Question 1

Which of the following items would be charged to the cost of of the building:

Accepted Answer

A)  Architectural fees. 
B)  Cost of foundation. 
C)  Capitalization of interest financing charges. 
D)  All of the above 
A)  Architectural fees. 
B)  Cost of foundation. 
C)  Capitalization of interest financing charges. 
D)  All of the above

Question 2

Unrealized gains and losses that appear in accumulated other comprehensive income are from securities classified as ___________________________________ securities.

Accepted Answer

The answer of Unrealized gains and losses that appear in...

Question 3

The three types of costs incurred in coal production are acquisition costs (costs to acquire the coal rich lands plus the present value of future cash flows necessary to restore the sites minus the cost of the land),exploration costs (costs of mining),and development costs (pipes,roads,and so on,to extract and transport the coal to customers).
Required:
Should each of these costs be capitalized or expensed? Explain.

Accepted Answer

All costs are capitalized except for exp

Question 4

Record Corporation
CD Inc. acquires 100% of the outstanding shares of Record Corp. for $1,200,000 and accounts for the transaction using the purchase method. Record Corp's balance sheet at the date of acquisition appears below:
  
-Based on the information concerning Record Corp.what is the market value of the company's shareholders' equity at the acquisition date?

Accepted Answer

A)  $0 
B)  $908,000 
C)  $1,200,000 
D)  $1,458,000 
A)  $0 
B)  $908,000 
C)  $1,200,000 
D)  $1,458,000

Question 5

Interpretation No.46R relates to the issue of whether an investing firm is the primary beneficiary in a variable-interest entity.When is an entity classified as a variable interest entity?

Accepted Answer

From Chapter 7 of Wahlen-Baginski-Bradsh

Question 6

Olivia Co.owns 5,600 of the 14,000 outstanding shares of Hobbitt Corp.common stock and exercises significant influence over the company.During 2011,Hobbitt earns $$90,000 and pays cash dividends of $25,000 If the beginning balance in the investment account was $190,000,the balance at December 31,2011 should be:

Accepted Answer

A)  $192,000 
B)  $172,000 
C)  $180,000 
D)  $216,000 
A)  $192,000 
B)  $172,000 
C)  $180,000 
D)  $216,000

Question 7

When a company records the cost of cutting down timber for example this cost is deemed to be :

Accepted Answer

A)  exploration cost. 
B)  asset retirement obligation. 
C)  development cost. 
D)  depletion cost. 
A)  exploration cost. 
B)  asset retirement obligation. 
C)  development cost. 
D)  depletion cost.

Question 8

Harbour Company purchased a new piece of equipment with a list price of $200,000 and subject to a 6 percent discount if paid within 45 days.Harbour paid within the discount period.The company also paid $1,650 to obtain title to the equipment and $650 as the license fee for the first year of operation.It paid $2,475 to level the area in which the equipment would be located and $11,750 to relocate other equipment that would have interfered with the proper operation of the new equipment.Harbour paid $500 for property and liability insurance for the first year of operation.What is the acquisition cost of this equipment that Harbour should record in its accounting records? Indicate the treatment of any amount not included in acquisition cost.

Accepted Answer

Harbour should record the equipment at t

Question 9

When a long-lived asset loses its ability to generate future benefits U.S.GAAP requires firms to write down the assets to their fair values and recognize an ______________________________ in income from continuing operations.

Accepted Answer

The answer of When a long-lived asset loses its ability...

Question 10

Managers are typically faced with all of the following primary choices and estimates when allocating acquisition costs of tangible assets and intangible assets to the periods benefited except:

Accepted Answer

A)  choosing an allocation method 
B)  estimating useful life 
C)  estimating salvage value 
D)  establishing a reserve for obsolescence 
A)  choosing an allocation method 
B)  estimating useful life 
C)  estimating salvage value 
D)  establishing a reserve for obsolescence

Question 11

Six years ago Moline Industries acquired a new machine to use in it primary manufacturing operations.The machine cost $47 million and the company expected the machine to have a ten-year useful life with a zero salvage value.The company uses straight-line depreciation for the asset.However,because of changes within the industry,Moline reevaluated the machine at the end of Year 6 and estimated that the machine is capable of generating undiscounted future cash flows of $12 million.Based on the quoted market prices of similar assets,Moline estimates the fair value of the machine at $10.5 million.
Required:1.What is the machine's book value at the end of Year 6?
2.Should Moline recognize an impairment of the asset? Why or why not? If yes,what amount?
3.At the end of Year 6,what amount should the machine be listed at on Moline's balance sheet?

Accepted Answer

1.Book value =$47,000,000-[$47,000,000/1

Question 12

Most publicly traded firms in the United States use the _________________________ method of depreciation for ______________ statement purposes.

Accepted Answer

straight-l

Question 13

An investing firm consolidates the variable interest entity if it absorbs the majority of the entity's expected ____________________ if they occur,receives a majority of the entity's expected ______________________________ if they occur,or both.

Accepted Answer

losses,res

Question 14

GAAP stipulates that firms should do what with expenditures that increase the service potential of an asset beyond that originally anticipated?

Accepted Answer

A)  Expense the expenditure immediately. 
B)  Capitalize the expenditure and depreciate it over the remaining service life of the asset. 
C)  Capitalize the expenditure, but do not depreciate the asset. 
D)  Charge it off to shareholders' equity. 
A)  Expense the expenditure immediately. 
B)  Capitalize the expenditure and depreciate it over the remaining service life of the asset. 
C)  Capitalize the expenditure, but do not depreciate the asset. 
D)  Charge it off to shareholders' equity.

Question 15

You are trying to determine the functional currency of a foreign unit.For the following three factors determine what conditions would result in the foreign currency being the functional currency:a.Sales Prices
b.Financing
c.Relationships between the Parent and the Foreign Unit

Accepted Answer

a.Sales Prices - Influenced primarily by

Question 16

Using the information below calculate the average total depreciable life of the assets: $$\begin{array}{l}
\text { Infarmation from the Balance Shet: }\
\begin{array} { l c c c } 
& \mathbf { 2 0 1 2 } & \mathbf { 2 0 1 1 } \
\text { Depreciable As5ets } & \mathbf { 4 0 0 , 0 0 0 } & \$ 400,000 \
\text { Accumulated Depreciation } & ( 175,000 ) & \text { (100,000) } \
\text { Depreciable A5sets (Net) } & \$ 425,000 & \$ 300,000
\end{array}
\end{array}$$

Accepted Answer

A)  6.54 years 
B)  7.25 years 
C)  6.91 years 
D)  9.15 years 
A)  6.54 years 
B)  7.25 years 
C)  6.91 years 
D)  9.15 years

Question 17

The functional currency of a foreign unit whose receivables and payables are denominated in foreign currency and not usually remitted to parent company is the ______________________________.

Accepted Answer

The answer of The functional currency of a foreign unit...

Question 18

All of the following statements are true regarding accounting for software development costs except:

Accepted Answer

A)  Firms must expense as incurred all costs incurred internally in developing computer software until such development achieves the technological feasibility of a product. 
B)  Firms must capitalize as incurred all costs incurred internally in developing computer software. 
C)  Researchers have found a significant association between costs and future earnings which support capitalizing and amortizing product development costs permitted by U.S. GAAP and IFRS. 
D)  The interpretation of the meaning of technological feasibility has created diversity in the practice of accounting for software development costs. 
A)  Firms must expense as incurred all costs incurred internally in developing computer software until such development achieves the technological feasibility of a product. 
B)  Firms must capitalize as incurred all costs incurred internally in developing computer software. 
C)  Researchers have found a significant association between costs and future earnings which support capitalizing and amortizing product development costs permitted by U.S. GAAP and IFRS. 
D)  The interpretation of the meaning of technological feasibility has created diversity in the practice of accounting for software development costs.

Question 19

The method used to account for oil and gas exploration costs that capitalizes the exploration costs of productive wells is the

Accepted Answer

A)  reserve recognition accounting. 
B)  successful efforts approach. 
C)  soft asset approach. 
D)  full-cost approach. 
A)  reserve recognition accounting. 
B)  successful efforts approach. 
C)  soft asset approach. 
D)  full-cost approach.

Question 20

Stock Trader,Inc.began operations in 2012.Stock Trader has acquired a number of equity investments during 2012.None have been sold.Stock Trader exerts no influence over any of its investments each of which represents a small percentage of the investee.An analysis of Stock Trader's investment portfolios shows the following totals at December 31,2012:
   
Based on the information provided,describe how Stock Trader would present this information in its financial statements.You should discuss what amounts would appear in each financial statement.

Accepted Answer

Both the trading and available-for-sale

Which of the following items would be charged to the cost of of the building:

Unrealized gains and losses that appear in accumulated other comprehensive income are from securities classified as ___________________________________ securities.

Interpretation No.46R relates to the issue of whether an investing firm is the primary beneficiary in a variable-interest entity.When is an entity classified as a variable interest entity?

When a company records the cost of cutting down timber for example this cost is deemed to be :

When a long-lived asset loses its ability to generate future benefits U.S.GAAP requires firms to write down the assets to their fair values and recognize an ______________________________ in income from continuing operations.

Managers are typically faced with all of the following primary choices and estimates when allocating acquisition costs of tangible assets and intangible assets to the periods benefited except:

Most publicly traded firms in the United States use the ___________ method of depreciation for statement purposes.

An investing firm consolidates the variable interest entity if it absorbs the majority of the entity's expected if they occur,receives a majority of the entity's expected __________ if they occur,or both.

GAAP stipulates that firms should do what with expenditures that increase the service potential of an asset beyond that originally anticipated?

You are trying to determine the functional currency of a foreign unit.For the following three factors determine what conditions would result in the foreign currency being the functional currency:a.Sales Prices b.Financing c.Relationships between the Parent and the Foreign Unit

The functional currency of a foreign unit whose receivables and payables are denominated in foreign currency and not usually remitted to parent company is the ______________________________.

All of the following statements are true regarding accounting for software development costs except:

The method used to account for oil and gas exploration costs that capitalizes the exploration costs of productive wells is the

Overview of Financial Reporting, financial Statement Analysis, and Valuation

Asset and Liability Valuation and Income Measurement

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Profitability Analysis

Risk Analysis

Accounting Quality

Financing Activities

Operating Activities

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters

Exam 8: Investing Activities

Which of the following items would be charged to the cost of of the building:

Unrealized gains and losses that appear in accumulated other comprehensive income are from securities classified as ___________________________________ securities.

Interpretation No.46R relates to the issue of whether an investing firm is the primary beneficiary in a variable-interest entity.When is an entity classified as a variable interest entity?

When a company records the cost of cutting down timber for example this cost is deemed to be :

When a long-lived asset loses its ability to generate future benefits U.S.GAAP requires firms to write down the assets to their fair values and recognize an ______________________________ in income from continuing operations.

Managers are typically faced with all of the following primary choices and estimates when allocating acquisition costs of tangible assets and intangible assets to the periods benefited except:

Most publicly traded firms in the United States use the _________________________ method of depreciation for ______________ statement purposes.

An investing firm consolidates the variable interest entity if it absorbs the majority of the entity's expected ____________________ if they occur,receives a majority of the entity's expected ______________________________ if they occur,or both.

GAAP stipulates that firms should do what with expenditures that increase the service potential of an asset beyond that originally anticipated?

You are trying to determine the functional currency of a foreign unit.For the following three factors determine what conditions would result in the foreign currency being the functional currency:a.Sales Prices b.Financing c.Relationships between the Parent and the Foreign Unit

Using the information below calculate the average total depreciable life of the assets: Infarmation from the Balance Shet: Depreciable As5ets \ 400,000 Accumulated Depreciation (175,000) (100,000) Depreciable A5sets (Net) \ 425,000 \ 300,000

The functional currency of a foreign unit whose receivables and payables are denominated in foreign currency and not usually remitted to parent company is the ______________________________.

All of the following statements are true regarding accounting for software development costs except:

The method used to account for oil and gas exploration costs that capitalizes the exploration costs of productive wells is the

Overview of Financial Reporting, financial Statement Analysis, and Valuation

Asset and Liability Valuation and Income Measurement

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Profitability Analysis

Risk Analysis

Accounting Quality

Financing Activities

Operating Activities

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters

Most publicly traded firms in the United States use the ___________ method of depreciation for statement purposes.

An investing firm consolidates the variable interest entity if it absorbs the majority of the entity's expected if they occur,receives a majority of the entity's expected __________ if they occur,or both.