Question 1

Use the following to answer questions
Missoula Inc.reported the following selected financial statement data:
  
-Required: Compute the average days in inventory for 2016.

Accepted Answer

365 / 4.0

Question 2

Refer to the information in the previous question.Assume that the UFL anticipates that,in addition to receiving the $1 million license fee,it will receive a bonus of $2 million in year 1 of the contract and a bonus of $3 million in years 2-4 of the contract based on Tank-Skin's sales.Also assume that the UFL is convinced that it is probable there will not be a significant reversal of any revenue recognized with respect to the bonus in subsequent periods.At the inception of the contract,what is the amount of transaction price that the UFL would estimate with respect to this license arrangement?

Accepted Answer

A) $0 
B) $1,000,000 
C) $3,000,000 
D) 12,000,000 
A) $0 
B) $1,000,000 
C) $3,000,000 
D) 12,000,000

Question 3

Sellers are only required to adjust the transaction price to reflect the time value of money when the contract has a significant financing component.

Accepted Answer

A) True 
 B)False

Question 4

What are CCC's estimated remaining construction costs on the project at the end of 2016?

Accepted Answer

A) $90 million. 
B) $135 million. 
C) $225 million. 
D) $0. 
A) $90 million. 
B) $135 million. 
C) $225 million. 
D) $0.

Question 5

In February 2016,Omnibus Interior Corporation enters into a contract with Pike Realty to remodel a 6-unit luxury condominium in New York City.Under the contract,the company is entitled to receive a fixed fee of $1 million,and an additional performance bonus of $500,000 if the property is sold during the same year.
Required: Given a strong demand for housing,Omnibus estimates that the property would most likely be sold within the same year,and bases estimates of variable consideration on the most likely estimate.On what transaction price should Omnibus base revenue recognition?

Accepted Answer

Based on the most likely amoun

Question 6

Prepare Terra's January journal entry to account for the revenue earned from January 1 - January 31.

Accepted Answer

In January,Terra earns the fixed monthly

Question 7

Which of the following is an example of an extended warranty?

Accepted Answer

A) Fancy Headphones,Inc.provides assurance that its headphones are defect-free after purchase. 
B) Azalea's Flowers assures clients that its flowers will stay fresh for at least a week. 
C) Mark Electronics offers a warranty at an affordable price that provides additional protection after the customer takes possession of the product. 
D) Erickson Electronics promises to make repairs or replace any product found to be defective within a week of purchase. 
A) Fancy Headphones,Inc.provides assurance that its headphones are defect-free after purchase. 
B) Azalea's Flowers assures clients that its flowers will stay fresh for at least a week. 
C) Mark Electronics offers a warranty at an affordable price that provides additional protection after the customer takes possession of the product. 
D) Erickson Electronics promises to make repairs or replace any product found to be defective within a week of purchase.

Question 8

In its December 31,2016,balance sheet,Lake would report:

Accepted Answer

A) Deferred gross profit of $700,000. 
B) Deferred gross profit of $600,000. 
C) Installment receivables (net)of $700,000. 
D) Installment receivables (net)of $400,000. 
A) Deferred gross profit of $700,000. 
B) Deferred gross profit of $600,000. 
C) Installment receivables (net)of $700,000. 
D) Installment receivables (net)of $400,000.

Question 9

Use the following to answer questions 
The following partial income statement and balance sheet information (in $ millions)comes from the Annual Report of Saratoga Springs Co.for the year ending 12/31/2016:
     Required: Compute the following amounts for Saratoga Springs Co.
-Its receivables turnover ratio for 2016.Round your answer to one decimal place.

Accepted Answer

Its receivables turn

Question 10

Estimate the stand-alone selling price of the software using the adjusted market assessment approach.

Accepted Answer

A) $50 
B) $80 
C) $90 
D) $97.50 
A) $50 
B) $80 
C) $90 
D) $97.50

Question 11

Which of the following is not an indicator that the constraint on recognizing variable consideration should be applied?

Accepted Answer

A) Poor (limited)evidence on which to base an estimate 
B) A broad range of outcomes that could occur 
C) A short delay before uncertainty resolves 
D) A history of the seller changing payment terms on similar contracts 
A) Poor (limited)evidence on which to base an estimate 
B) A broad range of outcomes that could occur 
C) A short delay before uncertainty resolves 
D) A history of the seller changing payment terms on similar contracts

Question 12

What would be the journal entry made in 2015 to record revenue?

Accepted Answer

The answer of What would be the journal entry made...

Question 13

On June 1st,Joseph & Company received a $500 deposit for 80 cases of wine.On June 10th the customer identified specific vintages that are included in Joseph's inventory,and asked that Joseph not ship the wine until June 20 so the customer could ready space to store the wine,so Joseph set those wines aside for the customer,boxed and ready for shipment to the customer.On June 20th the wine was shipped and delivered to the customer.Joseph likely would recognize revenue on

Accepted Answer

A) June 20th 
B) June 10th 
C) June 1st 
D) Upon consumption of the wine by the customer 
A) June 20th 
B) June 10th 
C) June 1st 
D) Upon consumption of the wine by the customer

Question 14

Hans Cars & Trucks sells various types of used vehicles with a one-year warranty that covers any defects.When customers make a purchase,they also receive a coupon for 10 free engine oil changes and an option to change all of the tires for $50 after 30,000 miles.Typically,customers pay $25 for an oil change and $250 for a new set of tires.
Required:
(a)Given the information above,how many performance obligations exist in the contract to purchase a vehicle?
(b)Assume the same contract but that it offers customers an option to change all of the tires for $250 after 30,000 miles.How many performance obligations exist in the contract to purchase a vehicle?

Accepted Answer

(a)In total,there are three performance

Question 15

Use the following to answer questions 
Sahara Desert Homes (SDH)reports under IFRS and constructed a new subdivision during 2015 and 2016 under contract with Cactus Development Co.Relevant data are summarized below:
   SDH uses the cost recovery method under IFRS to recognize revenue.
-What is SDH's journal entry to record revenue in 2016?

Accepted Answer

The answer of Use the following to answer questions 
Sahara...

Question 16

After Sweeney has transferred a painting to a barbershop,the painting:

Accepted Answer

A) Should be counted in Sweeney's inventory until the barbershop sells it. 
B) Should be counted in the barbershop's inventory,as the barbershop now possesses it. 
C) Should be counted in either Sweeney's or the barbershop's inventory,depending on which incurred the cost of preparing the painting for display. 
D) We lack sufficient information to know who should carry the painting in inventory. 
A) Should be counted in Sweeney's inventory until the barbershop sells it. 
B) Should be counted in the barbershop's inventory,as the barbershop now possesses it. 
C) Should be counted in either Sweeney's or the barbershop's inventory,depending on which incurred the cost of preparing the painting for display. 
D) We lack sufficient information to know who should carry the painting in inventory.

Question 17

The adjusted market assessment approach can be used to estimate the stand-alone selling price of a good or service.

Accepted Answer

A) True 
 B)False

Question 18

If a licensee benefits from the seller's activity over the license period with respect to the licensed intellectual property,revenue should be recognized over time.

Accepted Answer

A) True 
 B)False

Question 19

Goods and services are capable of being distinct if:

Accepted Answer

A) The seller regularly sells the good or service separately. 
B) A buyer could use the good or service on its own. 
C) A buyer could use the good or service in combination with goods or services the buyer could obtain elsewhere. 
D) The seller regularly sells the good or service separately,or the buyer could use the good or service on its own,or the buyer could use the good or service in combination with goods or services the buyer could obtain elsewhere. 
A) The seller regularly sells the good or service separately. 
B) A buyer could use the good or service on its own. 
C) A buyer could use the good or service in combination with goods or services the buyer could obtain elsewhere. 
D) The seller regularly sells the good or service separately,or the buyer could use the good or service on its own,or the buyer could use the good or service in combination with goods or services the buyer could obtain elsewhere.

Question 20

A decrease in the receivables turnover ratio indicates a decrease in the time between credit sales and cash collection.

Accepted Answer

A) True 
 B)False

Use the following to answer questions Missoula Inc.reported the following selected financial statement data: -Required: Compute the average days in inventory for 2016.

Sellers are only required to adjust the transaction price to reflect the time value of money when the contract has a significant financing component.

What are CCC's estimated remaining construction costs on the project at the end of 2016?

Prepare Terra's January journal entry to account for the revenue earned from January 1 - January 31.

Which of the following is an example of an extended warranty?

In its December 31,2016,balance sheet,Lake would report:

Estimate the stand-alone selling price of the software using the adjusted market assessment approach.

Which of the following is not an indicator that the constraint on recognizing variable consideration should be applied?

What would be the journal entry made in 2015 to record revenue?

After Sweeney has transferred a painting to a barbershop,the painting:

The adjusted market assessment approach can be used to estimate the stand-alone selling price of a good or service.

If a licensee benefits from the seller's activity over the license period with respect to the licensed intellectual property,revenue should be recognized over time.

Goods and services are capable of being distinct if:

A decrease in the receivables turnover ratio indicates a decrease in the time between credit sales and cash collection.

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, comprehensive Income, and the Statement of Cash Flows

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, plant, and Equipment and Intangible Assets: Utilization and Impairment

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Shareholders Equity

Share-Based Compensation and Earnings Per Share

Accounting Changes

The Statement of Cash Flows

Filters

Exam 5: Income Measurement

Use the following to answer questions Missoula Inc.reported the following selected financial statement data: -Required: Compute the average days in inventory for 2016.

Sellers are only required to adjust the transaction price to reflect the time value of money when the contract has a significant financing component.

What are CCC's estimated remaining construction costs on the project at the end of 2016?

Prepare Terra's January journal entry to account for the revenue earned from January 1 - January 31.

Which of the following is an example of an extended warranty?

In its December 31,2016,balance sheet,Lake would report:

Estimate the stand-alone selling price of the software using the adjusted market assessment approach.

Which of the following is not an indicator that the constraint on recognizing variable consideration should be applied?

What would be the journal entry made in 2015 to record revenue?

After Sweeney has transferred a painting to a barbershop,the painting:

The adjusted market assessment approach can be used to estimate the stand-alone selling price of a good or service.

If a licensee benefits from the seller's activity over the license period with respect to the licensed intellectual property,revenue should be recognized over time.

Goods and services are capable of being distinct if:

A decrease in the receivables turnover ratio indicates a decrease in the time between credit sales and cash collection.

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, comprehensive Income, and the Statement of Cash Flows

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, plant, and Equipment and Intangible Assets: Utilization and Impairment

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Shareholders Equity

Share-Based Compensation and Earnings Per Share

Accounting Changes

The Statement of Cash Flows

Filters