Cole, Inc., which owes Henry Co. $600,000 in notes payable with accrued interest of $54,000, is in financial difficulty. To settle the debt, Henry agrees to accept from Cole equipment with a fair value of $570,000, an original cost of $840,000, and accumulated depreciation of $195,000.
Instructions
(a) Compute the gain or loss to Cole on the settlement of the debt.
(b) Compute the gain or loss to Cole on the transfer of the equipment.
(c) Prepare the journal entry on Cole's books to record the settlement of this debt.
(d) Prepare the journal entry on Henry's books to record the settlement of the receivable.
Click here for the solution: Cole, Inc., which owes Henry Co. $600,000 in notes payable with accrued interest of $54,000, is in financial difficulty
Showing posts with label which. Show all posts
Showing posts with label which. Show all posts
Wednesday, April 13, 2016
1. In comparing financial and management accounting, which of the following more accurately describes management accounting information? (Points : 1)
MULTIPLE CHOICE
1. In comparing financial and management accounting, which of the following more accurately describes management accounting information? (Points : 1)
2. One major difference between financial and management accounting is that _______. (Points : 1)
3. Which of the following is not a valid method for determining product cost? (Points : 1)
4. Cost accounting is directed toward the needs of _______. (Points : 1)
5. Financial accounting _______. (Points : 1)
6. Which of the following statements is true? (Points : 1)
7. Which of the following statements is false? (Points : 1)
8. The set of processes that convert inputs into services and products that consumers use is called _______. (Points : 1)
9. The balanced scorecard perspective that focuses on using a firm's intellectual capital to adapt to customer needs through product or service innovations is the ________. (Points : 1)
10. The world has essentially become smaller because of _______. (Points : 1)
11. The term "relevant range" as used in cost accounting means the range over which ______. (Points : 1)
12. When cost relationships are linear, total variable prime costs will vary in proportion to changes in ______. (Points : 1)
13. An example of a fixed cost is _______. (Points : 1)
14. A(n) ____ cost increases or decreases in intervals as activity changes. (Points : 1)
15. When the number of units manufactured increases, the most significant change in unit cost will be reflected as a(n) ________. (Points : 1)
16. A cost driver _______. (Points : 1)
17. Product costs are deducted from revenue _______. (Points : 1)
18. Which of the following is not a product cost component? (Points : 1)
19. Davis Company manufacturers desks. The beginning balance of Raw Material Inventory was $4,500; raw material purchases of $29,600 were made during the month. At month end, $7,700 of raw material was on hand. Raw material used during the month was _______. (Points : 1)
20. Urban Company manufacturers tables. If raw material used was $80,000 and Raw Material Inventory at the beginning and end of the period, respectively, was $17,000 and $21,000, what was amount of raw material was purchased? (Points : 1)
Click here for the solution: 1. In comparing financial and management accounting, which of the following more accurately describes management accounting information? (Points : 1)
1. In comparing financial and management accounting, which of the following more accurately describes management accounting information? (Points : 1)
2. One major difference between financial and management accounting is that _______. (Points : 1)
3. Which of the following is not a valid method for determining product cost? (Points : 1)
4. Cost accounting is directed toward the needs of _______. (Points : 1)
5. Financial accounting _______. (Points : 1)
6. Which of the following statements is true? (Points : 1)
7. Which of the following statements is false? (Points : 1)
8. The set of processes that convert inputs into services and products that consumers use is called _______. (Points : 1)
9. The balanced scorecard perspective that focuses on using a firm's intellectual capital to adapt to customer needs through product or service innovations is the ________. (Points : 1)
10. The world has essentially become smaller because of _______. (Points : 1)
11. The term "relevant range" as used in cost accounting means the range over which ______. (Points : 1)
12. When cost relationships are linear, total variable prime costs will vary in proportion to changes in ______. (Points : 1)
13. An example of a fixed cost is _______. (Points : 1)
14. A(n) ____ cost increases or decreases in intervals as activity changes. (Points : 1)
15. When the number of units manufactured increases, the most significant change in unit cost will be reflected as a(n) ________. (Points : 1)
16. A cost driver _______. (Points : 1)
17. Product costs are deducted from revenue _______. (Points : 1)
18. Which of the following is not a product cost component? (Points : 1)
19. Davis Company manufacturers desks. The beginning balance of Raw Material Inventory was $4,500; raw material purchases of $29,600 were made during the month. At month end, $7,700 of raw material was on hand. Raw material used during the month was _______. (Points : 1)
20. Urban Company manufacturers tables. If raw material used was $80,000 and Raw Material Inventory at the beginning and end of the period, respectively, was $17,000 and $21,000, what was amount of raw material was purchased? (Points : 1)
Click here for the solution: 1. In comparing financial and management accounting, which of the following more accurately describes management accounting information? (Points : 1)
Tuesday, April 12, 2016
Suppose Daimler Chrysler is considering which of two emission testing devices to buy
B10. (Replacement cycles) Suppose Daimler Chrysler is considering which of two emission testing devices to buy. Machine A costs $100,000, has a five-year useful life, and has operating expenses of $40,000 per year. Machine B costs $36,000, has a six-year useful life, and has operating expenses of $62,000 per year. Both machines will have zero salvage value, revenues of $85,000 per year, and straight-line depreciation to a zero book value, and both will be replaced at the end of their lives. Daimler Chrysler’s tax rate is 35%.
a. Assume a 12% cost of capital for each machine. Which one should Daimler Chrysler buy?
b. Suppose instead that machine A requires a higher cost of capital, 15%, because it’s a riskier process. Machine B’s cost of capital is still 12%. Which machine should Daimler Chrysler buy?
Click here for the solution: Suppose Daimler Chrysler is considering which of two emission testing devices to buy
a. Assume a 12% cost of capital for each machine. Which one should Daimler Chrysler buy?
b. Suppose instead that machine A requires a higher cost of capital, 15%, because it’s a riskier process. Machine B’s cost of capital is still 12%. Which machine should Daimler Chrysler buy?
Click here for the solution: Suppose Daimler Chrysler is considering which of two emission testing devices to buy
Thursday, January 14, 2016
Compute a fair rate of return for a common stock which has a 1.2 beta
Required rate of return using CAPM:
A. Compute a fair rate of return for a common stock which has a 1.2 beta. The risk free rate is 6% and the market portfolio has an expected return of 16%
B. Why is the rate computed considered a fair rate.
Click here for the solution: Compute a fair rate of return for a common stock which has a 1.2 beta
A. Compute a fair rate of return for a common stock which has a 1.2 beta. The risk free rate is 6% and the market portfolio has an expected return of 16%
B. Why is the rate computed considered a fair rate.
Click here for the solution: Compute a fair rate of return for a common stock which has a 1.2 beta
Thursday, November 26, 2015
Nonfinancial measures for internal quality performance include all but which of the following
1. (TCO 11) Nonfinancial measures for internal quality performance include all but which of the following? (Points: 3)
2. (TCO 11) _____________________________is a formal means of distinguishing between random and nonrandom variation in an operating process. (Points: 3)
3. (TCO 11) Which of the following is NOT one of the steps in managing bottlenecks under the theory of constraints? (Points: 3)
4. (TCO 11) Design engineering is an example of: (Points: 3)
5. (TCO 11) Regal Products has a budget of $900,000 in 20X6 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $60,000 in variable costs. The new method will require $18,000 in training costs and $120,000 in annual equipment costs. Management is willing to adjust the budget for an amount up to the cost of the new equipment. The budgeted production level is 150,000 units. Appraisal costs for the year are budgeted at $600,000. The new prevention procedures will save appraisal costs of $30,000. Internal failure costs average $15 per failed unit of finished goods. The internal failure rate is expected to be 3% of all completed items. The proposed changes will cut the internal failure rate by one-third. Internal failure units are destroyed. External failure costs average $54 per failed unit. The company's average external failures average 3% of units sold. The new proposal will reduce this rate by 50%. Assume all units produced are sold and there are no ending inventories. How much will internal failure costs change if the internal product failures are reduced by 50% with the new procedures? (Points: 3)
6. (TCO 12) The amount of time between when a customer places an order for a product or requests a service to when the product or service is delivered to that customer is called (Points: 3)
7. (TCO 12) The costs associated with storage are an example of which cost category? (Points: 3)
8. (TCO 12) The economic order quantity ignores: (Points: 3)
9. (TCO 12) ) The ________ describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers. (Points: 3)
10. (TCO 12) Liberty Celebrations, Inc., manufactures a line of flags. The annual demand for its flag display is estimated to be 100,000 units. The annual cost of carrying one unit in inventory is $1.60, and the cost to initiate a production run is $30. There are no flag displays on hand but Liberty had scheduled 60 equal production runs of the display sets for the coming year, the first of which is to be run immediately. Liberty Celebrations has 250 business days per year. Assume that sales occur uniformly throughout the year and that production is instantaneous. If Liberty Celebrations does not maintain a safety stock, the estimated total carrying cost for the flag displays for the coming year is the estimated total setup cost for the flag displays for the coming year is (Points: 3)
Click here for the solution: Nonfinancial measures for internal quality performance include all but which of the following
2. (TCO 11) _____________________________is a formal means of distinguishing between random and nonrandom variation in an operating process. (Points: 3)
3. (TCO 11) Which of the following is NOT one of the steps in managing bottlenecks under the theory of constraints? (Points: 3)
4. (TCO 11) Design engineering is an example of: (Points: 3)
5. (TCO 11) Regal Products has a budget of $900,000 in 20X6 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $60,000 in variable costs. The new method will require $18,000 in training costs and $120,000 in annual equipment costs. Management is willing to adjust the budget for an amount up to the cost of the new equipment. The budgeted production level is 150,000 units. Appraisal costs for the year are budgeted at $600,000. The new prevention procedures will save appraisal costs of $30,000. Internal failure costs average $15 per failed unit of finished goods. The internal failure rate is expected to be 3% of all completed items. The proposed changes will cut the internal failure rate by one-third. Internal failure units are destroyed. External failure costs average $54 per failed unit. The company's average external failures average 3% of units sold. The new proposal will reduce this rate by 50%. Assume all units produced are sold and there are no ending inventories. How much will internal failure costs change if the internal product failures are reduced by 50% with the new procedures? (Points: 3)
6. (TCO 12) The amount of time between when a customer places an order for a product or requests a service to when the product or service is delivered to that customer is called (Points: 3)
7. (TCO 12) The costs associated with storage are an example of which cost category? (Points: 3)
8. (TCO 12) The economic order quantity ignores: (Points: 3)
9. (TCO 12) ) The ________ describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers. (Points: 3)
10. (TCO 12) Liberty Celebrations, Inc., manufactures a line of flags. The annual demand for its flag display is estimated to be 100,000 units. The annual cost of carrying one unit in inventory is $1.60, and the cost to initiate a production run is $30. There are no flag displays on hand but Liberty had scheduled 60 equal production runs of the display sets for the coming year, the first of which is to be run immediately. Liberty Celebrations has 250 business days per year. Assume that sales occur uniformly throughout the year and that production is instantaneous. If Liberty Celebrations does not maintain a safety stock, the estimated total carrying cost for the flag displays for the coming year is the estimated total setup cost for the flag displays for the coming year is (Points: 3)
Click here for the solution: Nonfinancial measures for internal quality performance include all but which of the following
Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments
1. Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments? (Points : 1)
2. Process costing is used in companies that _______. (Points : 1)
3. A producer of ____ would not use a process costing system. (Points : 1)
4. Equivalent units of production are equal to the _______. (Points : 1)
5. In a process costing system using the weighted average method, cost per equivalent unit for a given cost component is found by dividing which of the following by EUP? (Points : 1)
6. The difference between EUP calculated using FIFO and EUP calculated using weighted average is the equivalent units _______. (Points : 1)
7. In a FIFO process costing system, which of the following are assumed to be completed first in the current period? (Points : 1)
8. The primary difference between the FIFO and weighted average methods of process costing is _______. (Points : 1)
9. In a cost of production report using process costing, transferred-in costs are similar to the ______. (Points : 1)
10. In a process costing system, the journal entry to record the transfer of goods from Department #2 to Finished Goods Inventory is a _______. (Points : 1)
11. Transferred-in cost represents the cost from _______. (Points : 1)
12. A hybrid costing system combines characteristics of _______. (Points : 1)
13. When standard costs are used in process costing, _______. (Points : 1)
14. The cost of abnormal continuous losses is _______. (Points : 1)
15. Normal spoilage units resulting from a continuous process _______. (Points : 1)
16. Listed below are the steps to assign costs to ending inventory using the weighted average method process costing method.
A. Assign the costs to the inventory accounts
B. Calculate the physical units accounted for
C. Calculate the physical units to account for
D. Calculate the equivalent units of production
E. Calculate the total costs to account for
F. Calculate the cost per equivalent units
(Points : 1)
17. Units started and completed during the period equals (Points : 1)
18. In process costing systems, unit costs are found by dividing total costs incurred by (Points : 1)
19. Equivalent units of production using the weighted average method of costing are found using which of the following formulas: (Points : 1)
20. Total costs to account for is: (Points : 1)
Click here for the solution: Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments
2. Process costing is used in companies that _______. (Points : 1)
3. A producer of ____ would not use a process costing system. (Points : 1)
4. Equivalent units of production are equal to the _______. (Points : 1)
5. In a process costing system using the weighted average method, cost per equivalent unit for a given cost component is found by dividing which of the following by EUP? (Points : 1)
6. The difference between EUP calculated using FIFO and EUP calculated using weighted average is the equivalent units _______. (Points : 1)
7. In a FIFO process costing system, which of the following are assumed to be completed first in the current period? (Points : 1)
8. The primary difference between the FIFO and weighted average methods of process costing is _______. (Points : 1)
9. In a cost of production report using process costing, transferred-in costs are similar to the ______. (Points : 1)
10. In a process costing system, the journal entry to record the transfer of goods from Department #2 to Finished Goods Inventory is a _______. (Points : 1)
11. Transferred-in cost represents the cost from _______. (Points : 1)
12. A hybrid costing system combines characteristics of _______. (Points : 1)
13. When standard costs are used in process costing, _______. (Points : 1)
14. The cost of abnormal continuous losses is _______. (Points : 1)
15. Normal spoilage units resulting from a continuous process _______. (Points : 1)
16. Listed below are the steps to assign costs to ending inventory using the weighted average method process costing method.
A. Assign the costs to the inventory accounts
B. Calculate the physical units accounted for
C. Calculate the physical units to account for
D. Calculate the equivalent units of production
E. Calculate the total costs to account for
F. Calculate the cost per equivalent units
(Points : 1)
17. Units started and completed during the period equals (Points : 1)
18. In process costing systems, unit costs are found by dividing total costs incurred by (Points : 1)
19. Equivalent units of production using the weighted average method of costing are found using which of the following formulas: (Points : 1)
20. Total costs to account for is: (Points : 1)
Click here for the solution: Which cost accumulation procedure is most applicable in continuous mass-production manufacturing environments
Wednesday, November 25, 2015
Describe the journal entry for a stock dividend on a common stock (which has a par value)
Describe the journal entry for a stock dividend on a common stock (which has a par value).
Click here for the solution: Describe the journal entry for a stock dividend on a common stock (which has a par value)
Click here for the solution: Describe the journal entry for a stock dividend on a common stock (which has a par value)
Tuesday, November 10, 2015
Peter M. Dell Co. purchased equipment for $510,000 which was estimated to have a useful life of 10 years with a salvage value of $10,000 at the end of that time
E22-11 (Change in Estimate—Depreciation) Peter M. Dell Co. purchased equipment for $510,000 which was estimated to have a useful life of 10 years with a salvage value of $10,000 at the end of that time. Depreciation has been entered for 7 years on a straight-line basis. In 2008, it is determined that the total estimated life should be 15 years with a salvage value of $5,000 at the end of that time.
Instructions
(a) Prepare the entry (if any) to correct the prior years’ depreciation.
(b) Prepare the entry to record depreciation for 2008.
Click here for the solution: Peter M. Dell Co. purchased equipment for $510,000 which was estimated to have a useful life of 10 years with a salvage value of $10,000 at the end of that time
Instructions
(a) Prepare the entry (if any) to correct the prior years’ depreciation.
(b) Prepare the entry to record depreciation for 2008.
Click here for the solution: Peter M. Dell Co. purchased equipment for $510,000 which was estimated to have a useful life of 10 years with a salvage value of $10,000 at the end of that time
Wednesday, October 14, 2015
Jack Shellenkamp owns and manages a computer repair service, which had the following trial balance on December 31, 2007 (the end of its fiscal year)
P2-3A Jack Shellenkamp owns and manages a computer repair service, which had the following trial balance on December 31, 2007 (the end of its fiscal year).
BYTE REPAIR SERVICE, INC.
Trial Balance
December 31, 2007
Cash $8,000
Accounts Receivable 15,000
Parts Inventory 13,000
Prepaid Rent 3,000
Shop Equipment 21,000
Accounts Payable $19,000
Common Stock 30,000
Retained Earnings 11,000
$60,000 $60,000
Summarized transactions for January 2008 were as follows:
1. Advertising costs, paid in cash, $1,000.
2. Additional repair parts inventory acquired on account $4,000.
3. Miscellaneous expenses, paid in cash, $2,000.
4. Cash collected from customers in payment of accounts receivable $14,000.
5. Cash paid to creditors for accounts payable due $15,000.
6. Repair parts used during January $4,000. (Hint: Debit this to Repair Parts Expense.)
7. Repair services performed during January: for cash $6,000; on account $9,000.
8. Wages for January, paid in cash, $3,000.
9. Dividends paid in January were $3,000.
Instructions
(a) Prepare journal entries to record each of the January transactions.
(b) Open T accounts for each of the accounts listed in the trial balance, and enter the opening balances for 2008. Post the journal entries to the accounts in the ledger.
(c) Prepare a trial balance as of January 31, 2008.
Click here for the solution: Jack Shellenkamp owns and manages a computer repair service, which had the following trial balance on December 31, 2007
BYTE REPAIR SERVICE, INC.
Trial Balance
December 31, 2007
Cash $8,000
Accounts Receivable 15,000
Parts Inventory 13,000
Prepaid Rent 3,000
Shop Equipment 21,000
Accounts Payable $19,000
Common Stock 30,000
Retained Earnings 11,000
$60,000 $60,000
Summarized transactions for January 2008 were as follows:
1. Advertising costs, paid in cash, $1,000.
2. Additional repair parts inventory acquired on account $4,000.
3. Miscellaneous expenses, paid in cash, $2,000.
4. Cash collected from customers in payment of accounts receivable $14,000.
5. Cash paid to creditors for accounts payable due $15,000.
6. Repair parts used during January $4,000. (Hint: Debit this to Repair Parts Expense.)
7. Repair services performed during January: for cash $6,000; on account $9,000.
8. Wages for January, paid in cash, $3,000.
9. Dividends paid in January were $3,000.
Instructions
(a) Prepare journal entries to record each of the January transactions.
(b) Open T accounts for each of the accounts listed in the trial balance, and enter the opening balances for 2008. Post the journal entries to the accounts in the ledger.
(c) Prepare a trial balance as of January 31, 2008.
Click here for the solution: Jack Shellenkamp owns and manages a computer repair service, which had the following trial balance on December 31, 2007
Sunday, September 27, 2015
Ava Borzi is the new controller for Halo Software, Inc., which develops and sells education software
P16-29B Ava Borzi is the new controller for Halo Software, Inc., which develops and sells education software. Shortly before the December 31 fiscal year-end, Jeremy Busch, the company president, asks Borzi how things look for the year-end numbers. He is not happy to learn that earnings growth may be below 9% for the first time in the company's five-year history. Busch explains that financial analysts have again predicted a 9% earnings growth for the company and that he does not intend to disappoint them. He suggests that Borzi talk to the assistant controller, who can explain how the previous controller dealt with such situations. The assistant controller suggests the following strategies:
a. Persuade suppliers to postpone billing $18,000 in invoices until January 1.
b. Record as sales $120,000 in certain software awaiting sale that is held in a public warehouse.
c. Delay the year-end closing a few days into January of the next year so that some of next year's sales are included as this year's sales.
d. Reduce the estimated Bad debt expense from 3% of Sales revenue to 2%, given the company's continued strong performance.
e. Postpone routine monthly maintenance expenditures from December to January.
Requirements
1. Which of these suggested strategies are inconsistent with IMA standards?
2. What should Borzi do if Busch insists that she follow all of these suggestions?
Click here for the solution: Ava Borzi is the new controller for Halo Software, Inc., which develops and sells education software
a. Persuade suppliers to postpone billing $18,000 in invoices until January 1.
b. Record as sales $120,000 in certain software awaiting sale that is held in a public warehouse.
c. Delay the year-end closing a few days into January of the next year so that some of next year's sales are included as this year's sales.
d. Reduce the estimated Bad debt expense from 3% of Sales revenue to 2%, given the company's continued strong performance.
e. Postpone routine monthly maintenance expenditures from December to January.
Requirements
1. Which of these suggested strategies are inconsistent with IMA standards?
2. What should Borzi do if Busch insists that she follow all of these suggestions?
Click here for the solution: Ava Borzi is the new controller for Halo Software, Inc., which develops and sells education software
The agreement under which Patterson, Inc., issued its long-term debt requires the restriction of $200,000 of the company's retained earnings balance
The agreement under which Patterson, Inc., issued its long-term debt requires the restriction of $200,000 of the company's retained earnings balance. Total retained earnings is $250,000 and total paid in capital is $500,000.
Required
Show how to report stockholder's equity on Patterson's balance sheet, assuming the following:
A. Patterson discloses the restrictions in a note. Write the note.
B. Patterson appropriates retained earnings in the amount of the restriction and includes no note in its statements.
C. Patterson's cash balance is $100,000. What is the maximum amount of dividends Patterson can declare?
Click here for the solution: The agreement under which Patterson, Inc., issued its long-term debt requires the restriction of $200,000 of the company's retained earnings balance
Required
Show how to report stockholder's equity on Patterson's balance sheet, assuming the following:
A. Patterson discloses the restrictions in a note. Write the note.
B. Patterson appropriates retained earnings in the amount of the restriction and includes no note in its statements.
C. Patterson's cash balance is $100,000. What is the maximum amount of dividends Patterson can declare?
Click here for the solution: The agreement under which Patterson, Inc., issued its long-term debt requires the restriction of $200,000 of the company's retained earnings balance
Wednesday, September 23, 2015
I am going to work for a hospital, which is a not-for-profit organization
Exercise 3-16 “I am going to work for a hospital, which is a
not-for-profit organization. Because there are no profits, I will not be
able to apply any CVP analysis in my work.” Do you agree with this
statement? Why or Why not?
Click here for the solution: I am going to work for a hospital, which is a not-for-profit organization
Click here for the solution: I am going to work for a hospital, which is a not-for-profit organization
Sunday, September 13, 2015
Which is the best capital investment evaluation technique for ranking investment opportunities?
5. Which is the best capital investment evaluation technique for ranking investment opportunities?
Click here for the solution: Which is the best capital investment evaluation technique for ranking investment opportunities?
Click here for the solution: Which is the best capital investment evaluation technique for ranking investment opportunities?
Friday, September 11, 2015
Which of the following would never require reporting deferred tax assets or deferred tax liabilities?
MULTIPLE CHOICE
1. Which of the following would never require reporting deferred tax assets or deferred tax liabilities? (Points : 1)
2. Which of the following statements typifies defined contribution plans? (Points : 1)
3. Which of the following causes a temporary difference between taxable and pretax accounting income? (Points : 1)
4. Consider the following:
A. I present value of vested benefits at present pay levels
B. II present value of nonvested benefits at present pay levels
C. III present value of additional benefits related to projected pay increases
Which of the above constitutes the accumulated benefit obligation? (Points : 1)
5. Of the following temporary differences, which one ordinarily creates a deferred tax asset? (Points : 1)
6. The annual pension expense for what type of pension plan(s) is recorded by a journal entry that includes a debit to pension expense and a credit to the pension asset or pension liability? (Points : 1)
7. The postretirement benefit obligation is the: (Points : 1)
8. When the service method is used for amortizing prior service costs, the amount recognized each year is (Points : 1)
9. The result of interperiod tax allocation is that: (Points : 1)
10. Which of the following statements is true regarding SFAS 109 and its use of the asset and liability approach? (Points : 1)
Click here for the solution: Which of the following would never require reporting deferred tax assets or deferred tax liabilities?
1. Which of the following would never require reporting deferred tax assets or deferred tax liabilities? (Points : 1)
2. Which of the following statements typifies defined contribution plans? (Points : 1)
3. Which of the following causes a temporary difference between taxable and pretax accounting income? (Points : 1)
4. Consider the following:
A. I present value of vested benefits at present pay levels
B. II present value of nonvested benefits at present pay levels
C. III present value of additional benefits related to projected pay increases
Which of the above constitutes the accumulated benefit obligation? (Points : 1)
5. Of the following temporary differences, which one ordinarily creates a deferred tax asset? (Points : 1)
6. The annual pension expense for what type of pension plan(s) is recorded by a journal entry that includes a debit to pension expense and a credit to the pension asset or pension liability? (Points : 1)
7. The postretirement benefit obligation is the: (Points : 1)
8. When the service method is used for amortizing prior service costs, the amount recognized each year is (Points : 1)
9. The result of interperiod tax allocation is that: (Points : 1)
10. Which of the following statements is true regarding SFAS 109 and its use of the asset and liability approach? (Points : 1)
Click here for the solution: Which of the following would never require reporting deferred tax assets or deferred tax liabilities?
Which method (direct or indirect) of presenting the statement of cash flows is more intuitively logical? Why?
13. Which method (direct or indirect) of presenting the statement of cash flows is more intuitively logical? Why?
Click here for the solution: Which method (direct or indirect) of presenting the statement of cash flows is more intuitively logical? Why?
Click here for the solution: Which method (direct or indirect) of presenting the statement of cash flows is more intuitively logical? Why?
Tuesday, September 8, 2015
You are the controller of Software Company, a distributor of computer software, which is planning to acquire a portion of the net assets
You are the controller of Software Company, a distributor of computer software, which is planning to acquire a portion of the net assets of a product line of Midge Company, a competitor enterprises. The projected acquisition cost is expected to exceed substantially the current fair value of the identifiable net assets to be acquired, which the competitor has agreed to sell because of its substantial net losses of recent years. The board of directors of Software asks if the excess acquisition costs may appropriately be recognized as goodwill.
Prepare a memorandum to the board of directors in answer to the question
Click here for the solution: You are the controller of Software Company, a distributor of computer software, which is planning to acquire a portion of the net assets
Prepare a memorandum to the board of directors in answer to the question
Click here for the solution: You are the controller of Software Company, a distributor of computer software, which is planning to acquire a portion of the net assets
Sunday, September 6, 2015
If two service departments service the same number of departments, which service department's costs are allocated first when using the step method
1. If two service departments service the same number of departments, which service department's costs are allocated first when using the step method?
2. Which of the following service department cost allocation methods is most widely used by manufacturing companies?
3. Which of the following statements is (are) false regarding the effective use of management control systems.
(A) In general, cost allocations should not be used in management control systems because clear control over the cost being allocated cannot be determined.
(B) The primary reason to use a dual rate allocation system is to focus a manager's performance evaluation on factors under the manager's direct control.
4. The amount of resources used in an activity-based costing (ABC) system for a specific activity is computed by multiplying the:
5. Which of the following statements is false?
6. In general, the first budget prepared is the
7. Relative performance evaluations (RPE) are not designed to
8. Which of the following items would be classified as a batch-level cost in an activity-based cost management (ABM) system?
9. Which of the following activities is most likely to be classified as value-added for a manufacturing company?
10. The unused resource capacity is the difference between the resources supplied and the resources
Click here for the solution: If two service departments service the same number of departments, which service department's costs are allocated first when using the step method
2. Which of the following service department cost allocation methods is most widely used by manufacturing companies?
3. Which of the following statements is (are) false regarding the effective use of management control systems.
(A) In general, cost allocations should not be used in management control systems because clear control over the cost being allocated cannot be determined.
(B) The primary reason to use a dual rate allocation system is to focus a manager's performance evaluation on factors under the manager's direct control.
4. The amount of resources used in an activity-based costing (ABC) system for a specific activity is computed by multiplying the:
5. Which of the following statements is false?
6. In general, the first budget prepared is the
7. Relative performance evaluations (RPE) are not designed to
8. Which of the following items would be classified as a batch-level cost in an activity-based cost management (ABM) system?
9. Which of the following activities is most likely to be classified as value-added for a manufacturing company?
10. The unused resource capacity is the difference between the resources supplied and the resources
Click here for the solution: If two service departments service the same number of departments, which service department's costs are allocated first when using the step method
Wednesday, September 2, 2015
Which of the following is true regarding the Budgetary Comparison Schedule?
1. Which of the following is true regarding the Budgetary Comparison Schedule?
2. Assume encumbrances do not expire at year-end. $15,000 was encumbered during the prior year for a computer and the actual cost of the computer in the current year is $12,000. How does this affect unreserved fund balance?
3. Which of the following items would typically not need an encumbrance?
4. Which of the following is not considered Required Supplementary Information (RSI)?
5. Fiduciary funds are to use the:
6. Level "A" GAAP for The University of Virginia, a public institution, would be established by the:
7. Which of the following is true regarding the composition of the Comprehensive Annual Financial Report (CAFR)?
8. Under the modified accrual basis of accounting, revenues should be recognized when they are:
9. The Governmental Accounting Standards Board has been given authority to establish accounting and financial reporting standards for:
10. Which of the following is true regarding the government-wide Statement of Activities?
Click here for the solution: Which of the following is true regarding the Budgetary Comparison Schedule?
2. Assume encumbrances do not expire at year-end. $15,000 was encumbered during the prior year for a computer and the actual cost of the computer in the current year is $12,000. How does this affect unreserved fund balance?
3. Which of the following items would typically not need an encumbrance?
4. Which of the following is not considered Required Supplementary Information (RSI)?
5. Fiduciary funds are to use the:
6. Level "A" GAAP for The University of Virginia, a public institution, would be established by the:
7. Which of the following is true regarding the composition of the Comprehensive Annual Financial Report (CAFR)?
8. Under the modified accrual basis of accounting, revenues should be recognized when they are:
9. The Governmental Accounting Standards Board has been given authority to establish accounting and financial reporting standards for:
10. Which of the following is true regarding the government-wide Statement of Activities?
Click here for the solution: Which of the following is true regarding the Budgetary Comparison Schedule?
Fleming, Inc. had a dividend payout ratio of 25% this year, which resulted in a payout of $80,000 in dividends
Fleming, Inc. had a dividend payout ratio of 25% this year, which resulted in a payout of $80,000 in dividends. Return on sales (ROS) was 8% this year and is expected to increase to 9% next year. If Fleming expects to have $305,100 available from next year’s retained earnings, what percent increase is it forecasting in revenues?
Click here for the solution: Fleming, Inc. had a dividend payout ratio of 25% this year, which resulted in a payout of $80,000 in dividends
Click here for the solution: Fleming, Inc. had a dividend payout ratio of 25% this year, which resulted in a payout of $80,000 in dividends
In a decision analysis situation, which one of the following costs is not likely to contain a variable cost component?
MULTIPLE CHOICE
1) In a decision analysis situation, which one of the following costs is not likely to contain a variable cost component? (CMA adapted, 6/96)
2) You have been asked to help a student health center determine which costs will vary with the number of students who come to the health center. The health center employs one doctor, three nurses, and several other employees. How would you classify (1) the nurse's salary and (2) film and other materials used in radiology to give X-rays to students? The nurse’s salary would be considered a ______, while the film and other materials would be considered a ______.
3) Given the following information:
Sales $5,000
Fixed Expenses 2,000
Variable Expenses 1,750
What would expected net income be if the company experienced a 10 percent increase in fixed costs and 10 percent increase in sales volume?
4) Pete's Pizza Place wishes to determine which of its costs will vary with the number of pizzas made. The Pizza Place has four pizza makers and ten other employees who take orders from customers and perform other tasks. The four pizza makers and the other employees are paid an hourly wage. How would one classify (1) the wages paid to the pizza makers and other employees and (2) materials (e.g., cheeses, sauce, etc.) used to make the pizza? The employees’ wages would be considered a ______, while the materials to make the pizza are a ______.
5) Which of the following statements is (are) true?
(1). An asset is a cost that will be matched with revenues in a future accounting period.
(2). Opportunity costs are recorded as intangible assets in the current accounting period.
6) If the fixed costs for a product decrease and the variable costs (as a percentage of sales dollars) decrease, what will be the effect on the contribution margin ratio and the breakeven point respectively? The contribution margin ratio will _____ and the breakeven point will _____.
7) Which of the following activities would not be considered a value-added activity?
8) The development of just-in-time (JIT) methods of production focused on
9) The field of accounting that depends on generally accepted accounting principles (GAAP) is called
10) Inventoriable costs:
Click here for the solution: In a decision analysis situation, which one of the following costs is not likely to contain a variable cost component?
1) In a decision analysis situation, which one of the following costs is not likely to contain a variable cost component? (CMA adapted, 6/96)
2) You have been asked to help a student health center determine which costs will vary with the number of students who come to the health center. The health center employs one doctor, three nurses, and several other employees. How would you classify (1) the nurse's salary and (2) film and other materials used in radiology to give X-rays to students? The nurse’s salary would be considered a ______, while the film and other materials would be considered a ______.
3) Given the following information:
Sales $5,000
Fixed Expenses 2,000
Variable Expenses 1,750
What would expected net income be if the company experienced a 10 percent increase in fixed costs and 10 percent increase in sales volume?
4) Pete's Pizza Place wishes to determine which of its costs will vary with the number of pizzas made. The Pizza Place has four pizza makers and ten other employees who take orders from customers and perform other tasks. The four pizza makers and the other employees are paid an hourly wage. How would one classify (1) the wages paid to the pizza makers and other employees and (2) materials (e.g., cheeses, sauce, etc.) used to make the pizza? The employees’ wages would be considered a ______, while the materials to make the pizza are a ______.
5) Which of the following statements is (are) true?
(1). An asset is a cost that will be matched with revenues in a future accounting period.
(2). Opportunity costs are recorded as intangible assets in the current accounting period.
6) If the fixed costs for a product decrease and the variable costs (as a percentage of sales dollars) decrease, what will be the effect on the contribution margin ratio and the breakeven point respectively? The contribution margin ratio will _____ and the breakeven point will _____.
7) Which of the following activities would not be considered a value-added activity?
8) The development of just-in-time (JIT) methods of production focused on
9) The field of accounting that depends on generally accepted accounting principles (GAAP) is called
10) Inventoriable costs:
Click here for the solution: In a decision analysis situation, which one of the following costs is not likely to contain a variable cost component?
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