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21) Harris Enterprises owns 100% of the outstanding stock of Staton Company. The following transactions occurred during 2X13: a) Harris Enterprises sold inventory costing $2,750 on account to Staton Company for $3,800. As of year-end, the amount due had not been paid. Harris Enterprises and Staton Company use a perpetual inventory.
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Learning Objective 12.2 Questions 1) Fulton Company has the following data available: Wage Expense, For the Year Ending December 31, 2X13 $95 Wage Expense, For the Year Ending December 31, 2X12 $90 What is the percentage increase or (decrease) in wage expense from 2X12 to 2X13 for Fulton Company? A) 5.3% B) (5.3)% C) 2.6% D) (5.6)% E) 5.6% 2).
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11.3   Learning Objective 3 1) Which statement about contingencies is correct? A) It involves only potential economic outflows of resources. B) It is a possible condition that depends upon the outcome of a future event. C) It involves uncertainty about either the timing or amount of payment. D) It is an existing condition that depends.
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11.4   Learning Objective 4 1) Which statement is correct? A) Contingencies arise from future events. B) Financial guarantees arise from contracts previously entered into. C) Current liabilities arise from future events. D) The amount to be paid for financial guarantees is known or reasonably estimable. 2) Indemnities and letters of credit are examples of? A) Commitments. B) Provisions. C).
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7) Which of the following statements is false? A) Trading securities are short-term investments with unrealized gains and losses due to changes in market value that are recognized in the income statement. B) The unrealized gains and losses from changes in market value of available-for-sale securities are not recognized in the income.
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38) Based on the information for the following three companies, a) compute the accounts receivable turnover ratio for each company for 2X13 and b) determine which company is in the best liquidity position based on the calculation in part a. Hadman Teltor Comdok Net credit sales 2X13 $110,000 $120,000 $200,000 2X12 120,000 99,000.
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Learning Objective 12.5 Questions 1) Big Apple Cabins has net income of $725,000. Throughout the year, the company had 150,000 shares of common stock outstanding. Also, the company has 25,000 shares of preferred stock that pay a dividend of $5.00 per share that is convertible into 5 shares of common stock.
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4) For each independent situation: 1. Langford Airport Parking Ltd. awards customers 250 reward miles per stay, in a well-known airline mileage program. Langford pays the airline $0.06 for each mile. Langford, which is not an agent for the airline, estimates that the fair value of the miles is the same.
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21) Cider Company has the following data: 2X13      2X12     2X11 Current Liabilities: Accounts Payable $ 50 $ 30 $ 20 Wages Payable 20 10 5 Taxes Payable 10 5 15 Current Long-Term Debt 10 15 5 Total Current Liabilities $ 90 $ 60 $ 45 Long-Term Liabilities: Long-Term Debt 35 45 40 Total Liabilities $125 $105 $ 85 Stockholders' Equity: Common Stock.
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11) Montreal Electronics has the following data available: 2013      2012 Net Income $ 90 $ 80 Earnings Per Share $ .45 $ .40 Annual Common Dividends Per Share $ .40 $ .20 Closing Market Price Common Stock, 12/31 $9.00 $6.00 What is the dividend-payout for Montreal Electronics in 2013? Has the dividend-payout increased or decreased since.
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28) Comparative income statements are available for Floatlin Company: Floatlin Company Comparative Statements of Income For the Years Ending December 31, 2X13 and 2X12 2X13 2X12 Sales $750 $690 Cost of Goods Sold 440 400 Gross Profit $310 $290 Less: Operating Expenses 220 205 Operating Income $ 90 $ 85 Less: Income Tax Expense 40 37 Net Income $ 50 $.
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Learning Objective 11.3 Questions 1) Bond discounts are amortized by taking the difference between the A) interest based on the effective interest rate and the interest based on the coupon interest rate. B) interest based on the nominal interest rate and the interest based on the coupon interest rate. C) interest based on the.
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Learning Objective 11.1 Questions 1) Consolidated financial statements A) are used to offset gains and losses on the parent company's income statement. B) combine the financial records of two or more separate legal entities. C) make clear distinctions between principal and secondary long-term asset owners. D) provide a depiction of process costs. E) must provide predetermined.
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Learning Objective 10.8 Questions 1) Joino Manufacturing issued 2,000 shares of $100 par 9% convertible preferred stock for $112 per share. Each share of preferred stock can be converted into 8 shares of $2 par value common stock. On June 20, 2X13, 300 shares of preferred stock were converted when the.
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19) What are the three broad categories of liabilities? 20) Fill in the following chart. Initial measurement of the liability Subsequent measurement of the liability Non-financial liability Financial liability held for trading 21) Fill in the following chart. Initial measurement of the liability Subsequent measurement of the liability Non-financial liability Financial liability not held for trading .
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Learning Objective 12.6 Questions 1) Over the Top, Inc. sells one of its four swing sets. The company regularly sells seasonal outdoor furniture. How shall the gain on the sale be classified on the income statement? A) Extraordinary item B) Ordinary income C) Accounting Change D) Discontinued Operation E) Recapture 2) It is now 2X09 and Jump.
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Learning Objective 11.7 Questions 1) Presented below are the balance sheets of Dental Works and Forgash Company at January 1, 2X13: Dental Works Forgash Company Balance Sheet Balance Sheet January 1, 2X13 January 1, 2X13 Cash $ 23 Cash $110 Net Fixed Assets 127 Net Fixed Assets 290 Total Assets $150 Total Assets $400 Accounts Payable $ 15.
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11.5   Comprehensive Questions 1) For each independent situation: ∗× 1. A former employee of Melvin Minimarket Inc. sued the company for $900,000, alleging that the company owner sexually harassed her. Melvin's lawyers suggest that the lawsuit has a 30-40% probability of success and that, if successful, the plaintiff will be awarded between.
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47) LMZ Computer Systems Inc. maintains office equipment under contract. The contracts are for labour only; customers must reimburse LMZ for parts. LMZ's rate schedule follows: One year Two years Three years Photocopies $220 400 620 Fax machine $175 340 440 LMZ's 2018 sales of maintenance agreements is set out below: One year Two years Three years Photocopies 20 12 30 Fax machine 24 20 30 Required: Assuming that sales occurred evenly through the year: a..
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11) Short-term liquidity refers to an organization's ability to generate enough cash to repay long-term debts as they mature. 12) Long-term solvency refers to an organization's ability to meet current payments as they become due. 13) Annual reports and 10K filings for the Securities and Exchange Commission are timely, since they usually.
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Learning Objective 12.1 Questions 1) In addition to annual reports, financial information regarding a company can come from all of the following sources EXCEPT A) a company's own press releases. B) the popular press. C) stockbrokers. D) a company's Web site. E) the Internal Revenue Service. 2) When analyzing the financial statements of a potential debtor, the.
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31) Liquidity focuses on whether there are sufficient current assets to satisfy current liabilities as they become due. 32) The quick ratio is calculated as current assets divided by current liabilities. 33) The following financial statements are available for Jerry Company: Comparative Income Statements For the Years Ending December 31, 2X13 and 2X12 2X13 2X12 Sales(all.
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18) For the following transaction, provide all of the required journal entries from inception to liquidation. Assume a December 31 year end and that the company does not prepare interim statements. Round all amounts to nearest dollar. Face value of note payable$200,000 Date of issue for noteMay 1, 2016 Due date for noteMay.
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11.2   Learning Objective 2 1) Which statement is correct? A) HST payable is a financial liability. B) Bank overdraft is a non-financial liability. C) Unearned revenue is a non-financial liability. D) Unearned subscriptions are a financial liability. 2) Which is a non-current liability? A) HST payable. B) 45 day accounts payable. C) Five year loan that matures four months.
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36) State whether the following ratios are classified as a. ratios that measure long-term solvency, b. ratios that measure profitability, c. ratios used to analyze the company's stock as an investment, or d. ratios that measure short-term liquidity. 1. ________ Return on sales 2. ________ Earnings per share 3. ________ Dividend-yield 4. ________ Average collection period in days 5..
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14) For the following transaction, provide all of the required journal entries from inception to liquidation. Assume a December 31 year end and that the company does not prepare interim statements. Round all amounts to nearest dollar. Face value of note payable$200,000 Date of issue for noteMarch 1, 2017 Due date for noteMay.
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11) Under the equity method, the investor recognizes revenue based upon an appropriate share of the investee's net income. 12) Under the market method, the investment in another company's stock is recorded at acquisition cost and is adjusted for the investor's share of dividends and for any earnings or losses experienced.
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Learning Objective 12.7 Questions 1) When the PEG ratio for a stock is less than 0.5, this indicates that the A) market believes the earnings growth estimate reflected in the consensus forecast is too low. B) market expects the future EPS growth to be greater than currently reflected in the analysts' consensus forecast.
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Learning Objective 12.4 Questions 1) Xemen Company has the following data:                               2X13         2X12         2X11 Sales $ 930 $700 Less: Cost of Goods Sold 410 235 Gross Profit 520 465 Less: Operating Expenses 284 255 Operating Income 236 210 Less: Other Revenue/Other Expense: Interest Revenue 24 24 Interest Expense (30) (30) Income before Tax 230 204 Less: Income Tax Expense 92 82 Net Income.
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11) Presented below are the balance sheets of Tallton Company and Handel Company at January 1, 2X13: Handel Company Tallton Company Balance Sheet Balance Sheet January 1, 2X13 January 1, 2X13 Cash $ 70 Cash $240 Net Fixed Assets 210 Net Fixed Assets 210 Total Assets $280Total Assets $450 Accounts Payable $ 20 Accounts Payable $ 70 Long-term.
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11.1   Learning Objective 1 1) Which of the following characteristic is required for a liability under IFRS Framework? A) A past obligation. B) A present obligation. C) An unknown obligation. D) A future obligation. 2) Which of the following characteristic is required for a liability under IFRS Framework? A) Arises from a past obligation. B) Is a present.
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11) Manchester Technology has the following data available: Inventory, December 31, 2013 $120 Inventory, December 31, 2012 $200 What is the percentage increase or (decrease) in inventory from 2012 to 2013 for Manchester Technology? A) (120.0)% B) 120.0% C) 40.0% D) 62.5% E) (40.0)% 12) What issue would be of most concern on behalf of banks or other creditors.
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21) Common-size statements aid in comparing companies of different sizes. 22) The common-size income statement percentages use Cost of Goods Sold as the base amount at 100%. 23) Each element on a common-size balance sheet is compared to total liabilities. 24) Component percentages are line items of income statements that express each line.
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11) Explain some of the challenges that exist in determining the amount of a "liability" by identifying factors that influence the value of the indebtedness. 12) Which of the following is correct about a "liability" under IFRS Framework? A) A future obligation arising from current events, the settlement of which is expected.
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Learning Objective 12.3 Questions 1) How is working capital calculated? A) (total current assets) minus (total current liabilities) B) (total current assets) minus (inventories and prepaid assets) C) (total current assets) divided by (total current liabilities) D) (total current assets) E) (total current liabilities) 2) Montreal Electronics has the following data available: 2X13 2X12 Sales               $999               $800 Cost.
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8) Explain the nature of current liabilities and how these are accounted for in the financial statements. 9) Explain the meaning of the following terms: current assets, trade payables, expected value, deferred revenue and warranty. 10) For a $100,000 trade payable with terms of 2/10, net 45, how much would be reported.
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45) RJ Magazines sells two-year magazine subscriptions for $108 cash each. The cost of producing and delivering each monthly magazine is $2.75 paid in cash at the time of delivery. RJ's sales activity for the year follows: Sales activity ?On January 1, 2017, RJ sells 22,000 subscriptions. ?On April 1, 2017, RJ sells.
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Learning Objective 11.6 Questions 1) ________ represent the rights of nonmajority shareholders in the assets and earnings of a company that is consolidated into the accounts of its majority shareholder. A) Parent interests B) Noncontrolling interests C) Subsidiary interests D) Consolidated interests E) Intercompany interests 2) Presented below are the balance sheets of Blanco, Inc. and Stalle.
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Learning Objective 11.4 Questions 1) Highland Cutlery acquired as a long-term investment some of the common stock of LTS Company on December 31, 2X12. During 2X13, LTS Company had net income of $300,000 and declared and paid cash dividends of $90,000. What journal entry would Highland Cutlery make for 2X13 to.
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17) U.S. Treasury obligations are interest-bearing notes, bonds, and bills issued by the U.S. federal government. 18) Comprehensive income includes both net income and the change in market value of available-for-sale securities. 19) The market method applies to short-term debt securities classified as trading securities and, as a result, a drop in.
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