Info
Warning
Danger

Study Resources (Accounting)

76. The information below was taken from the records of the Piper Company for the year ended December 31, 2016: Acquisition of building $250,000 Amortization of premium on bonds payable 2,000 Decrease in deferred income tax liability 8,000 Decrease in inventories 6,000 Decrease in salaries payable 2,000 Depreciation expense 24,000 Dividends paid 11,000 Loss on sale of land 18,000 Increase in accounts payable 14,000 Increase in accounts receivable 5,000 Issuance of long-term.
6 Views
View Answer
31.When disclosing the impact of a retrospective adjustment for the change from LIFO to FIFO in 2017, which of the following impacts is not expected to be reported in the comparative financial statements when two-year comparative statements are presented? a.impact on beginning inventory for 2016 b.impact on 2016 net income c.impact on ending.
4 Views
View Answer
105.In 2018, Bevins Company decided to change from LIFO to FIFO due to better representation of the flow of inventory and costs. Bevins started the business in 2016. Bevin’s tax rate is 35%. The following analysis was provided by management: Ending Inventory ? LIFO ? FIFO ? Net Income 12/31/2016 $375,650 $405,900 975,000 12/31/2017 $360,450 $410,750 1,350,000 12/31/2018 $365,975 $445,775 1,389,500   Required:1) Prepare the journal entry necessary to record the.
4 Views
View Answer
88. Jamison Company is preparing its statement of cash flows for the current year. During the year, the company retired two issuances of debt and properly recorded the transactions. These transactions were as follows: ? 1) Paid cash of $115,000 to retire bonds payable with a face value of $120,000 and a book.
5 Views
View Answer
92. The Percy's Landing Co. reported the following condensed income statement for 2016: Percy's Landing CO. Condensed Income Statement For the Year Ended December 31, 2016 Sales ? $305,000 Cost of goods sold ?  150,000 Gross profit ? $155,000 Operating expenses: ? ? ? Depreciation. $42,000 ? ? Insurance expense 5,000 ? ? Salaries expense 80,000 127,000 Income before taxes ? $ 28,000 Income taxes ?     6,000 Net income ? $ 22,000 ? Also during 2016, the company's current assets and current liabilities changed as follows: ? Increase (Decrease) Cash $49,500 Accounts.
9 Views
View Answer
89. Your friend is in business and wants your advice on preparing and interpreting the statement of cash flows for 2016. Information regarding the business is as follows: Cash received from customers $ 175,000 Cash paid to vendors 75,000 Cash paid to employees 140,000 Cash paid for interest 35,000 Depreciation expense 40,000 Cash paid in acquiring equipment 375,000 Cash received from issuing bonds 250,000 Cash received.
4 Views
View Answer
32.FASB’s Statement of Financial Accounting Concepts No. 7 provides general principles governing the use of present value and the objectives of present value accounting measurements. a. True b. False 33.To compare the value of amounts received at different times in the future, dollar amounts a. may be restated to their present value through discounting or restated to.
90 Views
View Answer
32. A company sold equipment for $5,000. The equipment originally cost $16,000 and had accumulated depreciation of $12,000. Which of the following statements is correct regarding the statement of cash flows prepared using the indirect method to report operating activities? a. $5,000 will be added to net income. b. Investing activities will reflect proceeds of.
3 Views
View Answer
11.A change in accounting entity is limited to presenting consolidated or combined financial statements in place of individual statements or a change in the subsidiaries that make up a group of companies in which one would report either as consolidated financial statements or changing the mix of companies included in.
6 Views
View Answer
155.In certain respects, IFRS provide more principles-based guidance in accounting for lease transactions. Describe the differences between IFRS and GAAP in lease capitalization criteria that demonstrate the more principles-based approach of the IFRS. 156.Lessees may try to avoid having a lease be classified as a capital lease. Explain why a lessee.
6 Views
View Answer
110.In Western reviewed their estimated warranty costs which at that time were 5% of sales. This estimated was based upon the warranty accrual method. In 2016 net sales were $3,250,000 they recorded warranty expense of $162,500. Due to some pending changes in product improvement and certain economic factors the company.
5 Views
View Answer
22. Which statement best defines a company's operating cash inflows? a. collections from customers and shareholders b. collections from customers and shareholders and earnings from investments c. collections from customers and earnings from investments d. collections from customers 23. According to current GAAP, cash flow per share statistics a. are required disclosures only if EPS information is disclosed. b. are not allowed disclosures. c. are required disclosures for.
3 Views
View Answer
94. Provide three examples of noncash investing and financing activities. 95. What are the five categories of operating cash outflows under the direct method of reporting cash flows? 96. What are the four steps necessary to prepare the spreadsheet and its statement of cash flows? 97. How should the sale of a depreciable asset be presented on the.
4 Views
View Answer
122.What are the two methods for reporting changes as approved by GAAP provide a brief explanation of each? 123.According to GAAP how should items be reported in order that information is reported in a relevant manner? 124.When is a retrospective adjustment considered impractical to make? 125.Provide three examples of changes in principle. .
5 Views
View Answer
84. The following is a list of items to be included in the 2016 statement of cash flows for the Winter Company: Beginning cash balance $ 90,000 Decrease in accounts payable 4,000 Increase in accounts receivable 3,000 Payment of dividends 6,000 Loss on sale of equipment 3,000 Decrease in prepaid expenses 1,000 Proceeds from bonds 46,000 Depreciation expense 12,000 Purchase of building 80,000 Net loss 32,000 Decrease in inventory 6,000 Proceeds from sale of.
3 Views
View Answer
99. What working paper information does a company need for its statement of cash flows under the direct method? 100. Why do companies use the spreadsheet method to prepare the statements of cash flows? 101. What are the four steps necessary to complete the statement of cash flows using the visual inspection method? 102. What is the.
5 Views
View Answer
42. The IFRS categories of cash flows are a. long-term changes and short-term changes. b. operating and other. c. operating, investing, and financing. d. operating and nonoperating. 43. Mayberry’s statement of cash flow is completed using the visual inspection method. Information regarding the Mayberry Company in 2016 appears below: Net income $140,000 Dividends paid 20,000 Decrease in inventory 15,000 Increase in accounts payable 30,000 Proceeds from issue of common stock 70,000 Depreciation.
6 Views
View Answer
133.Explain the direct and indirect effects of a change in accounting principles. 134.Most errors are discovered automatically through proper use of the double-entry system or by the internal or external auditors. However, some errors escape detection until after they have been included in the published financial statements of a company.Required:Describe three.
12 Views
View Answer
1. Receipts of dividends from investments in equity securities would be reported in the financing activities section of the cash flow statement. a. True b. False 2. Generating positive cash flows from operations is one of the most important cash flow activities of a company. a. True b. False 3. GAAP allows the use of either.
15 Views
View Answer
104. Current GAAP permits two methods of calculating and reporting a company's net cash flow from operating activities on its statement of cash flows. ? Required: ?Identify the two methods. Which method does the FASB prefer? Which method do most companies use and why? 105. The statement of cash flows classifies cash inflows and outflows into.
8 Views
View Answer
Exhibit 21-2In preparation for completing the statement of cash flows using the spreadsheet method, Williams Company provided the following information relating to patents for 2016: Balance, 1/1/2016 $4,800 Purchase of 10-year life patent for cash 2,000 Sale of patent at book value (1,400) Amortization of patents   (290) Balance, 12/31/2016 $5,110 ? 52. Refer to Exhibit 21-2. The Cash Flows from Operating Activities.
8 Views
View Answer
115.On January 1, 2016, Sarah Company purchased for $60,000 a truck that had an estimated life of five years and no residual value at the end of its useful life. Sarah uses straight-line depreciation. The cost of the truck was charged to Repairs Expense when purchased in 2016. Required: a. Ignoring income taxes,.
8 Views
View Answer
12.?The present value of an amount decreases as the discount rate increases. a. True b. False 13.?The present value factors for any discount rate increase as the number of periods increases. a. True b. False 14.?To determine an unstated interest rate, divide the future amount by the present value then divide by the number of periods. a. True b. False 15.An annuity isthe same amount.
11 Views
View Answer
113.On January 1, 2016 Kefauver Company purchased a piece of equipment for $375,000. The equipment had a useful life of 10 years and a residual value of $10,000. The company initially starts recording depreciation on a straight-line method. The following independent situations occur at the beginning of 2018: a. The life of.
5 Views
View Answer
21.Change in an accounting principle is accounted for a.prospectively. b.by a prior period adjustment. c.by a retrospective application of a new accounting principle. d.by constructive application of a new accounting principle. 22.A retrospective adjustment requires a change in the a.prior period financial statements to look like the current period financial statements. b.current period income to reflect the.
5 Views
View Answer
73. A statement of cash flows contains the following sections: a. net cash flow from operating activities b. cash flows from investing activities c. cash flows from financing activities d. investing and financing activities not affecting cash ? A list of items that appear on the statement is provided below: ____ 1. Depreciation expense ____ 2. Proceeds from sale of land at a gain ____ 3. Decrease in accounts payable ____ 4. Conversion.
14 Views
View Answer
127.What is the GAAP requirement of accounting for a change in estimates? 128.What is a change in reporting entity and how is an adjustment handled? 129.What are the 4 steps involved in the basic framework for the analysis and correction of an error? 130.What is the difference between counterbalancing errors and noncounterbalancing errors? 131.Most.
7 Views
View Answer
1.?One type of compensation provided by the time value of money is compensation for expected consumption. a. True b. False 2.?One type of compensation provided by the time value of money is compensation for risk. a. True b. False 3.Compounding is the conversion of future cash flow amounts to their present value. a. True b. False 4.?Discounting is the conversion of future cash flow amounts.
43 Views
View Answer
11. Under the direct method of reporting operating cash flows, a company deducts its operating cash outflows from its operating cash inflows to determine its net cash provided by (or used) in operating activities. a. True b. False 12. Under the direct method of reporting operating cash flows, a company computes the cash.
8 Views
View Answer
42.The future value of $7,000 deposited today and compounded semiannually at an 9% annual interest rate for four years is a. $9,955. b. $9,520. c. $8,100. d. $7,920. 43.Maxine has $1,000 to invest today. How much will her money be worth in 15 years if she earns 9% compounded semiannually on her money? a. $3,745 b. $13,268 c. $3,642 d. $1,935 44.The future value of $50,000 deposited today.
69 Views
View Answer
52.Margaret will receive an insurance settlement of $3,000,000 in five years. Randall is willing to give her a lump sum today in return for the payment in five years. If current interest rates are 12% per year, how much will Margaret receive today? a. $960,637 b. $1,702,281 c. $1,116,790 d. $1,800,000 53.Tessa won the lottery for $2,500,000 but due.
82 Views
View Answer
61.Refer to Exhibit 22-3. If the revised estimated useful life of the truck is a total of eight years, what is the amount of depreciation expense that Katrina should report in its 2017 income statement? a.$14,000 b.$16,000 c.$17,500 d.$28,000 62.Lavender Company purchased a machine on January 1, 2016, for $80,000. The machine has an estimated.
6 Views
View Answer
1.An advantage of retrospective adjustment method is that it achieves comparability and consistency between accounting periods. a.True b.False 2.A change in a reporting entity is accounted for by a prospective adjustment so that all financial statements are presented for the same entity. a.True b.False 3.Correction of an error involves corrections to reported financial statements similar to.
9 Views
View Answer
51.A change in accounting estimate is always accounted for a.using a prior period adjustment. b.retrospectively. c.using the cumulative effect method. d.prospectively. 52.A change in accounting estimate affected by a change in accounting principle should be reported as a.a change in accounting principle. b.a change in accounting estimate and a change in accounting principle. c.a change in accounting estimate. d.neither.
7 Views
View Answer
62. A company's unearned rental revenue account increases from the beginning to the end of the year. In the statement of cash flows using the direct method, the cash collected from tenants would be a. rent revenue plus unearned rent revenue at the beginning of the year. b. rent revenue plus the increase in unearned.
6 Views
View Answer
92.Exceptions exist in the retrospective restatement requirements when accounting for errors under GAAP IFRS I. No No II. No Yes III. Yes Yes IV. Yes No ? a. I b. II c. III d. IV 93.IFRS differ from U.S. GAAP regarding the indirect effects of a change in accounting principle in that IFRS a. do not specify when the indirect effects should be reported or what disclosures are required. b. do not specify when the indirect effects should.
3 Views
View Answer
108.On January 1, Year 1, the Dole Company purchased an asset that cost $154,000. The asset had an expected useful life of seven years and no estimated residual value. The company initially decided to use sum-of-the-years'-digits (SYD) depreciation for both financial accounting and income tax purposes. Depreciation expense for the.
4 Views
View Answer
71.A company accounts for the correction of a material error of a past period that it discovers in the current period as a.a retrospective accounting change. b.an adjustment to the current period. c.a prospective adjustment. d.a prior period restatement. 72.Which of the following errors normally would not be automatically corrected over two accounting periods? a.failure to.
7 Views
View Answer
147.How is the present value of the minimum lease payment computed? 148.What are the disclosure requirements for lessee’s of operating leases and what two disclosures are required for all leases? 149.In whatthree classifications can lessors categorize their leases? 150.What are the two components of net receivables for leases? .
5 Views
View Answer
81.All of the following would be reported retrospectively by restating prior period's financial results except a.change from the completed-contract method to the percentage-of-completion method for long-term construction contracts. b.correction of an error in previous periods. c.change from LIFO to FIFO. d.change from the straight-line depreciation method to the sum-of-the-years'-digits method. 82.Langley Company received merchandise on.
8 Views
View Answer
81. Accounting information from the records of the Sarah Jane's Clothing Corporation at the end of 2016 is shown below: Net income $100,000 Proceeds from sale of long-term investment in marketable securities 20,000 Proceeds from sale of building 80,000 Gain on sale of building 35,000 Increase in accounts receivable 5,000 Increase in accounts payable 7,000 Cash dividends declared 5,000 Depreciation expense 18,000 Patent amortization expense 1,000 Amortization of premium on.
3 Views
View Answer

Welcome Back!

ScholarOn has more then 20 Million answers, flashcards & more being added everyday!

or
Forgot?
Login
Don't have an account? Signup

Join ScholarOn

ScholarOn has more then 20 Million answers, flashcards & more being added everyday!

or
Signup
By registering, I agree to the Terms and Privacy Policies
Already have an account? Log in

Verify Your Email

Check your inbox & click on the link to activate your account.

Resend Email
Verification Mail Send Successfully. Please Check Your Email.

Forgot Password

Please enter your registered email to recieve the password reset link.

Send reset link
Already have an account? Log in
Did you know?

ScholarOn has more than 2 Million+ answers, textbook solutions & flashcards. Explore Now!

Let us boost your grade together!