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Accounting Expert Answers & Study Resources : Page 449

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73. A statement of cash flows contains the following sections: a. net cash flow from operating activities b. cash flows from investing activities c. cash flows from financing activities d. investing and financing activities not affecting cash ? A list of items that appear on the statement is provided below: ____ 1. Depreciation expense ____ 2. Proceeds from sale of land at a gain ____ 3. Decrease in accounts payable ____ 4. Conversion.

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  • 73. A statement of cash flows contains the following sections: a. net cash
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12.?The present value of an amount decreases as the discount rate increases. a. True b. False 13.?The present value factors for any discount rate increase as the number of periods increases. a. True b. False 14.?To determine an unstated interest rate, divide the future amount by the present value then divide by the number of periods. a. True b. False 15.An annuity isthe same amount.

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  • 12.?The present value of an amount decreases as the discount
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1.?One type of compensation provided by the time value of money is compensation for expected consumption. a. True b. False 2.?One type of compensation provided by the time value of money is compensation for risk. a. True b. False 3.Compounding is the conversion of future cash flow amounts to their present value. a. True b. False 4.?Discounting is the conversion of future cash flow amounts.

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  • 1.?One type of compensation provided by the time value of
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1.An advantage of retrospective adjustment method is that it achieves comparability and consistency between accounting periods. a.True b.False 2.A change in a reporting entity is accounted for by a prospective adjustment so that all financial statements are presented for the same entity. a.True b.False 3.Correction of an error involves corrections to reported financial statements similar to.

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  • 1.An advantage of retrospective adjustment method that it achieves comparability
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22. Which statement best defines a company's operating cash inflows? a. collections from customers and shareholders b. collections from customers and shareholders and earnings from investments c. collections from customers and earnings from investments d. collections from customers 23. According to current GAAP, cash flow per share statistics a. are required disclosures only if EPS information is disclosed. b. are not allowed disclosures. c. are required disclosures for.

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  • 22. Which statement best defines a company's operating cash inflows? a.
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81. Accounting information from the records of the Sarah Jane's Clothing Corporation at the end of 2016 is shown below: Net income $100,000 Proceeds from sale of long-term investment in marketable securities 20,000 Proceeds from sale of building 80,000 Gain on sale of building 35,000 Increase in accounts receivable 5,000 Increase in accounts payable 7,000 Cash dividends declared 5,000 Depreciation expense 18,000 Patent amortization expense 1,000 Amortization of premium on.

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  • 81. Accounting information from the records of the Sarah Jane's Clothing
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89. Your friend is in business and wants your advice on preparing and interpreting the statement of cash flows for 2016. Information regarding the business is as follows: Cash received from customers $ 175,000 Cash paid to vendors 75,000 Cash paid to employees 140,000 Cash paid for interest 35,000 Depreciation expense 40,000 Cash paid in acquiring equipment 375,000 Cash received from issuing bonds 250,000 Cash received.

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  • 89. Your friend in business and wants your advice preparing and
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21.Change in an accounting principle is accounted for a.prospectively. b.by a prior period adjustment. c.by a retrospective application of a new accounting principle. d.by constructive application of a new accounting principle. 22.A retrospective adjustment requires a change in the a.prior period financial statements to look like the current period financial statements. b.current period income to reflect the.

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  • 21.Change in an accounting principle accounted for a.prospectively. b.by a prior period
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Exhibit 21-2In preparation for completing the statement of cash flows using the spreadsheet method, Williams Company provided the following information relating to patents for 2016: Balance, 1/1/2016 $4,800 Purchase of 10-year life patent for cash 2,000 Sale of patent at book value (1,400) Amortization of patents   (290) Balance, 12/31/2016 $5,110 ? 52. Refer to Exhibit 21-2. The Cash Flows from Operating Activities.

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  • Exhibit 21-2In preparation for completing the statement of cash flows
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155.In certain respects, IFRS provide more principles-based guidance in accounting for lease transactions. Describe the differences between IFRS and GAAP in lease capitalization criteria that demonstrate the more principles-based approach of the IFRS. 156.Lessees may try to avoid having a lease be classified as a capital lease. Explain why a lessee.

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  • 155.In certain respects, IFRS provide more principles-based guidance in accounting
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92.Exceptions exist in the retrospective restatement requirements when accounting for errors under GAAP IFRS I. No No II. No Yes III. Yes Yes IV. Yes No ? a. I b. II c. III d. IV 93.IFRS differ from U.S. GAAP regarding the indirect effects of a change in accounting principle in that IFRS a. do not specify when the indirect effects should be reported or what disclosures are required. b. do not specify when the indirect effects should.

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  • 92.Exceptions exist in the retrospective restatement requirements when accounting for
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84. The following is a list of items to be included in the 2016 statement of cash flows for the Winter Company: Beginning cash balance $ 90,000 Decrease in accounts payable 4,000 Increase in accounts receivable 3,000 Payment of dividends 6,000 Loss on sale of equipment 3,000 Decrease in prepaid expenses 1,000 Proceeds from bonds 46,000 Depreciation expense 12,000 Purchase of building 80,000 Net loss 32,000 Decrease in inventory 6,000 Proceeds from sale of.

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  • 84. The following a list of items to be included in
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32. A company sold equipment for $5,000. The equipment originally cost $16,000 and had accumulated depreciation of $12,000. Which of the following statements is correct regarding the statement of cash flows prepared using the indirect method to report operating activities? a. $5,000 will be added to net income. b. Investing activities will reflect proceeds of.

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  • 32. A company sold equipment for $5,000. The equipment originally cost
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79. The following information relates to the Maxwell Company for 2016:   Gain on sale of land $ 800 Bond payable premium amortization 300 Decrease in accounts payable 700 Increase in prepaid expenses 100 Net income 9,400 Purchased equipment 15,000 Increase in salaries payable 400 Proceeds from sale of land 7,000 Decrease in inventories 2,100 Payment of dividends 1,600 Depreciation expense 1,000 ? Required: Compute net cash provided by operating activities for the Maxwell Company for 2016. .

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  • 79) The following information relates to the
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92. The Percy's Landing Co. reported the following condensed income statement for 2016: Percy's Landing CO. Condensed Income Statement For the Year Ended December 31, 2016 Sales ? $305,000 Cost of goods sold ?  150,000 Gross profit ? $155,000 Operating expenses: ? ? ? Depreciation. $42,000 ? ? Insurance expense 5,000 ? ? Salaries expense 80,000 127,000 Income before taxes ? $ 28,000 Income taxes ?     6,000 Net income ? $ 22,000 ? Also during 2016, the company's current assets and current liabilities changed as follows: ? Increase (Decrease) Cash $49,500 Accounts.

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  • 92. The Percy's Landing Co. reported the following condensed income statement
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105.In 2018, Bevins Company decided to change from LIFO to FIFO due to better representation of the flow of inventory and costs. Bevins started the business in 2016. Bevin’s tax rate is 35%. The following analysis was provided by management: Ending Inventory ? LIFO ? FIFO ? Net Income 12/31/2016 $375,650 $405,900 975,000 12/31/2017 $360,450 $410,750 1,350,000 12/31/2018 $365,975 $445,775 1,389,500   Required:1) Prepare the journal entry necessary to record the.

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  • 105.In 2018, Bevins Company decided to change from LIFO to
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51.A change in accounting estimate is always accounted for a.using a prior period adjustment. b.retrospectively. c.using the cumulative effect method. d.prospectively. 52.A change in accounting estimate affected by a change in accounting principle should be reported as a.a change in accounting principle. b.a change in accounting estimate and a change in accounting principle. c.a change in accounting estimate. d.neither.

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  • 51.A change in accounting estimate always accounted for a.using a prior
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71.A company accounts for the correction of a material error of a past period that it discovers in the current period as a.a retrospective accounting change. b.an adjustment to the current period. c.a prospective adjustment. d.a prior period restatement. 72.Which of the following errors normally would not be automatically corrected over two accounting periods? a.failure to.

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  • 71.A company accounts for the correction of a material error
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94. Provide three examples of noncash investing and financing activities. 95. What are the five categories of operating cash outflows under the direct method of reporting cash flows? 96. What are the four steps necessary to prepare the spreadsheet and its statement of cash flows? 97. How should the sale of a depreciable asset be presented on the.

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  • 94. Provide three examples of noncash investing and financing activities. 95. What the
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76. The information below was taken from the records of the Piper Company for the year ended December 31, 2016: Acquisition of building $250,000 Amortization of premium on bonds payable 2,000 Decrease in deferred income tax liability 8,000 Decrease in inventories 6,000 Decrease in salaries payable 2,000 Depreciation expense 24,000 Dividends paid 11,000 Loss on sale of land 18,000 Increase in accounts payable 14,000 Increase in accounts receivable 5,000 Issuance of long-term.

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  • 76. The information below was taken from the records of the
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42. The IFRS categories of cash flows are a. long-term changes and short-term changes. b. operating and other. c. operating, investing, and financing. d. operating and nonoperating. 43. Mayberry’s statement of cash flow is completed using the visual inspection method. Information regarding the Mayberry Company in 2016 appears below: Net income $140,000 Dividends paid 20,000 Decrease in inventory 15,000 Increase in accounts payable 30,000 Proceeds from issue of common stock 70,000 Depreciation.

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  • 42. The IFRS categories of cash flows are a.
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81.All of the following would be reported retrospectively by restating prior period's financial results except a.change from the completed-contract method to the percentage-of-completion method for long-term construction contracts. b.correction of an error in previous periods. c.change from LIFO to FIFO. d.change from the straight-line depreciation method to the sum-of-the-years'-digits method. 82.Langley Company received merchandise on.

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  • 81.All of the following would be reported retrospectively by restating
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