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Study Resources (Accounting)

ESSAY 1.Barnes and Noble, both lawyers, have decided to form a partnership. They have asked your advice on how the profits and losses should be divided and have provided you with the following information: Initial Capital Contribution:      Barnes $20,000      Noble $80,000 Time Devoted to Business Operations:      Barnes 75%      Noble 100% Personal facts: Barnes has an excellent reputation in the.
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MULTIPLE CHOICE 1.The primary emphasis of interim reporting is on: a. interim cash flow b. the interim statement of financial position c. interim retained earnings d. interim income data 2.Which of the following best describes the proper accounting for interim financial reports? a. The interim period is viewed as an integral part of the annual accounting period. b. The interim period is viewed as.
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7.The partnership of Able, Bower, and Cramer was liquidated. The partners have shared profits and losses in the ratio of 2:4:4. Prior to liquidation, their capital balances were the following*: Able Bower Cramer $10,000 $(5,000) $(15,000) * Deficit shown in parentheses Cash totaled $20,000, with liabilities amounting to $30,000. A review of the individual partners' personal financial status.
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ESSAY 1.The management of Trident, Inc. is trying to determine if three of the company's nonreportable segments should be combined into one single segment for reporting purposes. In what five ways must these segments be similar in order to be reported as one? 2.For purposes of interim reporting, US-GAAP permits certain modifications.
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3.Explain the difference in the independent and integral viewpoints of accounting for interim periods. Which method best describes the accepted accounting practice for interim financial reporting? 4.The following lists account titles found on the books of Icell Corporation: a. Research and Development b. Inventory c. Annual Bonuses d. Unfavorable Materials Usage Variance Required: Discuss how each of these items is accounted.
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6.Oak, Pine, and Maple are partners with present capital balances of $42,000, $39,000, and $90,000, respectively. The partners share profits and losses according to the following percentages: 20% for Oak, 20% for Pine, and 60% for Maple. The existing assets of the original partnership have market values equal to book.
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MULTIPLE CHOICE 1.Which of the following is NOT a characteristic of the proprietary theory that influences accounting for partnerships? a. Partners' salaries are viewed as a distribution of income rather than a component of net income. b. A partnership is not viewed as a separate, distinct, taxable entity. c. A partnership is characterized by limited liability. d. Changes in.
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11.If goodwill is traceable to the incoming partner, the new partner's capital balance equals a. the fair market value of consideration paid by the incoming partner b. the book value of the older partnership divided by the existing partners' ownership percentage in the new partnership minus the book value of the old partnership. c. incoming partner's.
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14.An American firm owns 100% of a German firm that had the following transactions occur relative to their equipment account: January 1, 20X5 Purchased equipment for 50,000 euros July 1, 20X5 Purchased equipment for 30,000 euros January 1, 20X6 Purchased equipment for 75,000 euros July 1, 20X6 Sold equipment purchased on January 1, 20X5 for 48,000 euros The following.
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9.Corriveau Industries decided to switch from an accelerated depreciation method to a straight-line method in the second quarter of 20X1. This is classified as a cumulative effect of a change in accounting principle. The first-quarter, pretax income reported was $30,000, and projected pretax income for 20X1 was $90,000. If Corriveau.
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11.The partnership of Alt, Brown, and Carns has total assets and liabilities of $30,000 and $25,000, respectively. Information relating to the partners is as follows: Alt Brown Carns Total personal assets $90,000 $20,000 $12,000 Total personal liabilities 60,000 15,000 15,000 Partnership capital balance      (deficit) 10,000 (2,000) (3,000) Required: a. Assuming that the Uniform Partnership Act is applicable, indicate how the partners' personal.
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14.East Company, a highly diversified corporation, reports the results of operations quarterly. At the beginning of the third quarter, management decided to discontinue its recreational division. At this time, a formal plan was authorized, calling for disposal by year end. Results for the current year, excluding taxes, are as follows: Quarter Continuing Operations Discontinued Segment First $33,000 Second 40,200 Third 62,000 $(6,500) Fourth 71,500 .
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19.Kerry Manufacturing Company is a German subsidiary of a U.S. company. Kerry records its operations and prepares financial statements in euros. However, its functional currency is the British pound. Kerry was organized and acquired by the U.S. company on June 1, 20X4. The cumulative translation adjustment as of December 31,.
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15.Adam Enterprise includes seven industry segments. Operating profits (losses) relating to those segments are: Segment Operating Profit (Loss) 1 $ 100,000   2 500,000 3 400,000 4 (295,000) 5 (600,000) 6 (100,000) 7 (105,000) Required: Based only on the above operating profit(loss) information, which of Adam's segments would be reported separately? 16.Santas Corporation is a diversified firm with operations in the United States, Canada, Chile, Spain, and France,.
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3.Wright, Smith, and Young are partners with present capital balances of $60,000, $35,000, and $30,000, respectively. The partners share profits and losses according to the following percentages: 40% for Wright, 30% for Smith, and 30% for Young. Locke is to join the partnership upon contributing $40,000 to the partnership in.
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12.Richardson and George have been partners in the medical supply business since July 18, 20X3. Since the formation of the partnership, profits and losses have been shared in the ratio of 55:45, respectively. Capital balances on December 31, 20X7, were $159,000 for Richardson and $106,000 for George. They have agreed.
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4.Scott Inc. expects to have financial income of $375,000 for 20X1 and estimates annual tax credits of $22,500. Included in Scott's income is interest income on municipal securities totaling $45,000 and meals and entertainment expenses of $62,500 of which 50% are not deductible under current tax code. Assume that the.
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2.Matt and Jeff organized their partnership on 1/1/00. The following entries were made into their capital accounts during 00: Matt Debit Credit Balance 1/1 35,000 35,000 6/1 10,000 45,000 10/1 5,000 50,000 Jeff 1/1 25,000 25,000 3/1 10,000 35,000 9/1 10,000 25,000 11/1 5,000 20,000 12/1 8,000 28,000 If partnership profits for the year equaled $66,000, indicate the allocations between the partners under the following independent profit-sharing allocation conditions: a. Interest of 10% is allocated on weighted average capital balance and the.
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8.Millstone Company's first-quarter 20X3, pretax income is $25,000. The company anticipates an annual tax credit of $5,500. Millstone is projecting income for the remaining three quarters of $95,000. For the second quarter of 20X4, Millstone reports $55,000 of pretax income with a projected pre-tax income for the remainder of the.
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PROBLEM 1.Lee, Alverez, and Tyne have a partnership. Their capital balances are $50,000, $70,000 and $30,000, respectively. The partner profit percentages are 30%, 40%, and 30%, respectively. They are considering on what basis to admit Patton, a prospective new partner. Based on appraisal analysis, the net assets of the partnership are.
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7.The Amato, Bergin, Chelsey partnership profit allocation agreement calls for salaries of $15,000 and $30,000 for Amato & Bergin, respectively. Amato is also to receive a bonus equal to 10% of partnership income after her bonus. Interest at the rate of 10% is to be allocated to Chelsey based on.
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7.Cracker Corporation's first-quarter 20X4, pretax income is $55,000. The company anticipates an annual tax credit of $15,500. Cracker is projecting income for the remaining three quarters of $135,000. For the second quarter of 20X4, Cracker reports $85,000 of pretax income with a projected pre-tax income for the remainder of the.
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4.Martel, Tusk, and Davis are partners with present capital balances of $40,000, $50,000, and $20,000, respectively. The partners share profits and losses according to the following percentages: 60% for Martel, 30% for Tusk, and 10% for Davis. Frank is to join the partnership upon contributing $40,000 to the partnership in.
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9.              For each of the following account balances, identify the exchange rate used to translate or remeasure. The choices are current exchange rate, historical rate, weighted average, other (specify). Current Method Remeasurement Method Accounts Receivable Prepaid Assets Accounts Payable Common Stock Land Goodwill Sales Revenue Depreciation Expense 10.A U.S. firm purchased 100% of a foreign firm on January 1, 20X1, when.
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MULTIPLE CHOICE 1.Which of the following results in dissolution of a partnership? a. contribution of additional assets to the partnership by an existing partner b. receipt of a draw by an existing partner c. winding up of the partnership and the distribution of remaining assets to the partners d. withdrawal of a partner from a partnership 2.Changes in partnership ownership.
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13.              Luc, Denis, and Rollande have capital balances of $30,000, $70,000, and $15,000, respectively. The partners share profits/losses 2:6:2. All assets book values equal market except as noted. The partnership agreement states the bonus method is to be used to account for partner sale of interest to the partnership. Required: Calculate Luc's.
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11.Futura Corporation reported pretax net income of $30,000 in the first quarter of 20X1. The company anticipated pretax net income of $90,000 for the year. During the second quarter, after issuing the first-quarter interim statement, Futura decided to discontinue its electronics division and adopted a formal plan for its disposal. During.
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PROBLEM 1.Carey and Drew formed a partnership on January 1, 2008. Carey invested $100,000, Drew $70,000. Each withdrew $12,000 on each of the following dates during 2008: February 1, August 1, and November 1. These withdrawals in total were equal to salaries for the year. Interest of 8 percent was to.
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3.              Olsen and Katch organized the OK Partnership on 1/1/01. The following entries were made into their capital accounts during 01: Olsen Debits Credits 1/1 20,000 4/1 5,000 10/1 5,000 Katch 1/1 40,000 3/1 10,000 9/1 10,000 11/1 10,000 The partnership agreement called for the following in the allocation of partnership profits and losses: Salaries of $48,000 and $36,000 would be allocated to Olsen and Katch, respectively Interest of 8% on.
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8.Merz, Dechter, and Flowers are partners in a partnership and share profits and losses 40%, 40%, and 20%, respectively. The partners have agreed to liquidate the partnership and anticipate that liquidation expenses will total $14,000. Prior to the liquidation, the partnership balance sheet reflects the following book values: Cash $  25,000 Noncash.
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4.Cable and Jones are considering forming a partnership whereby profits will be allocated through the use of salaries and bonuses. Bonuses will be 10% of net income after total salaries and total bonuses. Cable will receive a salary of $30,000 and a 10% bonus. Jones has the option of receiving.
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11.Partners Acker, Becker & Checker have the following profit and loss agreement: (1) Acker & Becker receive salaries of $40,000 each (2) Checker gets a bonus of 10 percent of net income after salaries and bonus (the bonus is zero if salaries exhaust net income) (3) Remaining profits are shared by Acker, Becker & Checker in.
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17.Information about the seven segments of the Kenny Corporation is presented below. Determine which of the segments are reportable and why. General and Revenue from Administrative Total Segment     All Sources Cost of Sales          Expenses Assets      1 $17,450,000 $15,200,000 $  4,500,000 $  55,000,000      2 25,200,000 20,000,000 4,000,000 80,000,000      3 9,150,000 7,000,000 1,500,000 28,250,000      4 780,000 300,000 100,000 4,750,000      5 11,500,000 8,900,000 4,250,000 25,500,000      6 6,800,000 3,400,000 2,000,000 12,000,000      7     2,100,000     1,000,000        900,000     10,000,000 Total $72,980,000 $55,800,000 $17,250,000 $215,500,000 12-1 .
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13.Consider the following: Case A Income (loss) for quarters 1 through 4 is ($50,000), $30,000, $40,000, and $40,000, respectively. Future projected income for the year is uncertain at the end of quarters 1 and 2. Annual income at the end of quarter 3 is estimated to be $20,000. No carryback benefit exists,.
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9.The Nice, Rice, and Dice Partnership has not been successful. The partners have determined they must liquidate their partnership. The partners have agreed to liquidate the partnership and anticipate that liquidation expenses will total $1,000. Prior to the liquidation, the partnership balance sheet reflects the following book values: Cash $18,000 Noncash assets 51,000 Note receivable-Nice 3,000 Other.
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18.On January 1, 20X8, Cayane Inc. purchased 90% of an German firm, Brosch Manufacturing when Brosch's equity consisted of the following: Common stock 500,000 euros Paid-in capital in excess of par 100,000 Retained earnings 150,000 750,000 euros Cayane paid 810,000 euros for its 90% interest in Brosch. The excess over book value was attributed to a building with a 20-year.
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11.Which of the following statements about interim reporting is false? a. If a company reports year-to-date financial information for the current year, it also must report the last twelve month-to-date information. b. Under some circumstances, a company can restate the financial information of an earlier current-year quarter. c. Tax benefits arising from earlier interim periods in.
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21.In determining whether a segment should be reported, a profit and loss test can be used. The test selects segments for reporting by: a. only including profitable segments. b. comparing the absolute value of a segment's profit or loss to 10% of all segments cumulative profit or cumulative loss, whichever is higher. c. comparing the absolute.
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20.A foreign subsidiary operates in a highly inflationary economy. The company's December 31, 20X2, trial balance includes the following: Equipment:      Acquired on June 1, 20X1 800,000 FC      Acquired on October 1, 20X2 600,000 FC Inventory:      Valued at lower cost or market      Market Value 182,000 FC      A cost of 184,000 FC represents 84,000 FC acquired      on December 1, 20X2,.
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16.Foreign firms operating in highly inflationary economies received special treatment under generally accepted accounting principles (GAAP) relative to translating their financial statements. Required: a. How does the FASB define a highly inflationary economy? b. Why is the method typically used for translating foreign entities not permitted for these firms? c. What method is used for remeasuring or.
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5.Long-term partners, Pop, Ping, and Pam have capital balances of $60,000, $45,000 and $30,000, respectively. They share in profits and losses 50%-to-30%-to-20%, respectively. All assets are valued fairly. Pam decides to retire from the partnership. Calculate the remaining partners' capital balances after the Pam withdrawal under the following situations: a. Pam sells.
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10.              The Tyler, Russell, and Colby partnership is liquidating. The three partners share profits and losses equally. The following is the post-closing trial balance for the partnership: Dr. Cr. Assets $177,000 Liabilities (including $15,000 loan from Russell) $85,000 Tyler, Capital 30,000 Russell, Capital 12,000 Colby, Capital 50,000 Required: Draft a predistribution plan for the partnership liquidation and provide a schedule of payments. 14-1 .
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12.Allee Co. has pretax, ordinary income of $7,000 and $38,000 in the first and second quarters, respectively. The projected ordinary income for the third and fourth quarters is $60,000 and $30,000. Occurring in the second quarter is a pretax, nonordinary loss of $50,000 and pretax nonordinary income of $35,000. The.
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21.Which of the following statements is correct regarding a partner's debit capital balances? a. The partner should make contributions to reduce the debit balance to whatever extent possible. b. If contributions are not possible, the other partners with credit capital balances will be allocated a portion of the debit balance based on their proportionate.
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6.Good Time, Inc. is a worldwide manufacturer of toys and games. In accordance with generally accepted accounting principles, quarterly statements are prepared. At the end of the first quarter of 20X2, the following data have been collected from the financial records: a. Sales were $14,680,000. b. Expenses related directly to the sales were $10,600,000,.
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