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Manal Elkhoshkhany
Manal Elkhoshkhany, Tutor
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For BusinessTutor" problem 25 and 26 chapter 1 advanced accounting 10e
Submitted: 2 years ago.
Category: Finance
Expert:  Manal Elkhoshkhany replied 2 years ago.

Hello and welcome to JA

 

Is that Larsen's book?

Customer: replied 2 years ago.

Not, Advanced Accounting

McGraw-Hill Irwin

Hoyle- Schaefer-Doupnik

Customer: replied 2 years ago.
Relist: Answer came too late.
Customer: replied 2 years ago.
Why so slow the process to get my answer?
Expert:  Manal Elkhoshkhany replied 2 years ago.
There is no slow process :)If you check you will see that I have asked you about the name of the book you are using 46 minutes after you made the post, but you have responded 10 hours later, then 30 minutes later and I cannot be online for 24 hours. In any case, do you still need the solutions?
Customer: replied 2 years ago.
Yes, Please.
Expert:  Manal Elkhoshkhany replied 2 years ago.

Here you go :)

 

Please click on the following link for the solutions:

 

http://www.box.net/shared/s4y2660hatxkkct9clnj

 

 

P.S. If you like my services, please feel free to direct your future posts to me specifically by typing "For BusinessTutor" at the beginning of your post. Should you choose to do this, please try to allow me 48 hours before the deadline. If you need to meet me online for a timed assignment, please advise me of the date and time (EST) you want me to meet you here and I will. Please make sure you take the length (and number) of the questions into consideration when making your offer to avoid delays in providing solutions.

 

Thank you

Manal Elkhoshkhany, Tutor
Category: Finance
Satisfied Customers: 9482
Experience: More than 5000 online tutoring sessions.
Manal Elkhoshkhany and 3 other Finance Specialists are ready to help you
Customer: replied 2 years ago.
I will like to see if I can work with you for feew weeks?
Customer: replied 2 years ago.

I will like to see if I can work with you for feew weeks?

 

Same books chapter 2 problem 16 & 24

Expert:  Manal Elkhoshkhany replied 2 years ago.

Hi

 

Sure, but please advise the deadline for those

Expert:  Manal Elkhoshkhany replied 2 years ago.

Hello

 

Please disregard the last message. Here are the solutions:

 

http://www.box.net/shared/7e1rmim97s5i06kkrrn6

 

Regards,

Manal Elkhoshkhany, Tutor
Category: Finance
Satisfied Customers: 9482
Experience: More than 5000 online tutoring sessions.
Manal Elkhoshkhany and 3 other Finance Specialists are ready to help you
Customer: replied 2 years ago.
Are you wake up?
Customer: replied 2 years ago.
I am working in something I like to know if you are available tonight? if not it is fine, Thank you.
Expert:  Manal Elkhoshkhany replied 2 years ago.
I am yes :) Do you mean a timed assignment?
Customer: replied 2 years ago.
I need to take a quizz today , is by time has to be before 11:00pm
Customer: replied 2 years ago.
yes is timed assignment
Expert:  Manal Elkhoshkhany replied 2 years ago.

Ok, I can help after 10 minutes. So after 10 minutes, please make a new post and type "For BusinessTutor" at the beginning, then post your questions. It would be better if you copy the questions into a word file, upload them to www.mediafire.com then copy and paste the share link here

 

Thank you

Customer: replied 2 years ago.
ok 7:45 is ok, I only have one hour. to re-send back
Expert:  Manal Elkhoshkhany replied 2 years ago.
yep
Customer: replied 2 years ago.
how safe is that web
Expert:  Manal Elkhoshkhany replied 2 years ago.

I do not want to sound blunt, but when I asked you to post after 10 minutes, it is because I am busy, but you keep sending me messages that distract me from finishing what I am working on and cause a delay in being able to help you. We have thousands of students and they all post their questions with no problems, I am sorry but I really cannot keep wasting my time responding to messages while I should be helping other students, so please understand that other people need my help and responding to your messages takes from my time. I am happy to help you with your assignments and explain anything related to the content of the assignment, but I cannot engage in chatting. The internet is the internet, we are not a bank so we do not use security codes ..etc and if we do (in JA I mean), then I would not know, the guys at the technical department are the ones who can answer your question.

 

please post the questions after 10 minutes as we have agreed and do not respond to this message as this would lock me out of replying to other posts and cause a delay in getting back to you

 

Thank you

Customer: replied 2 years ago.

In a situation where the investor exercises significant influence over the investee, which of the following entries is not actually posted to the books of the investor?

1) Debit to the Investment account, and a Credit to the Equity in Investee Income account.
2) Debit to Cash (for dividends received from the investee), and a Credit to Dividend Revenue.
3) Debit to Cash (for dividends received from the investee), and a Credit to the Investment account.

 

 

Entries 1 and 2

 

Entries 2 and 3

 

Entry 1 only

 

Entry 2 only

 

Entry 3 only

5 points

Question 2

On January 1, 2011, Jordan Inc. acquired 30% of Nico Corp. Jordan used the equity method to account for the investment. On January 1, 2012, Jordan sold two-thirds of its investment in Nico. It no longer had the ability to exercise significant influence over the operations of Nico. How should Jordan have accounted for this change?

 

Jordan should continue to use the equity method to maintain consistency in its financial statements.

 

Jordan should restate the prior years' financial statements and change the balance in the investment account as if the fair-value method had been used since 2011.

 

Jordan has the option of using either the equity method or the fair-value method for 2011 and future years.

 

Jordan should report the effect of the change from the equity to the fair-value method as a retrospective change in accounting principle.

 

Jordan should use the fair-value method for 2012 and future years but should not make a retrospective adjustment to the investment account.

5 points

Question 3

A company has been using the fair-value method to account for its investment. The company now has the ability to significantly control the investee and the equity method has been deemed appropriate. Which of the following statements is t

 

A cumulative effect change in accounting principle must occur.

 

A prospective change in accounting principle must occur.

 

A retrospective change in accounting principle must occur.

 

The investor will not receive future dividends from the investee.

 

Future dividends will continue to be recorded as revenue.

5 points

Question 4

On January 1, 2009, Dermot Company purchased 15% of the voting common stock of Horne Corp. On January 1, 2011, Dermot purchased 28% of Horne's voting common stock. If Dermot achieves significant influence with this new investment, how must Dermot account for the change to the equity method?

 

 

It must use the equity method for 2011 but should make no changes in its financial statements for 2010 and 2009.

 

It should prepare consolidated financial statements for 2011.

 

It must restate the financial statements for 2010 and 2009 as if the equity method had been used for those two years.

 

It should record a prior period adjustment at the beginning of 2011 but should not restate the financial statements for 2010 and 2009.

 

It must restate the financial statements for 2010 as if the equity method had been used then.

5 points

Question 5

Club Co. appropriately uses the equity method to account for its investment in Chip Corp. As of the end of 2011, Chip's common stock had suffered a significant decline in fair value, which is expected to be recovered over the next several months. How should Club account for the decline in value?

 

 

Club should switch to the fair-value method.

 

No accounting because the decline in fair value is temporary.

 

Club should decrease the balance in the investment account to the current value and recognize a loss on the income statement.

 

Club should not record its share of Chip's 2011 earnings until the decline in the fair value of the stock has been recovered.

 

Club should decrease the balance in the investment account to the current value and recognize an unrealized loss on the balance sheet.

5 points

Question 6

Which of the following results in a decrease in the Equity in Investee Income account when applying the equity method

 

Dividends paid by the investor

 

Net income of the investee

 

Unrealized gain on intra-entity inventory transfers for the current year

 

Unrealized gain on intra-entity inventory transfers for the prior year

 

Extraordinary gain of the investee

5 points

Question 7

All of the following statements regarding the investment account using the equity method are true except:

 

The investment is recorded at cost.

 

Dividends received are reported as revenue.

 

Net income of investee increases the investment account.

 

Dividends received reduce the investment account.

 

Amortization of fair value over cost reduces the investment account.

5 points

Question 8

On January 3, 2011, Roberts Company purchased 30% of the 100,000 shares of common stock of Thomas Corporation, paying $1,500,000. There was no goodwill or other cost allocation associated with the investment. Roberts has significant influence over Thomas. During 2011, Thomas reported income of $300,000 and paid dividends of $100,000. On January 4, 2012, Roberts sold 15,000 shares for $800,000.
What is the appropriate journal entry to record the sale of the 15,000 shares?

 

 

A Above

 

B Above

 

C Above

 

D Above

 

E Above

5 points

Question 9

Clancy Incorporated, sold $210,000 of its inventory to Reid Company during 2011 for $350,000. Reid sold $224,000 of this merchandise in 2011 with the remainder to be disposed of during 2012. Assume Clancy owns 30% of Reid and applies the equity method.
What journal entry will be recorded in 2012 to realize the intra-entity profit that was deferred in 2011?

 

 

Entry A

 

Entry B

 

Entry C

 

Entry D

 

No entry is necessary

5 points

Question 10

On January 1, 2010, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan a 15% ownership of Cook. On January 1, 2011 Mehan purchased an additional 25,000 shares (25%) of Cook for $300,000. This last purchase gave Mehan the ability to apply significant influence over Cook. The book value of Cook on January 1, 2010, was $1,000,000. The book value of Cook on January 1, 2011, was $1,150,000. Any excess of cost over book value for this second transaction is assigned to a database and amortized over five years.
Cook reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout the years:

On April 1, 2012, just after its first dividend receipt, Mehan sells 10,000 shares of its investment.
How much income did Mehan report from Cook during 2010?

 

$30,000

 

$22,500

 

$7,500

 

$0

 

$50,000

5 points

Question 11

What is the primary accounting difference between accounting for when the subsidiary is dissolved and when the subsidiary retains its incorporation?

 

 

If the subsidiary is dissolved, it will not be operated as a separate division.

 

If the subsidiary is dissolved, assets and liabilities are consolidated at their book values.

 

If the subsidiary retains its incorporation, there will be no goodwill associated with the acquisition.

 

If the subsidiary retains its incorporation, assets and liabilities are consolidated at their book values.

 

If the subsidiary retains its incorporation, the consolidation is not formally recorded in the accounting records of the acquiring company.

5 points

Question 12

An example of a difference in types of business combination is

 

A statutory merger can only be effected by an asset acquisition while a statutory consolidation can only be effected by a capital stock acquisition.

 

A statutory merger can only be effected by a capital stock acquisition while a statutory consolidation can only be effected by an asset acquisition.

 

A statutory merger requires dissolution of the acquired company while a statutory consolidation does not require dissolution.

 

A statutory consolidation requires dissolution of the acquired company while a statutory merger does not require dissolution.

 

Both a statutory merger and a statutory consolidation can only be effected by an asset acquisition but only a statutory consolidation requires dissolution of the acquired company.

5 points

Question 13

On January 1, 20X1, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long-term liabilities and 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows:

Note: Parentheses indicate a credit balance.
In Moody's appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60.
What amount was recorded as goodwill arising from this acquisition

 

$230

 

$120

 

$520

 

None. There is a gain on bargain purchase of $230

 

None. There is a gain on bargain purchase of $265

5 points

Question 14

Using the acquisition method for a business combination, goodwill is generally defined as:

 

 

Cost of the investment less the subsidiary's book value at the beginning of the year.

 

Cost of the investment less the subsidiary's book value at the acquisition date.

 

Cost of the investment less the subsidiary's fair value at the beginning of the year.

 

Cost of the investment less the subsidiary's fair value at acquisition date.

 

is no longer allowed under federal law.

5 points

Question 15

At the date of an acquisition which is not a bargain purchase, the acquisition method:

 

consolidates the subsidiary's assets at fair value and the liabilities at book value.

 

consolidates all subsidiary assets and liabilities at book value.

 

consolidates all subsidiary assets and liabilities at fair value.

 

consolidates current assets and liabilities at book value, long-term assets and liabilities at fair value.

 

consolidates the subsidiary's assets at book value and the liabilities at fair value.

5 points

Question 16

The financial balances for the Atwood Company and the Franz Company as of December 31, 20X1, are presented below. Also included are the fair values for Franz Company's net assets.

Note: Parenthesis indicate a credit balance
Assume an acquisition business combination took place at December 31, 20X1. Atwood issued 50 shares of its common stock with a fair value of $35 per share for all of the outstanding common shares of Franz. Stock issuance costs of $15 (in thousands) and direct costs of $10 (in thousands) were paid.

Compute the investment to be recorded at date of acquisition.

 

 

$1,750

 

$1,760

 

$1,775

 

$1,300

 

$1,120

5 points

Question 17

Chapel Hill Company had common stock of $350,000 and retained earnings of $490,000. Blue Town Inc. had common stock of $700,000 and retained earnings of $980,000. On January 1, 2011, Blue Town issued 34,000 shares of common stock with a $12 par value and a $35 fair value for all of Chapel Hill Company's outstanding common stock. This combination was accounted for as an acquisition. Immediately after the combination, what was the consolidated net assets?

 

 

$2,520,000

 

$1,190,000

 

$1,680,000

 

$2,870,000

 

$2,030,000

5 points

Question 18

Carnes has the following account balances as of May 1, 2010 before an acquisition transaction takes place.

The fair value of Carnes' Land and Buildings are $650,000 and $550,000, respectively. On May 1, 2010, Riley Company issues 30,000 shares of its $10 par value ($25 fair value) common stock in exchange for all of the shares of Carnes' common stock. Riley paid $10,000 for costs to issue the new shares of stock. Before the acquisition, Riley has $700,000 in its common stock account and $300,000 in its additional paid-in capital account.

What will be Riley's balance in its common stock account as a result of this acquisition?

 

$300,000

 

$990,000

 

$1,000,000

 

$1,590,000

 

$1,600,000

5 points

Question 19

The financial statements for Goodwin, Inc., and Corr Company for the year ended December 31, 20X1, prior to Goodwin's acquisition business combination transaction regarding Corr, follow (in thousands):

On December 31, 20X1, Goodwin issued $600 in debt and 30 shares of its $10 par value common stock to the owners of Corr to acquire all of the outstanding shares of that company. Goodwin shares had a fair value of $40 per share.
Goodwin paid $25 to a broker for arranging the transaction. Goodwin paid $35 in stock issuance costs. Corr's equipment was actually worth $1,400 but its buildings were only valued at $560.
Compute the consideration transferred for this acquisition at December 31, 20X

 

$900

 

$1,165

 

$1,200

 

$1,765

 

$1,800

5 points

Question 20

The financial statements for Goodwin, Inc., and Corr Company for the year ended December 31, 20X1, prior to Goodwin's acquisition business combination transaction regarding Corr, follow (in thousands):

On December 31, 20X1, Goodwin issued $600 in debt and 30 shares of its $10 par value common stock to the owners of Corr to acquire all of the outstanding shares of that company. Goodwin shares had a fair value of $40 per share.
Goodwin paid $25 to a broker for arranging the transaction. Goodwin paid $35 in stock issuance costs. Corr's equipment was actually worth $1,400 but its buildings were only valued at $560.
Compute the consolidated revenues for 20X1

 

$2,700

 

$720

 

$920

 

$3,300

 

$1,54

5 points

 

Expert:  Manal Elkhoshkhany replied 2 years ago.

I am not sure why you are not reading my messages! I have asked you to post the questions 10 minutes after I sent the last message and have advised you not respond to this message as this would lock me out of replying to other posts and cause a delay in getting back to you

 

Why are you making it hard for me to help you?

 

 

 

Customer: replied 2 years ago.

sorry for the inconvenience, I just have 5 more minutes

This is the only way that i know to comunicated with you.

 

Expert:  Manal Elkhoshkhany replied 2 years ago.

What way? Click on the following link for the solutions and then we will talk:

 

http://www.box.net/shared/gn1x77xmckjrt9e7xmpv

 

 

Manal Elkhoshkhany, Tutor
Category: Finance
Satisfied Customers: 9482
Experience: More than 5000 online tutoring sessions.
Manal Elkhoshkhany and 3 other Finance Specialists are ready to help you
Expert:  Manal Elkhoshkhany replied 2 years ago.

Please remember to click the Accept button on the solutions I have just posted

 

Now, once you enter or submit the solutions, you can respond to this. What do you mean by " This is the only way that i know to comunicated with you."?

 

I have clearly advised you to make a new post after 10 minutes and type "For BusinessTutor" at the beginning of the post. I had also asked you not to respond to my message "do not respond to this message as this would lock me out of replying to other posts and cause a delay in getting back to you"

 

You went ahead and posted the questions one minute after I sent you that message when I told you I was busy for 10 more minutes which caused me to answer your questions and the other student's at the same time which is very distracting so by not reading the messages I send you, you are not allowing me to help you within the deadline.

 

Please carefully read the following to ensure that things run smoother with future posts:

 

 

If you like my services, please feel free to direct your future posts to me specifically by typing "For BusinessTutor" at the beginning of your post. Should you choose to do this, please try to allow me 48 hours before the deadline. If you need to meet me online for a timed assignment, please advise me of the date and time (EST) you want me to meet you here and I will. Please make sure you take the length (and number) of the questions into consideration when making your offer to avoid delays in providing solutions.

 

Thank you

Customer: replied 2 years ago.

For business Tutor

Same book chapter 3 problem 16 & 22

 

Also time assignment tomorrow at 5.00pm?

Expert:  Manal Elkhoshkhany replied 2 years ago.

Hello

 

Please carefully read the following to ensure that things run smoother:

 

1) I have provided a solution above that you have not accepted; you need to click accept on the solutions provided to you above (on 11/6/2011) before I can answer your new posts.

 

2) I cannot meet you today for a timed assignment, the earliest I would be available is starting Saturday, so if you need to take a timed assignment, please choose a day and time to meet you any day starting Saturday.

 

3) When is the deadline for the questions you have posted (Same book chapter 3 problem 16 & 22)?

 

If you like my services, please feel free to direct your future posts to me specifically by typing "For BusinessTutor" at the beginning of your post. Should you choose to do this, please try to allow me 48 hours before the deadline. If you need to meet me online for a timed assignment, please advise me of the date and time (EST) you want me to meet you here and I will. Please make sure you take the length (and number) of the questions into consideration when making your offer to avoid delays in providing solutions.

 

Thank you

Customer: replied 2 years ago.
are you able for time assignment
Customer: replied 2 years ago.
time assignment at 7:30 pm today
Customer: replied 2 years ago.

FOR BUSINESS TUTOR

 

Same book chapter 3 problem 16 & 22, deadline sunday at 11:00 am

Expert:  Manal Elkhoshkhany replied 2 years ago.

Hello again

 

Please click on the following link for the solutions (and remember to click the Accept button)

 

http://www.box.net/s/funoprr4ckt6sl2xj1sp

 

P.S. I will meet you here at 7:30 P.M. EST for the quiz

 

Thank you

Manal Elkhoshkhany, Tutor
Category: Finance
Satisfied Customers: 9482
Experience: More than 5000 online tutoring sessions.
Manal Elkhoshkhany and 3 other Finance Specialists are ready to help you
Customer: replied 2 years ago.
Are yo able to 2 time assignment today one at 9.00pm and other 10;00 pm today. deadline today.
Expert:  Manal Elkhoshkhany replied 2 years ago.
Our appointment is at 7:30 P.M. tonight. Please when you make an appointment with me, stick to that time. We can do 2 timed assignments, but please be here at 7:30 as we have agreed
Customer: replied 2 years ago.
I believe is a mistake I said 7.30 on saturday today I mention at 8.00 pm and 9.00 pm, I want to aplogy if a meke the mistake I am ready now
Expert:  Manal Elkhoshkhany replied 2 years ago.

Yes, I did get confused, but you also kept sending me messages and sending messages to the customer service..etc telling them you have not received a response. Please for the last time, understand that as much as I want to help you, I cannot be online for 24 hours a day so that I immediately respond to your messages, check the above, you will see that when I send you a messages, it takes you days to respond to me, so please understand that I would respond to your message as soon as I get online no need for multiple messages. Please read the following carefully:

 

please feel free to direct your future posts to me specifically by typing "For BusinessTutor" at the beginning of your post. Should you choose to do this, please try to allow me 48 hours before the deadline. If you need to meet me online for a timed assignment, please advise me of the date and time (EST) you want me to meet you here and I will. Please make sure you take the length (and number) of the questions into consideration when making your offer to avoid delays in providing solutions.

 

Thank you

 

Expert:  Manal Elkhoshkhany replied 2 years ago.

You can post the questions now by the way, but please carefully read the above message so that we ensure there are no delays in providing the solutions.

 

Thank you

Customer: replied 2 years ago.
FOR TUTOR TIME ASSIGMENT 30 MINUTES

Top of Form

Yaro Company owns 30% of the common stock of Dew Co. and uses the equity method to account for the investment. During 2011, Dew reported income of $250,000 and paid dividends of $80,000. There is no amortization associated with the investment. During 2011, how much income should Yaro recognize related to this investment?

 

$24,000

 

$75,000

 

$99,000

 

$51,000

 

$80,000

5 points

Question 2

A company has been using the fair-value method to account for its investment. The company now has the ability to significantly control the investee and the equity method has been deemed appropriate. Which of the following statements is true?

Answer

 

A cumulative effect change in accounting principle must occur.

 

A prospective change in accounting principle must occur.

 

A retrospective change in accounting principle must occur.

 

The investor will not receive future dividends from the investee.

 

Future dividends will continue to be recorded as revenue.

5 points

Question 3

Gaw Company owns 15% of the common stock of Trace Corporation and used the fair-value method to account for this investment. Trace reported net income of $110,000 for 2011 and paid dividends of $60,000 on October 1, 2011. How much income should Gaw recognize on this investment in 2011?

Answer

 

$16,500

 

$9,000

 

$25,500

 

$7,500

 

$50,000

5 points

Question 4

On January 1, 2010, Dawson, Incorporated, paid $100,000 for a 30% interest in Sacco Corporation. This investee had assets with a book value of $550,000 and liabilities of $300,000. A patent held by Sacco having a book value of $10,000 was actually worth $40,000 with a six year remaining life. Any goodwill associated with this acquisition is considered to have an indefinite life. During 2010, Sacco reported income of $50,000 and paid dividends of $20,000 while in 2011 it reported income of $75,000 and dividends of $30,000. Assume Dawson has the ability to significantly influence the operations of Sacco.
The amount allocated to goodwill at January 1, 2010, is:

Answer

 

$25,000.

 

$13,000.

 

$9,000.

 

$16,000.

 

$10,000.

5 points

Question 5

An investee company incurs an extraordinary loss during the period. The investor appropriately applies the equity method. Which of the following statements is true?

Answer

 

Under the equity method, the investor only recognizes its share of investee's income from continuing operations.

 

The extraordinary loss would reduce the value of the investment.

 

The extraordinary loss should increase equity in investee income.

 

The extraordinary loss would not appear on the income statement but would be a component of comprehensive income.

 

The loss would be ignored but shown in the investor's notes to the financial statements.

5 points

Question 6

All of the following would require use of the equity method for investments except:

Answer

 

material intra-entity transactions.

 

investor participation in the policy-making process of the investee.

 

valuation at fair value.

 

technological dependency.

 

significant control.

5 points

Question 7

All of the following statements regarding the investment account using the equity method are true except:

Answer

 

The investment is recorded at cost.

 

Dividends received are reported as revenue.

 

Net income of investee increases the investment account.

 

Dividends received reduce the investment account.

 

Amortization of fair value over cost reduces the investment account.

5 points

Question 8

On January 3, 2011, Roberts Company purchased 30% of the 100,000 shares of common stock of Thomas Corporation, paying $1,500,000. There was no goodwill or other cost allocation associated with the investment. Roberts has significant influence over Thomas. During 2011, Thomas reported income of $300,000 and paid dividends of $100,000. On January 4, 2012, Roberts sold 15,000 shares for $800,000.
What is the appropriate journal entry to record the sale of the 15,000 shares?

Answer

 

A Above

 

B Above

 

C Above

 

D Above

 

E Above

5 points

Question 9

On January 1, 2010, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan a 15% ownership of Cook. On January 1, 2011 Mehan purchased an additional 25,000 shares (25%) of Cook for $300,000. This last purchase gave Mehan the ability to apply significant influence over Cook. The book value of Cook on January 1, 2010, was $1,000,000. The book value of Cook on January 1, 2011, was $1,150,000. Any excess of cost over book value for this second transaction is assigned to a database and amortized over five years.
Cook reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout the years:

On April 1, 2012, just after its first dividend receipt, Mehan sells 10,000 shares of its investment.
How much income did Mehan report from Cook during 2010?

Answer

 

$30,000

 

$22,500

 

$7,500

 

$0

 

$50,000

5 points

Question 10

On January 1, 2010, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan a 15% ownership of Cook. On January 1, 2011 Mehan purchased an additional 25,000 shares (25%) of Cook for $300,000. This last purchase gave Mehan the ability to apply significant influence over Cook. The book value of Cook on January 1, 2010, was $1,000,000. The book value of Cook on January 1, 2011, was $1,150,000. Any excess of cost over book value for this second transaction is assigned to a database and amortized over five years.
Cook reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout the years:

On April 1, 2012, just after its first dividend receipt, Mehan sells 10,000 shares of its investment.
How much income did Mehan report from Cook during 2011?

Answer

 

$90,000

 

$110,000

 

$67,500.

 

$87,500

 

$78,750

5 points

Question 11

Which of the following is a not a reason for a business combination to take place?

Answer

 

Cost savings through elimination of duplicate facilities

 

Quick entry for new and existing products into domestic and foreign markets

 

Diversification of business risk

 

Vertical integration

 

Increase in stock price of the acquired company

5 points

Question 12

An example of a difference in types of business combination is:

Answer

 

A statutory merger can only be effected by an asset acquisition while a statutory consolidation can only be effected by a capital stock acquisition.

 

A statutory merger can only be effected by a capital stock acquisition while a statutory consolidation can only be effected by an asset acquisition.

 

A statutory merger requires dissolution of the acquired company while a statutory consolidation does not require dissolution.

 

A statutory consolidation requires dissolution of the acquired company while a statutory merger does not require dissolution.

 

Both a statutory merger and a statutory consolidation can only be effected by an asset acquisition but only a statutory consolidation requires dissolution of the acquired company.

5 points

Question 13

Using the acquisition method for a business combination, goodwill is generally defined as:

Answer

 

Cost of the investment less the subsidiary's book value at the beginning of the year.

 

Cost of the investment less the subsidiary's book value at the acquisition date.

 

Cost of the investment less the subsidiary's fair value at the beginning of the year.

 

Cost of the investment less the subsidiary's fair value at acquisition date.

 

is no longer allowed under federal law.

5 points

Question 14

In an acquisition where control is achieved, how would the land accounts of the parent and the land accounts of the subsidiary be combined?

Answer

 

Entry A.

 

Entry B.

 

Entry C.

 

Entry D.

 

Entry E.

5 points

Question 15

How are stock issuance costs and direct combination costs treated in a business combination which is accounted for as an acquisition when the subsidiary will retain its incorporation?

Answer

 

Stock issuance costs are a part of the acquisition costs, and the direct combination costs are expensed.

 

Direct combination costs are a part of the acquisition costs, and the stock issuance costs are a reduction to additional paid-in capital.

 

Direct combination costs are expensed and stock issuance costs are a reduction to additional paid-in capital.

 

Both are treated as part of the acquisition consideration transferred.

 

Both are treated as a reduction to additional paid-in capital.

5 points

Question 16

On January 1, 20X1, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long-term liabilities and 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows:

Note: Parentheses indicate a credit balance.
In Moody's appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60.
Compute the amount of consolidated additional paid-in capital at date of acquisition.

Answer

 

$1,080

 

$1,420

 

$1,065

 

$1,425

 

$1,440

5 points

Question 17

The financial balances for the Atwood Company and the Franz Company as of December 31, 20X1, are presented below. Also included are the fair values for Franz Company's net assets.

Note: Parenthesis indicate a credit balance
Assume an acquisition business combination took place at December 31, 20X1. Atwood issued 50 shares of its common stock with a fair value of $35 per share for all of the outstanding common shares of Franz. Stock issuance costs of $15 (in thousands) and direct costs of $10 (in thousands) were paid.

Compute the investment to be recorded at date of acquisition.

Answer

 

$1,750

 

$1,760

 

$1,775

 

$1,300

 

$1,120

5 points

Question 18

Chapel Hill Company had common stock of $350,000 and retained earnings of $490,000. Blue Town Inc. had common stock of $700,000 and retained earnings of $980,000. On January 1, 2011, Blue Town issued 34,000 shares of common stock with a $12 par value and a $35 fair value for all of Chapel Hill Company's outstanding common stock. This combination was accounted for as an acquisition. Immediately after the combination, what was the consolidated net assets?

Answer

 

$2,520,000

 

$1,190,000

 

$1,680,000

 

$2,870,000

 

$2,030,000

5 points

Question 19

On January 1, 20X1, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long-term liabilities and 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows:

Note: Parentheses indicate a credit balance.
In Moody's appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary's books: Inventory by $10, Land by $40, and Buildings by $60.
Compute the amount of consolidated common stock at date of acquisition.

Answer

 

$370

 

$570

 

$610

 

$330

 

$530

5 points

Question 20

The financial statements for Goodwin, Inc., and Corr Company for the year ended December 31, 20X1, prior to Goodwin's acquisition business combination transaction regarding Corr, follow (in thousands):

On December 31, 20X1, Goodwin issued $600 in debt and 30 shares of its $10 par value common stock to the owners of Corr to acquire all of the outstanding shares of that company. Goodwin shares had a fair value of $40 per share.
Goodwin paid $25 to a broker for arranging the transaction. Goodwin paid $35 in stock issuance costs. Corr's equipment was actually worth $1,400 but its buildings were only valued at $560.
Compute the consolidated revenues for 20X1.

Answer

 

$2,700

 

$720

 

$920

 

$3,300

 

$1,54

5 points

Save and Submit

 

 

Expert:  Manal Elkhoshkhany replied 2 years ago.

Please click on the following link for the solutions (please click the accept button before you post the next one)

 

http://www.box.net/s/gn1x77xmckjrt9e7xmpv

 

P.S. My ID is BusinessTutor not Tutor :)

 

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Customer: replied 2 years ago.

Book PSYCHSMART

 

ISBN 978-0-07-803523-4

 

ARE YOU FAMILIAR WITH THIS BOOK

Expert:  Manal Elkhoshkhany replied 2 years ago.
No unfortunately. I only tutor Accounting and Finance
Customer: replied 2 years ago.
ok, thank
Expert:  Manal Elkhoshkhany replied 2 years ago.
You can make a new post and post the questions you need help with (but do not type For BusinessTutor in the beginning), another expert might be able to help. Are we done with Advanced Accounting?
Customer: replied 2 years ago.
yes, for today yhank you and sorry for all my inconvenience this is my first experience.
Expert:  Manal Elkhoshkhany replied 2 years ago.

No problem at all, but if you follow what I told you above there will be no delays or confusions at all :)

 

All the best

 

 

Please do not respond to this message as this would lock me out of replying
to other posts and cause a delay in getting back to you

Customer: replied 2 years ago.

BusinessTutor

Same book chapter 4

 

problems 21 & 28 in chapter 4

 

Also , time assignmet sunday at 12:30 PM, please confirm.

Expert:  Manal Elkhoshkhany replied 2 years ago.

Hello

 

Please stick to the 48 hours advance notice. I cannot meet you here tomorrow, I can do it on Monday, is that ok?

Customer: replied 2 years ago.

let me check, sorry was my fault I totally forget, can be at 10:30 pm tomorrow

Expert:  Manal Elkhoshkhany replied 2 years ago.
Ok :) That would work yes :)
Customer: replied 2 years ago.
ok 10:30 pm tomorrow
Expert:  Manal Elkhoshkhany replied 2 years ago.

Deal :)

 

 

Please do not respond to this message now as this would lock me out of replying
to other posts and I will see you here tomorrow at 10:30 P.M.

 

Thank you

Expert:  Manal Elkhoshkhany replied 2 years ago.

Hi

 

Please click on the following link for the solutions to the problems (please remember to click accept before you post the new questions tonight):

 

http://www.box.com/s/k4qz9geh0k6vgb56i9na

 

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Customer: replied 2 years ago.
Push-down accounting is concerned with the:Answer
impact of the purchase on the subsidiary's financial statements.
recognition of goodwill by the parent.
correct consolidation of the financial statements.
impact of the purchase on the separate financial statements of the parent.
recognition of dividends received from the subsidiary.

5 points

Question 2

  1. Which one of the following varies between the equity, initial value, and partial equity methods of accounting for an investment?Answer
    The amount of consolidated net income
    Total assets on the consolidated balance sheet
    Total liabilities on the consolidated balance sheet
    The balance in the investment account on the parent's books
    The amount of consolidated cost of goods sold

5 points

Question 3

  1. One company acquires another company in a combination accounted for as an acquisition. The acquiring company decides to apply the equity method in accounting for the combination. What is one reason the acquiring company might have made this decision?Answer
    It is the only method allowed by the SEC.
    It is relatively easy to apply.
    It is the only internal reporting method allowed by generally accepted accounting principles.
    Operating results on the parent's financial records reflect consolidated totals.
    When the equity method is used, no worksheet entries are required in the consolidation process.

5 points

Question 4

  1. When consolidating a subsidiary under the equity method, which of the following statements is true with regard to the subsidiary subsequent to the year of acquisition?Answer
    All net assets are revalued to fair value and must be amortized over their useful lives.
    Only net assets that had excess fair value over book value when acquired by the parent must be amortized over their useful lives.
    All depreciable net assets are revalued to fair value at date of acquisition and must be amortized over their useful lives.
    Only depreciable net assets that have excess fair value over book value must be amortized over their useful lives.
    Only assets that have excess fair value over book value must be amortized over their useful lives.

5 points

Question 5

  1. All of the following are acceptable methods to account for a majority-owned investment in subsidiary except:Answer
    The equity method.
    The initial value method.
    The partial equity method.
    The fair-value method.
    Book value method.

5 points

Question 6

  1. Under the equity method of accounting for an investment:Answer
    The investment account remains at initial value.
    Dividends received are recorded as revenue.
    Goodwill is amortized over 20 years.
    Income reported by the subsidiary increases the investment account.
    Dividends received increase the investment account.

5 points

Question 7

  1. Kaye Company acquired 100% of Fiore Company on January 1, 2011. Kaye paid $1,000 excess consideration over book value which is being amortized at $20 per year. Fiore reported net income of $400 in 2011 and paid dividends of $100.
    Assume the equity method is applied. How much will Kaye's income increase or decrease as a result of Fiore's operations?Answer
    $400 increase
    $300 increase
    $380 increase
    $280 increase
    $480 increase

5 points

Question 8

  1. Jansen Inc. acquired all of the outstanding common stock of Merriam Co. on January 1, 2010, for $257,000. Annual amortization of $19,000 resulted from this acquisition. Jansen reported net income of $70,000 in 2010 and $50,000 in 2011 and paid $22,000 in dividends each year. Merriam reported net income of $40,000 in 2010 and $47,000 in 2011 and paid $10,000 in dividends each year. What is the Investment in Merriam Co. balance on Jansen's books as of December 31, 2011, if the equity method has been applied?Answer
    $286,000
    $295,000
    $276,000
    $344,000
    $324,000

5 points

Question 9

  1. Perry Company acquires 100% of the stock of Hurley Corporation on January 1, 2010, for $3,800 cash. As of that date Hurley has the following trial balance:

    Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life. FIFO inventory valuation method is used.
    Compute the consideration transferred in excess of book value acquired at January 1, 2010.Answer
    $150
    $700
    $2,200
    $550
    $2,900

5 points

Question 10

  1. According to GAAP regarding amortization of goodwill and other intangible assets, which of the following statements is true?Answer
    Goodwill recognized in consolidation must be amortized over 20 years.
    Goodwill recognized in consolidation must be expensed in the period of acquisition.
    Goodwill recognized in consolidation will not be amortized but subject to an annual test for impairment.
    Goodwill recognized in consolidation can never be written off.
    Goodwill recognized in consolidation must be amortized over 40 years.

5 points

Question 11

  1. Perry Company acquires 100% of the stock of Hurley Corporation on January 1, 2010, for $3,800 cash. As of that date Hurley has the following trial balance:

    Any excess of consideration transferred over fair value of net assets acquired is considered goodwill with an indefinite life. FIFO inventory valuation method is used.


    Compute goodwill, if any, at January 1, 2010.Answer
    $150
    $250
    $700
    $1,200
    $550

5 points

Question 12

  1. When a parent uses the equity method throughout the year to account for its investment in an acquired subsidiary, which of the following statements is false before making adjustments on the consolidated worksheet?Answer
    Parent company net income equals controlling interest in consolidated net income.
    Parent company retained earnings equals consolidated retained earnings.
    Parent company total assets equals consolidated total assets.
    Parent company dividends equals consolidated dividends.
    Goodwill will not be recorded on the parent's books.

5 points

Question 13

  1. Femur Co. acquired 70% of the voting common stock of Harbor Corp. on January 1, 2010. During 2010, Harbor had revenues of $2,500,000 and expenses of $2,000,000. The amortization of excess cost allocations totaled $60,000 in 2010.
    What is the effect of including Harbor in consolidated net income for 2010?Answer
    $350,000
    $308,000
    $500,000
    $440,000
    $290,000

5 points

Question 14

  1. When Jolt Co. acquired 75% of the common stock of Yelts Corp., Yelts owned land with a book value of $70,000 and a fair value of $100,000.
    What amount should have been reported for the land in a consolidated balance sheet at the acquisition date?Answer
    $52,500
    $70,000
    $75,000
    $92,500
    $100,000

5 points

Question 15

  1. MacHeath Inc. bought 60% of the outstanding common stock of Nomes Inc. in an acquisition business combination that resulted in the recognition of goodwill. Nomes owned a piece of land that cost $250,000 but was worth $600,000 at the date of acquisition. What value would be attributed to this land in a consolidated balance sheet at the date of acquisition?Answer
    $250,000
    $150,000
    $600,000
    $360,000
    $460,000

5 points

Question 16

  1. Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000. The fair value of Float's net assets was $1,850,000, and the book value was $1,500,000. The noncontrolling interest shares of Float Corp. are not actively traded.
    What amount of goodwill should be attributed to Perch at the date of acquisition?Answer
    $150,000
    $250,000
    $0
    $120,000
    $170,000

5 points

Question 17

  1. Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2010. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life.
    Demers earns income and pays dividends as follows:

    Assume the partial equity method is applied.
    How much does Pell record as income from Demers for the year ended December 31, 2012?Answer
    $98,400
    $56,000
    $104,000
    $97,000
    $50,400

5 points

Question 18

  1. Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2010. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired.
    Demers earns income and pays dividends as follows:

    Assume the equity method is applied.
    Compute the noncontrolling interest in the net income of Demers at December 31, 2010.Answer
    $20,000
    $12,000
    $18,600
    $10,600
    $14,400

5 points

Question 19

  1. Kordel Inc. acquired 75% of the outstanding common stock of Raxston Corp. Raxston currently owes Kordel $500,000 for inventory acquired over the past few months. In preparing consolidated financial statements, what amount of this debt should be eliminated?Answer
    $375,000
    $125,000
    $300,000
    $500,000
    $0

5 points

Question 20

  1. Royce Co. acquired 60% of Park Co. for $420,000 on December 31, 2010 when Park's book value was $560,000. The Royce stock was not actively traded. On the date of acquisition, Park had equipment (with a ten-year life) that was undervalued in the financial records by $140,000. One year later, the following selected figures were reported by the two companies. Additionally, no dividends have been paid.

    What is consolidated net income for 2011 attributable to Royce's controlling interest?Answer
    $686,000
    $560,000
    $644,000
    $635,600
Expert:  Manal Elkhoshkhany replied 2 years ago.

How long do we have?

 

Also for future timed assignments, please carefully read the following:

 

 

  • 1) On the day of the assignment, please type something like "Are you here?"..
  • 2) Do not open the assignment until I respond to your message, I will be here on time, but just in case anything happens I do not want us to waste valuable time.
  • 3) Once I respond to you, you can open the quiz, copy and paste all the questions into a word document then upload the word document into http://www.mediafire.com/ then copy and paste the share link on the post.
  • 4) I will work out all the questions and send you the solutions
Expert:  Manal Elkhoshkhany replied 2 years ago.

Please click on the following link (please remember to click the Accept button):

 

http://www.box.com/s/9xvfopo43jxzinbgl2ak

 

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Customer: replied 2 years ago.

For Bussines Tutor

 

Same book chapter 9 problems 37 & 41

Expert:  Manal Elkhoshkhany replied 2 years ago.

Ok

 

company chooses the fair value option

Expert:  Manal Elkhoshkhany replied 2 years ago.

Please click on the following link:

 

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Category: Finance
Satisfied Customers: 9482
Experience: More than 5000 online tutoring sessions.
Manal Elkhoshkhany and 3 other Finance Specialists are ready to help you
Customer: replied 2 years ago.

Thank you have a great day with your family, tomoroow. Happy Thangiven Day.

Expert:  Manal Elkhoshkhany replied 2 years ago.
:)
Thank you. Happy Thanksgiving :))
Customer: replied 2 years ago.

For Business Tutor

 

Same book chapter 11 problem 15 and research case 1 on page 555 in chapter 12,

 

also time assignmet on sunday at 10.00 pm , please let me know

Expert:  Manal Elkhoshkhany replied 2 years ago.
Can you please copy and paste the case here?
Expert:  Manal Elkhoshkhany replied 2 years ago.
By the way, Sunday at 10:00 P.M. is ok :)
Customer: replied 2 years ago.

Domer Corporation is preparing to issue a relatively small amount of securities and does not want to go to the trouble and expenses of filing a registration statement with the SEC. Company official hope to be exempt under provision of Regulation A. These officials want to be certain that they meet these provisions precisely so that no later legal problems arise.

Required

Go to the Web site http://www.sec.gov/ and then select corporate Finance under Divisions. Then select the link for Statues, Rules, and forms, followed by the Rules and Regulation Link. Based on the information provide for regulation A, prepare a report for Domer Corporation officials as to the requirement for exemption and advise as to the maximum amount of capital that may be raised through such issuance. Assuming that the Domer Corporation is a development stage company, revise the report. Note specifically Regulation 230, 251

Expert:  Manal Elkhoshkhany replied 2 years ago.
Thank you
Customer: replied 2 years ago.

FOR BUSINESS TUTOR

 

Same book chapter 11 problem 15 and research case 1 on page 555 in chapter 12,

 

Please let me know if you have the answer, for the assignment ,I submit on Friday

 

at see you at 10.00 pm ,

Thank you

Expert:  Manal Elkhoshkhany replied 2 years ago.

Ok, but please do not send me messages to lock me out from answering other posts. We have agreed to meet at 10:00 and I will be here

 

 

Please do not respond to this message as this would lock me out of replying
to other posts and cause a delay in getting back to you

Customer: replied 2 years ago.

The forward rate may be defined as:

Answer

 

The price a foreign currency can be purchased or sold today.

 

The price today at which a foreign currency can be purchased or sold in the future.

 

The forecasted future value of a foreign currency.

 

The U.S. dollar value of a foreign currency.

 

The Euro value of a foreign currency.

5 points

Question 2

All of the following data may be needed to determine the fair value of a forward contract at any point in time except

Answer

 

The forward rate when the forward contract was entered into.

 

The current forward rate for a contract that matures on the same date as the forward contract entered into.

 

The future spot rate.

 

A discount rate.

 

The company's incremental borrowing rate.

5 points

Question 3

Williams, Inc., a U.S. company, has a Japanese yen account receivable resulting from an export sale on March 1 to a customer in Japan. The exporter signed a forward contract on March 1 to sell yen and designated it as a cash flow hedge of a recognized receivable. The spot rate was $.0094, and the forward rate was $.0095. Which of the following did the U.S. exporter report in net income?

Answer

 

Discount revenue

 

Premium revenue

 

Discount expense

 

Premium expense

 

Both a discount revenue and a premium expense

5 points

Question 4

A U.S. company buys merchandise from a foreign company denominated in the foreign currency. Which of the following statements is true?

Answer

 

If the foreign currency appreciates, a foreign exchange gain will result.

 

If the foreign currency depreciates, a foreign exchange loss will result.

 

No foreign exchange gain or loss will result.

 

If the foreign currency appreciates, a foreign exchange loss will result.

 

Any gain or loss will be included in comprehensive income.

5 points

Question 5

Which of the following is not a problem caused by diverse accounting practices across countries?

Answer

 

Preparation of consolidated financial statements

 

Gaining access to foreign capital markets

 

Lack of comparability of financial statements between companies in the same country

 

Cost and expertise required of consolidations accounting staff

 

Need for a company to maintain multiple sets of accounting records

5 points

Question 6

Brisco Bricks purchases raw material from its foreign supplier, Bolivian Clay, on May 8. Payment of 2,000,000 foreign currency units (FC) is due in 30 days. May 31 is Brisco's fiscal year-end. The pertinent exchange rates were as follows:

For what amount should Brisco's Accounts Payable be credited on May 8?

Answer

 

$2,500,000

 

$2,440,000

 

$1,600,000

 

$1,639,344

 

$1,666,667

5 points

Question 7

Brisco Bricks purchases raw material from its foreign supplier, Bolivian Clay, on May 8. Payment of 2,000,000 foreign currency units (FC) is due in 30 days. May 31 is Brisco's fiscal year-end. The pertinent exchange rates were as follows:

How much Foreign Exchange Gain or Loss should Brisco record on May 31?

Answer

 

$2,520,000 gain

 

$20,000 gain

 

$20,000 loss

 

$80,000 gain

 

$80,000 loss

5 points

Question 8

Belsen purchased inventory on December 1, 2010. Payment of 200,000 stickles was to be made in sixty days. Also on December 1, Belsen signed a contract to purchase §200,000 in sixty days. The spot rate was §1 = .35714, and the 60-day forward rate was §1 = $.38462. On December 31, the spot rate was §1 = .34483 and the 30-day forward rate was §1 = .38168. Assume an annual interest rate of 12% and a fair value hedge. The present value for one month at 12% is .9901.
In the journal entry to record the establishment of a forward exchange contract, at what amount should the Forward Contract account be recorded on December 1?

Answer

 

$71,428

 

$76,924

 

$588

 

$582

 

$0, since there is no cost, there is no value for the contract at this date

5 points

Question 9

Alpha, Inc., a U.S. company, had a receivable from a customer that was denominated in Mexican pesos. On December 31, 2010, this receivable for 75,000 pesos was correctly included in Alpha's balance sheet at $8,000. The receivable was collected on March 2, 2011, when the U.S. equivalent was $6,900. How much foreign exchange gain or loss will Alpha record on the income statement for the year ended December 31, 2011?

Answer

 

$1,100 loss

 

$1,100 gain

 

$6,900 loss

 

$6,900 gain

 

$8,000 gain

5 points

Question 10

Which of the following statements is true concerning hedge accounting?

Answer

 

Hedges of foreign currency firm commitments are used for future sales only.

 

Hedges of foreign currency firm commitments are used for future purchases only.

 

Hedges of foreign currency firm commitments are used for current sales or purchases.

 

Hedges of foreign currency firm commitments are used for future sales or purchases.

 

Hedges of foreign currency firm commitments are speculative in nature.

5 points

Question 11

Foreign companies whose stock is listed on a U.S. stock exchange and using foreign GAAP other than IFRS must file their annual report with the SEC on:

Answer

 

Form 8-A.

 

Form 10-A.

 

Form 16-K.

 

Form 20-F.

 

Form 20-K.

5 points

Question 12

The following information pertains to inventory held by a company at December 31, 2011.

What amount of inventory should be reported under IFRS?

Answer

 

$25,000

 

$21,000

 

$20,000

 

$4,000

 

$5,000

5 points

Question 13

The following information pertains to inventory held by a company on December 31, 2011:

What is the amount of inventory loss shown on the income statement under U.S. GAAP?

Answer

 

$0

 

$3,000

 

$14,000

 

$10,000

 

$8,400

5 points

Question 14

The goals of the SEC include all except which one of the following?

Answer

 

Prohibiting the dissemination of materially misstated information.

 

Controlling the number of companies whose stock is listed on major stock exchanges.

 

Regulating the operation of securities markets.

 

Ensuring that full and fair information is disclosed to all investors before the securities of a company are allowed to be bought and sold.

 

Preventing the misuse of information especially by inside parties.

5 points

Question 15

The SEC's operating costs are supported through:

Answer

 

tax revenues of the federal government.

 

registration fees charged to issuers offering securities to the public.

 

fees paid by stock exchanges.

 

fees paid by stock brokers.

 

fees paid by accounting firms that practice before the SEC.

5 points

Question 16

The SEC's role in the initial registration of securities to be publicly issued is:

Answer

 

to ensure that the content of the registration filing is in compliance with securities regulations.

 

to ensure that securities issued are quality investments.

 

to provide data to the public regarding first-time issuance of securities.

 

to give permission to an independent CPA firm to audit the registrant's financial statements.

 

to make the registrant's annual report available for public viewing.

5 points

Question 17

What is the primary focus of the Sarbanes-Oxley Act?

Answer

 

Accounting standards and the registration of securities

 

Regulation of the continuous reporting by publicly owned companies

 

Accounting standards and registration of investment companies that engage in investing and trading in securities

 

Accounting standards and penalties against persons who profit from illegal use of inside information

 

Regulation of independent audit firms and audit standards

5 points

Question 18

Which statement is false regarding the registration of public accounting firms with the PCAOB under the Sarbanes-Oxley Act?

Answer

 

Registration is required of all U.S. firms that prepare, issue, or participate in the preparation of an audit report for an entity that issues securities.

 

Foreign accounting firms are exempt from registration.

 

Disclosure requirements include annual fees received from each issuer for the firm's audit and nonaudit services.

 

The Public Company Accounting Oversight Board subjects registered firms to periodic inspections.

 

Information regarding disagreements between the issuer and the audit firm during the previous year must be disclosed.

5 points

Question 19

What information is required in proxy statements?
(1) Five-year summary of operations
(2) Five-year summary of industry segments
(3) Listing of company directors and executive officers
(4) Management discussion and analysis (MD&A).

Answer

 

1, 2 and 3

 

2, 3 and 4

 

1, 3 and 4

 

1, 2 and 4

 

1, 2, 3, and 4

5 points

Question 20

Audited financial statements in an annual report of an issuer that is subject to SEC regulation must include:

Answer

 

three balance sheets, three income statements, and three statements of cash flows.

 

three balance sheets, two income statements, and two statements of cash flows.

 

one balance sheet, one income statement, and one statement of cash flows.

 

two balance sheets, three income statements, and three statements of cash flows.

 

two balance sheets, two income statements, and two statements of cash flows.

 

 

Expert:  Manal Elkhoshkhany replied 2 years ago.

Please click on the following link for the solutions:

 

http://www.box.com/s/oyv8eqkzo73ii2dc023g

 

Please remember to click accept before we start on the quiz

 

Thank you

Manal Elkhoshkhany, Tutor
Category: Finance
Satisfied Customers: 9482
Experience: More than 5000 online tutoring sessions.
Manal Elkhoshkhany and 3 other Finance Specialists are ready to help you
Expert:  Manal Elkhoshkhany replied 2 years ago.
How long do we have?
Customer: replied 2 years ago.
20 more minutes, my computer screw me
Expert:  Manal Elkhoshkhany replied 2 years ago.
No problem :)
Expert:  Manal Elkhoshkhany replied 2 years ago.

And here you go:

 

http://www.box.com/s/1kuoi8y1rg84cgk4eiy4

 

All the best

Manal Elkhoshkhany, Tutor
Category: Finance
Satisfied Customers: 9482
Experience: More than 5000 online tutoring sessions.
Manal Elkhoshkhany and 3 other Finance Specialists are ready to help you
Customer: replied 2 years ago.

For Business Tutor Question

 

I am not received my answer yest, that I submit thursday, Please do not fortghuet

Customer: replied 2 years ago.

Question for Business Tutor

 

same book - problems 43 & 44 in chapter 13.

Customer: replied 2 years ago.

For Business Tutor

 

Please let me know if you have any problem. I am worrie. You are very sharp responding.

Thank you

Expert:  Manal Elkhoshkhany replied 2 years ago.

Please please please :) allow me at least 48 hours advance notice before the deadline. Yes I try to answer as soon as I can, but sometimes I take a day off (sometimes just a couple of hours off) so please allow me enough time in case I take a day off. Please click on the following link for the solution:

 

http://www.box.com/s/naqjkygx4148zhoesbc9

 

Regards,

Manal Elkhoshkhany, Tutor
Category: Finance
Satisfied Customers: 9482
Experience: More than 5000 online tutoring sessions.
Manal Elkhoshkhany and 3 other Finance Specialists are ready to help you
Customer: replied 2 years ago.
  • Samke book problem #29 from chapter 14 and #30 from chapter 15.
Customer: replied 2 years ago.

For Bussines Tutor

 

Time assignment this Friday 1.00 pm, or Sunday 10:00 PM , please confirm.

Expert:  Manal Elkhoshkhany replied 2 years ago.

Let us do it Friday 1:00 P.M. so that in case anything comes up, we can still make it on Sunday :)

 

 

Expert:  Manal Elkhoshkhany replied 2 years ago.

Good thing I noticed :) I was going to miss your last request :)

Here you go:

 

http://www.box.com/s/zop3ie3ru7ple4xroef9

 

Regards,

Manal Elkhoshkhany, Tutor
Category: Finance
Satisfied Customers: 9482
Experience: More than 5000 online tutoring sessions.
Manal Elkhoshkhany and 3 other Finance Specialists are ready to help you
Customer: replied 2 years ago.
Timing assignment let me open one time for 50 minutes, no second chance.
Expert:  Manal Elkhoshkhany replied 2 years ago.
Not sure what you mean
Customer: replied 2 years ago.

for bussines tutor if you want to do the toming assignmet before 10.00 pm please let me know, I am ready.

Customer: replied 2 years ago.

For Business Tutor, please confirm our 10:00 pm appointment, thank you

Customer: replied 2 years ago.

I can not the open the timing assignment if we are not in the same picture, please let me know.

Expert:  Manal Elkhoshkhany replied 2 years ago.

Hello

 

Remember you said "Time assignment this Friday 1.00 pm, or Sunday 10:00 PM "

 

and I responded "Let us do it Friday 1:00 P.M. so that in case anything comes up, we can still make it on Sunday".

 

I was here Friday, but you did not show up and to tell you the truth, I forgot that Sunday option. I hope we can still make it today, if you can do it tonight, please send me a message with the time to meet you and I will be here

Customer: replied 2 years ago.

Sorry for the inconvenience, not your fall,

 

are you avaible now, For timing assignment?

Expert:  Manal Elkhoshkhany replied 2 years ago.

:) That is ok. Yes, I am here now :)

Customer: replied 2 years ago.
ok, i will send the assignment in 5 minutes or less
Expert:  Manal Elkhoshkhany replied 2 years ago.
ok :)
Customer: replied 2 years ago.
The statement of financial affairs should be prepared:Answer
under the going concern assumption.
under the concept of conservatism.
under the assumption that liquidation will occur.
under the continuity concept.
only for a company in Chapter 7 bankruptcy.

5 points

Question 2

  1. How should liabilities (except for deferred income taxes) be reported by a company using fresh start accounting?Answer
    At the undiscounted sum of future cash payments
    At book value prior to the reorganization
    As partially secured liabilities
    At the present value of future cash payments
    As unsecured liabilities

5 points

Question 3

  1. Quincy Corp., about to be liquidated, has the following amounts for its assets and liabilities:

    The mortgage is secured by the land and building, and the note payable is secured by the equipment. Quincy expects that the expenses of administering the liquidation will total $40,000.


    How much should the mortgage holder expect to collect from the liquidation?Answer
    $474,000
    $510,000
    $450,000
    $480,000
    $478,000

5 points

Question 4

  1. What are free assets?Answer
    Assets for which net realizable value is greater than historical cost
    Assets for which no market exists
    Assets for which replacement cost is greater than historical cost
    Assets available to be distributed for liabilities with priority and for other unsecured obligations
    Assets available to be distributed to stockholders

5 points

Question 5

  1. Gongman Corp. owned the following assets when it came out of a Chapter 11 bankruptcy:

    Gongman Corp. had a fresh start reorganization value of $1,000,000. What amount of goodwill should have been recognized in recording the reorganization?Answer
    $20,000
    $100,000
    $60,000
    $210,000
    $98,000

5 points

Question 6

  1. Mandich Co. had the following amounts for its assets, liabilities, and stockholders' equity accounts just before filing a bankruptcy petition and requesting liquidation:

    Of the salaries payable, $30,000 was owed to an officer of the company. The remaining amount was owed to salaried employees who had not been paid within the previous 80 days: John Webb was owed $10,600, Samantha Jones was owed $15,000, XXXXX XXXXX was owed $11,900, and XXXXX XXXXX was owed $2,500. The maximum owed for any one employee's claims for contributions to benefit plans was $800. Estimated expense for administering the liquidation amounted to $40,000.
    What was the total amount of unsecured liabilities with priority?Answer
    $130,000
    $155,000
    $165,000
    $170,000
    $200,000

5 points

Question 7

  1. Cherryhill and Hace had been partners for several years, and they decided to admit Quincy to the partnership. The accountant for the partnership believed that the dissolved partnership and the newly formed partnership were two separate entities. What method would the accountant have used for recording the admission of Quincy to the partnership?Answer
    The bonus method
    The equity method
    The goodwill method
    The proportionate method
    The cost method

5 points

Question 8

  1. Which of the following is not a characteristic of a partnership?Answer
    The partnership itself pays no income taxes.
    It is easy to form a partnership.
    Any partner can be held personally liable for all debts of the business.
    A partnership requires written Articles of Partnership.
    Each partner has the power to obligate the partnership for liabilities.

5 points

Question 9

  1. Cleary, Wasser, and Nolan formed a partnership on January 1, 2010, with investments of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed to (1) interest of 10% of the beginning capital balance each year, (2) annual compensation of $10,000 to Wasser, and (3) sharing the remainder of the income or loss in a ratio of 20% for Cleary, and 40% each for Wasser and Nolan. Net income was $150,000 in 2010 and $180,000 in 2011. Each partner withdrew $1,000 for personal use every month during 2010 and 2011.
    What was Nolan's total share of net income for 2010?Answer
    $63,000
    $53,000
    $58,000
    $29,000
    $51,000

5 points

Question 10

  1. Cleary, Wasser, and Nolan formed a partnership on January 1, 2010, with investments of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed to (1) interest of 10% of the beginning capital balance each year, (2) annual compensation of $10,000 to Wasser, and (3) sharing the remainder of the income or loss in a ratio of 20% for Cleary, and 40% each for Wasser and Nolan. Net income was $150,000 in 2010 and $180,000 in 2011. Each partner withdrew $1,000 for personal use every month during 2010 and 2011.
    What was Wasser's total share of net income for 2010?Answer
    $63,000
    $53,000
    $58,000
    $29,000
    $51,000

5 points

Question 11

  1. Jell and Dell were partners with capital balances of $600 and $800 and an income sharing ratio of 2:3. They admitted Zell to a 30% interest in the partnership, and the total amount of goodwill credited to the original partners was $700. What amount did Zell contribute to the business?Answer
    $900.
    $560.
    $600.
    $590.
    $630.

5 points

Question 12

  1. The partnership of Clapton, Seidel, and Thomas was insolvent and will be unable to pay $30,000 in liabilities currently due. What recourse was available to the partnership's creditors?Answer
    They must present equal claims to the three partners as individuals.
    They must try obtain a payment from the partner with the largest capital account balance.
    They cannot seek remuneration from the partners as individuals.
    They may seek remuneration from any partner they choose.
    They must present their claims to the three partners in the order of the partners' capital account balances.

5 points

Question 13

  1. Jerry, a partner in the JSK partnership, begins the year on January 1, 2011 with a capital balance of $20,000. The JSK partnership agreement states that Jerry receives 6% interest on this weighted average capital balance.
    • On March 1, 2011, when the partnership tax return for 2010 was completed, Jerry's capital account was credited for his share of 2010 profit of $120,000.

    • Jerry withdrew this amount quarterly, beginning April 1.
    • On September 1, Jerry's capital account was credited with a special bonus of $60,000 for business he brought to the partnership.
    What amount of interest will be attributed to Jerry for year 2011 that will go toward his profit distribution for the year? (Use a 360-day year for calculations.)Answer
    $5,250
    $6,000
    $6,400
    $7,000
    $7,200

5 points

Question 14

  1. Donald, Anne, and Todd have the following capital balances; $40,000, $50,000 and $30,000 respectively. The partners share profits and losses 20%, 40%, and 40% respectively.
    Anne retires and is paid $80,000 based on an independent appraisal of the business. If the goodwill method is used, what is the capital of the remaining partners?Answer
    Donald, $55,000; Todd, $60,000
    Donald, $40,000; Todd, $30,000
    Donald, $65,000; Todd, $55,000
    Donald, $15,000; Todd, $30,000

5 points

Question 15

  1. The Abrams, Bartle, and Creighton partnership began the process of liquidation with the following balance sheet:

    Abrams, Bartle, and Creighton share profits and losses in a ratio of 3:2:5. Liquidation expenses are expected to be $12,000.
    If the noncash assets were sold for $234,000, what amount of the loss would have been allocated to Bartle?Answer
    $43,200
    $46,800
    $40,000
    $42,400
    $43,100

5 points

Question 16

  1. When a partnership is insolvent and a partner has a deficit capital balance, that partner is legally required to:Answer
    declare personal bankruptcy.
    initiate legal proceedings against the partnership.
    contribute cash to the partnership.
    deliver a note payable to the partnership with specific payment terms.
    None of the above. The partner has no legal responsibility to cover the capital deficit balance.

5 points

Question 17

  1. Dancey, Reese, Newman, and Jahn were partners who shared profits and losses on a 4:2:2:2 basis, respectively. They were beginning to liquidate their business. At the start of the process, capital balances were as follows:

    Which one of the following statements is true for a predistribution plan?Answer
    The first available $16,000 would go to Newman.
    The first available $20,000 would go to Dancey.
    The first available $8,000 would go to Jahn.
    The first available $8,000 would go to Newman.
    The first available $4,000 would go to Jahn.

5 points

Question 18

  1. Which of the following will not result in the termination and liquidation of a partnership?
    (1) Partners are incompatible and choose to cease operations.
    (2) There are excessive losses that are expected to continue.
    (3) Retirement of a partner.Answer
    1 only
    1 and 2 only
    2 and 3 only
    3 only
    1, 2, and 3

5 points

Question 19

  1. A local partnership was in the process of liquidating and reported the following capital balances:

    Douglass indicated that the $14,000 deficit would be covered by a forthcoming contribution. However, the two remaining partners asked to receive the $31,000 that was then in the cash account.
    How much of this money should Justice receive?Answer
    $15,467
    $15,533
    $17,333
    $16,533
    $15,867

5 points

Question 20

  1. The dissolution of a partnership occurs:Answer
    only when the partnership sells its assets and permanently closes its books.
    only when a partner leaves the partnership.
    at the end of each year, when income is allocated to the partners.
    only when a new partner is admitted to the partnership.
    when there is any change in the individuals who make up the partnership.

5 points

Expert:  Manal Elkhoshkhany replied 2 years ago.
How long do we still have?
Customer: replied 2 years ago.

25 more minutes

 

chapter 13,14,15

Expert:  Manal Elkhoshkhany replied 2 years ago.
Manal Elkhoshkhany, Tutor
Category: Finance
Satisfied Customers: 9482
Experience: More than 5000 online tutoring sessions.
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