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1) Bountiful Corporation has the following investment portfolio at December 31, 2012: Management intentions Transactions Fair value @ Dec 31, 2012 Shares in Sherman Inc. Intend to trade frequently •Purchased 1,500 shares on Mar 31 for $1,500,000. •Purchased 50 shares for $60,000. •Dividends of $50/share were received on July 18. •Sold 10 shares on Sept 1 for $1,300/share. $1,650,000 Bonds of Fryter.
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26) How does having significant influence over an investee alleviate information asymmetry? 27) On January 1, 2013, Ella Ltd. purchased 25% of the common shares of JB Inc. for $2,200,000. In 2013, JB reported net income of $280,000 and paid dividends of $100,000. Required: a. Which of the following conditions must be met.
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21) Assume that ending inventory in fiscal 2012 is overstated by $1,000.What impact will this have on fiscal 2013 financial reporting? A) Retained earnings is overstated by $1,000. B) Retained earnings is understated by $1,000. C) No effect on retained earnings. D) The retained earnings will be correctly stated. 22) Assume that ending inventory in.
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31) For each of the following independent scenarios, indicate the effect of the error (if any) on: i. 2012 net income; ii. 2013 net income; and iii. 2013 closing retained earnings. The company uses the periodic system of inventory and its fiscal year-end is December 31. Ignore income tax effects. Consider each of the.
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31) Safe Investment Company (SIC) began operations on January 1, 2012. It acquired the following investments: Type Category Cost Fair Value at Year End Bonds Held-to-maturity $195,000 $198,000 Shares Held-for-trading 55,000 75,000 Shares Available-for-sale 60,000 70,000 SIC earned interest of $12,000 during 2012. Dividends of $16,000 were declared on the shares it owned during 2012. Of that amount, $9,000 was received in December 2012 and $7,000 was.
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1) Top Trimaran manufactures sailboats. Due to recessionary conditions which have significantly depressed sales, the company had to cut back production to levels significantly below the normal level of 900 units a year. In 2013, the company's production resulted in the following figures: Item Amount Number of boats   Opening inventory 50 Production 740 Sales (690) Ending inventory 100 Standard cost per unit.
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11) Assume that a purchase invoice for $1,000 was appropriately recorded in fiscal 2012, but the inventory was excluded in error during the ending inventory count. What impact will this have on fiscal 2013 financial reporting? A) Gross margin is understated by $1,000. B) Cost of sales is overstated by $1,000. C) Ending.
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25) Using the conceptual framework, explain why there is a difference between IFRS and ASPE in accounting for interest capitalization for property, plant and equipment. 26) Daniel Manufacturing Limited (DML) purchased a large lathe. The invoice cost of the lathe was $6,200,000 but DML was able to get the price reduced.
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5) Which statement is correct about debt instruments? A) A contract whose value changes according to a specified variable. B) A contract that gives the holder the residual interest in an entity. C) A contract that gives the holder joint interest in an entity. D) A contract that is not an equity instrument or.
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38) Use the chart provided below to determine the impact of a company expensing $4,000 transportation costs related to the purchase of its inventory. At year end, the company had sold 50% of the affected inventory items. Goods included in inventory count Purchases recorded during the year Transportation costs included in inventory   2013 2014 Beginning inventory +.
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38) Praguian Company built two similar buildings. Each building took one year to build and required $30,000,000 in construction costs. The Company had limited internal financial resources, so it could fund only Building A internally and financed Building B by borrowing the $30,000,000 evenly over the year (i.e., zero at.
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35) Forest Company paid $38,000,000 for a warehouse and related assets from a company that was in bankruptcy. The warehouse includes land, building, moving equipment, and heating /ventilation/air conditioning (HVAC) system. An independent appraiser valued these items individually as follows:   Required: Allocate the purchase price among the assets acquired. 36) Office Plus Company.
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41) Explain the nature of and the impact on the balance sheet and the income statement of held-for-trading securities and available-for-sale securities. 42) Discuss three factors that are important in classifying an investment as a "loan or receivable." 43) On January 25, 2012, Harper Ltd. purchased 2,500 common shares of RBC (Royal.
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1) Which statement is correct about inventory errors? A) Misstatements in inventory usually affect two reporting periods. B) Misstatements in inventory usually affect only the current accounting period. C) Misstatements in inventory usually affect only beginning inventory amounts. D) Misstatements in inventory usually affect only ending inventory amounts. 2) What issues arise on the subsequent.
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15) For financial reporting purposes, financial assets can be put into one of eight categories: subsidiaries, joint ventures, associates, held for trading, available for sale, held to maturity, joint operations, and loans and receivables. For each of the following items, identify the possible categories into which it can be placed..
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35) Use the chart provided below to determine the impact of a company processing a $3,500 purchase invoice in fiscal 2014 for a purchase made near its fiscal 2013 year end. The goods were appropriately included in the year end inventory count. Goods included in inventory count Purchases recorded during the year   2013 2014 Beginning.
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3) SimBis Enterprises incurred the following costs to produce and sell its inventory in 2012: Raw materials consumed $100,000 Labour used 75,000 Variable overhead incurred 50,000 Fixed overhead incurred 25,000 Selling costs 20,000 General administration 10,000 Freight costs to bring in raw materials 12,000 Freight costs on shipments to customers 7,000 SimBis also noted that the following errors were made in recording transactions in 2012 (note that.
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48) The inventory records of ZUP indicate the following regarding its best-selling product for the month of January:   Units Unit cost Opening inventory 6,000 $4.00 Purchase 1 4,000 3.70 Sale 1 (3,600) Purchase 2 8,000 2.80 Sale 2 (5,000) Ending inventory 9,400 Required: Calculate the dollar amount of ending inventory and cost of goods sold under each of the following cost flow assumptions: a. Weighted-average cost, periodic inventory. b. First-in, first-out.
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21) Philips has a 50% joint operation interest in Josef. Based on the following information, what amount will be presented for net income on Philips' proportionately consolidated income statement? Philips Josef Revenue 1,000 2,000 Income from Josef 200 Expenses 450 1,600 Net income 750 400 A) $200 B) $550 C) $750 D) $1,150 22) Kings has a 40% joint operation interest in Fisher. Based on the following information,.
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8) Identify whether each of the following items is a financial asset: 9) Describe the single most important characteristic of a financial asset that distinguishes it from a real asset. 10) Explain the characteristics of a financial asset. Discuss if cash has the characteristics of a financial asset. Why is (or is.
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42) Compare the FIFO and LIFO methods of inventory valuation. Which method provides better quality information and why? 43) Consider the following inventory information for last year: Number of units Cost per unit Beginning inventory, Jan 1 2,500 $130 Purchase, March 10,000 100 Purchase, July 5,000 90 Purchase, October 7,500 80 Goods available for sale 25,000 The company uses a periodic inventory system. The year-end inventory count indicated.
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45) Consider the following inventory information: Using the first-in, first-out (FIFO) method and the periodic inventory system, calculate the cost of goods sold in January and the cost of inventory on January 31. 46) Johnson Ltd. began operations on January l, 2012. Merchandise purchases and four alternative methods of valuing inventory for.
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2) Super Control Group has the following investments: Transactions Net income of Investee for calendar 2012 Fair value at Dec. 31, 2012 XYZ Corp • Purchased all of the outstanding shares on Mar 31 for $1,500,000. $1,000,000 $1,150,000 VWX Inc. • Purchased 80% for $1,000,000 Acquired joint control over the strategic, operating and investing decisions on January 1. 200,000 175,000 ABC Inc • Purchased 25% of.
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20) Use the following chart to explain the difference in accounting between IAS 39 and IFRS 9 for non-strategic financial assets Issue IAS 39 Requirements IFRS 9 Requirements Basis of classification Possible classifications for non-strategic financial assets Treatment of financial assets carried at fair value through OCI 21) A bond has a maturity value of $750,000 payable.
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11) What factor is not important in classifying an investment as held for trading? A) Whether the instrument is a debt, equity or derivative instrument. B) Whether the instrument has a set maturity date. C) What the intentions of management are. D) Whether the instrument generates dividends. 12) What factor is not important in classifying.
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5) ABHAY Co. prepares monthly income statements. Inventory is counted only at year end; thus, month-end inventories must be estimated. All sales are made on account. The rate of mark-up on cost is 25%. The following information relates to the month of June. Accounts receivable, June 1$121,000 Inventory, June 1147,000 Collections of accounts.
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1) Which statement about investments is not correct? A) A held-for-trading investment is a non-strategic investment. B) An investment in an associate is a strategic investment. C) An available-for-sale investment is a strategic investment. D) A held-to-maturity investment is a non-strategic investment. 2) When there is no specific trading intention, what should an investment be.
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21) Satellite Corporation has the following investments at December 31, 2012: Historical cost Fair value Sept 30, 2011 Fair value Sept 30, 2012 Fair value Dec 31, 2012 Shares of ABC 25,000 15,000 25,000 30,000 Bonds of Brooke (purchased at par value) 10,000 12,000 11,000 12,500 Shares of CooksTown (Satellite holds 35% of the outstanding voting shares of CooksTown) 12,000 18,000 16,000 16,000 Shares of Davenport 18,000 20,000 19,000 19,000 If Satellite classifies its investment in Davenport as held.
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4) Koala had the following transactions relating to its investments during 2013. Koala uses the effective interest method of amortization of premiums or discounts when applicable. a.On July 1, 2013, Koala acquired a $400,000, 16%, 8-year government bond with interest paid semi-annually on January 1 and July 1. Because the market.
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11) Which statement is not correct about "joint arrangements"? A) Joint arrangements usually have a limited life and a defined set of objectives or activities. B) A joint arrangement is the same as a partnership for financial accounting purposes. C) Unanimous consent for all decisions is required of all parties. D) There is a.
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1) Which of the following is correct about joint operations? A) Joint operation is not a type of joint arrangement. B) Joint operation is the same as a joint venture. C) Proportionate consolidation is used for a joint operation. D) Equity method of accounting is used for a joint operation. 2) Explain the difference between.
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1) Why are inventories reported at the lower of cost and market? A) Neutrality. B) Matching. C) Conservatism (prudence). D) Comparability. 2) Which statement best explains "net realizable value"? A) The amount required to re-manufacture an item of inventory. B) The amount that can be obtained from the sale of inventory less selling costs. C) The amount it.
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1) Which statement is correct about non-strategic investments? A) IFRS carries AFS investments at fair value with only unrealized gains going to OCI. B) ASPE carries AFS investments at fair value with only unrealized gains going to OCI. C) ASPE carries AFS investments at fair value with unrealized gains and losses going to.
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38) Tingalo Inc. purchased three equity investments during the year ended December 31, 2012. Required: a. Based on the available information, how did Tingalo classify each financial asset? b. Determine the cost of each of the three investments. If it is not possible to do so with the available information, indicate what additional.
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