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15-3Bryant, O'Neal, and Rice formed a partnership and agreed to share profits in a 3:1:2 ratio after recognition of 5% interest on average capital balances and monthly salary allowances of $2,500 to O'Neal and $2,000 to Rice.  Average capital balances were as follows: Bryant120,000 O'Neal100,000 Rice80,000 Required: Compute the net income (loss) allocated to each.
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16-9 The MDS partnership has decided to liquidate.  At the time, the profit and loss ratios for Murphy, Donnelly and Sullivan were 1:1:3.  The balance sheet is below. Cash $   30,000 Liabilities $   20,000 Other assets    170,000 M, Capital      50,000 D, Capital      70,000 S, Capital      60,000  $200,000  $200,000 A.Using the loss absorption potential system, determine how the partners will share in the.
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Multiple Choice 1.Special entities are not-for-profit organizations that are a.government owned. b.privately owned. c.publicly owned. d.either government owned or privately owned. 2.A municipality's capital projects fund is similar to a university's a.renewals and replacements fund. b.retirement of indebtedness fund. c.investment in plant fund. d.none of these. 3.Board designated funds should be accounted for as a.restricted funds. b.specific purpose funds. c.unrestricted funds. d.none of these. 4.For a.
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19-3Prepare journal entries for the following transactions or events: 1.The board of trustees of West College voted to designate $160,000 for expansion of the student union and $90,000 for future research projects. 2.In accordance with the requirements of a bond indenture, West College transferred $65,000 of unrestricted funds for the accumulation of.
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17-5    The unadjusted trial balance for the general fund of the City of Clark at June 30, 2004 is as follows: Debits Cash$100,000 Due from agency fund    15,000 Encumbrances    80,000 Estimated revenues  540,000 Expenditures  410,000 Property taxes receivable    75,000 Credits Allowance for uncollectible taxes      5,000 Appropriations  520,000 Unreserved fund balance    20,000 Reserve for encumbrances    40,000 Revenues  560,000 Vouchers payable    75,000 Supplies on hand at June.
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15 – 9 Able and Baker have had a successful partnership, but now Able wants to retire.  Account balances after restating the assets and liabilities for the partnership are below. Tangible assets$150,000 Liabilities   30,000 Able, Capital   50,000 Baker, Capital   70,000 Able and Baker’s residual profit and loss ratio is 40:60 A.Able sells her equity to Cab for.
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15-5Wine and Yates are partners whose capital balances are $80,000 and $60,000 and who share profits 3:2.  Due to a shortage of cash, Wine and Yates agree to admit Zale to the firm. Required: Prepare the journal entries required to record Zale's admission under each of the following assumptions: (a)Zale invests $40,000 for.
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Multiple Choice 1.Governmental units include all of the following except a.counties. b.school districts. c.industrial development districts. d.voluntary health and welfare organizations. 2.Which type of fund entities are used to account for the activities of nonbusiness organizations that are similar to those of business enterprises? a.Expendable fund entities b.Proprietary fund entities c.Budgetary fund entities d.Restricted fund entities 3.When budgeted expenditures are enacted.
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16-5A trial balance for the DEF partnership just prior to liquidation is given below: DebitCredit Cash$  50,000 Noncash Assets500,000 Nonpartner Liabilities$160,000 Dixon, Loan50,000 Dixon, Capital150,000 Elston, Capital102,000 Flynn, Capital          88,000     Totals$550,000$550,000 The partners share income and loss on the following basis: Dixon50% Elston30% Flynn20% Required: Prepare an advance cash distribution plan for the partners. .
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15-7Allen, Bates, and Carson are partners who share income in a 5:3:2 ratio.  Carson, whose capital balance is $60,000, retires from the partnership. Required: Determine the amount paid to Carson under each of the following cases: (1)$20,000 is debited to Allen's capital account; the bonus approach is used. (2)Goodwill of $24,000 is recorded; the.
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18-6 The citizens of Hokah approved a $10,000,000 bond issue on January 1, 2005.  Proceeds were to be used in the construction of a new city hall, municipal building and jail.  Other approved financing sources were $5,000,000 from a federal grant and $1,500,000 from the Hokah City general fund.  The revenue.
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The partnership will be liquidated over a prolonged period of time. As cash is available, it will be distributed to the partners.  The first sale of noncash assets having a book value of $240,000 realized $190,000.  How much cash should be distributed to each partner after this sale? a.Stine, $36,000; Ellis,.
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16-6Cathy, Paul, and Andy are partners in a CPA firm sharing profits and losses in a ratio of 2:2:3, respectively.  Immediately prior to liquidation, the following balance sheet was prepared: Cash           $  25,000Liabilities $ 70,000 Noncash assets               145,000Cathy, Capital                    40,000 Paul, Capital    40,000 ---------Andy, Capital    20,000    Total Assets$170,000                                         Total Equities$170,000 Required: Assuming the.
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11.In accounting for loan funds, revenue is recorded when the a.contribution is received. b.loan is made to students. c.loan is repaid by students. d.students graduate. 12.All of the following are a plant fund in colleges and universities except a.unexpended plant fund. b.funds for renewals and replacements. c.investment in plant. d.plant replacement and expansion fund. 13.Most property, plant and equipment.
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13-8 On January 1, 2004, Paisano Company, a U.S. corporation, acquired 100% of the common stock of Chiara Company, an Italian chocolate company.  It was determined that the functional currency of Chiara was the euro.  At the time of the combination, Chiara’s retained earnings were 150,000 euros.  Chiara’s assets has.
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Multiple Choice 1.The highest level of priority of pronouncements that a government entity should look to for accounting and reporting guidance is a.GASB Technical Bulletins. b.GASB Concepts Statements. c.AICPA Industry Accounting Guides. d.GASB Statements. 2.Which of the following funds would account for operations that are financed and operated in a manner similar to private business enterprises? a.Debt.
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16-2The trial balance for the ABC Partnership is as follows just before liquidation: OTHERBALLAGLERBELLCARR CASHASSETSRECEIVABLE=LIABILITIESCAPITALCAPITALCAPITAL 90,000375,00045,00075,000210,000135,00090,000 Partners share profits a 50:30:20 ratio. Required: Prepare an advance cash distribution plan showing how available cash would be distributed. .
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11.Selected data for a segment of a business enterprise are to be separately reported in accordance with SFAS No. 131 when the revenues of the segment is 10% or more of the combined a.net income of all segments reporting profits. b.external and internal revenue of all reportable segments. c.external revenue of all reportable.
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Problems 17-1During 2004, the City of Olathe was involved in the following transactions: 1.A budget consisting of estimated revenues of $900,000 and appropriations for expenditures of $930,000 was approved by the city council. 2.Statements of property tax assessments totaling $660,000 were mailed to property owners.  Experience indicates that 2% of assessed taxes will.
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Problems 16-1The NOP Partnership is being liquidated.  A balance sheet prepared prior to liquidation is presented below: Cash$  85,000Liabilities$  55,000 Other Assets95,000Pratt, Loan20,000 Nye, Capital60,000 Ott, Capital20,000       Pratt, Capital    25,000    Total Assets$180,000Total Equities$180,000 Nye, Ott, and Pratt share profits and losses in a 40:40:20 ratio. All partners are personally insolvent. Required: A.Prepare the journal entries necessary to record the.
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16-4Due to the fact that the partnership had been unprofitable for the past several years, A, B, C, and D decided to liquidate their partnership.  The partners share profits and losses in the ratio of 40:30:20:10, respectively.  The following balance sheet was prepared immediately before the liquidation process began: A B.
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17-4The following information regarding the fiscal year ended June 30, 2004, was drawn from the accounts and records of the Brown County general fund: Revenues and other asset inflows: Property taxes$8,000,000 Licenses and permits  1,000,000 State grants     200,000 Collection of interfund advance to other fund     100,000 Proceeds from sale of equipment        50,000 Expenditures and other asset.
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11.Encumbrances would not appear in which fund? a.General b.Enterprise c.Capital projects d.Special revenue 12.Which type of fund can be either expendable or nonexpendable? a.Debt service b.Enterprise c.Trust d.Special revenues 13.Which of the following funds frequently does not have a fund balance? a.General fund b.Agency fund c.Special revenue fund d.Capital projects fund 14.A city should record depreciation as an expense in its a.general fund and enterprise fund. b.internal.
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14-4Kiner Company prepares quarterly financial statements.  The following information is available concerning calendar year 2004: Estimated full-year earnings$800,000 Full-year permanent differences: Goodwill amortization60,000 Estimated dividend income exclusion25,000 Actual pretax earnings, 1/1/04 to 3/31/04195,000 Nominal income tax rate35% Required: Compute the income tax provision for the first quarter of 2004. 14-5           XYZ Corporation has eight industry segments with sales, operating.
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13-6           Bass Corporation, a U.S. Company, formed a subsidiary with a new company in London on January 1, 2004 by investing 500,000 British pounds in exchange for all of the subsidiary’s common stock.  The subsidiary purchased land for 100,000 pounds and a building for 300,000 pounds on July 1, 2004. .
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31.Which of the following statements most accurately describes interim period tax expense? a.The best estimate of the annual tax rate times the ordinary income (loss) for the quarter. b.The best estimate of the annual tax rate times income (loss) for the year to date less tax expense (benefit) recognized in previous interim.
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16-8The December 31, 2003 balance sheet of the Chan, Dickerson, and Grunther partnership, along with the partners’ residual profit and loss sharing ratios, is summarized as follows:                    Assets                                                                                   Equities Cash$ 60,000Accounts Payable   $ 90,000 Receivables 120,000Loan from Dickerson      20,000 Inventories 150,000Chan, Capital (20%)    100,000 Other Assets 190,000Dickerson, Capital (30%)    160,000               Grunther, Capital (50%)    150,000    .
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19-4An NNO obtained cash for the acquisition of property and equipment as follows: Loan proceeds$ 75,000 Contributions$300,000 These funds are used to acquire land.  In addition, $10,000 in principal and $1,500 in interest is paid on indebtedness relating to property and equipment.  Depreciation on property and equipment for the year is $60,000. Prepare all.
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Use the following information in answering Questions 21-22. Chuck and Bagon are partners operating an electronics repair shop.  For 2004, net income was $10,000.  Chuck and Bagon have salary allowances of $18,000 and $12,000, respectively, and remaining profits and losses are shared 4:6. 21.The division of profits would be:     $4,000 and $6,000   .
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18-3Prepare entries, in general journal form, to record the following transactions in the proper fund(s) and/or account group(s).  Designate the fund or account group in which each entry is recorded. 1.Bond proceeds of $2,400,000 were received to be used in constructing a new City Jail.  An equal amount is contributed from.
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11.If assets on the initial balance sheet are fairly valued, Ace and Bell consent and Dent pays Carr $75,000 for his interest; the revised capital balances of the partners would be a.Ace, $105,000; Bell, $165,000; Dent, $150,000. b.Ace, $105,000; Bell, $165,000; Dent, $140,000. c.Ace, $100,000; Bell, $160,000; Dent, $150,000. d.Ace, $100,000; Bell, $160,000; Dent,.
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17-3The trial balance for the General Fund of the City of Lenexa as of December 31, 2004 is presented below:     CITY OF LENEXA The General Fund Adjusted Trial Balance December 31, 2004 DebitCredit Cash$216,000 Property Tax Receivable31,000 Estimated Uncollectible Taxes$ 10,000 Due from Trust Fund41,000 Vouchers Payable55,000 Reserve for Encumbrances18,000 Unreserved Fund Balance        205,000 $288,000$288,000 Transactions for the year ended December 31, 2005.
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16-3Maris, Nolan, and Oslo operate the MNO Partnership.  The partnership agreement provides that the partners share profits in the ratio of 40:40:20, respectively.  Unable to satisfy the firm's debts, the partners decide to liquidate.  Account balances just prior to the start of the liquidation process are as follows:     DebitCredit Cash$ 60,000 Other.
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Use the following information to answer Problems 13-4 and 13-5. On January 2, 2004, a U.S. parent company purchased a 100% interest in a subdivision located in West Germany.  The purchase method of accounting was used to account for the acquisition.  The subsidiary's financial statements for 2004 in marks were as.
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Problems 15-1Tyler, Eddy, & Carter are partners with capital balances of $60,000, $150,000, and $90,000, respectively.  Profits and losses are shared in a 3:2:1 ratio.  Eddy decided to withdraw and the partnership revalued its assets.  The value of inventory was decreased by $15,000 and the value of land was increased by.
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19-5 The following information was taken from the accounts and records of the NSP Foundation, a private, not-for-profit organization.  All balances are as of June 30, 2004, unless otherwise noted. Unrestricted Support – Contributions$200,000 Unrestricted Revenues – Investment Income    28,000 Temporarily Restricted Gain on Sale of Investments    13,000 Expenses – Scholarships  300,000 Expenses – Fund Raising   .
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Multiple Choice 1.Which of the following statements is correct? 1.Personal creditors have first claim on partnership assets. 2.Partnership creditors have first claim on partnership assets. 3.Partnership creditors have first claim on personal assets. a.1 b.2 c.3 d.Both 2 and 3 2.The first step in the liquidation process is to a.convert noncash assets into cash. b.pay partnership creditors c.compute any net income (loss).
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11.Which of the following requires the use of the encumbrance system? a.Capital projects fund b.Debt service fund c.General fixed assets group of accounts d.Enterprise fund   12.The following related entries were recorded in sequence in the general fund of a municipality: 1.Encumbrances15,000 Reserve for Encumbrances15,000 2.Reserve for Encumbrances15,000 Encumbrances15,000 3.Expenditures15,350 Vouchers Payable15,350 The sequence of entries indicates that a.an adverse event was foreseen and.
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17 - 6 The City of Ridgeway had the following transactions for 2004.  Journalize the transactions in the General Fund. The budget is approved.  Tax levies and additional revenues are expected to be $5,000,000.  Expenditures of $5,100,000  are authorized, along with a $50,000 payment to be made to the Debt Service Fund. b.The.
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Problems 19-1The following events affected the Williamsburg University Loan Fund: 1.$80,000 is received from a donor to establish a student loan fund.  Loans will carry a 5% annual interest rate. 2.The Loan Fund loaned the $80,000 to students.  Five percent of the loans are estimated to be uncollectible. 3.Loans of $20,000 were repaid with.
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1.A component of an enterprise that may earn revenues and incur expenses, and about which management evaluates separate financial information in deciding how to allocate resources and assess performance is a(n) a.identifiable segment. b.operating segment. c.reportable segment. d.industry segment. 2.An entity is permitted to aggregate operating segments if the segments are similar regarding the a.nature of.
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13-3Accounts are listed below for a foreign subsidiary that maintains its books in its local currency.  The equity interest in the subsidiary was acquired in a purchase transaction.  In the space provided, indicate the exchange rate that would be used to translate the accounts into dollars assuming the functional currency.
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Multiple Choice 1.When a partner retires and withdraws assets in excess of his book value, the remaining partners absorb the excess a.equally. b.in their profit-sharing ratio. c.based on their average capital balances. d.based on their ending capital balances. 2.In a partnership, interest on capital investment is accounted for as a(n) a.return on investment. b.expense. c.allocation of net income. d.reduction of.
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14-6 Miller Corporation is a manufacturer with four product lines.  Below is some financial information about each of the four product lines. Product Segment Booyas Widgets Humdrums Loonies Total Sales to nonaffiliates $10,000 $30,000 $35,000 $15,000 $90,000 Intersegment sales   2,000   6,000    8,000 16,000 33,000 Total revenue $12,000 $36,000 $43,000 $31,000 $122,000 Operating profit (loss) 2,000 6,000 (1,000) 8,000 14,000 Identifiable assets 10,000 15,000 60,000 80,000 165,000 Using all the tests below, determine which of the product segments are reportable segments and explain how nonreportable segments (if any).
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Problems 18-1During 2004, the City of Iola started a street paving project. The project is being financed by the proceeds from the issue of five-year, 6% special assessment bonds payable at a face value of $1,500,000.  The bonds were issued July 1, 2004 at their par value.  One-fifth of the principal.
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18-2The following activities and transactions are typical of those which may affect the various funds used by a municipal government. Required: Prepare journal entries to record each transaction and identify the Fund or Group of Accounts in which each entry is recorded. 1.The Arma City Council passed a resolution approving a general operating.
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Problems 14-1The following information is available for Torrey Company for 2004: a.In early April Torrey made major repairs to its equipment at a cost of $45,000.  These repairs will benefit the remainder of 2004 operations. b.At the end of May, Torrey sold machinery with a book value of $25,000 for $31,000. c.An inventory loss.
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18-4           The general fund trial balance for Pierpont City held the following balances at June 30, 2004, just before closing entries were made:     Unreserved Fund Balance$ 2,000 Estimated Revenues 30,000 Revenues 27,250 Appropriations 28,000 Expenditures 24,200 Expenditures-Prior Year   1,200 Encumbrances   3,000 Operating Transfers In   5,000 Reserve for Encumbrances   3,000 Reserve for Encumbrances – Prior Year   1,200 Required: Prepare the necessary closing entries. 18-5          .
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21.Which of the following does not have to be disclosed in interim reports? a.Seasonal costs or expenses. b.Significant changes in estimates. c.Disposal of a segment of a business. d.All of these must be disclosed. 22.For interim financial reporting, the effective tax rate should reflect AnticipatedExtraordinary tax creditsitems a.YesYes b.YesNo c.NoYes d.NoNo 23.Companies using the LIFO method may encounter a liquidation of base.
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21.It is proper to recognize revenues or expenditures resulting from which of the following classifications of interfund activity? a.Interfund loans and interfund transfers b.Interfund services provided/used and interfund reimbursements c.Interfund reimbursements and interfund loans d.Interfund services provided/used and interfund transfers 22.Revenues of a special revenue fund of a governmental unit should be recognized in.
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