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Study Resources (Accounting)

11) Reuse It Inc.'s activities for the year ended December 31, 2016 included the following: •Comprehensive income totaled $468,000 including $88,000 in other comprehensive income. •Paid a cash dividend of $30,000 that was declared in 2015. •Interest expense for the year was $14,000; the opening and closing balances in the interest payable account.
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16) The opening balance in the computer account for Adara Corp for fiscal 2017 was $100,000; the closing balance was $107,000. The corresponding balances in the accumulated depreciation accounts were $63,000 and $67,500. During the year Adara scrapped a computer originally costing $13,000 having a remaining net book value of.
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19.5   Learning Objective 5 1) Green Leaf 's activities for the year ended December 31, 2016 included the following: •Comprehensive income totaled $538,000 including $88,000 in other comprehensive income. •Paid a cash dividend of $80,000 that was declared in 2015. •Interest expense for the year was $29,000; the opening and closing balances in the.
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13) Select transactions of June Bowen Inc. (JBI) are listed below. JBI uses the indirect method to determine cash flows from operating activities. 1. JBI amortizes $12,000 of the discount on bonds payable. 2. At year-end JBI increases its allowance for bad debts by $18,000. 3. JBI's income tax expense totaled $50,000. Its.
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6) Viribana Corporation started operations on March I, 2009. It needs to acquire a special piece of equipment for its manufacturing operations. It is evaluating two options as follows. Option 1: Lease the equipment for 10 years. Lease payments would be $11,200 per year, due at the beginning of each fiscal.
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19.4   Learning Objective 4 1) Which statement is correct? A) Cash flows are grouped by operating, investing and financing activities. B) Cash inflows and outflows are netted against each other. C) Net interest received or paid can be offset in the cash flow statement. D) Income tax paid does not need to be presented separately. 2).
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8) Here are the terms of a lease agreement: Fair value of leased asset 250,000 Lease term 4 years Payment frequency Annual Payment timing End of year Guaranteed residual value 25,000 Interest rate implicit in lease (known to lessee) 14% Lessee's incremental borrowing rate 16% Requirements: a. Determine the amount of lease payment that the lessor would require to lease the asset. b. Compute the present value.
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18.4   Learning Objective 4 1) Which statement is correct? A) Lessees prefer finance leases. B) Lessees prefer operating leases. C) Operating leases are more favourable to the lessor in the short term. D) Finance leases are more favourable to the lessee in the short term. 2) Assume that Speery agrees to lease a new machine from.
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14) Select transactions of Irene Accounting Inc. (IAI) are listed below. IAI uses the indirect method to determine cash flows from operating activities. 1. IAI sells a held-to-maturity investment for $28,000. The investment's amortized cost is $20,000. 2. IAI's income tax expense totaled $30,000. Its income tax payable account increased $5,000, while.
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10) The following are some of the characteristics of an asset available for lease:   Fair value of leased asset 120,000 Useful life 10 years Lease term 7 years Payment frequency Annual Payment timing Beginning of year Unguaranteed residual value 10,000 Interest rate implicit in lease (not known to lessee) 15% Lessee's incremental borrowing rate 14% Requirements: a. Determine the amount of lease payment that the lessor would require.
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23) Which of the following users of accounting information seek to assess the organization's ability to make scheduled payments? A) creditors B) taxing authorities C) government regulatory agencies D) employees 24) The Accounting Standards Board is responsible for establishing: A) the Canadian Institute of Chartered Accountants B) generally accepted accounting principles C) the code of professional conduct for.
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11) On July 1, 2010, Jupiter Company leased equipment to Planet Company. The terms of the lease are as follows:   Fair value of leased asset 70,000 Lease payments, due each Jul 1 12,000 Lease term 9 years Economic life of leased asset 10 years Guaranteed residual value 6,000 Lessee's incremental borrowing rate 15% Planet uses straight-line depreciation for its property, plant, and equipment,.
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19.3   Learning Objective 3 1) Which of the following is a financing activity? A) Collection of accounts receivable. B) Collection of loans receivable C) Receipt of bank loan. D) Sale of a machine. 2) Which of the following is an operating activity? A) Receipt of customer deposit. B) Proceeds from mortgage issue. C) Purchase of land. D) Redemption of preferred.
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7) Rusabh Ltd.'s policy is to report all cash flows arising from interest and dividends in the operating section. Rusabh's activities for the year ended December 31, 2018 included the following: •Sold a held-for-trading investment for $16,000. The book value of this investment, which was not designated as a cash equivalent,.
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6) Mamie K. Ltd.'s policy is to report all cash flows arising from interest and dividends in the operating section. Mamie's activities for the year ended December 31, 2018 included the following: •Income tax expense for the year was $36,000. •Sales for the year were $730,000. •Accounts payable decreased $20,000 in 2018. •Selling and.
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4) Financial information for Fesone Inc.'s balance sheet for fiscal 2013 and 2014 follows: 20142013 Cash204,800550,000 Accounts receivable1,150,0001,300,000 Inventory410,000250,000 Investments - held for trading400,000 Investments - held to maturity150,000 Property plant and equipment3,400,0003,400,000 Accumulated depreciation(1,860,000)(1,570,000) Total3,854,8003,930,000 Accounts payable260,00080,000 Bank loan2,226,0002,850,000 Bonds payable187,800185,000 Preferred shares015,000 Common shares597,000450,000 Retained earnings584,000350,000 Total3,854,8003,930,000 Additional information: 1. Preferred shares were converted to common shares during the year at their book value. 2. The face.
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6) Complete the following: a. List the three primary sources of information required to prepare a statement of cash flows. b. A company may report its accounts receivable at the gross amount less an allowance for bad debts. Contrast the direct and indirect methods of adjusting for accounts receivable reported at the.
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8) Which category is used on the cash flow statement? A) Non-current. B) Operating. C) Non-operating. D) Discontinued. 19.2   Learning Objective 2 1) Which statement is correct? A) A security that meets the criteria of cash equivalent must be classified as cash such. B) A security that meets the criteria of cash equivalent can be classified as cash.
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7) Financial information for Fesone Inc.'s balance sheet for fiscal 2013 and 2014 follows: 20142013 Cash204,800550,000 Accounts receivable1,150,0001,300,000 Inventory410,000250,000 Investments - held for trading400,000 Investments - held to maturity150,000 Property plant and equipment3,400,0003,400,000 Accumulated depreciation(1,860,000)(1,570,000) Total3,854,8003,930,000 Accounts payable260,00080,000 Bank loan2,226,0002,850,000 Bonds payable187,800185,000 Preferred shares015,000 Common shares597,000450,000 Retained earnings584,000350,000 Total3,854,8003,930,000 Additional information: 1. Preferred shares were converted to common shares during the year at their book value. 2. The face.
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32) For the following lease, determine the minimum lease payments for the lessee. Annual lease payment at the end of the end $23,000 Lease term 5 Incremental rate 10% Implicit rate (known to lessee) 8% Unguaranteed residual value 5,000 Guaranteed residual value 20,000 A) 91,832 B) 102,711 C) 105,444 D) 108,847 33) For the following lease, determine the minimum lease payments for the lessor. Annual lease payment at.
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9) Boboto Inc.'s policy is to report all cash flows arising from interest and dividends in the operating section. Boboto's activities for the year ended December 31, 2018 included the following: •Declared and issued a stock dividend valued at $50,000. •Paid $46,000 to repurchase ordinary shares and cancelled them. The book value.
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17) Channel leased equipment to Montage Company on November I, 2010. The terms of the lease are as follows: Lease term 12 years Economic life of leased asset 13 year Fair value of leased asset 105,000 Guaranteed residual value 10,000 Lease payments, due at the end of the year, starting Nov 1, 2011 11,000 Lessee's incremental borrowing rate 5% Montage uses straight-line depreciation.
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15) The following are characteristics of a lease: Price of leased asset from manufacturer 312,100 Lease payments 75,000 Lease term 4 years Lease frequency Annual Payment timing End of year Guaranteed residual value 15,000 Interest rate implicit in the lease agreement 5% Requirement: Determine the appropriate classification for this lease for the lessor (who is not the manufacturer) and record the journal entries for the lessor.
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12) Salisbury Creamery leases its ice cream making equipment from Little Rock Finance Company under the following lease terms:   •The lease term is five years, non-cancellable, and requires equal rental payments of $56,926 due at the beginning of each year starting January 1, 2011. •Upon inception of the lease on January 1,.
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19.1   Learning Objective 1 1) Which statement is correct? A) Net income equals the cash generated by the company's operations. B) Net income seldom reflects the change in cash during the period. C) Net income is the most important metric to measure the financial performance of a company. D) Cash flow is the most important.
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20) The following are some of the characteristics of an asset available for lease: Fair value of leased asset 80,000 Useful life 10 years Lease term 7 years Payment frequency Annual Payment timing Beginning of year Guaranteed residual value 10,000 Interest rate implicit in lease (not known to lessee) 10% Lessee's incremental borrowing rate 8% Requirements: a. Determine the amount of lease payment that the lessor would require.
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10) Which statement about "cash and cash equivalents" is correct? A) Exchanges of "cash and cash equivalents" for items that are not "cash and cash equivalents" result in cash flows for the cash flow statement. B) Changes in the composition of "cash and cash equivalents" is considered a cash flow for purposes.
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5) ABC Inc.'s policy is to report all cash flows arising from interest and dividends in the operating activities section. Tub Time's activities for the year ended December 31, 2017 included the following: •Net income after taxes totaled $400,000. •The company recorded a $4000 goodwill impairment loss during the year. •Depreciation expense for.
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23) What entry is required for the lessor in a operating lease? A) Gain/loss on asset sale. B) Loan receivable. C) Interest income. D) Depreciation expense. 18.3   Learning Objective 3 1) Which statement is correct about the "guaranteed residual value"? A) It is assurance that the lessee will take care of the property. B) It is provided by.
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8) Cerebral Corporation started operations on March I, 2009. It needs to acquire a special piece of equipment for its manufacturing operations. It is evaluating two options as follows. Option 1: Lease the equipment for 5 years. Lease payments would be $12,000 per year, due at the beginning of each fiscal.
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18) The following are some of the characteristics of an asset available for lease: Fair value of leased asset 150,000 Lease term 8 years Payment frequency Annual Payment timing Beginning of year Guaranteed residual value 25,000 Interest rate implicit in lease (not known to lessee) 9% Lessee's incremental borrowing rate 8% Requirements: a. Determine the amount of lease payment that the lessor would require to lease.
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6) Here are the terms of a lease agreement: Fair value of leased asset 50,000 Lease term 5 years Payment frequency Annual Payment timing End of year Guaranteed residual value 0 Interest rate implicit in lease (known to lessee) 5% Lessee's incremental borrowing rate 5% Requirements: a. Determine the amount of lease payment that the lessor would require to lease the asset. b. Compute the present value.
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3) Reuse It Inc.'s (RII) policy is to report all cash flows arising from interest and dividends in the operating section. The company's activities for the year ended December 31, 2016 included the following: •Comprehensive income totaled $468,000 including $88,000 in other comprehensive income. •Paid a cash dividend of $30,000 that was.
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8) Financial information for Fesone Inc.'s balance sheet for fiscal 2013 and 2014 follows: 20142013 Cash204,800550,000 Accounts receivable1,150,0001,300,000 Inventory410,000250,000 Investments - held for trading400,000 Investments - held to maturity150,000 Property plant and equipment3,400,0003,400,000 Accumulated depreciation(1,860,000)(1,570,000) Total3,854,8003,930,000 Accounts payable260,00080,000 Bank loan2,226,0002,850,000 Bonds payable187,800185,000 Preferred shares015,000 Common shares597,000450,000 Retained earnings584,000350,000 Total3,854,8003,930,000 Additional information: 1. Preferred shares were converted to common shares during the year at their book value. 2. The face.
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10) Sherya Inc.'s policy is to report all cash flows arising from interest and dividends in the operating section. Sherya's activities for the year ended December 31, 2018 included the following: •Interest expense for the period was $10,000. The interest payable account decreased $4,000. •Made a $110,000 principal payment on a bank.
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1) Financial statements provide information about business activities to decision makers. 2) Investors provide money to a business to begin operations. 3) Not-for-profit organizations need accounting information, as do profit-oriented organizations. 4) The designation CA stands for Certified Public Accountant. 5) A proprietorship can have two owners, so long as they are husband and.
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13) The following are characteristics of a lease: Price of leased asset from manufacturer 312,100 Lease payments 100,000 Lease term 4 years Lease frequency Annual Payment timing End of year Guaranteed residual value 35,000 Interest rate implicit in the lease agreement 14% Requirement: Determine the appropriate classification for this lease for the lessor (who is not the manufacturer) and record the journal entries for the lessor.
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10) Boris Corporation started operations on March I, 2009. It needs to acquire a special piece of equipment for its manufacturing operations. It is evaluating two options as follows. Option 1: Lease the equipment for 5 years. Lease payments would be $12,000 per year, due at the beginning of each fiscal.
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5) The following amortization schedule is for a lease entered into at the start of fiscal 2012 for an asset that will be useful for 5 years. The company uses straight-line depreciation method. Required: Provide the appropriate presentation of this lease in the lessee's balance sheet for December 31, 2013, distinguishing amounts.
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12) Select transactions of SimBis Accounting Inc. (SAI) are listed below. SAI uses the indirect method to determine cash flows from operating activities. 1. SAI purchases a $200,000, 45-day treasury bill held-for-trading investment. 2. SAI amortizes $32,000 of the discount on bonds payable. 3. At year-end SAI increases its allowance for bad debts.
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14) Here are the terms of a lease agreement: Fair value of leased asset 65,000 Lease term 10 years Payment frequency Annual Payment timing End of year Guaranteed residual value 0 Interest rate implicit in lease (known to lessee) 4% Lessee's incremental borrowing rate 4% Requirement: Determine the amount of lease payment that the lessor would require to lease the asset. 15) Here are the terms of.
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18.6   Learning Objective 6 1) On January 1, 2011, Teddy Company sold a building to Breezy Bank for $40,000,000 and immediately leased it back under a 25-year non-cancellable lease at $3,208,000 per year, payable at the beginning of each year. Breezy used an implicit rate of 7% to determine the lease.
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16) Here are the terms of a lease agreement: Fair value of leased asset 150,000 Lease term 8 years Payment frequency Annual Payment timing End of year Guaranteed residual value 5,000 Interest rate implicit in lease (known to lessee) 6% Lessee's incremental borrowing rate 8% Requirements: a. Determine the amount of lease payment that the lessor would require to lease the asset. b. Compute the present value.
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10) Hoboken's activities for the year ended December 31, 2018 included the following: •Sold a held-for-trading investment for $12,000. The book value was $10,000. •Sold an available-for-sale investment for $8,000. The book value was $9,000. How much would be presented as cash flow from operations for the "held for trading" investment? A) Proceeds from.
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