Exam 9: Operating Activities

Falcon Networks Falcon Networks is a leading semiconductor company with operations in 17 different countries.Information about the company's taxes appears below: Falcon Networks Components of Income Tax Expense (in millions) Current - Federal - Foreign - State and Local Total Current Deferred - Federal - Foreign Total Deferred Total Income Tax Expense Note: Falcon Networks has no current liability at year-end with respect to total current taxes. Components of Income before Taxes United States Foreign Total \ 55.65 \ 47.52 83.85 78.95 \ 154.19 \ 138.97 \ 30.28 \ 42.90 \ 54.17 \ 57.48 \ 256.35 \ 253.68 -Using the information provided by Falcon Networks determine the combined effective tax rate for 2012.

Which of the following would not be suggestive of a company recognizing sales too early?

One sign that a company may be recognizing sales too early is that it has unusually large amounts of ______________________________.

All of the following are considered by analysts when assessing the quality of accounting except:

A typical defined benefit pension plan formula includes all of the following except:

A company may try to paint a favorable picture of itself by accelerating the timing of revenues or estimating the collectible amounts too aggressively.In these cases the quality of accounting information declines because it does not represent the company's true economic condition and may not be sustainable.List four conditions that might suggest that a company is recognizing revenues too early?

All of the following are conditions for revenue recognition outlined by SAB 104 except:

Under U.S.GAAP,application of the LIFO and FIFO inventory methods result in differences in the balance sheet,income statement and cash flow statement.Compare and contrast the effect of the two methods on each financial statement and determine the advantages and disadvantages of each method.

Gorilla,Corp.implemented a defined-benefit pension plan for its employees on January 2,2012.The following data are provided for year 2012,as of December 31: Accumulated benetit obligation Plan assets at fair value Net period pension expense Employer's contribution \ 103,000 78,000 90,000 70,000 What amount should Gorilla record as additional minimum pension liability at December 31,2012?

Playtime Corporation Assume that Playtime Corp.has agreed to construct a new playground for Surrey County for $2,450,000.Construction of the new playground will begin on March 17, 2012 and is expected to be completed in August 2013.At the signing of the contract Playtime Corp.estimates that it will cost $1,750,000 to build the playground. -At the end of 2012 Playtime provided the following information about the project: Costsincurred Estimated costs Year to date remaining 2012 \ 1,200.000 \ 600.000 If Playtime uses the percentage of completion to recognize revenue on the long-term contract,how much gross margin should Playtime recognize in 2012?

Recording municipal bond interest received in the general ledger will generate a(n)_________________ difference

If the portions of the firm's foreign operations in higher-tax-rate countries grew more rapidly than foreign operations in lower-tax-rate countries,the company may seek out more tax effective ways of operating abroad through all of the following means except:

A contractor would not use ________________________________________ method of income recognition when there is substantial uncertainty regarding the total costs it will incur in completing the project.

Presented below is pension information related to Roberts Corp.for the year 2012: Service cost Interest on projected benefit obligation Amortization of prior service cost due to increase in benefits Expected return on plan assets 36,000 12,00 6,000 8000 The amount of pension expense to be reported for 2012 is:

Which of the following will most likely help identify an increasing proportion of uncollectible sales?

The following information is taken from Satin financial statements (amounts in thousands): Inventory at LIFO Cost of goods sold Stockholders' Equity Net Income Tax rate 12/31/2010 12/31/2009 \ 219,686 \ 241,154 754,661 675,138 242,503 242,712 31,185 64,150 Inventory Footnote: If the first-in,first-out method of accounting for inventory had been used,inventory would have been approximately $26.9 million and $25.1 million higher than reported at 12/31/2010 and 12/31/2009,respectively. Required: a.Calculate what inventory would have been at 12/31/2010 and 12/31/2009 had the FIFO inventory method been used. b.What would net income for the year ended 12/31/2010,have been if the FIFO inventory method been used? c.Calculate what stockholders' equity would have been at 12/31/2010 and 12/31/2009 had the FIFO inventory method been used.

The difference between the economic resources received from customers and the economic resources paid to suppliers,employees and other providers of goods and services is called ____________________.

Accountants use reserve accounts for various reasons,for each of the scenarios below describe a specific account example that matches the scenario. 1.The use of a reserve account in order to match expense with revenues. 2.The use of a reserve account in order to keep expense out of the income statement. 3.The use of a reserve account in order to revalue an asset,but delay the income recognition effect.

Explain the difference between a temporary and a permanent timing difference for income tax purposes"

Magnum Construction contracted to construct a factory building for $545,000.The company started during 2012 and was completed in 2013.Information relating to the contract is as follows: Costs incured during the year Estinated additional cost to complete 165,000 \@cdots Billings during the year 280,000 285,000 Cash collections during the year 260,000 305,000 Required: Record the preceding transactions in Magnum's books under completed-contract and the percentage of completion methods.Determine amounts that will be reported on the balance sheet at the end of 2012.