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8) Plate Corporation, a US company, acquired ownership of Saucer Corporation of Switzerland on January 1, 2011 for $1,500,000 when Saucer's stockholders' equity in Swiss francs (SF) consisted of 700,000 SF Capital Stock and 300,000 SF Retained Earnings. The exchange rate for Swiss francs was $1.20 on January 1. All.
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9) Illiana Corporation has several accounting issues with respect to its interim financial statements for the first quarter of calendar 2011. Required: For each of the independent situations given below, state whether or not the method proposed by Illiana is acceptable. Justify each answer with appropriate reasoning. 1. Illiana will not perform.
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13) Astrotuff Company is planning to purchase 200,000 pounds of nylon from Tangsun Company. On November 1, 2011, Astrotuff entered into a 90-day forward contract to hedge the planned purchase. The forward contract is to purchase 200,000 pounds of nylon at $1.80 per pound (forward rate at November 1, 2011)..
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11) Accounts representing an allowance for uncollectible accounts are converted into U.S. dollars at A) historical rates when the U.S. dollar is the functional currency. B) current rates only when the U.S. dollar is the functional currency. C) historical rates regardless of the functional currency. D) current rates regardless of the functional currency. 12) Palk.
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18) Rollins Publishing has five operating segments, as summarized below: Fiction Non-fiction Reference Childrens Periodicals Sales to outside entities 870,000 416,000 796,000 236,000 517,000 Intersegment sales -0- -0- 80,000 -0- 50,000 Cost of goods sold 430,000 270,000 290,000 65,000 420,000 Operating Expenses 120,000 89,000 95,000 74,000 238,000 Interest Expense -0- 61,000 -0- -0- 24,000 Income Tax Expense 80,000 (1,000) 120,000 24,000 (28,000) Assets 22,000 24,000 29,000 16,000 100,000 Required: Determine which of the operating segments of Rollins Publishing are reportable segments for the period shown. 19) Snodberry Catering has five operating segments, as summarized below: Buffet Alcohol Bakery Wait Service Bar Service Sales to outside.
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6) For internal decision-making purposes, Falcon Corporation identifies its industry segments by geographical area. For 2011, the total revenues of each segment are provided below. There are no intersegment revenues. Total Revenues Canada$22,000,000 United States76,000,000 Mexico10,000,000 South America9,000,000 China2,000,000 Russia1,500,000 Australia3,000,000 European Union12,000,000 Other European14,000,000 Total revenues$149,500,000 Required: 1. Which operating segments will be considered reporting segments based on the revenue test? 2. What is.
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8) On November 1, 2010, Ironside Company (a U.S. manufacturer) sold an airplane for 1 million New Zealand dollars (NZ$) to a New Zealand company, Wellington Corporation. Ironside will receive payment on January 30, 2011 in New Zealand dollars. In order to hedge the accounts receivable position, Ironside entered into.
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10) Jeale Corporation is preparing its interim financial statements for the third quarter of calendar 2011. The following information was provided for the preparation of the statements: 1.Credit sales for the quarter$1,700,000 2.Cash sales for the quarter800,000 3.Inventories, July 1 (FIFO cost method)250,000 4.Cash purchases of inventory during the quarter400,000 5.Inventory purchases made on account.
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11) If the average capital balances for Bertram and Ernest are $200,000 and $240,000, what will the total partnership profit allocations be for Bertram and Ernest in 2011? A) $100,000 and $140,000 B) $108,000 and $132,000 C) $120,000 and $120,000 D) $140,000 and $100,000 12) What is the total amount for the allocation of interest,.
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14) Nettle Corporation is preparing its first quarterly interim report. It is subject to a corporate income tax rate of 20% on the first $50,000 of taxable income and 35% on taxable income above $50,000. Its estimated pretax accounting income for 2011, by quarter, is: 1st2nd3rd4th2011 QuarterQuarterQuarterQuarterTotal Est. Income$75,000$165,000$143,000$120,000$503,000 Nettle expects to earn and.
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16) On January 1, 2011, Placid Corporation acquired a 40% interest in Superior Industries, a Canadian Corporation, for $811,900 when Superior's stockholders' equity consisted of 1,000,000 Canadian dollars (C$) capital stock and C$500,000 retained earnings. Superior's functional currency is the Canadian dollar and the books are kept in the same.
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12) Leotronix Corporation estimates its income by calendar quarter as follows for 2011: 1st2nd3rd4th2011 QuarterQuarterQuarterQuarterTotal Est. Income$30,000$40,000$40,000$50,000$160,000 Income tax rates applicable to Leotronix: From: $ 0 to $50,00015% From: $50,001 to $75,00025% Over: $75,00035% Required: Determine Leotronix's estimated effective tax rate. 13) Maxtil Corporation estimates its income by calendar quarter as follows for 2011: 1st2nd3rd4th2011 QuarterQuarterQuarterQuarterTotal Est. Income$40,000$30,000$20,000$20,000$110,000 Income tax rates applicable to Maxtil: From:.
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9) Plane Corporation, a U.S. company, owns 100% of Shipp Corporation, a Libyan company. Shipp's equipment was acquired on the following dates (amounts are stated in Libyan dinars): Jan. 01, 2011 Purchased equipment for 40,000 dinars Jul. 01, 2011 Purchased equipment for 80,000 dinars Jan. 01, 2012 Purchased equipment for 50,000 dinars Jul. 01,.
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Multiple Choice Questions 1) Similar operating segments may be combined if the segments have similar economic characteristics. Which one of the following is a similar economic characteristic under GAAP? A) The segments' management teams B) The tax reporting law sections C) The distribution method for products or services D) The expected rates of return and.
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2) For internal decision-making purposes, Dashwood Corporation's operating segments have been identified as follows: RevenuesOperating (includesProfitIdentifiable Operating Segmentintersegmentor LossAssets revenues) Appliances$1,100,000$(150,000)$1,200,000 Clothing1,300,000(750,000)400,000 Lawn and Garden850,000150,000150,000 Auto Accessories1,000,000100,000200,000 Service Contracts650,000(50,000)100,000 Catalog Sales2,300,00050,000500,000 Home Furnishings2,800,000250,0001,000,000 Tools2,400,000300,000250,000 $12,400,000$(100,000)$3,800,000 Revenues of the segments are external, with the exception of tools, which sold $400,000 to other segments, and Appliances, which sold $200,000 to other segments. Required: 1. In applying the "revenue".
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11) Which one of the following operating segment disclosures is not required by GAAP? A) Total Assets B) Equity C) Intersegment sales D) Extraordinary items 12) Which one of the following operating segment information items is not directly named by GAAP to be reconciled to consolidated totals? A) Assets B) Liabilities C) Revenues D) Profit or loss 13) What is.
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7) On January 1, 2011, Pilgrim Corporation, a U.S. firm, acquired ownership of Settlement Corporation, a foreign company, for $168,000, when Settlement's stockholders' equity consisted of 300,000 local currency units (LCU) and retained earnings of 100,000 LCU. At the time of the acquisition, Settlement's assets and liabilities were fairly valued.
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Multiple Choice Questions 1) Under the Uniform Partnership Act, loans made by a partner to the partnership are treated as A) liabilities to the partnership for which interest shall be paid from the date of the advance. B) advances to the partnership that are carried in the partners' capital accounts. C) Accounts Payable of.
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3) Pan Corporation, a U.S. company, formed a British subsidiary on January 1, 2012 by investing 450,000 British pounds (£) in exchange for all of the subsidiary's no-par common stock. The British subsidiary, Skillet Corporation, purchased real property on April 1, 2012 at a cost of £500,000, with £100,000 allocated.
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16) The following information was collected together for the Lawson Company relating to the preparation of their annual financial statements for 2011. For each item, indicate "yes" or "no" as to whether the item must be disclosed in the annual report. _____ 1. Names of major customers for all reportable segments _____.
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10) Phim Inc., a U.S. company, owns 100% of Sera Corporation, a New Zealand company. Sera's equipment was acquired on the following dates (amounts are stated in New Zealand dollars as NZ$): Jan. 01, 2011 Purchased equipment for NZ$40,000 Jul. 01, 2011 Purchased equipment for NZ$80,000 Jan. 01, 2012 Purchased equipment for NZ$50,000 Jul..
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14) On January 1, 2011, Psalm Corporation purchased all the stock of Solomon Corporation for $481,400 when Solomon had capital stock of 180,000 pounds (£) and retained earnings of 90,000£. The book value of Solomon's assets and liabilities represented the fair value, except for equipment with a 5-year life that.
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3) For internal decision-making purposes, Calam Corporation's operating segments have been identified as follows: Operating ProfitIdentifiable Operating SegmentRevenuesor LossAssets Appliances$110,000$(15,000)$120,000 Clothing130,000(75,000)40,000 Lawn and Garden85,00015,00015,000 Auto Accessories100,00010,00020,000 Service Contracts65,000(5,000)10,000 Catalog Sales230,0005,00050,000 Home Furnishings280,00025,000100,000 Tools240,00030,00025,000 $1,240,000(10,000)$380,000 Required: 1.In applying the "operating profit or loss" test to identify reporting segments, what is the test value for Calam Corporation? 2.Using the "reported profit or loss" test, which of Calam's.
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4) For internal decision-making purposes, Elom Corporation's operating segments have been identified as follows: Operating ProfitIdentifiable Operating SegmentRevenuesor LossAssets Appliances$110,000$(15,000)$120,000 Lawn and Garden85,00015,00015,000 Auto Accessories100,00010,00020,000 Service Contracts65,000(5,000)10,000 Catalog Sales230,0005,00050,000 Corporate________________25,000 $590,000$10,000$240,000 Corporate assets are typically allocated back evenly to the segments for internal analysis purposes. Required: 1. In applying the "asset" test to identify reporting segments, what is the test value for Elom.
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Exercises 1) For each of the 12 accounts listed in the table below, select the correct exchange rate to use when either remeasuring or translating a foreign subsidiary for its U.S. parent company. Codes C = Current exchange rate H = Historical exchange rate A = Average exchange rate U.S. dollar isThe foreign the functionalcurrency is the currencyfunctional.
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Exercises 1) The accountant for Baxter Corporation has assigned most of the company's assets to its three segments as follows: Electronics$1,760,000 Hardware3,420,000 Plumbing490,000 Total$5,670,000 The unassigned assets consist of $430,000 of unallocated goodwill and $270,000 of assets attached to the corporate headquarters. For internal decision-making purposes, goodwill is not assigned to the segments and the assets.
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Multiple Choice Questions 1) A U.S. firm has a Belgian subsidiary that uses the British pound as its functional currency. According to GAAP, the U.S. dollar from Belgian unit's point of view will be A) its only foreign currency. B) its local currency. C) its current rate method currency. D) its reporting currency. 2) Selvey Inc..
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11) Puddle Incorporated purchased an 80% interest in Soake Company, located in England. Puddle paid $1,560,000 on January 1, 2011, at a time when the book values of Soake equaled the fair values. Any excess cost/book value differential was attributed to a patent with a five-year remaining useful life. Soake's.
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7) On November 1, 2010, Stateside Company (a U.S. manufacturer) sold an airplane for 1 million New Zealand dollars (NZ$) to New Zealand company Aukland Corporation. Stateside will receive payment on January 30, 2011 in New Zealand dollars. In order to hedge the accounts receivable position, Stateside entered into a.
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8) The following data relate to Elle Corporation's industry segments. (Elle HQ represents the corporate headquarters). All other segments are geographical sales segments. AttributeEuropeRussiaChinaJapanElle HQ External sales$35,000$24,000$33,000$0$0 Intersegment   Sales2,0001,0004,00000 Expenses27,00018,00029,0005,00012,000 Assets assigned20,00022,00030,00014,00015,000 Income from   Equity investee5,000 Required: 1. Prepare a report which reconciles the reportable segment profits to total consolidated profits assuming that corporate expenses are not allocated.
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10) Slickton Corporation, a U.S. holding company, enters into a forward contract on November 1, 2011 to speculate in Singapore dollars (S$). The forward contract requires Slickton to sell 1,000,000 Singapore dollars to the exchange broker on January 30, 2012. Net settlement is not permitted. Relevant exchange rates for the.
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11) Wild West, Incorporated (a U.S. corporation) sold inventory to a company in the Philippines for 1,600,000 pesos on account on February 1, 2011, with payment expected in 90 days. Wild West entered into a forward contract to hedge this transaction, and properly accounts for the transaction as a cash.
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12) On December 15, 2011, Electronix Company purchased inventory from a foreign supplier for 2,000,000 foreign currency units (fcu's). Payment will be made on February 13, 2012. On December 15, 2011, to hedge the transaction, Electronix signed a forward contract to buy 2,000,000 fcu's in 60 days. Electronix uses a.
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19) On December 18, 2011, Wabbit Corporation (a U.S. Corporation) has a Forward Contract recorded on their ledger as a debit balance of $17,500. The forward contract was related to a purchase of electronic components purchased overseas, which were going to be re-sold in the United States. On December 20,.
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15) Par Industries, a U.S. Corporation, purchased Slice Company of New Zealand for $1,411,800 on January 1, 2011. Slice's functional currency is the New Zealand dollar (NZ$). Slice's books are kept in NZ$. The book values of Slice's assets and liabilities were equal to fair values, with the exception of.
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7) For internal decision-making purposes, Geogh Corporation identifies its industry segments by geographical area. For 2011, the total revenues of each segment are provided below. There are no intersegment revenues. Total Revenues Canada$980,000 United States1,410,000 Mexico1,260,000 South America430,000 China710,000 Russia660,000 Australia370,000 European Union1,220,000 Other European1,650,000 Total revenues$8,690,000 Required: 1. Which operating segments will be considered reporting segments based on the revenue test? 2. What is.
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18) Pritt Company purchased all the outstanding stock of Standy Company (a manufacturing company in Argentina) when the book value of Standy's net assets equaled their fair value. Standy's summarized balance sheet is shown below on January 1, 2011, the date of acquisition, and on December 31, 2011, when the.
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