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Exercises 1) Rank the following claims of an organization filing Chapter 7 bankruptcy from 1 to 4 based on the following classifications. Each classification may be used more than once. 1.Secured Claims 2.Unsecured Priority Claims 3.Unsecured Nonpriority Claims 4.Stockholders' Claims _____ A. Claims for wages that are less than $10,000 per individual, earned within 90 days.
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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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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) A cash distribution plan for the Sammi, Tammy, and Udd partnership was as follows: Priority CreditorsSammiTammyUdd First $250,000100% Next $100,00070%30% Next $150,00011/154/15 Remainder20%35%45% Required: If $850,000 of cash was distributed by the partnership, how much was received respectively by the priority creditors, Sammi, Tammy, and Udd? 8) The Vera, Wade, and Xena partnership was dissolved, and a cash.
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2) Dan and Ellie share partnership profits and losses at 70% and 30%, respectively. The partners agree to admit Fran into the partnership for a 50% interest in capital and earnings. Capital accounts immediately before the admission of Fran are: Dan (70%)$800,000 Ellie (30%)400,000 Total$              1,200,000 Required: 1.Prepare the journal entry(s) for the admission of.
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5) The following data relate to Falcon Corporation's industry segments: Sales to ExternalIntersegment Industry SegmentCustomers     Sales          Assets Oil Exploration$80,000$$310,000 Refinery240,000720,000 Plastics20,000$20,000120,000 Chemicals220,000160,000980,000 Solar Power20,00075,000270,000 Totals$580,000$255,000$$2,400,000 Required: 1. Which of Falcon's operating segments would be considered reporting segments under the "revenue" test? 2. Which of Falcon's operating segments would be considered reporting segments under the "asset" test? 6) For internal decision-making purposes, Falcon.
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Use the following information to answer the question(s) below. Lola, Melvin, and Nettie are in the process of liquidating their partnership. Since it may take several months to convert the other assets into cash, the partners agree to distribute all available cash immediately, except for $12,000 that is set aside for.
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5) The balance sheet of the Maude, Ned, and Oscar partnership on November 1, 2011 (before commencement of partnership liquidation) was as follows: Cash$12,000Georgia, capital (40%)$36,000 Holly, capital (30%)6,000     Festus, capital (50%)31,000 Total assets$90,000Total liab./equity$90,000 Cash$70,000Accounts payable$42,000 Inventory60,000Notes payable68,000 Loan to Maude10,000Maude, capital(20%)30,000 Loan to Oscar18,000Ned, capital(20%)32,000 Plant assets-net80,000Oscar, capital(60%)66,000              Total assets$238,000Total liab./equity$238,000 Liquidation events in November were as follows: - All.
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Exercises 1) The balance sheet of the Addy, Bess, and Clara partnership on January 1, 2011 (the date of partnership dissolution) was as follows: Cash$4,000Liabilities$8,000 Other assets26,000Loan from Addy1,000 Loan to Clara2,000Addy, capital (20%)2,000 Bess, capital (40%)9,000     Clara, capital (40%)12,000 Total assets$32,000Total liab./equity$32,000 In January, other assets with a book value of $16,000 were sold for $10,000 in.
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11) Krull Corporation is preparing its interim financial statements for the third quarter of calendar 2011. The following trial balance information is available for third quarter: AccountDebitCredit Cash$98,000 Accounts Receivable285,000 Inventory750,000 Fixed assets600,000 Accounts Payable$300,000 Common Stock50,000 Retained Earnings80,000 Sales4,400,000 Administrative expense312,000 Cost of goods sold2,650,000 Loss on sale of securities sold on July 3075,000 Annual equipment overhaul costs paid on August 160,000 Totals$4,830,000$4,830,000 Additional information: At.
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15) A summary balance sheet for the partnership of Quail, Rainne and Selma on December 31, 2011 is shown below. Partners Quail, Rainne and Selma allocate profit and loss in their respective ratios of 6:3:1. Assets Cash$ 320,000 Marketable securities640,000 Inventory270,000 Land130,000 Building-net210,000 Total assets$1,570,000 Equities Quail, capital$ 670,000 Rainne, capital580,000 Selma, capital320,000 Total equities$1,570,000 The partners agree to admit Trask for a.
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18) Eve, Fig, Gus, and Hal are partners who share profits and losses 50%, 25%, 15%, and 10%, respectively. The partnership will be liquidated gradually over several months beginning January 1, 2011. The partnership trial balance at December 31, 2010 is as follows: DebitsCredits Cash$9,000 Accounts receivable26,000 Inventory78,000 Loan to Eve16,000 Furniture27,000 Equipment59,000 Goodwill10,000 Accounts payable$23,000 Note payable70,000 Loan from Hal7,000 Eve,.
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Exercises 1) Anna and Bess share partnership profits and losses at 60% and 40%, respectively. The partners agree to admit Cal into the partnership for a 50% interest in capital and earnings. Capital accounts immediately before the admission of Cal are: Anna (60%)$300,000 Bess (40%)300,000 Total$600,000 Required: 1. Prepare the journal entry(s) for the admission of.
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19) Snodberry Catering has five operating segments, as summarized below: Buffet Alcohol Bakery Wait Service Bar Service Sales to outside entities 26,000 110,000 22,000 24,000 5,000 Intersegment sales -0- 20,000 4,000 -0- 56,000 Cost of goods sold 16,000 50,000 19,000 23,000 69,000 Operating Expenses 9,000 70,000 6,000 2,000 4,000 Interest Expense -0- 5,000 -0- 2,000 1,000 Income Tax Expense -0- 2,000 -0- -0- (3,000) Assets 2,000 22,000 2,000 1,000 1,000 Required: Determine which of the operating segments of Snodberry Catering are reportable segments for the period shown. 20) Tillman Fabrications has five operating segments, as summarized below: Wood Plastic Metal Paper Fabric Sales to outside.
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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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15) Osprin Corporation has three operating segments, as summarized below: Capsule Pill Liquid Total Sales to retailers 25,000 35,000 5,000 65,000 Intersegment sales 4,000 10,000 2,000 16,000 Operating Expenses 10,000 18,000 5,000 33,000 Interest Expense 2,000 3,000 1,000 6,000 Income Tax Expense 4,000 6,000 1,000 11,000 Assets 12,000 3,000 16,000 31,000 Required: 1. Using the revenue test, what is the minimum amount of revenue of a reportable segment? 2. Using the operating profit or loss test, what is the minimum amount of operating profit or loss of.
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14) Gargantuan Bank has loaned money in two separate loans to Little Company, which is now in Chapter 7 bankruptcy. Little Company has the following assets and liabilities, stated at fair value in liquidation. Assets pledged with secured creditors$190,000 Assets pledged with partially secured creditors70,000 Other assets30,000 Secured debt to Gargantuan130,000 Partially secured debt to.
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11) Creditor committees are elected A) in all bankruptcy cases. B) in Chapter 7 cases. C) only in bankruptcy cases arising from involuntary petitions. D) in Chapter 11 cases. 12) In a Chapter 7 bankruptcy case, what is the first-to-last ranking order of priority for payment? (Use the following list of claim types.) I.stockholder claims II.unsecured priority.
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8) Lesher Corporation lost their primary contract and entered into voluntary Chapter 7 bankruptcy in the early part of 2012. By July 1, all assets were converted into cash, the secured creditors were paid, and $124,500 in cash was left to pay the remaining claims as follows: Accounts payable$50,000 Claims incurred between.
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Use the following information to answer the question(s) below. Xavier, Young, and Zane operate a partnership with a complex profit and loss sharing agreement. The average capital balance for each partner on December 31, 2011 is $300,000 for Xavier, $250,000 for Young, and $325,000 for Zane. An 8% interest allocation is.
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Use the following information to answer the question(s) below. Bertram and Ernest share profits and losses equally after salary and interest allowances. Bertram and Ernest receive salary allowances of $40,000 and $60,000, respectively, and both partners receive 10% interest on their average capital balances. Average capital balances are calculated at the.
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4) Ending Company is in bankruptcy and is being liquidated under the provisions of Chapter 7 of the bankruptcy code. The trustee has converted all assets into $80,000 cash (which includes the amounts shown below for assets sold) and has prepared the following list of approved claims: Property taxes payable$10,000 Accounts payable,.
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16) The partners of Nelatyna Manufacturing have decided to dissolve their partnership as of the end of 2010. The partnership is going to liquidate during the first several months of 2011. The four partners of Nell, Ann, Tyler and Nadine, share profits and losses 35%, 30%, 25%, and 10%, respectively..
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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: $0 to $50,00015% From: $50,001 to $75,00025% Over: $75,00035% Required: Determine Maxtil's estimated effective tax rate. 14) Nettle Corporation is preparing its first quarterly interim report. It is subject to a corporate income tax rate of.
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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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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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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) 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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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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10) The Catt, Dogg, and Eustus partnership was dissolved by the partners in early 2011. On March 1, the partners prepared the following financial statement before commencement of final liquidation: Cash$80,000Accounts payable$125,000 Accounts Receivable160,000Notes payable70,000 Inventory130,000Loan from Dogg5,000 Loan to Catt10,000Catt, capital (20%)130,000 Loan to Eustus15,000Dogg, capital (20%)95,000 Plant assets-net210,000Eustus, capital(60%) 180,000 Total assets$605,000Total liab./equity$605,000 Liquidation events in March.
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3) The partnership of Georgia, Holly, and Izzy was dissolved, and by July 1, 2011, all assets had been converted into cash and all partnership liabilities were paid. The partnership balance sheet on July 1, 2011 (with partner residual profit and loss sharing percentages) was as follows: Cash$10,000Georgia, capital (40%)$              (20,000) Holly,.
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3) CommTex Corporation is liquidating under Chapter 7 of the Bankruptcy Act. The accounts of CommTex at the time of filing are summarized as follows: Estimated Realizable Book ValueValue Cash$80,000$80,000 Accounts receivable-net50,00040,000 Inventory80,00060,000 Land10,00020,000 Building-net150,000110,000 Equipment-net60,00040,000 Goodwill  10,0000 $440,000 Accounts payable$120,000 Wages and salaries20,000 Contributions due to pension plan10,000 Taxes payable60,000 Accrued interest payable (includes10,000 $8,000 from the mortgage payable and $2,000 from the note payable) Note payable120,000 Mortgage payable90,000 Capital stock80,000 Deficit(70,000) $440,000 The.
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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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Multiple Choice Questions 1) Which statement is correct in describing the rank order of payments as specified by the Uniform Partnership Act? A) Payments to partners are ranked equally, regardless of underlying basis. B) Payment to partners with excess capital balances may be placed ahead of payments to creditors. C) Payments to creditors other.
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Multiple Choice Questions 1) When the bankruptcy court grants an order for relief under Chapter 7, A) creditors may not seek payment for their claims directly from the debtor corporation. B) the reorganization plan was accepted by creditors having at least one-half of the total number of claims and the claims represent at.
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17) Alf, Bill, Cam, and Dot are partners who share profits and losses 30%, 20%, 35%, and 15%, respectively. The partnership will be liquidated gradually over several months beginning January 1, 2011. The partnership trial balance at December 31, 2010 is as follows: DebitsCredits Cash$6,000 Accounts receivable20,000 Inventory50,000 Loan to Bill8,000 Furniture30,000 Equipment36,000 Goodwill20,000 Accounts payable$23,500 Note payable60,000 Loan from Cam12,400 Alf,.
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17) Quantex Corporation has five operating segments, as summarized below: Household Industrial Packaging Storage Services Sales to outside entities 700,000 4,300,000 400,000 1,700,000 100,000 Intersegment sales 50,000 600,000 800,000 200,000 -0- Cost of goods sold 300,000 2,700,000 700,000 900,000 -0- Operating Expenses 200,000 1,300,000 200,000 600,000 30,000 Interest Expense 10,000 40,000 5,000 -0- -0- Income Tax Expense 60,000 210,000 70,000 100,000 18,000 Assets 540,000 1,900,000 1,600,000 70,000 32,000 Required: Determine which of the operating segments of Quantex Corporation are reportable segments for the period shown. 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.
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11) Daniel, Ethan, and Frank have a retail partnership business selling personal computers. The partners are allowed an interest allocation of 8% on their average capital. Capital account balances on the first day of each month are used in determining weighted average capital, regardless of additional partner investment or withdrawal.
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12) Dip Corporation is in a Chapter 11 bankruptcy reorganization. For each of the following transactions relating to the reorganization, show the journal entry that would be required by Dip. Assume that all unsecured liabilities were not reclassified to Prepetition Claims Subject to Compromise. 1.Dip has $200,000 in bonds payable which.
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Use the following information to answer the question(s) below. Adam, Bella, and Chris operate a partnership with a complex profit and loss sharing agreement. The average capital balance for Adam, Bella and Chris on December 31, 2011 is $120,000, $270,000, and $340,000, respectively. A 6% interest allocation is provided to each.
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12) The Justin, Kyle, and Lulu partnership was dissolved by the partners on May 1, 2011. Their balance sheet on that date is shown below: Cash$26,000Liabilities$41,000 Other assets96,000Loan from Kyle3,000 Loan to Justin10,000Justin,capital (20%)19,000 Kyle, capital (20%)26,000       Lulu, capital (60%) 43,000 Total assets$132,000Total liab./equity$132,000 In May, other assets with a book value of $46,000 were sold for $50,000.
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