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73.How does a foreign currency forward contract differ from a foreign currency option? 74.What factors create a foreign exchange gain? 75.What happens when a U.S. company purchases goods denominated in a foreign currency and the foreign currency depreciates? 76.What happens when a U.S. company purchases goods denominated in a foreign currency and the.
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Multiple Choice Questions 1.In accounting, the term translation refers to A.the calculation of gains or losses from hedging transactions. B.the calculation of exchange rate gains or losses on individual transactions in foreign currencies. C.the procedure required to identify a company's functional currency. D.the calculation of gains or losses from all transactions for the year. E.a procedure.
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84.Coyote Corp. (a U.S. company in Texas) had the following series of transactions in a foreign country during 2011:The appropriate exchange rates during 2011 were as follows:What amount will Coyote Corp. report in its 2011 income statement for Sales? 85.Coyote Corp. (a U.S. company in Texas) had the following series of.
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41.Under the temporal method, how would cost of goods sold be remeasured? A.Beginning of the year rate. B.Average rate. C.Current rate. D.Historical rate. E.Composite amount. 42.Under the current rate method, how would cost of goods sold be translated? A.Beginning of the year rate. B.Average rate. C.Current rate. D.Historical rate. E.Composite amount. 43.Where is the disposition of a translation loss reported in the.
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51.Which of the following statements is true? A.In determining reportable segments, two tests are applied and both must be met. B.In determining reportable segments, three tests are applied and all three must be met. C.In determining reportable segments, two tests are applied and only one must be met. D.In determining reportable segments, three tests.
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41.Frankfurter Company, a U.S. company, had a ruble receivable from exports to Russia and a euro payable resulting from imports from Italy. Frankfurter recorded foreign exchange loss related to both its ruble receivable and euro payable. Did the foreign currencies increase or decrease in dollar value from the date of.
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51.Esposito is an Italian subsidiary of a U.S. company.Esposito's ending inventory is valued at the average cost for the last quarter of the year.The following account balances are available for Esposito for 2011:Compute the cost of goods sold for 2011 in U.S. dollars using the current rate method. A.$376,550. B.$387,750. C.$388,800. D.$400,950. E.$409,050. 52.Esposito is an.
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41.Elektronix, Inc. has three operating segments with the following information:Which operating segments are separately reportable under the revenues test? A.DVDs only. B.DVDs and MP3s. C.DVDs and VCRs. D.VCRs and MP3s. E.DVDs, VCRs, and MP3s. 42.Elektronix, Inc. has three operating segments with the following information:Which operating segments are separately reportable under the operating profit or loss test? A.DVDs.
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21.A U.S. company's foreign subsidiary had the following amounts in stickles (§) in 2011:The average exchange rate during 2011 was §1 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90. The.
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93.Ginvold Co. began operating a subsidiary in a foreign country on January 1, 2011 by acquiring all of the common stock for §50,000 Stickles, the local currency. This subsidiary immediately borrowed §120,000 on a five-year note with ten percent interest payable annually beginning on January 1, 2012. A building was.
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61.Which of the following is not a required disclosure in an interim financial report? A.Sales or gross revenues. B.Provision for income taxes. C.Extraordinary items. D.Gains on sales of major equipment. E.Earnings per share. 62.Which of the following is not a required disclosure in an interim financial report? A.Net income. B.Earnings per share. C.Gross profit. D.Significant changes in estimates or provisions.
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93.For each of the following situations, select the best answer concerning accounting for foreign currency transactions:(G) Results in a foreign exchange gain.(L) Results in a foreign exchange loss.(N) No foreign exchange gain or loss._____1. Export sale by a U.S. company denominated in dollars, foreign currency of buyer appreciates._____2. Export sale.
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114.Dice Inc. owns 40% of the outstanding shares of Spalding Corp., an investment accounted for by the equity method. During 2011, Dice earned operating income (not including income from its investment in Spalding) of $370,000. For this same period, Spalding reported net income of $160,000 and paid cash dividends of.
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Multiple Choice Questions 1.Pigskin Co., a U.S. corporation, sold inventory on credit to a British company on April 8, 2011. Pigskin received payment of 35,000 British pounds on May 8, 2011. The exchange rate was £1 = $1.54 on April 8 and £1 = 1.43 on May 8. What amount of.
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Essay Questions77.A foreign subsidiary was acquired on January 1, 2011. Determine the exchange rate used to restate the following accounts at December 31, 2011. Land was purchased on October 1, 2011. Relevant exchange dates follow:(A) January 1, 2011(B) October 1, 2011(C) December 31, 2011(D) Average, 2011(E) Composite, using multiple dates.Identify.
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Multiple Choice Questions 1.In the United States, foreign companies filing annual reports with the SEC that are not prepared in accordance with U.S. GAAP must: A.present financial statements that comply with international GAAP. B.conform with U.S. GAAP or present a reconciliation to U.S. GAAP. C.have a demonstrated need for capital to be used for.
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Short Answer Questions88.On January 1, 2011, Fandu Corp. began operations of a foreign subsidiary. On April 1, 2011, the subsidiary purchased inventory costing 150,000 stickles. One-fourth of this inventory remained unsold at the end of 2011 while 40% of the liability from the purchase had not yet been paid. The.
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21.A U.S. company sells merchandise to a foreign company denominated in U.S. dollars. Which of the following statements is true? A.If the foreign currency appreciates, a foreign exchange gain will result. B.If the foreign currency depreciates, a foreign exchange gain will result. C.No foreign exchange gain or loss will result. D.If the foreign currency.
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11.Sinkal Co. was formed on January 1, 2011 as a wholly owned foreign subsidiary of a U.S. corporation. Sinkal's functional currency was the stickle(§). The following transactions and events occurred during 2011:What was the amount of the translation adjustment for 2011? A.$52,000 decrease in relative value of net assets. B.$60,800 decrease in.
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111.Harrison Company, Inc. began operations on January 1, 2010, and applied the LIFO method for inventory valuation. On June 10, 2011, Harrison adopted the FIFO method of accounting for inventory. Additional information is as follows:The LIFO method was applied during the first quarter of 2011 and the FIFO method was.
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31.Under the temporal method, inventory at market would be remeasured at what rate? A.Beginning of the year rate. B.Average rate. C.Current rate. D.Historical rate. E.Composite amount. 32.Under the current rate method, inventory at market would be translated at what rate? A.Beginning of the year rate. B.Average rate. C.Current rate. D.Historical rate. E.Composite amount. 33.Under the temporal method, common stock would be remeasured.
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11.Which of the following are not authoritative pronouncements of International Financial Reporting Standards (IFRSs)?1) International Financial Reporting Standards issued by the IASB2) International Accounting Standards issued by the IASC and adopted by the IASB3) Interpretations originated by the International Financial Reporting Interpretations Committee (IFRIC)4) U.S. Generally Accepted Accounting Principles A.4 only. B.3.
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92.Describe the test to determine whether a sufficient number of operating segments are disclosed. 93.What approach is used, according to U.S. GAAP, for determination of how a business is divided into segments? 94.According to U.S. GAAP, what general information about an operating segment needs to be disclosed? 95.According to U.S. GAAP, how should.
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Essay Questions87.What is the major objective of segment reporting? 88.What is meant by the term: disaggregated financial information? 89.Why are quarterly financial statements required to be published for publicly traded companies in the U.S.? 90.How does a company measure income tax expense to be reported in an interim period? 91.What two disclosure guidelines for.
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81.Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2011. Baker has an effective income tax rate of 30 percent and 100,000 shares of common stock issued and outstanding. The following additional information is available:Assuming Baker makes the change in the first quarter of.
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21.The hardware operating segment of Bloom Corporation has the following revenues for the year ended December 31, 2011:For purposes of the revenue test, what amount will be used as total revenues of the hardware operating segment? A.$417,000. B.$440,000. C.$424,000. D.$460,000. E.$480,000. 22.Which of the following statements is false concerning the number of operating segments that should.
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31.Dean Hardware, Inc. is comprised of five operating segments. Information about each of these segments is as follows (in thousands; Intersegment loans are receivables):Which operating segments are reportable under the asset test? A.None. B.Pails. C.Rakes, Pails, and Shovels. D.Rakes and Hardware. E.Rakes, Pails, and Hardware. 32.Schilling, Inc. has three operating segments with the following information:What is.
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116.For each of the following situations, select the best answer concerning segment disclosures of reportable segments.(A.) Required to be disclosed by an operating segment, but not a geographical segment.(B.) Required to be disclosed by a geographical segment, but not an operating segment.(C.) Required to be disclosed by both an operating.
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71.What is the appropriate treatment in an interim financial report for inventory that has market value below cost? A.The loss should always be recorded in the interim period in which market value drops below cost. B.The loss should be recorded in the interim period in which market value drops below cost if.
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118.Patton's operating income excludes income from the investment in Stevens, but includes $150,000 of unrealized gains on intra-entity transfers of inventory. Patton uses the initial value method to account for the investment in Stevens.How much will the consolidated group save if it decides to file a consolidated income tax return? 119.For.
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Short Answer Questions102.Burnside Corp. is organized into four operating segments. The following segment information was generated by the internal reporting system in 2011:Required:1) What was the profit or loss of each of these segments?2) Prepare the profit or loss test to determine which of these segments was separately reportable. 103.Faru Co..
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83.A foreign subsidiary of a U.S. corporation purchased equipment on January 4, 2008.(A.) How would depreciation expense on the equipment be translated for 2011?(B.) How would depreciation expense on the equipment be remeasured for 2011? 84.What exchange rate would be used to translate the asset and liability account balances of a.
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Multiple Choice Questions 1.Generally accepted accounting principles require a U.S. corporation to disclose the following disaggregated information for each operating segment, except: A.Revenues from external customers. B.Discontinued operations. C.Cost of goods sold. D.Depreciation expense. E.Intersegment revenues. 2.Which tests must a company use to determine which operating segments require separate disclosure? A.revenue test and asset test. B.revenue test, profit or.
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11.The Fratilo Co. had three operating segments with the following information:In addition, revenues generated at corporate headquarters are $1,400.What is the minimum amount of revenue that each of these segments must earn to be considered separately reportable? A.$2,730. B.$2,660. C.$2,800. D.$2,940. E.$2,520. 12.The Rivers Co. had four separate operating segments:What amount of revenues must be generated.
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106.Blanton Corporation is comprised of five operating segments. Information about each of these segments is as follows (in thousands):Required:(a.) Which operating segments are reportable under the revenue test?(b.) What is the total amount of revenues in applying the revenues test?(c.) Which operating segments are reportable under the profit or loss.
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Essay Questions 67.Yelton Co. just sold inventory for 80,000 euros, which Yelton will collect in sixty days. Briefly describe a hedging transaction Yelton could engage in to reduce its risk of unfavorable exchange rates. 68.Where can you find exchange rates between the U.S. dollar and most foreign currencies? 69.What is meant by the.
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Short Answer Questions 79.Gaw Produce Company purchased inventory from a Japanese company on December 18, 2011. Payment of 4,000,000 yen (¥) was due on January 18, 2012. Exchange rates between the dollar and the yen were as follows:Required:Prepare all journal entries for Gaw Produce Co. in connection with the purchase and.
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97.What is the purpose of the U.S. GAAP seventy-five percent requirement for industry segment disclosure? 98.According to U.S. GAAP, what revenues and expenses included in segment profit or loss need to be disclosed? 99.What related items need to be disclosed in regard to total segment assets? 100.Which items of information are required to.
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78.In translating a foreign subsidiary's financial statements, what exchange rate should be used for the subsidiary's revenues and expenses? 79.How can a parent corporation determine the functional currency for a foreign subsidiary that conducts business in more than one country? 80.What exchange rate should be used to translate (a) revenues and expenses.
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