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Study Resources (Statistics)

Q1General Electric uses the (FIFO / Weighted Average / LIFO) inventory cost-flow assumption(s).                                                             (Circle all that apply.) Q2Does the answer for Q1 comply with the Consistency Principle?  (Yes / No)  Explain. Refer to Note 11 above to answer Q3 through Q7. .
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Q1GAAP allows choices with regard to depreciation methods. In the first year of an asset’s useful life, if the straight-line rather than the double-declining-balance depreciation method is used then: a.reported depreciation expense will be (lower / higher), which leads to (lower / higher) net income. b.reported accumulated depreciation will be (lower /.
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Q4Assume the bond was originally issued for $8,000 and held to maturity. a.The corporation paid out _________ in total interest payments + paid out _________ of principal at maturity = total amounts paid of              _________ b.At issuance the corporation received from the investor              _________ c.The difference is the cost of borrowing over the.
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Q3Compute the gain (loss) on the sale for the SL and DDB depreciation methods. Straight-line Double-declining-balance Selling Price -   Book Value $ 22,000 _________ $ 22,000 _________ =   Gain (Loss) on the Sale _________ _________ Q4a.Compute the effect on net income for SL and DDB from purchase to sale of the asset. Record in the chart below. Straight-line Double-declining-balance Year 1 Depreciation Expense Year 2 Depreciation.
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Q1On the balance sheet, double counting a portion of ending inventory will result in (understating / having no affect on / overstating) ending inventory and (understating / having no affect on / overstating) total assets. Q2On the income statement, double counting a portion of ending inventory will result in (understating /.
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Q4The (straight-line / double-declining-balance / neither) method(s) of depreciation will result in greater depreciation the first year of an asset’s useful life and the (straight-line / double-declining-balance / neither) method(s) will result in greater total depreciation over the asset’s useful life. Q5Book value (is / is not) the same as current.
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Q1The Allied Waste bond has a _________ coupon rate (also referred to as the stated rate or the face rate) that determines the (cash interest payment / effective interest rate). An investor/creditor holding a $100,000 Allied Waste bond will receive _________ in interest payments each year. Q2The Allied Waste bond is.
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Q9The company generally appears better to shareholders when using (_________ / DDB).  Why? Q10For tax purposes, (SL / DDB) is usually preferred.  Why? Q11May a company choose one depreciation method for reporting to shareholders and a different depreciation method for tax purposes?  (Yes / No) .
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Q3Summarize the effects of using the FIFO and LIFO cost-flow assumptions on COGS and Ending Inventory by circling the type of costs allocated to each below. FIFO LIFO COGS (Recent / Older / Ancient) (Recent / Older / Ancient) Ending inventory (Recent / Older / Ancient) (Recent / Older / Ancient) Q4May a company use LIFO for tax purposes.
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Q1The amount originally paid (acquisition cost) to purchase the equipment was _________, which was capitalized and recorded as a(n) (noncurrent asset / expense). Q2The portion of the equipment's original cost expensed since it was purchased is _________. The cost allocated to Year 5 for use of the equipment is _________. Assuming.
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Q1Equipment costing $400,000 has an estimated useful life of five years and a residual value of $50,000. Record depreciation expense, accumulated depreciation, and book value in the chart below for each year of the five-year useful life using the straight-line method of depreciation. SL Depreciation Expense Accumulated Depreciation Book Value (Acquisition Cost  -  Acc Dep  = .
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Q2The issuing corporation makes interest payments of ($1,000 / $10,000 / $20,000) annually to the holder of this bond. Over the life of the bond, the corporation will pay out ($1,000 / $10,000 / $20,000) in interest payments and repay ($1,000 / $10,000 / $20,000) of principal at maturity, for a.
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Q1Compute the Double-Declining-Balance (DDB) Rate for each useful life below. Straight-Line Rate  =  (1 / Useful Life) DDB Rate = Straight-Line Rate  x  2  =  Double the Straight-line Rate SL Rate Double It   = DDB Rate a.5 year life b.10 year life c.3 year life 1/5 = 20% _________ x 2 x 2 x 2 40% _________ .
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Q1Assume Winfield Corporation purchased 100 shares of Coca-Cola stock and 100 shares of IBM stock on January 2, Year 1. These equity securities are classified as available-for-sale because the intent is to hold them for several years. Refer to the related financial information below to answer the following questions. Fair Market.
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Q6a.For financial statement purposes, a company generally prefers to report (lower / higher) net income and therefore would choose the (straight-line / double-declining-balance) depreciation method. b.For income tax purposes, a company generally prefers to report (lower / higher) taxable income and therefore would choose the (straight-line / double-declining-balance) depreciation method. c.Is intentionally.
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Q2Record amounts reported on the income statement and the balance sheet over a six-year period in the chart below. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Income Statement Depreciation Exp _________ _________ _________ _________ _________ _________ Balance Sheet Acquisition Cost _________ $400,000 _________ _________ _________ _________ Accumulated Dep _________ 140,000 _________ _________ _________ _________ Book Value _________ $260,000 _________ _________ _________ _________ .
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Q2_________The current prime-lending rate is _________, which is the interest rate charged by banks to their most credit-worthy customers (usually the most prominent and stable business customers). Please note the source of your information: (financial institution, newspaper, website, etc.) _________ Q3Explain why the reported interest rates differ between (a) and (b) above. .
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Q3Record the amounts reported on the income statement and the balance sheet over a six-year period. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Income Statement Depreciation Exp _________ _________ _________ _________ _________ _________ Balance Sheet Acquisition Cost _________ $400,000 _________ _________ _________ _________ Accumulated Dep _________ 256,000 _________ _________ _________ _________ Book Value _________ 144,000 _________ _________ _________ _________ .
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Q1Use the LIFO cost-flow assumption to answer the following questions. YEAR 1: Purchase #1   1,000 units @ $1 = $1,000 Purchase #2   1,000 units @ $1 = $1,000 a.How much is goods available for sale?$2,000 Sell 1,000 units. b.What costs remain in ending inventory?$1,000 YEAR 2: Beginning inventory 1,000 units @ $1 per unit =$1,000 Purchase 2,000.
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Q3When available-for-sale securities increase in value, this event will: a.(increase / decrease / have no effect on) total assets, b.(increase / decrease / have no effect on) net income, c.(increase / decrease / have no effect on) comprehensive income, and d.(increase / decrease / have no effect on) stockholders’ equity. Q4Assume the 100 shares of.
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Q4Examine the income statement above. In a period of inflation: a.FIFO allocates the (recent / older) inventory costs to COGS, which results in (lower / higher) COGS and, therefore, (lower / higher) operating income. b.LIFO allocates the (recent / older) inventory costs to COGS, which results in (lower / higher) COGS and,.
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Q1Research the following current interest rates. These rates are available on the Internet and at a local bank or credit union. The current rates banks/credit unions are offering/asking are a. _________for a traditional savings account. b. _________for a one-year certificate of deposit (CD). c.  _________for a 30-year fixed-rate mortgage with no points. d._________              for a.
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Q1(Current / Noncurrent) liabilities are obligations due within one year or within the company’s normal operating cycle if longer. Obligations due beyond that time are classified as (current / noncurrent) liabilities. Q2The purchase of inventory will usually increase the (accounts / notes / mortgage) payable account. Q3Warranty costs related to Year 5.
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Q3Is intentionally choosing a depreciation method that reports higher net income ethical? (Yes / No / Maybe)      Legal? (Yes / No / Maybe) Explain. Q4Depreciation expense is based on estimates of useful life and residual value. To make net income appear as favorable as possible, the controller would (shorten / lengthen).
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Q3Bonds have different lengths of time to maturity. a.Record the yield of a high-quality corporate bond that matures in 1-10 years._________ b.Record the yield of a high-quality corporate bond that matures in over 10 years._________ c.Explain why one yield is higher than the other for these two types of corporate bonds. Q4Bonds issued by.
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Q3Assume the 60 units in Q1 sold for $100 each and operating expenses total $3,500. Using FIFO and LIFO, complete the income statement in the space provided below. INCOME STATEMENT—Sell 60 units for $100 each FIFO LIFO Sales revenue _________ _________ COGS _________ _________ Gross profit _________ _________ Operating expenses 3,500 3,500 Operating income _________ _________ .
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Q2Equipment costing $400,000 has an estimated useful life of five years and a residual value of $50,000.  Complete the table below for Years 2-5 using the DDB method of depreciation. Beginning Book Value x  DDB Rate =  DDB Depreciation Expense DDB Depreciation Expense Accumulated Depreciation Book Value = Acquisition Cost - Accumulated Dep Acquisition Year 1 Year 2 Year 3 Year.
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Q1In the first year of an asset’s useful life, the DDB depreciation method reports: a.depreciation expense that is (higher / lower) than the SL depreciation method. b.net income that is (higher / lower) than the SL depreciation method. c.accumulated depreciation that is (higher / lower) than the SL depreciation method. d.total assets that are.
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Q2The Coca-Cola Company is more than 100 years old. Coca-Cola uses the LIFO cost-flow assumption. a.So how old are those inventory costs on the balance sheet? b.When will Coca-Cola get those “ancient” LIFO inventory costs off of the balance sheet? c.Because Coca-Cola uses LIFO, does it have cans of Coca-Cola that have been.
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