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  91. The formula for calculating straight-line depreciation is: A. Depreciable cost divided by the useful life in years. B. Cost plus residual value divided by the useful life in years. C. Depreciable cost divided by useful life in units. D. Cost divided by useful life in years. E. Cost divided by useful life in units. 92..
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11. When preparing a statement of cash flows (indirect method), an increase in ending inventory over beginning inventory will result in an adjustment to net income because a. cash was increased while cost of goods sold was decreased. b. acquisition of inventory is an investment activity. c. inventory purchased during the period was.
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131. Primadonna Company paid $870,000 plus $10,000 in legal costs for a parcel of real estate. This included land appraised at $350,000; land improvements appraised at $80,000; and a building appraised at $370,000. The plan is to use the building as a manufacturing plant. Determine the amounts that should be.
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Ex. 23-37—Segmented reporting. The following data relates to Jiwani's operating segments: Included in the amounts allocated to each segment on the above percentages are the following expenses, which relate to general corporate activities: Instructions (Assume that the corporation adheres to IFRS) (a) Prepare a schedule showing the amounts distributed to each segment. (b) Based only on.
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MULTIPLE CHOICE—Computational 23. Presented below are four segments that have been identified by Gander Corp: According to IFRS, which segments would be considered reportable segments? a. Segments A, B, and C b. Segments A, B, C, and D c. Segments A and B d. Segments A and D 24. Presented below are five segments that have been.
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26. During calendar 2012, Javert Inc sold equipment for $84,000. The equipment had cost $126,000 and had a book value of $72,000 at the time of sale. Accumulated Depreciation—Equipment was $344,000 at Dec 31, 2011 and $368,000 at Dec 31, 2012. Therefore, Depreciation Expense (Equipment) for 2012 was a. $30,000. b. $48,000. c..
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133. Shady Lanes installed automatic sprinkler systems. The electrical work for the installation was $24,000. The invoice price of the sprinkler equipment was $280,000. Additional costs were $5,000 for delivery and $800 for insurance during transportation. During installation a sprinkler line was punctured and was replaced for $200. What is.
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Ex. 23-38—Financial forecasts. Many investors and analysts have proposed that corporations include financial forecasts in their annual reports. Instructions (a) What are the arguments for supporting the publication of such forecasts? (b) What are the arguments for opposing the publication of such forecasts?       .
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Use the following information for questions 29 through 33. Financial statements for Myriel Corp are presented below: Myriel Corp Total assets on the December 31, 2012 balance sheet were $1,108,000. Accumulated depreciation on the equipment sold was $56,000. 31. The balance in the Accounts Payable account at December 31, 2012 was a. $148,000. b..
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  116. Creek Construction purchased a machine for $26,000. It traded in an old machine and received a $4,200 trade-in allowance. The old machine cost $24,000 and had accumulated depreciation of $16,000 to the date of trade-in. At what value should be new asset be recorded? A. $21,800. B. $24,000. C. $26,000. D. $29,800. E. $30,200. 117..
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129. Explain the difference between revenue and capital expenditures and how they are recorded in the accounting system. 130. Mandy Manufacturing purchased a machine on August 1, 2014, and it was installed and ready to run on January 1, 2015. The following costs were incurred in the purchase and installation of.
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  111. Sports Med sold an X-ray machine that originally cost $100,000 for $60,000. The accumulated depreciation on the machine to the date of sale was $40,000. On this sale, Sports Med should recognize: A. $0 gain or loss. B. $20,000 gain. C. $25,000 gain. D. $40,000 loss. E. $60,000 gain. 112. SportsWorld discarded a display case.
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16. A financial forecast presents, to the best of the responsible party's knowledge and belief, a. an enterprise's expected financial position, results of operations, and cash flows. b. an assessment of the company's ability to be successful in the future. c. given one or more hypothetical assumptions, an entity's expected financial position, results.
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Pr. 23-43—Interim reporting. There is ongoing discussion as to the proper method of reflecting results of operations at interim dates. Accordingly, IFRS has made recommendations regarding interim financial reporting. Instructions (a) Discuss generally how revenue should be recognized at interim dates and specifically how revenue should be recognized for industries subject to large.
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  126. The appropriate way to amortize goodwill is: A. Straight-line over a maximum of 40 years. B. Straight-line over a maximum of 20 years. C. Double-declining-balance over a period not to exceed 20 years. D. Over the estimated useful life of the goodwill. E. Goodwill is not amortized or depreciated. 127. Each year goodwill is examined.
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  71. Property, plant and equipment are: A. Current assets. B. Used in business operations. C. Natural resources. D. Long-term investments. E. Never depreciated. 72. Property, plant and equipment include: A. Land. B. Land improvements. C. Buildings. D. Machinery and equipment. E. All of these answers are correct. 73. Land improvements are: A. Assets that increase the usefulness of land, but that have a.
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Pr. 22-77—Complex statement of cash flows (indirect method). The net changes in the balance sheet accounts of Vermont Inc for the calendar year 2012 are shown below: Additional information: Instructions Prepare a statement of cash flows (indirect method) for calendar 2012.       .
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36. A fire damaged Eponine Corp’s office building. The company received $300,000 as a settlement from their insurance company, which was $90,000 less than the book value of the building. Their income tax rate is 30%. On the statement of cash flows (indirect method), the receipt from the insurance company.
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  76. SportsWorld purchased property for a building site. The costs associated with the property were: What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building? A. $150,000 to Land; $18,800 to Building. B. $190,000 to Land;.
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  106. Once the estimated depreciation for an asset is calculated: A. It cannot be changed due to the historical cost principle. B. It may be revised based on new information. C. Any changes are accumulated and recognized when the asset is sold. D. The estimate itself cannot be changed, however, new information should be.
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EXERCISES Ex. 23-35—Notes to financial statements. An article in Dun's Review made the following comments: "At least every other year, businesses should print the notes in big type and the financial figures in smaller ones." Instructions (a) Are notes considered part of the financial statements and what basic purpose do they serve? (b) What are.
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  81. Ordinary repairs: A. Are expenditures to keep an asset in normal operating condition. B. Do not extend an asset's useful life. C. Do not materially increase the asset's life or productive capabilities. D. Maintain an asset. E. All of these answers are correct. 82. Subsequent capital expenditures: A. Are expenditures making a property, plant and equipment.
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11. Which of the following statements is incorrect regarding IFRS requirements for interim reporting? a. Only a balance sheet and statement of comprehensive income are required. b. The same accounting policies should be used as for the annual statements. c. When an accounting change is applied retrospectively, the enterprise must present a balance.
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  86. The useful life of a property, plant and equipment asset is: A. The length of time it is productively used in a company's operations. B. Another term for its residual value. C. Measured by its potential inadequacy. D. Is impossible to estimate. E. All of these answers are correct. 87. Inadequacy refers to: A. The condition.
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  96. A depreciation method that produces larger depreciation charges during the early years of an asset's life and smaller charges in the later years is: A. Accelerated depreciation. B. Book value depreciation. C. Straight-line depreciation. D. Units-of-production depreciation. E. Capital cost allowance. 97. On January 1 of this year, SportsWorld purchased a new cash register for.
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Ex. 23-39—Interim reports. A few years ago, a publishing company reported a quarterly net profit figure that exceeded sales for that quarter. Such a situation suggests there are some difficult accounting issues involved in interim reporting. Instructions (a) What are the major accounting problems related to interim reports? (b) What problem exists with income.
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PROBLEMS Pr. 23-42—Segmented reporting (IFRS requirements). A central issue in reporting on operating segments of a business enterprise is the determination of which segments are reportable under IFRS. Instructions 1. According to IFRS, what are the tests to determine whether or not an operating segment is reportable? 2. What is the test to determine if.
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61. Intangible assets provide rights, privileges, and competitive advantages to the owner, are used in operations, and have no physical substance. 62. A copyright gives its owner the exclusive right to publish and sell a musical, literary, or artistic work during the life of the creator plus 20 years. 63. The cost.
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MULTIPLE CHOICE—Conceptual 1. Which of the following items found in an annual report is not subject to GAAP? a. Financial statements. b. Management discussion and analysis. c. Inventory methods. d. Accounting policies. 2. Reasons for increasing disclosure requirements do not include a. The necessity for timely information. b. The complexity of the business environment. c. Accounting as a control.
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MULTIPLE CHOICE—Computational 21. On Victor Ltd's statement of cash flows (indirect method) for calendar 2012, cash flows from operating activities were reported at $77,000. The statement included the following items: depreciation on plant assets of $30,000; impairment of goodwill of $5,000; and cash dividends paid of $36,000. Based only on the.
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  121. Intangible assets: A. Are rights, privileges, and competitive advantages to the owner, used in operations, having no physical substance. B. Include patents, leaseholds, and land improvements. C. Can be amortized. D. Are rights, privileges, and competitive advantages to the owner, used in operations, having no physical substance and can be amortized. E. All of.
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  101. Depreciation is usually recorded: A. From the beginning of the accounting year in which an asset is purchased. B. From the actual date of purchase. C. From the first of the month nearest the actual purchase date. D. From the end of the month nearest the actual purchase date. E. By any of the.
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6. A successful company’s major source of cash should be a. operating activities. b. investing activities. c. financing activities. d. both operating activities and investing activities. 7. Using the indirect method, an increase in inventory would be reported in a statement of cash flows as a(n) a. addition to net income in calculating cash flows from.
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2. Non-current assets are any liabilities that are used in the operations of a business. 3. Non-current assets can be divided into two groups including tangible and intangible assets. These assets are generally used in operations of a business and have useful lives extending over more than one accounting period. 4. Land.
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  Ex. 23-36—Segmented reporting (IFRS requirements). IFRS requires the reporting of segmented (disaggregated) financial data about operating segments and also about their products and services, the geographic areas in which they operate, and their major customers. Instructions Identify four of the items of segmented information IFRS requires an enterprise to report.       .
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16. When preparing a statement of cash flows, a decrease in prepaid insurance during a period would require which of the following adjustments in determining cash flows from operating activities? 17. On a statement of cash flows, additional cash invested by a sole proprietor would be disclosed in a. operating activities. b. investing.
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MULTIPLE CHOICE—CPA Adapted 28. Which of the following facts concerning property, plant and equipment should be included in the Summary of Significant Accounting Policies? 29. Moncton Corp is a multidivisional corporation that has both intersegment sales and sales to external customers. Moncton should report segmented financial information for each division meeting which.
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