Foreign companies whose stock is listed on a U.S. stock exchange and using foreign
GAAP other than IFRS must file their annual report with the SEC on:
A.Form 8-A.
B.Form 10-A.
C.Form 16-K.
D.Form 20-F.
E.Form 20-K.
Which of the following type of organization is classified as a partnership, or similar to a
partnership, for tax purposes?
(I) Limited Liability Company
(II) Limited Liability Partnership
(III) Subchapter S Corporation
A.II only
B.II and III
C.I and II
D.I and III
E.I, II, and III
Which of the following is the approximate internal rate of return for an investment that
costs $33,550 and provides a $5,000 annuity for 10 years?
A.5%
B.6%
C.8%
D.10%
Cash outflows from a capital investment project include:
A.increases in operating expenses.
B.the reduction in the amount of working capital.
C.terminal salvage value.
D.all of these answers are correct.
P, L, and O are partners with capital balances of $50,000, $30,000 and $20,000 and who
share in the profit and loss of the PLO partnership 30%, 20%, and 50%, respectively,
when they agree to admit C for a 20% interest.
If C is to contribute an amount equal to his book value share of the new partnership,
how much should C contribute?
A.$22,000
B.$20,000
C.$25,000
D.$18,000
E.$10,000
The following information pertains to inventory held by a company at December 31,
2013.
As a result of inventory loss, what is the difference in income between reporting using
U.S. GAAP and IFRS?
A.U.S. GAAP income is $1,000 higher.
B.U.S. GAAP income is $2,000 lower.
C.IFRS income is $1,000 higher.
D.IFRS income is $1,000 lower.
E.IFRS income is $5,000 higher.
A series of equal cash flows at fixed intervals is termed a(n):
A.net cash flow.
B.lump sum.
C.annuity.
D.return on investment.
Cleary, Wasser, and Nolan formed a partnership on January 1, 2012, with investments
of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed
to (1) interest of 10% of the beginning capital balance each year, (2) annual
compensation of $10,000 to Wasser, and (3) sharing the remainder of the income or loss
in a ratio of 20% for Cleary, and 40% each for Wasser and Nolan. Net income was
$150,000 in 2012 and $180,000 in 2013. Each partner withdrew $1,000 for personal use
every month during 2012 and 2013.
What will be the amount of interest attributed to Cleary for 2014?
A.$15,142
B.$13,942
C.$12,942
D.$14,142
E.$10,000
Which of the following describes the effects of a claims exchange transaction on a
company’s financial statements?
A.
B.
C.
D.
Select the incorrect statement regarding the information disclosed in financial
statements.
A.The costs of providing all possible information about a firm would be prohibitively
high for the business.
B.Some information disclosed in financial statements may be irrelevant to some users.
C.Financial statements should be detailed enough to answer any financial-related
question an investor might have.
D.When too much information is presented users may suffer from information
overload.
The Dennis Company reported net income of $50,000 on sales of $300,000. The
company has total assets of $500,000 and total liabilities of $100,000. What is the
company’s return on equity ratio?
A.10.0%
B.16.7%
C.12.5%
D.50.0%
Joan Osborne is evaluating a potential capital investment. She has calculated the net
present value using a minimum rate of return of 10%. Using this rate, the net present
value is negative. What does this tell her about the rate of return expected for the
project?
A.If the net present value is negative; the expected rate of return for the project is
greater than the 10% minimum or required rate of return.
B.If the net present value is negative; the expected rate of return for the project is less
than the 10% minimum or required rate of return.
C.If the net present value is negative; the expected rate of return for the project is equal
to the 10% minimum or required rate of return.
D.None of the other answers is correct.
The total equity of Timberlake Company at the beginning of 2013 amounted to $5,500.
During 2013 the company reported net income of $1,800 and paid a $500 dividend. If
retained earnings at the end of 2013 is $2,200, what was beginning common stock?
A.$3,300
B.$2,800
C.$1,300
D.$4,600
Woodward Enterprises had the following events during 2013:
The business issued $20,000 of common stock to its stockholders.
The business purchased land for $12,000 cash.
Services were provided to customers for $16,000 cash.
Services were provided to customers for $5,000 on account.
The company borrowed $16,000 from the bank.
Operating expenses of $12,000 were incurred and paid in cash.
Salary expense of $800 was accrued.
A dividend of $4,000 was paid to the owners of Woodward Enterprises.
Assuming the company began operations during 2013, the amount of retained earnings
as of December 31, 2013 would be:
A.$4,200
B.$5,000
C.$8,200
D.$21,000
What is the difference between a liquidation and a reorganization?
Assume the partnership of Dean, Hardin, and Roth has been in existence for a number
of years. Dean decides to withdraw from the partnership when the partners’ capital
balances are as follows:
An appraisal of the business and its property estimates the fair value to be $100,000.
Dean has agreed to receive $64,000 in exchange for his partnership interest.
What are the remaining partners’ capital balances after Dean’s interest is dissolved,
assuming the bonus method is applied?
What are measurement differences in international reporting and what would be an
example of a difference?
Matching. Select the term from the list that best matches the description or definition.
Enter the number of the best answer in “Your Answer” column.
What is required by the Trust Indenture Act of 1939?
Hampton Company is trying to decide whether to seek liquidation or reorganization.
Hampton has provided the following balance sheet:
Additional information is as follows:
– The investments are currently worth $13,000.
– It is estimated that $32,000 of the accounts receivable are collectible.
– The inventory can be sold for $74,000.
– The prepaid expenses and the intangible assets have no net realizable value.
– The land and building are currently valued at $250,000.
– The equipment can be sold for $60,000.
– Administrative expenses (not yet recorded) are estimated to be $12,500.
– Accrued expenses include $17,000 of salaries payable ($11,000 to one employee and
$3,000 each to two other employees).
– Accrued expenses include $7,000 of unpaid payroll taxes.
What is the payout percentage to unsecured creditors? (Round the percentage to a
whole number and two decimal places.)