Question 1

Balance Sheet Equation
 
-Refer to Balance Sheet Equation.JCP Company purchased marketable securities for $5,000 during the year,at the end of the year the company revalues the securities to $5,700.This revaluation would result in an increase to non-cash assets and ____________________________________________________________.

Accepted Answer

The answer of Balance Sheet Equation
 
-Refer to Balance Sheet...

Question 2

When income tax expense differs from income taxes currently payable on taxable income companies recognize deferred tax assets and deferred tax liabilities.What type of event would create a deferred tax asset and deferred tax liability?

Accepted Answer

The answer of When income tax expense differs from income...

Question 3

b.Assuming that Plaxo Corporation decides to use accelerated depreciation for both financial and tax reporting purposes for 2011 would there still be a deferred tax liability?

Accepted Answer

The answer of b.Assuming that Plaxo Corporation decides to use...

Question 4

Stockholders' equity can be expanded into the following three accounts: Accumulated other comprehensive income,retained earnings and _________________________________________________________________.

Accepted Answer

The answer of Stockholders' equity can be expanded into the...

Question 5

Disregarding cash flows with owners,over sufficiently long periods of time,net income equals:

Accepted Answer

A)  revenues minus dividends and expenses 
B)  assets minus liabilities 
C)  stockholders' equity 
D)  cash inflows minus cash outflows

Question 6

A change in the _________________________ or _________________________ will not change a preset series of cash flows,however it will change the present value of those cash flows.

Accepted Answer

The answer of A change in the _________________________ or _________________________...

Question 7

What valuation methods reflect current values? Discuss the advantage(s)and disadvantage(s)of valuing assets and liabilities using current values.

Accepted Answer

The answer of What valuation methods reflect current values? Discuss...

Question 8

Items,such as interest revenue on municipal bond holdings,that do not affect taxable income or income taxes paid in any year are referred to as _____________________________________________.

Accepted Answer

The answer of Items,such as interest revenue on municipal bond...

Question 9

The amount that a company would have to pay today to acquire an asset it now holds is called ________________________________________.

Accepted Answer

The answer of The amount that a company would have...

Question 10

____________________ assets and liabilities represent amounts of cash a firm can expect to receive or pay in the future.

Accepted Answer

The answer of ____________________ assets and liabilities represent amounts of...

Question 11

Current replacement cost represents

Accepted Answer

A)  the amount a firm would have to pay currently to acquire an asset it now holds 
B)  the amount a firm would have to pay currently to acquire an asset it does not now hold 
C)  the amount a firm would have to pay in the future to acquire an asset it now holds 
D)  the amount a firm would have to pay to purchase a comparably depreciated version of the asset it now holds

Question 12

What level are inputs for estimating fair values are based on inputs that are readily available via prices for identical assets or liabilities in actively traded markets such as securities exchanges?

Accepted Answer

A)  Level 1. 
B)  Level 2. 
C)  Level 3. 
D)  None of these.

Question 13

Which of the following transactions is consistent with recognizing value changes on the balance sheet and income statement when they are realized in a market transaction?

Accepted Answer

A)  Selling land at a cost greater than its original purchase price. 
B)  Recording an increase in the fair value of investments at year end. 
C)  Translating foreign operations accounted for in Yen back to U.S. dollars in order to prepare consolidated financial statements. 
D)  Writing down the value of an asset due to obsolescent.

Question 14

Future tax deductions

Accepted Answer

A)  result in deferred tax assets. 
B)  result in deferred tax liabilities. 
C)  occur where the tax basis of liabilities is more than the financial reporting basis. 
D)  occur where the tax basis of assets is less than financial reporting basis.

Question 15

The use of acquisition cost as a valuation method is justified on the basis that acquisition cost is:

Accepted Answer

A)  timely 
B)  relevant 
C)  subjective 
D)  objective

Question 16

Deferred tax assets and liabilities are created due to temporary differences between the tax and financial reporting basis of certain assets and liabilities.Discuss which scenarios result in a deferred tax asset and which result in deferred tax liabilities.

Accepted Answer

The answer of Deferred tax assets and liabilities are created...

Question 17

Balance Sheet Equation
 
-Refer to the Balance Sheet Equation.If ORP Corporation sells $25,000 of its product on account,it will see an increase in non-cash assets and ___________________________________.

Accepted Answer

The answer of Balance Sheet Equation
 
-Refer to the Balance...

Question 18

The analytical framework used to evaluate transactions is reproduced below:
  
Using this analytical framework indicate the effect of each of the following transactions for CX Corporation:
1.CX Corporation purchases land for $450,000 cash.
2.At the end of the period CX Corporation receives an appraisal that values the land at $540,000.
3.During the next period CX Corporation sells the land for $665,000.
4.CX pays taxes at a rate of 40%.

Accepted Answer

The answer of The analytical framework used to evaluate transactions...

Question 19

Fish Farm Corporation purchases a new tract of land on which it is going to build new growing and holding tanks in order to expand its business.Which of the following costs would not be part of the cost of the land?

Accepted Answer

A)  costs to run a title search 
B)  costs of grading to level the land 
C)  costs of tearing down an existing structure 
D)  cost of the new holding tanks

Question 20

The difference between income tax payable and income tax expense is reported on the balance sheet as either ___________________________________ or a ___________________________________.

Accepted Answer

The answer of The difference between income tax payable and...

Exam 2: Asset and Liability Valuation and Income Measurement