68.
With regard to reporting of contingent liabilities, U.S. GAAP and International Financial
Reporting Standards (IFRS) differ in defining the term “probable”. Which of the following is
correct with regard to defining “probable”?
69.
Which of the following results in a decrease in working capital?
70.
Smith Corporation entered into the following transactions:
• Purchased inventory on account.
• Collected an account receivable.
• Purchased equipment using cash.
Which of the following statements about Smith’s transactions is correct?
71.
Smith Corporation entered into the following transactions:
• Purchased inventory on account.
• Collected an account receivable.
• Purchased equipment using cash.
Which of the transactions for Smith Corporation resulted in an increase in working capital?
72.
SRJ Corporation entered into the following transactions:
• The accrual of interest expense on a six–month note payable.
• Collected cash for services to be provided within the next six months.
• The reclassification of short-term debt to long-term debt.
Which of the transactions for SRJ Corporation resulted in a decrease in working capital?
73.
SRJ Corporation entered into the following transactions:
• The accrual of interest expense on a six–month note payable.
• Collected cash for services to be provided within the next six months.
• The reclassification of short-term debt to long-term debt.
Which of the transactions for SRJ Corporation resulted in an increase in working capital?
74.
SRJ Corporation entered into the following transactions:
• The accrual of interest expense on a six–month note payable.
• Collected cash for services to be provided within the next six months.
• The reclassification of short-term debt to long-term debt.
Which of the following statements is correct with respect to determining the net cash flow
from operating activities on a statement of cash flows?
75.
Rocket Corporation entered into the following transactions:
• The accrual of wages and salaries expense.
• The cash payment of a six-month note payable.
• The cash payment in advance for a one-year insurance policy.
Which of the following statements is correct with respect to determining Rocket’s working
capital? Assume that Rocket’s operating cycle is four months.
76.
Black Corporation entered into the following transactions:
• The accrual of wages and salaries expense.
• The cash sale of equipment for a loss.
• The cash payment in advance for a one-year insurance policy.
Which of the following statements is correct with respect to determining Black’s cash flows
from operating activities on the statement of cash flows?
77.
Short Company purchased land by paying $10,000 cash on the purchase date and agreeing to
pay $10,000 for each of the next ten years beginning one-year from the purchase date. Short’s
incremental borrowing rate is 10%.
On the balance sheet as of the purchase date, after the initial $10,000 payment was made, the
liability reported is closest to:
78.
Short Company purchased land by paying $10,000 cash on the purchase date and agreeing to
pay $10,000 for each of the next ten years beginning one-year from the purchase date. Short’s
incremental borrowing rate is 10%.
The land reported on the balance sheet is closest to:
79.
Libby Company purchased equipment by paying $5,000 cash on the purchase date and
agreeing to pay $5,000 every six months during the next four years. The first payment is due
six months after the purchase date. Libby’s incremental borrowing rate is 8%.
The equipment reported on the balance sheet as of the purchase date is closest to:
80.
Libby Company purchased equipment by paying $5,000 cash on the purchase date and
agreeing to pay $5,000 every six months during the next four years. The first payment is due
six months after the purchase date. Libby’s incremental borrowing rate is 8%.
The liability reported on the balance sheet as of the purchase date, after the initial $5,000
payment was made, is closest to:
81.
Rae Company purchased a new vehicle by paying $10,000 cash on the purchase date and
agreeing to pay $3,000 every three months during the next five years. The first payment is due
three months after the purchase date. Rae’s incremental borrowing rate is 12%.
The liability reported on the balance sheet as of the purchase date, after the initial $10,000
payment was made, is closest to:
82.
Rae Company purchased a new vehicle by paying $10,000 cash on the purchase date and
agreeing to pay $3,000 every three months during the next five years. The first payment is due
three months after the purchase date. Rae’s incremental borrowing rate is 12%.
The vehicle reported on the balance sheet as of the purchase date is closest to:
83.
Rusty Corporation purchased a rust-inhibiting machine by paying $50,000 cash on the
purchase date and agreeing to pay $10,000 every three months during the next two years. The
first payment is due three months after the purchase date. Rusty’s incremental borrowing rate
is 8%.
The machine reported on the balance sheet as of the purchase date is closest to:
84.
Rusty Corporation purchased a rust-inhibiting machine by paying $50,000 cash on the
purchase date and agreeing to pay $10,000 every three months during the next two years. The
first payment is due three months after the purchase date. Rusty’s incremental borrowing rate
is 8%.
The liability reported on the balance sheet as of the purchase date, after the initial $50,000
payment was made, is closest to:
85.
Rachel Corporation purchased a building by paying $90,000 cash on the purchase date,
agreeing to pay $50,000 every year for the next nine years and one payment of $100,000 ten
years from the purchase date. The first payment is due one year after the purchase date.
Rachel’s incremental borrowing rate is 10%.
The building reported on the balance sheet as of the purchase date is closest to:
86.
Rachel Corporation purchased a building by paying $90,000 cash on the purchase date,
agreeing to pay $50,000 every year for the next nine years and one payment of $100,000 ten
years from the purchase date. The first payment is due one year after the purchase date.
Rachel’s incremental borrowing rate is 10%.
The liability reported at on the balance sheet as of the purchase date, after the initial $90,000
payment was made, is closest to:
87.
Rudy Corporation is looking to purchase a building costing $500,000 by paying $100,000 cash
on the purchase date, and agreeing to make annual payments for the next ten years. The first
payment is due one year after the purchase date. Rudy’s incremental borrowing rate is 10%.
Each of the annual payments is closest to:
88.
Grant Corporation is looking to purchase a building costing $900,000 by paying $300,000 cash
on the purchase date, and agreeing to make payments every three months for the next five
years. The first payment is due three months after the purchase date. Grant’s incremental
borrowing rate is 8%. Each of the payments is closest to: