows for the year ending december 31,
2012
johnston enterprises
balance sheet and income statement data
additional information:
during the year, johnston sold equipment with an original cost of $153,000 and
accumulated depreciation of $119,000 and purchased new equipment for $272,000.
22) determine the proper unit inventory price in the following independent cases by
applying the lower of cost or market rule. circle your choice.
23) what are some of the key obstacles for the fasb and iasb in their convergence project
for the statement of cash flows?