中级会计习题--英文版
中级财务会计英文版.课后答案(Chap03)
August 14
8,000 @ $ 5.50 = $44,000
2,000 @ $6.10
2,000 @ $5.50 $23,200
August 18
6,000 @ $5.00 = $30,000
2,000 @ $6.10
2,000 @ $5.50 $53,200
Cost of goods sold$82,200
Cost of ending inventory:
Date of
purchaseUnitsUnit costTotal cost
August 183,000$5.00$15,000
Last-in, first-out (LIFO)
Cost of goods available for sale(18,000 units)$97,200
12,000 units
August 14
8,000 @ $5.60 = $44,800
4,000 @ $5.60 $22,400
August 18
Available
6,000 @ $5.00 = $30,000
$52,400
= $5.24/unit
10,000 units
August 25
7,000 @ $5.24 =$36,680
Less: Ending inventory(determined below)(17,700)
Cost of goods sold$79,500
Cost of ending inventory:
Date of
purchaseUnitsUnit costTotal cost
金融英语中级会计学汇总真题一 (1)
金融英语中级会计学汇总真题一(总分：120.50，做题时间：120分钟)一、SECTION ONE (Compulsory) Answer all six questions in this section. Each question carries 10 marks. (总题数：7，分数：10.50)1.A “Carriage Outwards” account normally has a debit balance.（分数：1.50）__________________________________________________________________________________________正确答案：()解析：2.“Long Term Investment” is an item of shareholders’ fund.（分数：1.50）__________________________________________________________________________________________正确答案：()解析：3.“Cash basis accounting” means that accounts only record items which have realizable values in cash.（分数：1.50）__________________________________________________________________________________________正确答案：()解析：4.A “Purchases” acco unt records only items which were bought for resale.（分数：1.50）__________________________________________________________________________________________正确答案：()解析：5.“Share Premium” is a capital profit.（分数：1.50）__________________________________________________________________________________________正确答案：()解析：6.A “quick ratio” tests the liquidity of a business.（分数：1.50）__________________________________________________________________________________________正确答案：()解析：7.A variable cost is a cost which changes according to market conditions.（分数：1.50）__________________________________________________________________________________________正确答案：()解析：二、Question 2 (Total: 10 marks) Read the following statements and choose the correct answers by writing the alphabetical letter on the answer sheets.(总题数：10，分数：10.00)8.A “relevant cost” is（分数：1.00）A.a cost which has been paidB.a future cost which is associated with the decision at hand.C.a future cost which must be incurred if a firm is to continue in business.D.a fixed cost in a project解析：9.Provision for doubtful debts is（分数：1.00）A.an account recording all debts which are doubtful in collection.B.a current liability.C.a current asset.D.a reduction in the value of an asset.解析：10.A cash flow statement（分数：1.00）A.shows the amounts of money in cash, or near cash form, received and paid out by a firm from trading during a period.B.shows the amounts of money in cash, or near cash form, received and paid out by a firm from all activities during a period.C.shows the change in financial positions of a firm during a period.D.shows a firm’s cash transactions during a period.解析：11.A sole trader’s capital at a particular dat e equals（分数：1.00）A.the amount of cash he has in the business.B.his net assets at cost in the business.C.all his assets in the business at realizable values.D.all his assets at book values in the business less all liabilities of the business.解析：12.A balance sheet shows（分数：1.00）A.all assets of a firm at market values and all its liabilities at a particular date.B.all known assets and all known liabilities and capital of a firm at a particular date.C.estimated values of all assets, capital and liabilities of a firm at a particular date.D.all assets, all liabilities and proprietors’ fund at book values of a firm at a particular date.解析：13.A “liquid asset” means（分数：1.00）A.an asset in cash or readily convertible to cash.B.an asset which has not a physical form.C.an investment which is realizable at any time.D.a current asset other than trading stock解析：14. A machine bought for resale is（分数：1.00）A.a capital expenditureB.a trading stock itemC.a fixed assetD.a production cost15.A “break-even” sales volume means（分数：1.00）A.a sale volume which will produce no profit or lossB.a minimum sales volume which will produce the target profit.C.a sales volume which is very close to budget.D.a sales volume which is below the break-even point.解析：16.A pidend paid by a company is（分数：1.00）A.an appropriation of profits.B.a capital expenditure.C.a revenue expenditure.D.a return on capital解析：17.Capital profits mean（分数：1.00）A.profits derived from the use of capitalB.profits derived from the use of fixed assets.C.returns on capital.D.profits from disposal of fixed assets.解析：三、Question 3 (Total: 10 marks)(总题数：1，分数：10.00)18.$000 Stocks at 1 Jan 01: Raw materials 20 Work in progress 10 Finished goods 25 Wages paid to production workers 60 Raw materials bought in year 150 Factory administration expenses 12 Depreciation of production machinery 15 Further information: Closing stocks at 31 Dec 01: Raw materials 18 Work in progress 3 Finished goods 30 Required: Prepare a manufacturing account in good form for the business.（分数：10.00）__________________________________________________________________________________________ 正确答案：()解析：四、Question 4 (Total: 10 marks)(总题数：1，分数：10.00)The following are the account balances of a limited company as at 31 December 2001: $,000 $,000 Ordinary share capital 600 10% Preferential share capital 400 share premium on Ordinary shares 300 Retained profits 500 Debentures (due 30 June 2002 ) 1,300 Plant and machinery 1,700 Provision for depreciation of plant and machinery 600 Dividends declared: Preferential 40 Ordinary 10 Trade creditors 700 Trade debtors 1,200 Provision for doubtful debts 80 Office expenses due but unpaid 20 Investments income receivable 30 Investments in associated companies 920 Trading stock 700 _____ 4,500 4,500 Net profit for the year, after deducting profits tax $30,000 and interest payments $23,000, was $220,000. Required: Calculate the following accounting ratios for the company: （分数：10.00）(1).Current ratio (2 marks) （分数：2.50）__________________________________________________________________________________________ 正确答案：()解析：(2).Quick ratio (2 marks) （分数：2.50）__________________________________________________________________________________________ 正确答案：()(3).Return on investment (or assets) (3 marks) （分数：2.50）__________________________________________________________________________________________正确答案：()解析：(4).Return on equity (3 marks)（分数：2.50）__________________________________________________________________________________________正确答案：()解析：五、Question 5 (Total: 10 marks)(总题数：1，分数：10.00)X and Y were trading in partnership sharing profits and losses in the ratio of 1:1. They agreed to accept Z as a new partner. The new profit and loss sharing ratio among X, Y and Z would be 2:2:1. The capital account balances of X and Y were $100,000 (Cr) respectively. Z was to contribute $50,000 cash as his capital and also contribute $200,000 cash to the business as consideration for his share of the goodwill of the partnership. （分数：10.00）(1).Prepare a statement showing the sharing of the goodwill between the old partners and among the new partners. (5 marks)（分数：5.00）__________________________________________________________________________________________正确答案：()解析：(2).Make journal entries for Z’s contributions assuming that no goodwill account is to be raised.(5 marks)（分数：5.00）__________________________________________________________________________________________正确答案：()解析：六、Question 6 (Total: 10 marks)(总题数：1，分数：10.00)On 1 May 2002 the cash book of a business showed a bank balance of $7,712 (Dr) but the bank statement of the same date showed a credit balance of $10,912. After checking the records, the following information was found: 1. Cheque received in the amount of $1,000 has been recorded in the cash book but has not been banked. 2. Cheque in the sum $4,360 has been drawn and sent out but it has not been presented to the bank for payment. 3. A cheque for $960 was banked but was subsequently returned by the bank marked “Insufficient fund”. No entry has been made for this in the cash book. 4. Interest $200 has been charged by the bank but no entry has been made in the cash book.5. A cheque for $3,700 from a customer has been incorrectly entered in the cash book as $2,700. It was correctly recorded by the bank. Required: （分数：10.00）(1).Make adjusting entries in the cash book to show the correct balance. （分数：5.00）__________________________________________________________________________________________正确答案：()解析：(2).Prepare a bank reconciliation statement from the correct cash book balance to the balance in the bank statement. （分数：5.00）__________________________________________________________________________________________正确答案：()解析：七、SECTION TWO Answer any two questions in this section.(总题数：3，分数：60.00) Question 7 (Total: 20 marks) The book of Delta Ltd as at 31 December 2001 showed the following balances: $ Ordinary share capital ($1 per share) 3,000,000 8% Preferential Share capital ($1 per share) 300,000 Retained earnings at 1 Jan 2001 62,000 Plant and machinery at cost 6,000,000Provision for depreciation of plant and machinery 2,400,000 Sales 8,000,000 Purchases 4,500,000 Discounts received from suppliers 200,000 Trading stock at 1 Jan 2001 500,000 Trade debtors 600,000 Bad debts written off 40,000 Provision for doubtful debts at 1 Jan 2001 30,000 Trade creditors 200,000 Auditors’ fees 90,000 Salaries and wages 700,000 Rents and rates 1,200,000 General expenses 500,000 Interim Preferential dividend paid 12,000 Cash 50,000 Additional informations （分数：20.00）(1).Trading stock at 31 December 2001 was $700,000 （分数：4.00）__________________________________________________________________________________________ 正确答案：()解析：(2).A dividend of 2 cents per share on the Ordinary Shares and a final dividend of 4% on the Preferential Shares had been declared but had not been accounted for. （分数：4.00）__________________________________________________________________________________________ 正确答案：()解析：(3).20% depreciation using the straight line method should be provided for the plant and machinery. （分数：4.00）__________________________________________________________________________________________ 正确答案：()解析：(4).Provision for doubtful debts at 3% of the trade debtors should be made. （分数：4.00）__________________________________________________________________________________________ 正确答案：()解析：(5).Corporate tax rate at 16% should be provided for in the accounts. Required: Prepare a Trading and Profit and Loss Account for the company for the year ended 31 December 2001 and a Balance Sheet of the company as at that date. （分数：4.00）__________________________________________________________________________________________ 正确答案：()解析：19.Question 8 (Total: 20 marks) Mr Lee is a sole trader. He does not know accounting and he only keeps records of cash receipts and payments. The following is a statement of a receipts and payments of his business for the year ended 31.12 .01: $ $ Cash in hand 1.1.01 50,400 Payments for goods 1,131,000 Sales receipts 1,569,000 Transport expenses 87,000 Cash put in by Mr Lee 26,000 Rents and rates 38,100 Loan from Mr Wong 200,000 Wages paid to office assistants 60,000 Drawings by Mr Lee 120,000 Purchase of equipment 400,000 ________ Balance at 31.12.01 9,300 1,845,400 1,845,400 Further information: (a) The loan from Mr Wong was received on 1.1.01 . Interest payable is 10% p.a. (b) The equipment was purchased on 1.1.01. Estimated life is 5 years with no residue value. Depreciation should be provided for it on the straight line mrthod. (c) The assets and liabilities of Mr Lee were as follows: 1.1.01 31.12.01 $ $ Stock in trade at cost 150,000 240,000 Trade debtors 138,000 200,000 Trade creditors 100,000 120,000 Equipment at cost __ 400,000 Cash balance 50,400 9,300 Required:Prepare a Trading and Profit and Loss Account for Mr Lee for the year ended 31.1.01 and a Balance Sheet as at that date. （分数：20.00）__________________________________________________________________________________________ 正确答案：()解析：20.Question 9 (Total: 20 marks) X and Y are in partnership sharing profits and losses in the ratio 3:2. They agree to draw interest on their capital at 8% p.a.; an annual salary to Y of $50,000;and interest on drawings at 10% p.a.; and to allow interest on loans from partners at p.a. The capitals of the partners are to be kept intact. The financial information of the partnership as at 31 january 2001 disclosed the following: $ $ Capital : X 1,000,000 Y 600,000 1600,000 Current Accounts : X 52,600 Cr Y 10,420 Cr 63,020 Loan from X 300,000 Net capital employed 1,963,020 The partners took drawings on 1 July 01: X $60,000; Y $ 30,000 Net trading profit for the year ended 31 December 2001 before interest and salaries to partners was $ 250,000. Required:Prepare an Appropriation Account or Statement and the partners’ Current Accounts for the year.（分数：20.00）__________________________________________________________________________________________ 正确答案：()解析：。
中级财务会计习题(英文)
Chapter 1 A. An example of a business stakeholder is the federal government.B. A corporation is a business that is legally separate and distinct from its owners.C. Accounting is a service that provides many different users with financial information to make economic decisions.D. Small ethical lapses are harmless in and of themselves.E. Managerial accounting is primarily concerned with the recording and reporting of economic data and activities of an entity for use by owners, creditors, governmental agencies, and the public.F. The unit of measurement concept requires that economic data be recorded in a common unit of measurement.G. If a building is appraised for $90,000, offered for sale at $95,000, and the buyer pays $85,000 cash for it, the buyer would record the building at $90,000.H. The owner’s rights to the assets rank ahead of the creditors’ rights to the assets.I. Business transactions are economic events that directly or indirectly change an entity’s financial condition or results f rom operations.J. If net income for a proprietorship was $25,000, the owner withdrew $10,000 in cash and the owner invested $5,000 in cash, the capital of the owner increased by $20,000. K. The owner is only allowed to withdraw cash from the business.L. Receiving a bill or otherwise being notified that an amount is owed is amount is paid.M. The principal financial statements of a proprietorship are the income statement, statement of owner’s equity, and the balance sheet.N. An income statement is a summary of the revenues and expenses of a business as of a specific date.O. A low ratio of liabilities to owner’s equity indicates that a business is near bankruptcy. 1. Profit is the difference betweena. assets and liabilitiesb. the incoming cash and outgoing cashc. the assets purchased with cash contributed by the owner and the cash spent to operate the businessd. the assets received for goods and services and the amounts used to provide the goods and services2. Which of the items below is not a business organization form?a. entrepreneurshipb. proprietorshipc. partnershipd. corporation3. Which of the following is not a step in providing accounting information to stakeholders? a. design the accounting information systemb. prepare accounting surveysc. identify stakeholdersd. record economic data4. For accounting purposes, the business entity should be considered separate from its owners if the entity isa. a corporationb. a proprietorshipc. a partnershipd. all of the above5. Which of the following is not a business transaction?a. make a sales offerb. sell goods for cashc. receive cash for services to be rendered laterd. pay for supplies6. The Reynolds Company estimated that the value of its land had increased from $10,000 to $16,000 and therefore wrote up the land account to $16,000. Which accounting concept(s) was (were) violated?a. cost conceptb. objectivity conceptc. all of the aboved. none of the above7. Goods purchased on account for future use in the business, such as supplies, are called a. prepaid liabilities b. revenuesc. prepaid expensesd. liabilities8. All of the following are financial statement(s) of a proprietorship except thea. statement of retained ear ningsb. statement of owner’s equityc. income statementd. statement of cash flowsChapter 2 A. A chart of accounts is a listing of accounts that make up the journal.B. Drawings are an example of an expense.C. To determine the balance in an account, always subtract credits from debits.D. The double-entry accounting system records each transaction twice.E. The increase side of all accounts is the normal balance.F. The journal is the book of original entry.G. Journalizing transactions using the double-entry bookkeeping system will eliminate fraud. H. The process of transferring the data from the journal to the ledger accounts is posting. I. The post reference notation used in the journal is the page number.J. When a business receives a bill from the utility company, no entry should be made until the invoice is paid.K. A proof of the equality of debits and credits in the ledger at the end of an accounting period is called a balance sheet.L. Even when a trial balance is in balance, there may be errors in the individual accounts. M. Posting a part of a transaction to the wrong account will cause the trial balance totals to be unequal.N. Horizontal analysis is used to compare the financial statements of the same company for different periods. 1. A group of related accounts that comprise a complete unit is called aa. Journalb. liability2.3.4.5.6. c. ledger d. transaction Which statement(s) concerning cash is (are) true? a. cash will always have more debits than credits b. cash will never have a credit balance c.cash is increased by debiting d. all of the above Which of the following types of accounts have a normal credit balance? a. assets and liabilities b. liabilities and expenses c. revenues and liabilities d. capital and drawing Which of the following entries records the receipt of cash from patients on account? a. Accounts Payable, debit; Fees Earned, credit b. Accounts Receivable, debit; Fees Earned, credit c. Accounts Receivable, debit; Cash, credit d. Cash, debit; Accounts Receivable, credit If the two totals of a trial balance are not equal, it could be due to a. failure to record a transaction b. recording the same erroneous amount for both the debit and the credit parts of a transaction c. an error in determining the account balances, such as a balance being incorrectly computed d. recording the same transaction more than once Which of the following errors, each considered individually, would cause the trial balance totals to be unequal?a. a transaction was not postedb. a payment of $96 for insurance was posted as a debit of $46 to Prepaid Insurance and a credit of $46 to Cashc. a payment of $311 to a creditor was posted as a debit of $3,111 to Accounts Payable and a debit of $311 to Accounts Receivabled. cash received from customers on account was posted as a debit of $140 to Cash and a credit of $140 to Accounts PayableChapter 3 1. The accrual basis of accounting requires revenue be recorded when cash is received from customers.2. The matching concept requires expenses be recorded in the same period that the related revenue is recorded.3. Adjusting entries are made at the end of an accounting period to adjust accounts on the balance sheet.4. The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and deferred revenue has never been recorded.5. The systematic allocation of land’s cost to expense is called depreciation.6. The difference between the balance of a fixed asset account and the balance of its related accumulated depreciation account is termed the book value of the asset.7. If the adjustment for accrued salaries at the end of the period is inadvertently omitted, both liabilities and owner’s equity will be overstated for the period.8. The financial statements are prepared from the unadjusted trial balance.9. Vertical analysis compares each item in a statement with another item in the same statement.The correct: 2,6,91. Which account would normally not require an adjusting entry?a. Wages Expenseb. Accounts Receivablec. Accumulated Depreciationd. Smith, Capital2. What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, $15,500, and unexpired amounts per analysis of policies, $4,500?a. debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500b. debit Insurance Expense, $15,500; credit Prepaid Insurance, $15,500c. debit Prepaid Insurance, $11,500; credit Insurance Expense, $11,500d. debit Insurance Expense, $11,000; credit Prepaid Insurance, $11,0003. Depreciation Expense and Accumulated Depreciation are classified, respectively, asa. expense, contra assetb. asset, contra liabilityc. revenue, assetd. contra asset, expense4. If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a(n)a. deferralb. accrualc. drawingd. revenue5. What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, $15,500, and unexpired amounts per analysis of policies, $4,500?a. debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500b. debit Insurance Expense, $15,500; credit Prepaid Insurance, $15,500c. debit Prepaid Insurance, $11,500; credit Insurance Expense, $11,500d. debit Insurance Expense, $11,000; credit Prepaid Insurance, $11,0006. Depreciation Expense and Accumulated Depreciation are classified, respectively, asa. expense, contra assetb. asset, contra liabilityc. revenue, assetd. contra asset, expense7. If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a(n)a. deferralb. accrualc. drawingd. revenueMultiple choice: d d a aChapter 41. The most important output of the accounting cycle is the financial statements.2. A net loss is shown on the work sheet in the credit columns of both the Income Statement columns and the Balance Sheet columns.3. The difference between a classified balance sheet and one that is not classified is that the classified one has subheadings.4. Since the adjustments are entered on the work sheet, it is not necessary to record them in the journal or post them to the ledger.5. The post-closing trial balance will generally have fewer accounts than the trial balance.6. Solvency is essentially the ability of an organization to pay its bills.7. Working capital is current assets plus current liabilities.ANS:T F T F T T F1. The worksheeta. is an integral part of the accounting cycleb. eliminates the need to rewrite the financial statementsc. is a working paper that is requiredd. is used to summarize account balances and adjustments for the financial statements2. Which one of the fixed asset accounts listed below will not have a related contra asset account? a. Office Equipment b. Land c. Delivery Equipment d. Building3. Which of the accounts below would be closed by making a debit to the account?a. Unearned Revenueb. Fees Earnedc. Jeff Ritter, Drawingd. Rent Expense4. Which of the following accounts ordinarily appears in the post-closing trial balance?a. Bill Smith, Drawingb. Supplies Expensec. Fees Earnedd. Unearned Rent5. A fiscal yeara. ordinarily begins on the first day of a month and ends on the last day of the following twelfth monthb. for a business is determined by the federal governmentc. always begins on January 1 and ends on December 31 of the same yeard. should end at the height of the business’s annual operating cycle6. A current ratio of 4.3 means thata. there are $4.30 in current assets available to pay each dollar of current liabilitiesb. the company cannot pay its debts as they come duec. there are $4.30 in current assets for every $4.30 in current liabilitiesd. there are $4 in current assets for every $3 in current liabilitiesANS: dbbdaaChapter 61. In a merchandise business, sales minus operating expenses equals net income.2. In a perpetual inventory system, the Merchandise Inventory account is only used to reflect the beginning inventory.3. The single-step income statement is easier to prepare, but a criticism of this format is that gross profit and income from operations are not readily available.4. Under the perpetual inventory system, when a sale is made, both the retail and cost values are recorded.5. Sales Discounts is a revenue account with a credit balance.6. Discounts taken by the buyer for early payment of an invoice are credited to Cash Discounts by the buyer.7. If the ownership of merchandise passes to the buyer when the seller delivers the merchandise for shipment, the terms are stated as FOB destination.8. If merchandise costing $2,500, terms FOB destination, 2/10, n/30, with prepaid transportation costs of $100, is paid within 10 days, the amount of the purchases discount is $50.9. The adjusting entry to record inventory shrinkage would generally include a debit to Cost of Merchandise Sold. 1. The primary difference between a periodic and perpetual inventory system is that aa. periodic system determines the inventory on hand only at the end of the accounting periodb. periodic system keeps a record showing the inventory on hand at all timesc. periodic system provides an easy means to determine inventory shrinkaged. periodic system records the cost of the sale on the date the sale is made2. A sales invoice included the following information: merchandise price, $4,000; transportation, $300; terms 1/10, n/eom, FOB shipping point. Assuming that a credit for merchandise returned of $600 is granted prior to payment, that the transportation is prepaid by the seller, and that the invoice is paid within the discount period, what is the amount of cash received by the seller? a.$3,366 b.$3,400c.$3,666d.$3,9503. The net sales to asset s ratio measures a company’sa. working capitalb. net worthc. effective use of sales to support the purchase of new assetsd. effective use of assets to generate salesThe correct: 3,4,8,9 Multiple choice: a c dChapter 74. A customer’s c heck received in settlement of an account receivable is considered cash.5. If the balance in Cash Short and Over at the end of a period is a credit, it indicates that cash shortages have exceeded cash overages for the period.6. A voucher system is an example of an internal control procedure over cash payments.7. A remittance advice is the notification accompanying the check issued to a creditor that states the specific invoice being paid.8. The amount of the "adjusted balance" appearing on the bank reconciliation as ofa given date is the amount that is shown on the balance sheet for that date.9. When the petty cash fund is replenished, the petty cash account is credited for the total of all expenditures made since the fund was last replenished.10. Cash equivalents are short -term investments that will be converted to cash within 120 days.11. The doomsday ratio is almost always less than one.ANS:T F T T T F F T1. Credit memorandums from the banka. decrease a bank custom er’s accountb. are used to show a bank service chargec. show that a company has deposited a customer’s NSF checkd. show the bank has collected a note receivable for the customer2. Journal entries based on the bank reconciliation are required in the depositor’s accounts for a. outstanding checks b. deposits in transitc. bank errorsd. book errorsANS: d dChapter 81. Receivables from company owners and officers should be disclosed separately on the balance sheet.2. Since those responsible for receivables record keeping and credit approval do not handle cash, these duties do not need to be separated to maintain good internal control.3. Of the two methods of accounting for uncollectible receivables, the allowance method provides inadvance for uncollectible receivables.4. Although Allowance for Doubtful Accounts normally has a credit balance, it may have either a debit or a credit balance before adjusting entries are recorded at the end of the accounting period.5. At the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a debit balance of $2,000. If the estimate of uncollectible accounts determined by aging the receivables is $30,000, the current provision to be made for uncollectible accounts expense is $30,000.6. The due date of a 60-day note dated July 10 is September 10.7. If the maker of a note fails to pay the debt on the due date, the note is said to be dishonored.8. The discounting of a note receivable creates a contingent liability that continues in effect until the due date of the note. ANS: T F T T F F T T 1. Allowance for Doubtful Accounts has a debit balance of $500 at the end of the year (before adjustment), and uncollectible accounts expense is estimated at 3% of net sales. If net sales are $600,000, the amount of the adjusting entry to record the provision for doubtful accounts is a. $18,500 b. $17,500 c. $18,000 d. none of the above 2. On the balance sheet, the amount shown for the Allowance for Doubtful Accounts is equal to the a. Uncollectible accounts expense for the year b. total of the accounts receivables written-off during the year c. total estimated uncollectible accounts as of the end of the year d. sum of all accounts that are past due. 3. What is the type of account and normal balance of Allowance for Doubtful Accounts? a. Contra asset, credit b. Asset, debit c. Asset, credit d. Contra asset, debit 4. If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer’s account as uncollectible? a. Uncollectible Accounts Expense b. Accounts Receivable c. Allowance for Doubtful Accounts d. Interest Expense 5. A 90-day, 12% note for $10,000, dated May 1, is received from a customer on account. Thematurity value of the note isa. $10,000b. $10,300c. $450d. $9,550ANS: c c a b bChapter 91. 2. 3. 4. A business using the perpetual inventory system, with its detailed subsidiary records, does not need to take a physical inventory. Purchased goods in transit, shipped FOB destination, should be excluded from ending inventory. Unsold consigned merchandise should be included in the consignee’s inventory. Of the three widely used inventory costing methods (FIFO, LIFO, and average), the LIFO method of costing inventory is based on the assumption that costs are charged against revenues in the reverse order in which they were incurred.During inflationary periods, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet approximating the current replacement cost.When using the FIFO inventory costing method, the most recent costs are assigned to the cost of goods sold.The use of the lower-of-cost-or-market method of inventory valuation increases net income for the period in which the inventory replacement price declined. Generally, the lower the number of days’ sales in inventory, the better.ANS: F F F T T F F TTaking a physical count of inventorya. is not necessary when a periodic inventory system is usedb. is a detective controlc. has no internal control relevanced. is not necessary when a perpetual inventory system is usedMerchandise inventory at the end of the year was inadvertently overstated. Which of the following statements correctly states the effect of the error on net income, assets, and owner’s equity?a. net income is overstated, assets are overstated, owner’s equity is understatedb. net income is overstated, assets are overstated, ow ner’s equity is overstatedc. net income is understated, assets are understated, owner’s equity is understatedd. net income is understated, assets are understated, owner’s equity is overstated Inventory costing methods place primary emphasis on assumptions abouta. flow of goodsb. flow of costsc. flow of goods or costs depending on the methodd. flow of valuesIf merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income?a. average costb. LIFO 5. 6. 7. 8. 1. 2. 3. 4.c. FIFOd. weighted average 5. On the basis of the following data, what is the estimated cost of the merchandise inventory on October 31 by the retail method? Oct. 1 Merchandise Inventory $225,000 $324,500 Oct. 1-31 Purchases (net) 335,000 475,500 Oct. 1-31 Sales (net) 700,000 a. $372,000 b. $140,000 c. $100,000 d. $ 70,000 6. If the estimated rate of gross profit is 40%, what is the estimated cost of the merchandise inventory on June 30, based on the following data? June 1 Merchandise inventory $ 75,000 June 1-30 Purchases (net) 150,000 June 1-30 Sales (net) 135,000 a. $144,000 b. $140,000 c. $ 81,000 d. $ 54,500 7. Too much inventory on handa. reduces solvencyb. increases the cost to safeguard the assetsc. increases the losses due to price declinesd. all of the aboveANS: b b b b d a dChapter 10 1. The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use.2. Land acquired as a speculation is reported under Investments on the balance sheet.3. Standby equipment held for use in the event of a breakdown of regular equipment is reported as property, plant, and equipment on the balance sheet.4. As a company depreciates a piece of equipment, it cash flow goes up.5. All property, plant, and equipment assets are depreciated over time.6. The declining-balance method is an accelerated depreciation method.7. The cost of replacing an engine in a truck is an example of ordinary maintenance.8. The cost of new equipment is called a revenue expenditure because it will help generate revenues in the future.9. A gain can be realized when a fixed asset is discarded.10. When exchanging equipment, if the trade-in allowance is greater than the book value a loss results.11. The cost of a patent with a remaining legal life of 10 years and an estimated useful life of 7 years is amortized over 10 years.12. The method used to calculate the depletion of a natural resource is the straight line method.13. The higher the ratio of fixed assets to long-term liabilities the greater the margin of safety.ANS: T T T F F T F F F F F F T1. Factors contributing to a decline in the usefulness of a fixed asset may be divided into the following two categoriesa. salvage and functionalb. physical and functionalc. residual and salvaged. functional and residual2. Accumulated Depreciationa. is used to show the amount of cost expiration of intangiblesb. is the same as Depreciation Expensec. is a contra asset accountd. is used to show the amount of cost expiration of natural resources3. Equipment with a cost of $80,000, an estimated residual value of $5,000, and an estimated life of 15 years was depreciated by the straight-line method for 5 years. Due to obsolescence, it was determined that the useful life should be shortened by 5 years and the residual value changed to zero. The depreciation expense for the current and future years isa. $5,500b. $11,000c. $10,000d. $5,0004. A fixed asset with a cost of $42,000 and accumulated depreciation of $38,500 is traded for a similar asset priced at $60,000. Assuming a trade-in allowance of $5,000, the cost basis of the new asset isa. $58,000b. $58,500c. $60,000d. $61,5005. A machine with a cost of $65,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation for the second full year, using the declining-balance method at double the straight-line rate?a. $15,000b. $30,000c. $16,250d. $32,500ANS: b c b b cChapter 11 1. For a current liability to exist, the following two tests must be met. The liability must be due usually within a year and must be paid out of current assets.2. For an interest bearing note payable, the amount borrowed is equal to the face value of the note.3. The proceeds of a discounted note are equal to the face value of the note.4. Obligations that depend on past events and that are based on future transactions are contingent liabilities.5. The journal entry to record the cost of warranty repairs that were incurred during the current period, but related to sales made in prior years, includes a debit to Warranty Expense.6. Generally, all deductions made from an employee’s gross pay are required by law.7. FICA tax is a payroll tax that is paid only by employers.8. The higher the quick ratio, the more liquid a company is.ANS: T T F F F F F T1. On June 8, Acme Co. issued an $80,000, 6%, 120-day note payable to Still Co. Assume that the fiscal year of Acme Co. ends June 30. What is the amount of interest expense recognized by Acme in the current fiscal year?a. $293.33b. $400.00c. $391.11d. $1,600.002. Proceeds of $48,750 were received from discounting a $50,000, 90-day note at a bank. The discount rate used by the bank in computing the proceeds wasa. 6.25%b. 10.00%c. 10.26%d. 9.75%3. Pilgrim Company sells merchandise with a one year warranty. In 2005, sales consisted of 1,500 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2005 and 70% in 2006. In the 2005 income statement, Pilgrim should show warranty expense ofa. $4,500b. $10,500c. $15,000d. $0ANS: a b cChapter 12 1. A corporation is a separate entity for accounting purposes but not for legal purposes.2. Double taxation is a disadvantage of a corporation because the same party has to pay taxes twice on the income.3. The two main sources of stockholders’ equity are investments contributed by stockholders and net income retained in the business.4. The balance in retained earnings should be interpreted as representing surplus cash left over for dividends.5. Preferred stock with a preferential right to dividends in arrears is referred to asparticipating preferred.6. If 50,000 shares are authorized, 37,000 shares are issued, and 2,000 shares are reacquired, the number of outstanding shares is 39,000.7. When a corporation issues stock at a premium, it reports the premium as an other income item on the income statement.8. If 100 shares of treasury stock were purchased for $50 per share and then sold at $60 per share, $1,000 of income is reported in the income statement.9. Since a stock split changes information of a business, this transaction needs to be recorded.10. If 20,000 shares are authorized, 14,000 shares are issued, and 500 shares are held as treasury stock, a cash dividend of $1 per share would amount to $14,000.11. The declaration and issuance of a stock dividend does not affect the total amount of a corporation’s assets, liabilities, or stockholders’ equity.12. The dividend yield indicates the rate of return to stockholders in terms of cash dividend distributions.ANS: F F T F F F F F F F T T1. The outstanding stock is composed of 10,000 shares of $100 par, cumulative preferred $8 stock, and 50,000 shares of no-par common stock. Preferred dividends have been paid every year except for the preceding year and the current year. If $380,000 is to be distributed as a dividend for the current year, what total amount will be distributed to the common stockholders? a. $380,000b. $220,000c. $80,000d. $160,0002. A corporation issues 2,000 shares of common stock for $ 32,000. The stock has a stated value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock fora. $20,000b. $32,000c. $12,000d. $2,0003. When common stock is issued in exchange for a noncash asset, the transaction should be recorded ata. the par value of the stock issuedb. the fair market value of the stockc. the fair market value of the asset acquiredd. the fair market value of the asset acquired or the fair market value of the stock, whichever canbe determined more objectively.4. Treasury stock that had been purchased for $5,400 last month was reissued this month for $7,500. The journal entry to record the reissuance would include a credit。
中级财务会计习题英文
Chapter 1True or FalseA.An example of a bus in ess stakeholder is the federal gover nment.B. A corporati on is a bus in ess that is legally separate and dist inct from its own ers.C.Accounting is a service that provides many different users with financial information to make econo mic decisi ons.D.Small ethical lapses are harmless in and of themselves.E.Man agerial acco unting is primarily concerned with the record ing and report ing of econo mic data and activitiesof an en tity for use by own ers, creditors, gover nmen tal age ncies, and the public.F.The unit of measureme nt con cept requires that econo mic data be recorded in a com mon unit of measureme nt.G.If a building is appraised for $90,000, offered for sale at $95,000, and the buyer pays $85,000 cash for it, thebuyer would record the buildi ng at $90,000.H.The owner ' s rights to the assets rank ahead of the creditors' rights to the assets.I.Busin ess tran sacti ons are econo mic eve nts that directly or in directly cha nge an en tity's financialcondition or results from operations.J.If net in come for a proprietorship was $25,000, the owner withdrew $10,000 in cash and the owner in vested $5,000 in cash, the capital of the owner in creased by $20,000.K.The owner is only allowed to withdraw cash from the bus in ess.L.Receiving a bill or otherwise being notified that an amount is owed is not recorded until the amount is paid.M.The prin cipal finan cial stateme nts of a proprietorship are the in come stateme nt, stateme nt of own er's equity, and the bala nee sheet.N.An in come stateme nt is a summary of the revenues and expe nses of a bus in ess as of a specific date.O. A low ratio of liabilities to own er's equity in dicates that a bus in ess is n ear ban kruptcy.Multiple choice1.Profit is the differenee betweena.assets and liabilitiesb.the incoming cash and outgo ing cashc.the assets purchased with cash con tributed by the owner and the cash spe nt to operate the bus in essd.the assets received for goods and services and the amounts used to provide the goods and services2.Which of the items below is not a bus in ess orga ni zatio n form?a.en trepre neurshipb. proprietorshipc. partn ershipd. corporati on3.Which of the following is not a step in providing accounting information to stakeholders?a.desig n the acco un ti ng in formati on systemb.prepare acco un ti ng surveysc.ide ntify stakeholdersd. record econo mic data4.For acco un ti ng purposes, the bus in ess en tity should be con sidered separate from its owners if the en tity isa. a corporatio nb. a proprietorshipc. a partn ershipd. all of the above5.Which of the follow ing is not a bus in ess tran sact ion?a.make a sales offerb. sell goods for cashc.receive cash for services to be ren dered laterd.pay for supplies6.The Reyno Ids Compa ny estimated that the value of its land had in creased from $10,000 to $16,000 and thereforewrote up the land account to $16,000. Which accounting con cept(s) was (were) violated?a.cost con ceptb. objectivity con ceptc. all of the aboved. none of the above7.Goods purchased on acco unt for future use in the bus in ess, such as supplies, are calleda.prepaid liabilitiesb. revenuesc. prepaid expensesd. liabilities8.All of the following are financial statement(s) of a proprietorship except thea.stateme nt of reta ined earningsb. stateme nt of own er's equityc. in come stateme ntd. stateme nt of cash flowsChapter 2True or FalseA. A chart of accounts is a listing of accounts that make up the journal.B.Drawings are an example of an expense.C.To determine the balance in an account, always subtract credits from debits.D.The double-entry accounting system records each transaction twice.E.The in crease side of all acco unts is the no rmal bala nce.F.The journal is the book of original entry.G.Journ aliz ing tran sacti ons using the double-e ntry bookkeep ing system will elim in ate fraud.H.The process of transferring the data from the journal to the ledger accounts is posting.I.The post reference notation used in the journal is the page number.J.When a bus in ess receives a bill from the utility compa ny, no entry should be made un til the in voice is paid. K. A proof of the equality of debits and credits in the ledger at the end of an accounting period is called a bala nce sheet.L.Even whe n a trial bala nce is in bala nce, there may be errors in the in dividual acco un ts.M.Posting a part of a transaction to the wrong account will cause the trial balance totals to be un equal.N.Horizontal analysis is used to compare the financial statements of the same company for differe nt periods.Multiple choice1. A group of related accounts that comprise a complete unit is called aa.Jour nalb. liabilityc. ledgerd. tran sact ion2.Which statement(s) concerning cash is (are) true?a.cash will always have more debits tha n creditsb.cash will n ever have a credit bala neec.cash is in creased by debit ingd.all of the above3.Which of the following types of accounts have a normal credit balanee?a.assets and liabilitiesb.liabilities and expe nsesc.revenues and liabilitiesd.capital and draw ing4.Which of the following entries records the receipt of cash from patients on account?a.Acco unts Payable, debit; Fees Earn ed, creditb.Acco unts Receivable, debit; Fees Earn ed, creditc.Acco unts Receivable, debit; Cash, creditd.Cash, debit; Acco unts Receivable, credit5.If the two totals of a trial balance are not equal, it could be due toa.failure to record a tran sact ionb.record ing the same erron eous amount for both the debit and the credit parts of a tran sact ionc.an error in determ ining the acco unt bala nces, such as a bala nce being in correctly computedd.record ing the same tran sact ion more tha n once6.Which of the following errors, each considered individually, would cause the trial balance totals to be un equal?a. a tran sact ion was not postedb. a payme nt of $96 for in sura nce was posted as a debit of $46 to Prepaid In sura nce and a credit of $46 toCashc. a payme nt of $311 to a creditor was posted as a debit of $3,111 to Acco unts Payable and a debit of $311 toAccou nts Receivabled.cash received from customers on acco unt was posted as a debit of $140 to Cash and a credit of $140 to Accounts Payablech1 ch2A. T FB. T FC. T FD. F FE. F TF. T TG. F FH. F TI. F FJ. T/F FK. F FL. F TM. F TN. F TChapter 3True or False1.The accrual basis of accounting requires revenue be recorded when cash is received from customers.2.The matching concept requires expenses be recorded in the same period that the related reve nue is recorded.3.Adjusting entries are made at the end of an accounting period to adjust accounts on the balance sheet.4.The difference between deferred revenue and accrued revenue is that accrued revenue has been recorded and n eedsadjust ing and deferred revenue has n ever bee n recorded.5.The systematic allocation of Iand's cost to expense is called depreciation.6.The difference between the balance of a fixed asset account and the balance of its related accumulated depreciation acco unt is termed the book value of the asset.7.If the adjustment for accrued salaries at the end of the period is inadvertently omitted, both liabilities andowner's equity will be overstated for the period.8.The financial statements are prepared from the unadjusted trial balance.9.Vertical analysis compares each item in a statement with another item in the same statement.The correct: 2,6,9Multiple choice1.Which account would normally not require an adjusting entry?a.Wages Expe nseb. Acco unts Receivablec. Accumulated Depreciati ond. Smith, Capital2.What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaidin sura nce acco unt bala nce before adjustme nt, $15,500, and un expired amounts per an alysis of policies, $4,500?a.debit In sura nce Expe nse, $4,500; credit Prepaid In sura nce, $4,500b.debit In sura nce Expe nse, $15,500; credit Prepaid In sura nce, $15,500c.debit Prepaid In sura nce, $11,500; credit In sura nce Expe nse, $11,500d.debit In sura nce Expe nse, $11,000; credit Prepaid In sura nce, $11,0003.Depreciation Expense and Accumulated Depreciation are classified, respectively, asa.expe nse, contra assetb. asset, contra liabilityc. revenue, assetd. contra asset, expe nse4.If there is a balance in the unearned subscriptions account after adjusting entries are made, it represe nts a(n)a.deferralb. accrualc. draw ingd. reve nue5.What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaidin sura nce acco unt bala nce before adjustme nt, $15,500, and un expired amounts per an alysis of policies, $4,500?a.debit In sura nce Expe nse, $4,500; credit Prepaid In sura nce, $4,500b.debit In sura nce Expe nse, $15,500; credit Prepaid In sura nce, $15,500c.debit Prepaid In sura nce, $11,500; credit In sura nce Expe nse, $11,500d.debit In sura nee Expe nse, $11,000; credit Prepaid In sura nee, $11,0006.Depreeiation Expense and Accumulated Depreeiation are classified, respectively, asa.expe nse, contra assetb. asset, contra liabilityc. revenue, assetd. contra asset, expe nse7.If there is a balance in the unearned subscriptions account after adjusting entries are made, it represe ntsa(n)a.deferralb. accrualc. draw ingd. reve nueMultiple choice: d d a aChapter 4True or false1.The most important output of the accounting cycle is the financial statements.2. A net loss is show n on the work sheet in the credit colu mns of both the In come Stateme nt colu mns and theBala nce Sheet colu mns.3.The difference between a classified balance sheet and one that is not classified is that the classified one hassubheadi ngs.4.Since the adjustments are entered on the work sheet, it is not necessary to record them in the journal or postthem to the ledger.5.The post-clos ing trial bala nce will gen erally have fewer acco unts tha n the trial bala nce.6.Solvency is essentially the ability of an organization to pay its bills.7.Working capital is current assets plus current liabilities.ANS:T F T F T T FMultiple choice1.The worksheeta.is an in tegral part of the acco un ti ng cycleb.eliminates the need to rewrite the financial statementsc.is a work ing paper that is requiredd.is used to summarize acco unt bala nces and adjustme nts for the finan cial stateme nts2.Which one of the fixed asset acco unts listed below will not have a related contra assetacco unt?a.Office Equipme ntb. Landc. Delivery Equipme ntd. Buildi ng3.Which of the acco unts below would be closed by making a debit to the acco unt?a.Unearned Revenueb. Fees Earnedc. Jeff Ritter, Drawingd. Rent Expense4.Which of the following accounts ordinarily appears in the post-closing trial balance?a. Bill Smith, Drawingb. Supplies Expensec. Fees Earnedd. Unearned Rent5. A fiscal yeara.ordin arily beg ins on the first day of a month and ends on the last day of the follow ing twelfth monthb.for a bus in ess is determ ined by the federal gover nmentc.always beg ins on Jan uary 1 and ends on December 31 of the same yeard.should end at the height of the bus in ess's annual operati ng cycle6. A curre nt ratio of 4.3 means thata.there are $4.30 in current assets available to pay each dollar of current liabilitiesb.the compa ny cannot pay its debts as they come duec.there are $4.30 in curre nt assets for every $4.30 in curre nt liabilitiesd.there are $4 in current assets for every $3 in current liabilitiesANS: dbbdaaChapter 6True or False1.In a mercha ndise bus in ess, sales minus operati ng expe nses equals net in come.2.In a perpetual inventory system, the Merchandise Inventory account is only used to reflect the begi nninginven tory.3.The sin gle-step in come stateme nt is easier to prepare, but a criticism of this format is that gross profitand in come from operati ons are not readily available.4.Under the perpetual inventory system, when a sale is made, both the retail and cost values are recorded.5.Sales Discounts is a revenue account with a credit balanee.6.Disco unts take n by the buyer for early payme nt of an in voice are credited to Cash Disco unts by the buyer.7.If the ownership of merchandise passes to the buyer when the seller delivers the merchandise for shipme nt,the terms are stated as FOB dest in atio n.8.If merchandise costing $2,500, terms FOB destination, 2/10, n/30, with prepaid transportation costs of $100,is paid with in 10 days, the amount of the purchases disco unt is $50.9.The adjusti ng entry to record inven tory shri nkage would gen erally in clude a debit to Cost of Merchandise Sold.Multiple choice1.The primary differe nee betwee n a periodic and perpetual inven tory system is that aa.periodic system determines the inventory on hand only at the end of the accounting periodb.periodic system keeps a record showing the inventory on hand at all timesc.periodic system provides an easy means to determ ine inven tory shri nkaged.periodic system records the cost of the sale on the date the sale is made2. A sales in voice in cluded the followi ng in formati on: mercha ndise price, $4,000; tran sportati on, $300;terms 1/10, n/eom, FOB shipp ing point. Assu ming that a credit for mercha ndise retur ned of $600 is gran ted prior to payme nt, that the tran sportati on is prepaid by the seller, and that thein voice is paid with in the disco unt period, what is the amount of cash received by the seller?a.$3,366b.$3,400c.$3,666d.$3,9503.The net sales to assets ratio measures a company'sa.work ing capital worthc.effective use of sales to support the purchase of new assetsd.effective use of assets to gen erate salesThe correct: 3,4,8,9 Multiple choice: a c dChapter 7True or false4. A customer's check received in settleme nt of an acco unt receivable is con sidered cash.5.If the bala nee in Cash Short and Over at the end of a period is a credit, itin dicates that cash shortages have exceeded cash overages for the period.6. A voucher system is an example of an internal con trol procedure over cash payme nts.7. A remitta nee advice is the no tificati on accompa nying the check issued to a creditor thatstates the specific in voice being paid.8.The amount of the "adjusted balanee" appearing on the bank reconciliation as of a give n dateis the amount that is show n on the bala nee sheet for that date.9.When the petty cash fund is reple ni shed, the petty cash acco unt is credited for the total ofall expe nditures made since the fund was last reple ni shed.10.Cash equivale nts are short -term in vestme nts that will be con verted to cash within 120days.11.The doomsday ratio is almost always less than one.ANS:T F T T T F F TMultiple choice1.Credit memorandums from the banka.decrease a bank customer's acco untb.are used to show a bank service chargec.show that a compa ny has deposited a customer's NSF checkd.show the bank has collected a note receivable for the customer2.Journal entries based on the bank reconciliation are required in the depositor's accounts fora.outsta nding checksb. deposits in tran sitc. bank errorsd. book errorsANS: d dChapter 8True or false1.Receivables from company owners and officers should be disclosed separately on the balanee sheet.2.Since those responsible for receivables record keeping and credit approval do not handle cash, these duties do notn eed to be separated to maintain good internal con trol.3.Of the two methods of acco un ti ng for un collectible receivables, the allowa nee method provides in adva nee forun collectible receivables.4.Although Allowa nee for Doubtful Acco unts n ormally has a credit bala nee, it may have either a debit or a creditbala nee before adjusti ng en tries are recorded at the end of the acco un ti ng period.5.At the end of a period, before the acco unts are adjusted, Allowa nee for Doubtful Acco unts has a debit balanee of$2,000. If the estimate of uncollectible accounts determined by aging the receivables is $30,000, the current provision to be made for uncollectible accounts expense is $30,000.6.The due date of a 60-day note dated July 10 is September 10.7.If the maker of a note fails to pay the debt on the due date, the note is said to be dish ono red.8.The discounting of a note receivable creates a contingent liability that continues in effect until the due date ofthe no te.ANS: T F T T F F T TMultiple choice1.Allowanee for Doubtful Accounts has a debit balanee of $500 at the end of the year (before adjustme nt), and uncollectible acco unts expe nse is estimated at 3% of net sales. If net sales are $600,000, the amount of the adjusti ng entry to record the provisi on for doubtful acco unts isa.$18,500b.$17,500c.$18,000d.none of the above2.On the bala nee sheet, the amount show n for the Allowa nee for Doubtful Acco unts is equal to thea.Un collectible acco unts expe nse for the yearb.total of the acco unts receivables writte n-off duri ng the yearc.total estimated un collectible acco unts as of the end of the yeard.sum of all acco unts that are past due.3.What is the type of acco unt and no rmal bala nee of Allowa nee for Doubtful Acco un ts?a.Contra asset, creditb.Asset, debitc.Asset, creditd.Contra asset, debit4.If the direct write-off method of accounting for uncollectible receivables is used, what general ledger acco untis credited to write off a customer's acco unt as un collectible?a.Un collectible Acco unts Expe nseb.Acco unts Receivablec.Allowa nee for Doubtful Acco untsd.In terest Expe nse5. A 90-day, 12% note for $10,000, dated May 1, is received from a customer on aceount. The maturity value of thenote isa.$10,000b.$10,300c.$450d.$9,550ANS: c c a b bChapter 9True or false1. A bus in ess using the perpetual inven tory system, with its detailed subsidiary records, does not n eed to take aphysical inven tory.2.Purchased goods in tran sit, shipped FOB dest in ati on, should be excluded from ending inven tory.3.Un sold con sig ned mercha ndise should be in cluded in the con sig nee's inven tory.4.Of the three widely used inventory costing methods (FIFO, LIFO, and average), the LIFO methodof costing inventory is based on the assumption that costs are charged against revenues in the reverse order in which they were in curred.5.During inflationary periods, the use of the FIFO method of costing inventory will yield an inven tory amount forthe bala nee sheet approximati ng the curre nt replaceme nt cost.6.When using the FIFO inven tory cost ing method, the most rece nt costs are assig ned to the cost of goods sold.7.The use of the lower-of-cost-or-market method of inven tory valuati on in creases net in come for the period inwhich the inven tory replaceme nt price decli ned.8.Gen erally, the lower the nu mber of days' sales in inven tory, the better.ANS: F F F T T F F TMultiple choice1.Taking a physical count of inven torya.is not n ecessary whe n a periodic inven tory system is usedb.is a detective con trolc.has no internal con trol releva need.is not n ecessary whe n a perpetual inven tory system is used2.Merchandise inventory at the end of the year was inadvertently overstated. Which of the followi ng stateme ntscorrectly states the effect of the error on net in come, assets, and own er's equity? in come is overstated, assets are overstated, own er's equity is un derstated in come is overstated, assets are overstated, own er's equity is overstated in come is un derstated, assets are un derstated, own er's equity is un derstated in come is un derstated, assets are un derstated, own er's equity is overstated3.Inven tory costi ng methods place primary emphasis on assumpti ons abouta.flow of goodsb.flow of costsc.flow of goods or costs depe nding on the methodd.flow of values4.If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net in come?a.average costb.LIFOc.FIFOd.weighted average5.On the basis of the following data, what is the estimated cost of the merchandise inventory onOctober 31 by the retail method?Cost Retail Oct. 1 Mercha ndise Inven tory $225,000 $324,500 Oct. 1-31 Purchases (n et) 335,000 475,500 Oct. 1-31 Sales (n et) 700,000a.$372,000b.$140,000c.$100,000d.$ 70,0006.If the estimated rate of gross profit is 40%, what is the estimated cost of the merchandise inven tory on June 30,based on the followi ng data?June 1 Mercha ndise inven tory $ 75,000 June 1-30 Purchases (n et) 150,000 Ju ne 1-30 Sales (n et) 135,000a.$144,000b.$140,000c.$ 81,000d.$ 54,5007.Too much inven tory on handa.reduces solve ncyb.in creases the cost to safeguard the assetsc.in creases the losses due to price decli nesd.all of the aboveANS: b b b b d a dChapter 10True or False1.The acquisiti on costs of property, pla nt, and equipme nt should in clude all no rmal, reas on able and necessary costs to get the asset in place and ready for use.nd acquired as a speculati on is reported un der In vestme nts on the bala nee sheet.3.Stan dby equipme nt held for use in the eve nt of a breakdow n of regular equipme nt is reported as property,pla nt, and equipme nt on the bala nee sheet.4.As a compa ny depreciates a piece of equipme nt, it cash flow goes up.5.All property, pla nt, and equipme nt assets are depreciated over time.6.The decli nin g-bala nee method is an accelerated depreciati on method.7.The cost of replaci ng an engine in a truck is an example of ordinary maintenan ce.8.The cost of new equipme nt is called a reve nue expe nditure because it will help gen erate revenues in thefuture.9. A gain can be realized whe n a fixed asset is discarded.10.When exchanging equipment, if the trade-in allowanee is greater than the book value a loss results.11.The cost of a pate nt with a rema ining legal life of 10 years and an estimated useful life of 7 years isamortized over 10 years.12.The method used to calculate the depletion of a natural resource is the straight line method.13.The higher the ratio of fixed assets to Iong-term liabilities the greater the margin of safety.ANS: T T T F F T F F F F F F TMultiple choice1.Factors con tributi ng to a decli ne in the usefu In ess of a fixed asset may be divided into the follow ingtwo categoriesa.salvage and functionalb.physical and fun cti onalc.residual and salvaged.functional and residual2.Accumulated Depreciati ona.is used to show the amount of cost expirati on of intan giblesb.is the same as Depreciati on Expe nsec.is a contra asset acco untd.is used to show the amount of cost expirati on of n atural resources3.Equipme nt with a cost of $80,000, an estimated residual value of $5,000, and an estimated life of 15 years was depreciated by the straight-l ine method for 5 years. Due to obsolesce nee, it was determ ined that the useful life should be shorte ned by 5 years and the residual value cha nged to zero. The depreciati on expe nse for the curre nt and future years isa.$5,500b.$11,000c.$10,000d.$5,0004. A fixed asset with a cost of $42,000 and accumulated depreciation of $38,500 is traded for a similar asset priced at $60,000. Assu ming a trade-i n allowa nee of $5,000, the cost basis of the new asset isa.$58,000b.$58,500c.$60,000d.$61,5005. A machi ne with a cost of $65,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation for the second full year, using the decli nin g-bala nee method at double the straight-l ine rate?a.$15,000b.$30,000c.$16,250d.$32,500ANS: b c b b cChapter 11True or False1.For a curre nt liability to exist, the followi ng two tests must be met. The liability must bedue usually withi n a year and must be paid out of curre nt assets.2.For an in terest beari ng note payable, the amount borrowed is equal to the face value of the note.3.The proceeds of a disco un ted note are equal to the face value of the no te.4.Obligations that depend on past events and that are based on future transactions are con ti ngent liabilities.5.The jour nal en try to record the cost of warra nty repairs that were in curred duri ng the curre nt period, but related to sales made in prior years, includes a debit to Warranty Expense.6.Gen erally, all deduct ions made from an employee's gross pay are required by law.7.FICA tax is a payroll tax that is paid only by employers.8.The higher the quick ratio, the more liquid a compa ny is.ANS: T T F F F F F TMultiple choice1.On Ju ne 8, Acme Co. issued an $80,000, 6%, 120-day note payable to Still Co. Assume that the fiscal year of Acme Co. ends June 30. What is the amount of in terest expe nse recog ni zed by Acme in the curre nt fiscal year?a.$293.33b.$400.00c.$391.11d.$1,600.002.Proceeds of $48,750 were received from disco un ti ng a $50,000, 90-day note at a bank. The disco unt rate used by the bank in computi ng the proceeds wasa. 6.25%b.10.00%c.10.26%d.9.75%3.Pilgrim Compa ny sells mercha ndise with a one year warra nty. In 2005, sales con sisted of1,500 un its. It is estimated that warra nty repairs will average $10 per un it sold, and 30% of the repairs will be made in 2005 and 70% in 2006. In the 2005 in come stateme nt, Pilgrim should show warra nty expe nse ofa.$4,500b.$10,500c.$15,000d.$0ANS: a b cChapter 12True or False1. A corporati on is a separate en tity for acco un ti ng purposes but not for legal purposes.2.Double taxati on is a disadva ntage of a corporati on because the same party has to pay taxes twice on the in come.3.The two main sources of stockholders' equity are investments contributed by stockholders and net in come reta ined in the bus in ess.4.The bala nee in reta ined earnings should be in terpreted as represe nti ng surplus cash left over for divide nds.5.Preferred stock with a prefere ntial right to divide nds in arrears is referred to as participati ng preferred.6.If 50,000 shares are authorized, 37,000 shares are issued, and 2,000 shares are reacquired, the nu mber of outsta nding shares is 39,000.7.When a corporatio n issues stock at a premium, it reports the premium as an other in come item on the in come stateme nt.8.If 100 shares of treasury stock were purchased for $50 per share and then sold at $60 per share, $1,000 of in come is reported in the in come stateme nt.9.Since a stock split cha nges in formati on of a bus in ess, this tran sact ion n eeds to be recorded.10.If 20,000 shares are authorized, 14,000 shares are issued, and 500 shares are held as treasury stock, a cash divide nd of $1 per share would amount to $14,000.11.The declaratio n and issua nee of a stock divide nd does not affect the total amount of a corporati on's assets, liabilities, or stockholders' equity.。
《中级财务会计》期中考试试题(英文版)(doc 8页)
《中级财务会计》期中考试试题(英文版)(doc 8页)Sales returns and allowances 40,000Required:(a) Prepare the entries for estimated bad debts assuming that doubtful accounts areestimated to be (1) 6% of gross accounts receivable and (2) 1% of net sales.(b) Assume that all the information above is the same, except that the Allowance forDoubtful Accounts has a debit balance of $2,500 instead of a credit balance.Prepare the journal entry to record the bad debt expense?Question Three (9 points)The following trial balance was taken from the books of Fisk Corporation on December 31, 2007.Account Debit Credit Cash $ 12,000 Accounts Receivable 40,000Note Receivable 7,000Allowance for Doubtful Accounts $ 1,800 Merchandise Inventory 44,000Prepaid Insurance 4,800Furniture and Equipment 125,000Accumulated Depreciation--F. & E. 15,000 Accounts Payable 10,800 Common Stock 44,000 Retained Earnings 55,000 Sales 280,000Cost of Goods Sold 111,000Salaries Expense 50,000Rent Expense 12,800Totals $406,600 $406,600At year end, the following items have not yet been recorded.a. Insurance expired during the year, $2,000.b. Estimated bad debts, 1% of gross sales.c. Depreciation on furniture and equipment, 10% per year.d. Interest at 6% is receivable on the note for one full year.e. Rent paid in advance at December 1, $6,000 for half a yearf. Accrued salaries at December 31, $5,800.Required:(a) Prepare the necessary adjusting entries.(b) Prepare the necessary closing entries.Question Four (6 points)On May 1, Carter, Inc. factored $800,000 of accounts receivable with Rapid Finance ondiscounts, and absorb the credit losses. Rapid Finance assessed a finance charge of 6% of the total accounts receivable factored and retained an amount equal to 2% of the total receivables to cover sales discounts.Required:(a) Prepare the journal entry required on Carter 's books on May 1.(b) Prepare the journal entry required on Rapid Finance’s books on May 1.(c) Assume Carter factors the $800,000 of accounts receivable with Rapid Finance ona with recourse basis instead. The recourse provision has a fair value of $14,000.Prepare the journal entry required on Carter’s books on May 1.Question Five (6 points)Dent Company manufactures one product. On December 31, 2005, Dent adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO inventory method was $180,000. Inventory data are as follows:Inventory at Price indexYear year-end prices (base year 2005)2006 $252,000 1.052007 368,000 1.152008 387,500 1.25InstructionsCompute the inventory at December 31, 2006, 2007, and 2008, using the dollar-value LIFO method for each year.Question Six (9 points)On January 1, a store had inventory of $48,000. January purchases were $46,000 and January sales were $90,000. On February 1 a fire destroyed most of the inventory. The rate of gross profit was 25% of cost. Merchandise with a selling price of $5,000 remained undamaged after the fire. Compute the amount of the fire loss, assuming the store had no insurance coverage. Label all figures.Question Seven (5 points)Accounts receivable in the amount of $250,000 were assigned to the Fast Finance Company by Nance, Inc., as security for a loan of $200,000. The finance company charged a 4% commission on the face amount of the loan, and the note bears interest at 9% per year.During the first month, Nance collected $130,000 on assigned accounts. This amount was remitted to the finance company along with one month's interest on the note.Make all the entries for Nance Inc. associated with the transfer of the accounts receivable and the remittance to the finance company.Question Eight (6 points)A machine which cost $200,000 is acquired on October 1, 2006. Its estimated salvage value is $20,000 and its expected life is eight years.Required:Calculate depreciation expense for 2006 and 2007 by each of the following methods, showing the figures used.(a) Double-declining balance(b) Sum-of-the-years'-digitsQuestion Nine (8 points)Ferry Corporation follows a policy of a 10% depreciation charge per year on all machinery and a 5% depreciation charge per year on buildings. The following transactions occurred in 2007:March 31, 2007—Negotiations which began in 2006 were completed and a warehouse purchased 1/1/98 (depreciation has been properly charged throughDecember 31, 2006) at a cost of $3,200,000 with a fair market value of$2,000,000 was exchanged for a second warehouse which also had afair market value of $2,000,000. The exchange had no commercialsubstance. Both parcels of land on which the warehouses werelocated were equal in value, and had a fair value equal to book value. June 30, 2007—Machinery with a cost of $240,000 and accumulated depreciation through January 1 of $180,000 was exchanged with $150,000 cash for aparcel of land with a fair market value of $230,000.Required:Prepare all appropriate journal entries for Ferry Corporation for the above dates.Question Ten (7 points)On March 1, Gatt Co. began construction of a small building. The following expenditures were incurred for construction:March 1 $ 75,000 April 1 $ 74,000May 1 180,000 June 1 270,000July 1 100,000The building was completed and occupied on July 1. To help pay for construction $50,000 was borrowed on March 1 on a 12%, three-year note payable. The only other debt outstanding during the year was a $500,000, 10% note issued two years ago.(a) Calculate the weighted-average accumulated expenditures.(b) Calculate avoidable interest.Question Eleven (5 points)The management of Yastrzemski Inc. was discussing whether certain equipment should be written off as a charge to current operations because of obsolescence. This equipment has a cost of $1,200,000 with depreciation to date of $300,000 as of December 31, 2007. On December 31, 2007, management projected its future net cash flows from this equipment to be $700,000 and its fair value to be $600,000. The company intends to use this equipment in the future.Required:(a) Prepare the journal entry (if any) to record the impairment at December 31, 2007.(b) Where should the gain or loss (if any) on the write-down be reported in the income statement?(c) At December 31, 2008, the equipment’s fair value increased to $700,000. Prepare the journal entry (if any) to record this increase in fair value.Question Twelve (8 points)Buhner Company constructed a building at a cost of $3,000,000 and occupied it beginning in January 1988. It was estimated at that time that its life would be 40 years, with no salvage value.In January 2008, a new roof was installed at a cost of $500,000, and it was estimated then that the building would have a useful life of 25 years from that date. The cost of the old roof was $200,000.Required:(a) What amount of depreciation should have been charged annually from the years1988 to 2007?(Assume straight-line depreciation.)(b) What entry should be made in 2008 to record the replacement of the roof?(c) Prepare the entry in January 2008, to record the revision in the estimated life of thebuilding, ifnecessary.(d) What amount of depreciation should be charged for the year 2008?Question Thirteen (7 points)At 12/31/06, the end of Feeney Company's first year of business, inventory was $4,100 and $2,800 at cost and at market, respectively.Following is data relative to the 12/31/07 inventory of Feeney:Original Net Net Realizable AppropriateCost Replacement Realizable Value Less InventoryItem Per Unit Cost Value Normal ProfitC .70 .75D .75 .65E .90 .85Selling price is $1.00/unit for all items. Disposal costs amount to 10% of selling price and a "normal" profit is 30% of selling price. There are 1,000 units of each item in the 12/31/07 inventory.Required:(a) Prepare the entry at 12/31/06 necessary to implement the lower-of-cost-or-marketprocedure assuming Feeney uses a contra account for its balance sheet.(b) Complete the last three columns in the 12/31/07 schedule above based upon thelower-of-cost-or-market rules.(c) Prepare the entry(ies) necessary at 12/31/07 based on the data above.Question Fourteen (8 points)On December 31, 2007, Brown Company finished consultation services and accepted in exchange a promissory note with a face value of $400,000, a due date of December 31, 2010, and a stated rate of 5%, with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note is not readily marketable. Under the circumstances, the note is considered to have an appropriate imputed rate of interest of 10%.The following interest factors are provided:Interest Rate Table Factors For Three Periods 5% 10%Future Value of 1 1.15763 1.33100Present Value of 1 .86384 .75132Future Value of Ordinary Annuity of 1 3.15250 3.31000Present Value of Ordinary Annuity of 1 2.72325 2.48685 Required:(a) Determine the present value of the note.(b) Prepare a Schedule of Note Discount Amortization for Brown Company under theeffective interest method. (Round to whole dollars.) (Use the format below)Schedule of Note Discount AmortizationCash Effective Unamortized PresentInterest Interest Discount Discount Value Date (5%) (10%) Amortized Balance of Note12/31/0712/31/08(c) Prepare the entry for the interest receipt as of Dec. 31, 2008.。
(精品中级财务会计英文版.课后答案(chap2)
中级财务会计英文版.课后答案(c h a p2) Exercise 2-4Requirement 1Sales price = 100 units x $600 = $60,000 x 70% = $42,000November 17, 2011Accounts receivable ........................................................ 42,000Sales revenue .............................................................. 42,000 November 26, 2011Cash (98% x $42,000)........................................................ 41,160Sales discounts (2% x $42,000) (840)Accounts receivable .................................................... 42,000 Requirement 2Exercise 7-4 (concluded)Requirement 3Requirement 1, using the net method:Requirement 2, using the net method:Exercise 2-7Requirement 1Estimated returns = 4% x $11,500,000 = $460,000Less: Actual returns (450,000)Remaining estimated returns $10,000Note: another series of journal entries that produce the same end result would be:Exercise 2-7 (continued)Requirement 2Beginning balance in allowance account $300,000 Add: Year-end estimate 460,000 Less: Actual returns (450,000) Ending balance in allowance account $310,000Exercise 2-8Requirement 1Bad debt expense = $67,500 (1.5% x $4,500,000)Requirement 2Allowance for uncollectible accountsBalance, beginning of year $42,000 Add: Bad debt expense for 2011 (1.5% x $4,500,000) 67,500 Less: End-of-year balance (40,000) Accounts receivable written off $69,500 Requirement 3$69,500 — the amount of accounts receivable written off.Exercise 2-9Requirement 1To record the write-off of receivables.To reinstate an account previously written off and to record the collection.Allowance for uncollectible accounts:Balance, beginning of year $32,000Deduct: Receivables written off (21,000)Add: Collection of receivable previously written off 1,200Balance, before adjusting entry for 2011 bad debts 12,200Required allowance: 10% x $625,000 (62,500)Bad debt expense $50,300To record bad debt expense for the year.Requirement 2Current assets:Accounts receivable, net of $62,500 allowancefor uncollectible accounts $562,500Exercise 2-10Using the direct write-off method, bad debt expense is equal to actual write-offs. Collections of previously written-off receivables are recorded as revenue.Allowance for uncollectible accounts:Balance, beginning of year $17,280Deduct: Receivables written off (17,100)Add: Collection of receivables previously written off 2,200Less: End of year balance (22,410)Bad debt expense for the year 2011 $20,030 Exercise 2-11($ in millions)Allowance for uncollectible accounts:Balance, beginning of year $16Add: Bad debt expense 14Less: End of year balance (18)Write-offs during the year $ 12*Accounts receivable analysis:Balance, beginning of year ($1,084 + 16)$ 1,100Add: Credit sales 4,271Less: Write-offs* (12)Less: Balance end of year ($953 + 18) (971)Cash collections $4,388Exercise 2-12Requirement 1Requirement 22011 income before income taxes would be understated by $900 2012 income before income taxes would be overstated by $900.Exercise2-13Requirement 1Requirement 2$ 1,800 interest for 9 months÷ $28,200 sales price= 6.383% rate for 9 monthsx 12/9to annualize the rate_______= 8.511% effective interest rateExercise 2-14Requirement 1Book value of stock $16,000Plus gain on sale of stock 6,000= Note receivable $22,000Interest reported for the year $ 2,200= 10% rate Divided by value of note $ 22,000Requirement 2To record sale of stock in exchange for note receivable.To accrue interest on note receivable for twelve months.Exercise 2-15Exercise 2-16Exercise 2-17Exercise 2-18Mountain High retains significant risks and rewards and therefore must treat the transfer as a secured borrowing. The accounts receivable stay on the balance sheet of Mountain High, and they must record a liability.Exercise 2-19Step 1: Accrue interest earned.Step 2: Add interest to maturity to calculate maturity value.Step 3: Deduct discount to calculate cash proceeds.Step 4: To record a loss for the difference between the cash proceeds and the note’s book value.Exercise 2-21Requirement 1Step 1: To accrue interest earned for two months on note receivableStep 2: Add interest to maturity to calculate maturity value.Step 3: Deduct discount to calculate cash proceeds.Exercise 7-21 (continued)Step 4: To record a loss for the difference between the cash proceeds and the note’s book value.Exercise 2-21 (concluded)Requirement 2To accrue interest earned on note receivable.。
最新中级财务会计英文版.课后答案(chap2)
Exercise 2-4Requirement 1Sales price = 100 units x $600 = $60,000 x 70% = $42,000Requirement 2Exercise 7-4 (concluded)Requirement 3Requirement 1, using the net method:Requirement 2, using the net method:Exercise 2-7Requirement 1Estimated returns = 4% x $11,500,000 = $460,000Less: Actual returns (450,000)Remaining estimated returns $10,000Note: another series of journal entries that produce the same end result would be:Exercise 2-7 (continued)Requirement 2Beginning balance in allowance account $300,000 Add: Year-end estimate 460,000 Less: Actual returns (450,000) Ending balance in allowance account $310,000Exercise 2-8Requirement 1Bad debt expense = $67,500 (1.5% x $4,500,000)Requirement 2Allowance for uncollectible accountsBalance, beginning of year $42,000 Add: Bad debt expense for 2011 (1.5% x $4,500,000) 67,500 Less: End-of-year balance (40,000) Accounts receivable written off $69,500 Requirement 3$69,500 — the amount of accounts receivable written off.Exercise 2-9Requirement 1To record the write-off of receivables.To reinstate an account previously written off and to record the collection.Allowance for uncollectible accounts:Balance, beginning of year $32,000Deduct: Receivables written off (21,000) Add: Collection of receivable previously written off 1,200Balance, before adjusting entry for 2011 bad debts 12,200Required allowance: 10% x $625,000 (62,500) Bad debt expense $50,300 To record bad debt expense for the year.Requirement 2Current assets:Accounts receivable, net of $62,500 allowancefor uncollectible accounts $562,500Exercise 2-10Using the direct write-off method, bad debt expense is equal to actual write-offs. Collections of previously written-off receivables are recorded as revenue.Allowance for uncollectible accounts:Balance, beginning of year $17,280Deduct: Receivables written off (17,100)Add: Collection of receivables previously written off 2,200Less: End of year balance (22,410)Bad debt expense for the year 2011 $20,030 Exercise 2-11($ in millions)Allowance for uncollectible accounts:Balance, beginning of year $16Add: Bad debt expense 14Less: End of year balance (18)Write-offs during the year $ 12*Accounts receivable analysis:Balance, beginning of year ($1,084 + 16)$ 1,100Add: Credit sales 4,271Less: Write-offs* (12)Less: Balance end of year ($953 + 18) (971)Cash collections $4,388Exercise 2-12Requirement 1Requirement 22011 income before income taxes would be understated by $900 2012 income before income taxes would be overstated by $900.Exercise2-13Requirement 1Requirement 2$ 1,800 interest for 9 months÷ $28,200 sales price= 6.383% rate for 9 monthsx 12/9to annualize the rate_______= 8.511% effective interest rateExercise 2-14Requirement 1Book value of stock $16,000Plus gain on sale of stock 6,000= Note receivable $22,000Interest reported for the year $ 2,200= 10% rate Divided by value of note $ 22,000 Requirement 2To record sale of stock in exchange for note receivable.To accrue interest on note receivable for twelve months.Exercise 2-15Exercise 2-16Exercise 2-17Exercise 2-18Mountain High retains significant risks and rewards and therefore must treat the transfer as a secured borrowing. The accounts receivable stay on the balance sheet of Mountain High, and they must record a liability.Exercise 2-19Step 1: Accrue interest earned.Step 2: Add interest to maturity to calculate maturity value.Step 3: Deduct discount to calculate cash proceeds.Step 4: To record a loss for the difference between the cash proceeds and the note’s book value.Exercise 2-21Requirement 1Step 1: To accrue interest earned for two months on note receivableStep 2: Add interest to maturity to calculate maturity value.Step 3: Deduct discount to calculate cash proceeds.Exercise 7-21 (continued)Step 4: To record a loss for the difference between the cash proceeds and the note’s book value.Exercise 2-21 (concluded)Requirement 2To accrue interest earned on note receivable.。
中级会计 comprehensiveexam_b
COMPREHENSIVE EXAMINATION BPART 2(Chapters 7–9)Problem B-I— Multiple Choice — Cash and Receivables.Choose the best answer for each of the following questions and enter the identifying letter in the space provided.____ 1. When should the loss on an uncollectible account receivable be recorded as an expense for accrual accounting purposes?a. When it is determined that an account cannot be collected.b. In the same period in which the sale on account occurs.c. When the balance is past due for more than 3 months.d. When a lawyer indicates that collection efforts would cost more than theaccount is worth.____ 2. How should unearned discounts, finance charges, and interest included in the face amount of installment accounts receivable be presented in the balancesheet?a. As a current liability.b. As a deduction from the related installment accounts receivable.c. Within the net amount of installment accounts receivable.d. As an addition to the related installment accounts receivable.____ 3. Durler Company's account balances at December 31 for Accounts Receivable and the related Allowance for Doubtful Accounts are $800,000and $13,000, respectively. From an analysis of accounts receivable, it isestimated that $28,000 of the December 31 receivables will be uncollectible.After adjustment for the above facts, the net realizable value of accountsreceivable would bea. $800,000.b. $787,000.c. $759,000.d. $772,000.____ 4. Which group of items listed below should be included in the cash account?a. Silver coins, postage stamps, demand deposits, personal checks.b. Promissory notes, demand deposits, money orders, silver coins.c. Money orders, postdated checks, personal checks, time deposits.d. Silver coins, money orders, demand deposits, personal checks.____ 5. Which of the following methods of accounting for uncollectible accounts does not properly match costs with revenues?a. Percentage of salesb. Percentage of receivablesc. Direct write-offd. Aging scheduleB-2Comprehensive Exam B____ 6. Certain information relative to the 2012 operations of Ball Co. follows: Accounts receivable, January 1, 2012 $48,000Accounts receivable collected during 2012 92,000Cash sales during 2012 24,000Inventory, January 1, 2012 36,000Inventory, December 31, 2012 33,000Purchases of inventory during 2012 80,000Gross profit on sales 27,000What is Ball's accounts receivable balance at December 31, 2012?a. $36,000.b. $42,000.c. $48,000.d. $66,000.Problem B-II— Lower of Cost or MarketPresented below is data relative to the 12/31/12 inventory of Lance Company:Number Units Original Cost Total Current Item In Inventory Per Unit Original Cost Replacement CostA 5,000 $1.09 $5,450 $1.08B 5,000 1.30 6,500 1.15C 5,000 1.50 7,500 1.05D 5,000 1.60 8,000 1.65E 5,000 1.80 9,000 1.70Total 25,000 $36,450AppropriateUpper Lower InventoryLimit Limit Designated Valuation Item ("Ceiling") ("Floor") Market (Totals)ABCDETotalAdditional Data:Selling price is $2.00/unit for all items. Disposal costs amount to 10% of selling price anda "normal" profit is 35% of selling price.InstructionsComplete the last four columns above.Comprehensive Exam B B-3Problem B-III— Notes Receivable.On December 31, 2011 Berry Corporation sold some of its product to Flynn Company, accepting a 3%, four-year promissory note having a maturity value of $500,000 (interest payable annually on December 31). Berry Corporation pays 6% for its borrowed funds. Flynn Company, however, pays 8% for its borrowed funds. The product sold is carried on the books of Berry at a manufactured cost of $310,000. Assume Berry uses a perpetual inventory system.Instructions(a) Prepare the journal entries to record the transaction on the books of BerryCorporation at December 31, 2011. (Assume that the effective interest method is used. Use the interest tables below and round to the nearest dollar.)(b) Make all appropriate entries for 2012 on the books of Berry Corporation.(c) Make all appropriate entries for 2013 on the books of Berry Corporation.For Use on Problem B-IIITable 1Future Value of 1Periods 2% 3% 4% 6% 8%1 1.02000 1.03000 1.04000 1.06000 1.080002 1.04040 1.06090 1.08160 1.12360 1.166403 1.06121 1.09273 1.12486 1.19102 1.259714 1.08243 1.12551 1.16986 1.26248 1.360495 1.10408 1.15927 1.21665 1.33823 1.46933Table 2Present Value of 1Periods 2% 3% 4% 6% 8%1 0.98039 0.97087 0.96154 0.94340 0.925932 0.96117 0.94260 0.92456 0.89000 0.857343 0.94232 0.91514 0.88900 0.83962 0.793834 0.92385 0.88849 0.85480 0.79209 0.735035 0.90573 0.86261 0.82193 0.74726 0.68058Table 3Future Value of Ordinary Annuity of 1Periodic Rents 2% 3% 4% 6% 8%1 1.00000 1.00000 1.00000 1.00000 1.000002 2.02000 2.03000 2.04000 2.06000 2.080003 3.06040 3.09090 3.12160 3.18360 3.246404 4.12161 4.18363 4.24646 4.37462 4.506115 5.20404 5.30914 5.41632 5.63709 5.86660B-4Comprehensive Exam BTable 4Present Value of Ordinary Annuity of 1Periodic Rents 2% 3% 4% 6% 8%1 0.98039 0.97087 0.96154 0.94340 0.925932 1.94156 1.91347 1.88609 1.83339 1.783263 2.88388 2.82861 2.77509 2.67301 2.577104 3.80773 3.71710 3.62990 3.46511 3.312135 4.71346 4.57971 4.45182 4.21236 3.99271Comprehensive Exam B B-5Problem B-IV— FIFO vs. LIFO.In comparing and contrasting FIFO vs. LIFO inventory procedures, the following listingwas developed. You are to complete the tabulation with an answer of "YES" or "NO" as demonstrated by the first item. Any combination of yes-no answers is possible in each situation.FIFO LIFO0. Usually matches the actual physical flow of goods. Yes _ No _1. Emphasizes the income statement in that it matches the morerecent costs with revenue. ______ _____2. Defers tax payments in times of rising prices. ______ _____3. Possibility of liquidating the base may be a significant negativeaspect. ______ _____4. Will probably not be adopted if prices are expected to decline. ______ _____5. Emphasizes the balance sheet in that the more recent costsare contained in the inventory account. ______ _____6. Can use price indexes to cost layers. ______ _____7. Switching to this method could cause problems in the equitymarkets, with loan covenants, etc. ______ _____8. Income figure more accurately reflects cash available fordividends, investments, etc. ______ _____9. Tends to smooth income in periods of fluctuating prices. ______ _____10. Income figure is more "real" in that it doesn't contain "paperprofits." ______ _____ 11. A change to this method must be justified (i.e., to the auditor)other than solely on the basis of the tax effect. ______ _____B-6Comprehensive Exam B12. Perpetual inventory results may be different from periodicinventory results. ______ _____13. Is acceptable to the IRS (i.e., for income tax purposes). ______ _____14. Gives lower profits when prices rise. ______ _____15. In a period of rising prices has an adverse effect on assets,working capital, and stockholders' equity. ______ _____16. Quick inventory turnover may have somewhat of a mitigatingeffect on some of the method's claimed disadvantages. ______ _____17. Improves cash flow in periods of rising prices. ______ _____18. If used for tax purposes, it must be used for financial reportingpurposes. ______ _____19. Somewhat opens door for profit manipulation and may causepoor purchase decisions. ______ _____ 20. Is a current value, rather than a historical cost, valuation method. ______ _____Problem B-V— Year-end Inventory Cutoff.Abel Company's business year ends on December 31. Listed below are purchase transactions which occurred during the last few days of 2012 or during the first few daysof 2013. The inventory, determined by physical count, was taken after the close of business on December 31, 2012. The only adjusting entry recorded to date has been to enter the December 31 physical inventory on the books and to remove the beginning inventory.Instructions(a) On the accompanying chart, indicate the effect of each of these transactions on theending inventory and on reported net income for 2012, by writing the wordsoverstated, understated, or no effect in the appropriate column. Both columns mustbe answered for each transaction.(b) Prepare all necessary correcting entries for 2012.(c) Indicate which of the correcting entries must be reversed in 2011 by preparing thenecessary reversing entries.Comprehensive Exam B B-712/31/12Physical 2012Inventory Income 1. An invoice for $9,000, terms f.o.b. shipping point, was receivedand entered December 30. The invoice shows that themerchandise was shipped December 29, and the receivingreport indicates the merchandise was received January 2. _______ _______ 2. An invoice for $300, terms f.o.b. shipping point, was receivedand entered December 30. The invoice shows thatmerchandise was shipped December 29, and the receivingreport shows the merchandise was received December 31. _______ _______ 3. An invoice for $4,000, terms f.o.b. shipping point, wasreceived and entered January 2. The invoice shows themerchandise was shipped December 30, and the receivingreport indicates the merchandise was received December 31. _______ _______ 4. An invoice for $800, terms f.o.b. destination, was received andentered December 30. The receiving report shows themerchandise was received January 2. _______ _______ 5. An invoice for $500, terms f.o.b. destination, was received andentered December 29. The receiving report indicates that themerchandise was received December 31. _______ _______ 6. An invoice for $1,500, terms f.o.b. destination, was receivedand entered January 2. The receiving report indicates themerchandise was received December 31. _______ _______ 7. Merchandise costing $12,000 and with a selling price of$18,000 was on consignment to Maris Distributing Companyand was on that company's premises on December 31. Noentry has been made for the consignment. _______ _______B-8Comprehensive Exam BProblem B-VI— Conventional and LIFO Retail Method.**Note to Instructor. Part B is based on Appendix 9-A.A. Landmark Book Store uses the conventional retail method.InstructionsGiven the following data, prepare a neat, labeled schedule showing the computation ofthe cost of inventory on hand at 12/31/12.Cost Retail Inventory 1/1/12 $ 28,900 $ 40,000 Purchases 366,600 610,000 Purchases Returns 9,000 20,000 Purchase Discounts 7,000Sales (Gross) 615,000 Sales Returns 15,000 Employee Discounts 5,000 Freight-in 23,500Freight-out 50,000Loss from Breakage 2,500 Markups 38,000 Markup Cancellations 18,000 Markdowns 13,500 Markdown Cancellations 8,500 B. Landmark Book Store has decided to switch to the LIFO retail method for the periodbeginning 1/1/13.InstructionsPrepare a schedule showing the computation of the 12/31/13 inventory under the LIFO retail method adjusted for price level changes (i.e., dollar-value LIFO Retail.) Without prejudice to your answer in requirement A above, assume that the 12/31/12 inventory computed under the LIFO Retail method was $40,000 and $27,500 at retail and cost, respectively, for purposes of this requirement. Data for 2013 follows:Cost Retail Purchases (net) $360,000 $485,000 Sales (net) 402,000 Markups (net) 30,000 Markdowns (net) 15,000 2012 Price Index 1002013 Price Index 120Comprehensive Exam B B-9Problem B-VII— Multiple Choice — InventoryFor each of the following questions, select the letter of the statement which best answers the question and write it on the line to the left of the question.____ 1. Wade Company estimates the cost of its physical inventory at March 31 for use in an interim financial statement. The rate of markup on cost is 25%. Thefollowing account balances are available:Inventory, March 1 $1,000,000Purchases during March 500,000Purchase returns 26,000Sales during March 850,000The estimate of the cost of inventory at March 31 would bea. $624,000.b. $680,000.c. $794,000.d. $836,500.____ 2. Most methods of pricing inventories are in accord with generally accepted accounting principles and generally are permissible for income tax purposes.The method that must be used for financial reporting purposes if used for taxpurposes isa. moving average.b. weighted average.c. LIFO.d. FIFO.____ 3. A company has been using the FIFO cost method of inventory valuation since it was started 10 years ago. Its 2012 ending inventory was $120,000, but itwould have been $90,000 if LIFO had been used. Thus, if LIFO had beenused, this company's income before taxes would have beena. $30,000 less in 2012.b. $30,000 less over the 10-year period.c. $30,000 greater over the 10-year period.d. $30,000 greater in 2012.____ 4. Why are inventories included in the computation of net income?a. To determine cost of goods sold.b. To determine sales revenue.c. To determine merchandise returns.d. Inventories are not included in the computation of net income.____ 5. On December 31, 2012, Hill Company, which sells only one product, adopted the periodic last-in, first-out method of inventory valuation. The inventory wasvalued at $40,000 on the December 31, 2012 balance sheet. The number ofitems in its inventory remained constant during 2013. The December 31,2013 inventory valuation would bea. less than $40,000 if prices were steadily decreasing.b. less than $40,000 if prices were steadily increasing.c. greater than $40,000 if prices were steadily increasing.d. $40,000 regardless of any price changes.B-10Comprehensive Exam B____ *6. Kramer Company values its inventory by using the retail method (LIFO basis, stable prices). The following information is available for the year 2012.Cost Retail Beginning inventory $ 78,000 $140,000Purchases 368,000 628,000Freight-in 16,000Markups (net) —18,000Markdowns (net) —6,000Sales 610,000 At what amount would Kramer Company report its ending inventory?a. $95,700.b. $96,000.c. $100,300.d. $102,000.Solutions — Comprehensive Examination BProblem B-I— Solution.1. b 4. d2. c 5. c3. d 6. bSolutions to computational Multiple Choice Questions.3. $800,000 – $28,000 = $772,000.6. $80,000 + $3,000 + $27,000 – $24,000 + $48,000 – $92,000 = $42,000.Problem B-II— Solution.AppropriateUpper Lower InventoryLimit Limit Designated Valuation Item ("Ceiling") ("Floor") Market (Totals)A $1.80 $1.10 $1.10 $5,450B 1.80 1.10 1.15 5,750C 1.80 1.10 1.10 5,500D 1.80 1.10 1.65 8,000E 1.80 1.10 1.70 8,500$33,200Problem B-III— Solution.(a) 12/31/11Notes Receivable ........................................................................... 500,000Discount on Notes Receivable .......................................... 82,803Sales Revenve .................................................................... 417,197Computation of Present Value of Note: (using 8%)$500,000 × .73503 = $367,51515,000 × 3.31213 = 49,682Present value of note 417,197Face value of note 500,000Amount of discount $ 82,80312/31/11Cost of Goods Sold ........................................................................ 310,000Inventory ............................................................................. 310,000(b) 12/31/12Cash .............................................................................................. 15,000Interest Revenue ................................................................ 15,000 Discount on Notes Receivable ...................................................... 18,376Interest Revenue ................................................................ 18,376($417,197 × .08 = $33,376 – $15,000)(c) 12/31/13Cash .............................................................................................. 15,000Interest Revenue ................................................................ 15,000 Discount on Notes Receivable ...................................................... 19,846Interest Revenue ................................................................ 19,846[($417,197 + $18,376) × .08 = $34,846 – $15,000]Problem B-IV — Solution.1. No-Yes 7. No-Yes 13. Yes-Yes 19. No-Yes2. No-Yes 8. No-Yes 14. No-Yes 20. No-No3. No-Yes 9. No-Yes 15. No-Yes4. No-Yes 10. No-Yes 16. Yes-No5. Yes-No 11. Yes-Yes 17. No-Yes6. No-Yes 12. No-Yes 18. No-YesProblem B-V— Solution.(a) 1. Understated/Understated2. No effect/No effect3. No effect/Overstated4. No effect/Understated5. No effect/No effect6. No effect/Overstated7. Understated/Understated(b) 1. Inventory ................................................................................... 9,000Cost of Goods Sold ...................................................... 9,0002. None3. Purchases ................................................................................ 4,000Accounts Payable ........................................................ 4,0004. Accounts Payable (800)Purchases . (800)5. None6. Purchases ................................................................................ 1,500Accounts Payable ........................................................ 1,5007. Inventory ................................................................................... 12,000Cost of Goods Sold ...................................................... 12,000 (c) 3. Accounts Payable .................................................................... 4,000Purchases .................................................................... 4,0004. Purchases (800)Accounts Payable (800)6. Accounts Payable .................................................................... 1,500Purchases .................................................................... 1,500Problem B-VI — Solution.Cost Retail A. Beginning Inventory $ 28,900 $ 40,000Purchases 366,600 610,000 Purchase Returns (9,000) (20,000) Purchase Discounts (7,000)Freight-In 23,500Markups 38,000 Markup Cancellations (18,000) Goods Available $403,000 650,000 Cost Ratio = 62%Sales $615,000Sales Returns (15,000) (600,000) Employee Discounts (5,000) Goods Broken (2,500) Markdowns 13,500Markdown Cancellations (8,500) (5,000) Ending Inventory @ Retail $ 37,500 Est. Ending Inventory @ Cost (62% × $37,500) $ 23,250*B. Cost Retail__ Inventory, December 31, 2012 $ 27,500 $ 40,000 Net purchases 360,000 485,000 Net markups 30,000 Net markdowns (15,000) Total (excluding beginning inventory) 360,000 500,000 Total (including beginning inventory) $387,500 540,000 Net sales (402,000) Inventory, December 31, 2013, at retail $ 138,000 Cost to retail percentage ($360,000 ÷ $500,000) 72%12/31/13 inventory at base ($138,000 ÷ 1.20) $ 115,000 12/31/12 inventory at base $ 27,500 (40,000) Increase at base $ 75,000 Increase at current prices, at cost ($75,000 × 1.20 × .72) 64,80012/31/13 inventory at LIFO cost $ 92,300Problem B-VII — Solution.1. c 4. a2. c 5. d3. b *6. bSolutions to computational Multiple Choice Questions.1. $1,474,000– (80% × $850,000) = $794,000.6. $384,000 ÷ $640,000 = 60%. $78,000 + (60% × $30,000) = $96,000.。
中级财务会计英文版第十章课后题答案
Chapter 18Shareholders’ EquityQUESTIONS FOR REVIEW OF KEY TOPICSQuestion 18-1The two primary sources of shareholders’ equity are amounts invested by shareholders in the corporation and amounts earned by the corporation on behalf of its shareholders. Invested capital is reported as paid-in capital and earned capital is reported as retained earnings.Question 18-2The three primary ways a company can be organized are (1) a sole proprietorship, (2) a partnership, or (3) a corporation. Transactions are accounted for the same regardless of the form of business organization with the exception of the method of accounting for capital – the ownership interest in the company. Several capital accounts (as discussed in this chapter) are used to record changes in ownership interests for a corporation, rather than recording all changes in ownership interests in a single capital account for each owner, as we do for sole proprietorships and partnerships. Question 18-3In the eyes of the law, a corporation is a separate legal entity – separate and distinct from its owners. The owners are not personally liable for debts of the corporation. So, shareholders generally may not lose more than the amounts they invest when they purchase shares. This is perhaps the single most important advantage of corporate organization over a proprietorship or a partnership.Question 18-4―Not-for-profit‖ corporations, such as churches, hospitals, universities, and charities, are not organized for profit and do not sell stock. Some not-for-profit corporations, such as the Federal Deposit Insurance Corporation (FDIC), are government owned.Question 18-5Corporations that are organized for profit may be publicly held or privately (or closely) held. The stock of publicly held corporations is available for purchase by the general public. Shares might be traded on organized national stock exchanges available ―over-the-counter‖ from securities dealers. Privately held companies' shares are held by only a few individuals and are not available to the general public.Question 18-6Corporations are formed in accordance with the corporation laws of individual states. The Model Business Corporation Act serves as the guide to states in the development of their corporation statutes, presently as the model for the majority of states.Answers to Questions (continued)Question 18-7The ownership rights held by common shareholders, unless specifically withheld by agreement with the shareholders, are:a. The right to vote on policy issues.b. The right to share in profits when dividends are declared (in proportion to the percentage ofshares owned by the shareholder).c. The right to share in the distribution of any assets remaining at liquidation after other claims aresatisfied.Question 18-8The ―preemptive right‖ is the right to maintain one’s percentage share of ownership when new shares are issued. When granted, each shareholder is offered the opportunity to buy the same percentage of any new shares issued as the percentage of shares he/she owns at the time. For reasons of practicality, the preemptive right usually is excluded.Question 18-9The typical rights of preferred shares usually include one or both of the following:a. A preference to a predesignated amount of dividends, i.e., a stated dollar amount per share or %of par value per share. This means that when the board of directors of a corporation declares dividends, preferred shareholders will receive the specified dividend prior to any dividends being paid to common shareholders.b. A preference over common shareholders in the distribution of assets in the event the corporationis dissolved.Question 18-10If preferred shares are noncumulative, dividends not declared in any given year need never be paid. However, if cumulative, when the specified dividend is not paid in a given year, the unpaid dividends accumulate and must be made up in a later dividend year before any dividends are paid on common shares. These unpaid dividends are called ―dividends in arrears.‖Question 18-11Par value was defined by early corporation laws as the amount of net assets not available for distribution to shareholders (as dividends or otherwise). However, now the concepts of ―par value‖ and ―legal capital‖ have been eliminated entirely from the Mod el Business Corporation Act. Most shares continue to bear arbitrarily designated par values, typically nominal amounts. Although many states already have adopted these provisions, most established corporations issued shares prior to changes in the state statutes. So, most companies still have par value shares outstanding and continue to issue previously authorized par value shares.Answers to Questions (continued)Question 18-12Comprehensive income is a broader view of the change in shareholders’ equ ity than traditional net income. It is the total nonowner change in equity for a reporting period. It encompasses all changes in equity except those caused by transactions with owners. Transactions between the corporation and its owners (shareholders) primarily include dividends and the sale or purchase of shares of the company’s stock. Most nonowner changes (e. g., revenues and expenses) are reported in the income statement. So, the changes other than the ones that are part of net income are those reported as ―other comprehensive income.‖Two attributes of other comprehensive income are reported: (1) components of comprehensive income created during the reporting period and (2) the comprehensive income accumulated over the current and prior periods.The components of comprehensive income created during the reporting period - can be reported either (a) as an additional section of the income statement, (b) as part of the statement of shareholders’ equity, or (c) in a disclosure note. Regardless of the choice a company makes, the presentation will report net income, other components of comprehensive income, and total comprehensive income. The second attribute - the comprehensive income accumulated over the current and prior periods–is reported as a sep arate component of shareholders’ equity. This amount represents the cumulative sum of the changes in each component created during each reporting period throughout all prior years. Question 18-13As part of a joint project with the FASB, the International Accounting Standards Board (IASB) in 2007 issued a revised version of IAS No.1,―Presentation of Financial Statements,‖ that revised the standard to bring international reporting of comprehensive income largely in line with U.S. standards. It provides the option of presenting revenue and expense items and components of other comprehensive income either in (a) a single statement of comprehensive income or (b) two statements: an income statement and a statement of comprehensive income, traditionally referred to as the Statement of Recognized Income and Expense, or ―SoRIE.‖ U.S. GAAP also allows reporting other comprehensive income in the statement of shareholders’ equity, which is the way most U.S. companies report it.Question 18-14The statement of shareho lders’ equity reports the transactions that cause changes in its shareholders’ equity account balances. It shows the beginning and ending balances in primary shareholders’ equity accounts and any changes that occur during the years reported. Typical reas ons for changes are the sale of additional shares of stock, the acquisition of treasury stock, net income, and the declaration of dividends.Question 18-15The measurement objective is that the transaction should be recorded at fair value. This might be the fair value of the shares or of the noncash assets or services received, whichever evidence of fair value seems more clearly evident. This is consistent with the general practice of recording any noncash transaction at market value.Answers to Questions (continued)Question 18-16The cash received usually is the sum of the separate market values of the separate securities. However, when the total selling price is not equal to the sum of the separate market prices, the total selling price is allocated in proportion to their relative market values.Question 18-17Share issue costs reduce the net cash proceeds from selling the shares and thus paid-in capital –excess of par. On the other hand, debt issue costs are recorded in a separate ―debt issue costs‖ account and amortized to expense over the life of the debt. The difference often is justified by the presumption that share issue costs and debt issue costs are fundamentally different because a debt issue has a fixed maturity, but that selling shares represents a perpetual equity interest. Concept Statement 6 disagrees, stating that debt issue costs should be treated the same way as share issue costs. But, Concept Statements do not constitute GAAP, and the currently prescribed practice is to record debt issue costs as assets and expense the asset over the maturity of the debt.Question 18-18The same accounts that previously were increased when the shares were sold are decreased when the shares are retired. Specifically, common (or preferred) stock and paid-in capital – excess of par are reduced by the same amounts they were increased by when the shares were originally sold.If the cash paid to repurchase the shares differs from the amount originally paid in, accounting for the difference depends on whether the cash paid to repurchase the shares is less than or more than the price previously received when the shares were sold. When less cash is distributed to shareholders to retire shares than originally paid in, some of the original investment remains and is labeled paid-in capital –share repurchase. When more cash is distributed to shareholders to retire shares than originally was paid in for those shares, the additional amount is viewed as a dividend on the original investment, and thus a reduction of retained earnings (unless previous share repurchases have created a balance in paid-in capital – share repurchase which would be reduced first).Question 18-19The purchase of treasury stock and its subsequent resale are considered to be a ―single transaction.‖ The purchase of treasury stock is perceived as a temporary reduction of shareholders' equity, to be reversed later when the treasury stock is resold, so the cost of acquiring the shares is ―temporarily‖ debited to the treasury stock account. Allocating the effects to specific shareholders’ equity accounts is deferred until the shares are subsequently reissued.Answers to Questions (concluded)Question 18-20For a stock dividend of less than 25%, a "small" stock dividend, the fair value of the additional shares distributed is transferred from retained earnings to paid-in capital. The reduction in retained earnings is the same amount as if cash dividends were paid equal to the market value of the shares issued. The treatment is consistent with the belief that per share prices remain unchanged by stock dividends.This is not logical. If the value of each share were to remain the same when additional shares are distributed without compensation, the total value of the company would grow simply because additional stock certificates are distributed. Instead, the market price per share will decline in proportion to the increase in the number of shares distributed in a stock dividend.Question 18-21The effect and maybe the motivation for the stock split is to reduce the per share market price (by half). This will likely increase the stock’s marketability by making it attractive to a larger number of potential investors. The appropriate accounting treatment of a stock split is to make no journal entry, which avoids the reclassification of ―earned‖ capital as ―invested‖ capital. However, if the stock distribution is referred to as a "stock split effected in the form of a stock dividend," and the per share par value of the shares is not changed, a journal entry is recorded that increases the common stock account by the par value of the additional shares. To avoid reducing retained earnings Brandon can reduce (debit) paid-in capital –excess of par to offset the credit to common stock, although it’s permissible to debit retained earnings.Question 18-22When a company decreases, rather than increases, its outstanding shares a reverse stock split occurs. A 1 for 2 reverse stock split would cause one million $1 par shares to become one-half million $2 par shares. No journal entry would be recorded, so no account balances will change. But the market price per share would double, and the par amount per share would double.Question 18-23You would be entitled to 3.2 shares (4% x 80 shares). Since cash in lieu of payments usually are made when shareholders are entitled to fractions of whole shares, you probably would receive 3 shares and cash equal to the market value of 1/5 of one share. Sometimes fractional share rights are issued for the partial shares, which would entitle you to a fractional share right for 1/5of a share.Question 18-24A quasi reorganization allows a company to (1) write down inflated asset values and (2) eliminate an accumulated deficit in retained earnings. The following steps are taken:1. Assets and liabilities are revalued to reflect their fair values, with corresponding credits or debitsto retained earnings. This may temporarily increase the deficit.2. The debit balance in retained earnings is eliminated against additional paid-in capital. Whenadditional paid-in capital is not sufficient to absorb the entire deficit,capital stock is debited.3. Disclosure is provided to indicate the date the deficit was eliminated and when the newaccumulation of earnings began.BRIEF EXERCISESBrief Exercise 18-1Two attributes of other comprehensive income are reported: (1) components of comprehensive income created during the reporting period($15 million in this instance) and (2) the comprehensive income accumulated over the current and prior periods ($50 million at the end of this year).The $50 million represents the cumulative sum of the changes in each component created during each reporting period (the disclosure note) throughout all prior years. Since this amount increased by $15 million, the balance must have been $35 million last year.Brief Exercise 18-2($ in millions) Cash (8 million shares x $12 per share) (96)Common stock (8 million shares x $1 par per share) (8)Paid-in capital – excess of par (remainder) (88)Lewelling’s paid-in capital – excess of par will increase by $860,000: 4,000 hours x $240 less $100,000 par.Journal entry (not required):Legal expense (4,000 hours x $240) .................................... 960,000Common stock (100,000 shares x $1 par per share)............... 100,000Paid-in capital – excess of par (remainder) ................... 860,000Brief Exercise 18-4Hamilton’s shareholders’ equity will increase by $3,500,000 as a result of this transaction.Journal entry (not required):Inventory of motors (1,000 x $3,500)................................. 3,500,000Common stock ............................................................. 3,500,000MLS’s common shareholders’ will receive dividends of $18 million as a result of the 2011 distribution.Preferred Common2009 $20 million*02010 20 million**02011 32 million***$18 million(remainder)* $24 million current preference (6% x $400 million), thus $4 million dividends in arrears.**$24 million current preference (6% x $400 million), thus another $4 million dividends in arrears.*** $8 million dividends in arrears plus the $24 million current preference.Brief Exercise 18-6Horton’s total paid-in capital will decline by $17 million, the price paid to buy back the shares.Journal entry (not required):($ in millions) Common stock (2 million shares x $1 par) (2)Paid-in capital – excess of par (2 million shares x $9*) (18)Paid-in capital – share repurchase (difference) (3)Cash (2 million shares x $8.50 per share) (17)* Paid-in capital – excess of par: $900 ÷ 100 million sharesBrief Exercise 18-7Agee’s total paid-in capital will decline by $18 million because recording thetransaction involves a $1 million reduction of retained earnings and an $18 million reduction in paid-in capital accounts.Journal entries (not required):First buyback ($ in millions)Common stock (1 million shares x $1 par) (1)Paid-in capital – excess of par (1 million shares x $15*) (15)Paid-in capital – share repurchase (difference) (2)Cash (1 million shares x $14) (14)* $16 - $1 parSecond buybackCommon stock (1 million shares x $1 par) (1)Paid-in capital – excess of par (1 million shares x $15*) (15)Paid-in capital – share repurchase (balance from first buyback).. 2Retained earnings (difference) (1)Cash (1 million shares x $19) (19)* $16 - $1 parBrief Exercise 18-8Jennings’ retained earnings will decline by $2 million because the $67 million sale price is less than the sum of the cost of the treasury stock ($70 million) and paid-in capital from the previous treasury stock sale ($1 million).Journal entries (not required):Purchase of treasury stock ($ in millions)Treasury stock (2 million shares x $70) (140)Cash (140)First sale of treasury stockCash (1 million shares x $71) (71)Treasury stock (1 million shares x $70) (70)Paid-in capital – share repurchase (remainder) (1)Second sale of treasury stockCash (1 million shares x $67) (67)Paid-in capital – share repurchase (balance from first sale) (1)Retained earnings (remainder) (2)Treasury stock (1 million shares x $70) (70)Brief Exercise 18-9Cox’ paid-in capital – share repurchase will increase by $7 million as determined in the following journal entry:($ in millions) Cash (1 million shares x $29) (29)Paid-in capital – share repurchase (difference) (7)Treasury stock (1 million shares x $22*) (22)* 2 million shares x $20 = $40 million1 million shares x $26 = 26 million3 million shares $66 million$66 million ÷ 3 million shares = $22 average cost per shareBrief Exercise 18-10Cox’ paid-in capital – share repurchase will increase by $9 million as determined in the following journal entry:($ in millions) Cash (1 million shares x $29) (29)Paid-in capital – share repurchase (difference) (9)Treasury stock (1 million shares x $20*) (20)* 2 million shares x $20 = $40 million (first million at $20)1 million shares x $26 = 26 million$66 millionBrief Exercise 18-11Declaration date ($ in millions) Retained earnings .............................................................. 1,158Cash dividends payable (8,908 million shares x $.13)....... 1,158 Date of recordno entryPayment dateCash dividends payable .................................................... 1,158Cash .............................................................................. 1,158Brief Exercise 18-12Declaration dateLoss on investment ($37,000 - 35,000)................................ 2,000Investment in GE stock ................................................ 2,000Retained earnings (1,000 shares at $35 per share) ......................35,000Property dividends payable .......................................... 35,000 Payment dateProperty dividends payable .............................................. 35,000Investment in GE stock ................................................ 35,000Brief Exercise 18-13($ in millions) Retained earnings (3 million* shares at $25 per share) (75)Common stock (3 million* shares at $1 par per share) (3)Paid-in capital – excess of par (remainder) (72)* 5% x 60 million shares = 3 million sharesBrief Exercise 18-14If a stock split is not to be effected in the form of a stock dividend, no entry isrecorded. Since the shares double, but the balance in the common stock account is not changed, the par per share is reduced, to $.50 in this instance.Brief Exercise 18-15($ in millions) Paid-in capital – excess of par 60Common stock (60 million shares* x $1 par per share)60* 100% x 60 million shares = 60 million sharesIf the per share par value of the shares is not to be changed, the stock distribution is referred to as a "stock split effected in the form of a stock dividend." In that case, the journal entry increases the common stock account by the par value of the additional shares. This prevents the increase in shares from reducing (by half in this case) the par per share. The par is $1 before and after the split.Brief Exercise 18-16If Nestle used U.S. GAAP:∙Ordinary share capital would be Common stock,∙Share premium would be Paid-in capital–excess of par, and∙Translation reserve would be Net gains (losses) from foreign currency translation–AOCI.EXERCISESExercise 18-1Requirement 1Comprehensive income is a mor e expansive view of the change in shareholders’ equity than traditional net income. It is the total nonowner change in equity for a reporting period. In fact, it encompasses all changes in equity other than from transactions with owners. Transactions between the corporation and its shareholders primarily include dividends and the sale or purchase of shares of the company’s stock. Most nonowner changes are reported in the income statement. So, the changes other than those that are part of net income are the ones reported as ―other comprehensive income.‖Requirement 2Two attributes of other comprehensive income are reported: (1) components of comprehensive income created during the reporting period and (2) the comprehensive income accumulated over the current and prior periods.The second measure - the comprehensive income accumulated over the current and prior periods–is reported in the balance sheet as a separate component of shareholders’ equity. This is what Kaufman reported in its balance shee t ($107 million in 2011). Be sure to realize this amount represents the cumulative sum of the changes in each component created during each reporting period (the disclosure note) throughout all prior years.Exercise 18-1 (continued)Requirement 3Kaufman's 2011 balance sheet amount ($107 million) differs from the 2011 amount reported in the disclosure note. On the other hand, the comprehensive income created during the reporting period can be reported either (a) as an additional section of the income s tatement, (b) as part of the statement of shareholders’ equity, or (c) in a disclosure note. This is the measure of comprehensive income Kaufman reported in the disclosure note. Regardless of the placement a company chooses, the presentation is similar. It will report net income, other components of comprehensive income, and total comprehensive income, similar to the following:($ in millions) Net income $xxx Other comprehensive income:Net unrealized holding gains (losses) on investments (net of t ax)†$ xGains (losses) from and amendments to postretirement plans (net of tax)‡(x)Deferred gains (losses) from derivatives (net of tax)§ xGains (losses) from foreign currency translation (net of tax)* x xx Comprehensive income $xxx†Changes in the fair value of securities available-for-sale. (An unrealized loss also might occur from recording an ―other than temporary‖ impairment of an investment in debt securities. As described in Chapter 12, if the fair value of a debt security investment falls below its amortized cost, and that decline if viewed as other than temporary, the current period credit loss is included in net income, but any amount that exceeds the current period credit loss is recorded as a loss in OCI.)‡Gains and losses due to revising assumptions or market returns differing from expectations and prior service cost from amending the plan (described in Chapter 17).§When a derivative designated as a cash flow hedge is adjusted to fair value, the gain or loss is deferred as a component of comprehensive income and included in earnings later, at the same time as earnings are affected by the hedged transaction (described in the Derivatives Appendix to the text).* Gains or losses from changes in foreign currency exchange rates from the translation of foreign subsidiary financial statements. The amount could be an addition to or reduction inshareholders’ equity. (This item is discussed elsewhere in your accounting curriculum.)Notice that each component is reported net of its related income tax expense or income tax benefit.Exercise 18-1 (concluded)Requirement 4From the information Kaufman's financial statements provide, we can determine how the company calculated the $107 million accumulated other comprehensive income in 2011:($ in millions) Accumulated other comprehensive income, 2010 $75Change in net unrealized gains on investments 34 Change in ―other‖ (2) Accumulated other comprehensive income, 2011 $ 107Exercise 18-2Requirement 1The specific citation that describes the guidelines for presenting accumulated other comprehensive income on the statement of shareholders’ equity is FASB ACS220–10–45–14: ―Comprehensive Income–Overall–Other Presentation Matters–Reporting Other Comprehensive Income in the Equity Section of a Statement of Financial Position.”Requirement 245-14 The total of other comprehensive income for a period shall be transferred to a component of equity that is displayed separately from retained earnings and additional paid-in capital in a statement of financial position at the end of an accounting period. A descriptive title such as accumulated other comprehensive income shall be used for that component of equity. An entity shall disclose accumulated balances for each classification in that separate component of equity on the face of a statement of financial position, in a statement of changes in equity, or in notes to the financial statements. The classifications shall correspond to classifications used elsewhere in the same set of financial statements for components of other comprehensive income.Exercise 18-3Indicate by letter whether each of the items listed below most likely is reported in the income statement as Net Income (NI) or in the statement of comprehensive income as Other Comprehensive Income (OCI).ItemsOCI 1. Increase in the fair value of securities available-for-saleNI 2. Gain on sale of landOCI 3. Loss on pension plan assets (actual return less than expected)OCI 4. Gain from foreign currency translationNI 5. Increase in the fair value of trading securitiesOCI 6. Loss from revising an assumption related to a pension planNI 7. Loss on sale of patentOCI 8. Prior service costNI 9. Increase in the fair value of bonds outstanding; fair value optionOCI 10. Gain on postretirement plan assets (actual return more than expected)Exercise 18-4Cash (3 million shares x $17.15 per share).............................. 51,450,000Common stock (3 million shares x $.01 par per share) ....... 30,000Paid-in capital – excess of par (remainder) ................... 51,420,000Exercise 18-5February 12Cash (2 million shares x $9 per share)................................ 18,000,000Common stock (2 million shares x $1 par) ................... 2,000,000 Paid-in capital – excess of par (difference) ................... 16,000,000February 13Legal expenses (40,000 shares x $9 per share).................. 360,000Common stock (40,000 shares x $1 par) ...................... 40,000 Paid-in capital – excess of par (difference) ...................320,000Note: Because 2 million shares sold the previous day for $9 per share, it’s reasonable to assume a $9 per share fair value.February 13Cash ............................................................................. 945,000Common stock (80,000 shares x $1 par) ..................... 80,000 Paid-in capital – excess of par, common*............... 640,000 Preferred stock (4,000 shares x $50 par) ...................... 200,000 Paid-in capital – excess of par, preferred**............ 25,000 * 80,000 shares x [$9 market value - $1 par]** Since the value of the common shares is known ($720,000), the market value of the preferred ($225,000) is assumed from the total selling price ($945,000).November 15Property, plant, and equipment (cash value).................. 3,688,000Common stock (380,000 shares at $1 par per share)...... 380,000 Paid-in capital – excess of par (difference) ............... 3,308,000。
英文版中级会计(现金及应收账款)
Payment terms are 2/10, n/30
Chapter 7-12
LO 4 Explain accounting issues related to recognition of accounts receivable.
Recognition of Accounts Receivables
Learning Objectives
1. 2. Identify items considered as cash. Indicate how to report cash and related items.
3.
4.
Define receivables and identify the different types of receivables.
Explain accounting issues related to recognition of accounts receivable.
5.
6.
Explain accounting issues related to valuation of accounts receivable.
Explain accounting issues related to recognition of notes receivable.
Understanding Cash and ReceivablesChapter6
Intermediate Accounting 12th Edition Kieso, Weygandt, and Warfield
Chapter 7-1
Prepared by Coby Harmon, University of California, Santa Barbara
中级会计课后习题Chapter1
中级会计课后习题Chapter1CHAPTER 1 Environment and Theoretical Structure of Financial Accounting 35However, the primary focus is on the financial information provided by profit-oriented companies to theirpresent and potential investors and creditors. (p. 4)●L O1–2 Cash basis accounting provides a measure of periodic performance called n et operating cash flow,which is the difference between cash receipts and cash disbursements from transactions related to providinggoods and services to customers. Accrual accounting provides a measure of performance called n etincome,which is the difference between revenues and expenses. Periodic net income is considered a bet-ter indicator of future operating cash flows than is current net operating cash flows. (p. 6)●L O1–3 Generally accepted accounting principles (GAAP) comprise a dynamic set of both broad and specific guidelines that companies follow when measuring and reporting the information in their financial state-ments and related notes. The Securities and Exchange Commission (SEC) has the authority to set account-ing standards in the United States. However, the SEC has always delegated the task to a private sectorbody, at this time the Financial Accounting Standards Board (FASB). T he International Accounting36 SECTION 1 The Role of Accounting as an Information SystemStandards Board (IASB) sets global accounting standards and works with national accounting standardsetters to achieve convergence in accounting standards around the world. (p. 8)●L O1–4 Accounting standards can have significant differential effects on companies, investors, creditors, and otherinterest groups. Various interested parties sometimes lobby standard setters for their preferred outcomes. Forthis reason, the setting of accounting standards often has been characterized as a political process. (p. 13) ● LO1–5 Factors encouraging high-quality financial reporting include conceptually based financial accounting stan-dards, external auditors, financial reporting reforms (such as the Sarbanes-Oxley Act), ethical management,and professional accounting organizations that prescribe ethical conduct and license practitioners. (p. 15)●L O1–6 The FASB’s conceptual framework is a set of cohesive objectives and fundamental concepts on whichfinancial accounting and reporting standards can be based. (p. 19)●L O1–7 The objective of financial reporting is to provide useful financial information to capital providers. Theprimary decision-specific qualities that make financial information useful are relevance and faithful rep-resentation. To be relevant, information must possess predictive value and/or confirmatory value, and allmaterial information should be included. Completeness, neutrality, and freedom from error enhance faith-ful representation. The 10 elements of financial statements are assets, liabilities, equity, investments byowners, distributions to owners, revenues, expenses, gains, losses, and comprehensive income. (p. 21)●L O1–8 The four basic assumptions underlying GAAP are (1) the economic entity assumption, (2) the going con-cern assumption, (3) the periodicity assumption, and (4) the monetary unit assumption. (p. 25)●L O1–9 Recognition determines whether an item is reflected in the financial statements, and measurement deter-mines the amount of the item. Measurement involves choice of a monetary unit and choice of a measure-ment attribute. In the United States, the monetary unit is the dollar. Various measurement attributes areused in GAAP, including historical cost, net realizable value, present value, and fair value. (p. 27)●L O1–10 A revenue/expense approach to financial reporting emphasizes recognition and measurement of revenues (typically using the realization principle) and expenses (typically applying the matching principle), whilean asset/liability approach emphasizes recognition and measurement of assets and liabilities. (p. 33)●L O1–11 IFRS and U.S. GAAP are similar in the organizations that support standard setting and in the presenceof ongoing political pressures on the standard-setting process. U.S. GAAP and IFRS also have similarconceptual frameworks, although the role of the conceptual framework in IFRS is to provide guidance topreparers as well as to standard setters, while the role of the conceptual framework in U.S. GAAP is moreto provide guidance to standard setters. (pp. 15 and 21) ●Q 1–2 What is meant by the phrase e fficient allocation of resources?What mechanism fosters the efficient allocation of resources in the United States?Q 1–3 Identify two important variables to be considered when making an investment decision.Q 1–4 What must a company do in the long run to be able to provide a return to investors and creditors?Q 1–5 What is the primary objective of financial accounting?Q 1–6 Define net operating cash flows. Briefly explain why periodic net operating cash flows may not be a good indicator of futureoperating cash flows.Q 1–7 What is meant by GAAP? Why should all companies follow GAAP in reporting to external users?Q 1–8 Explain the roles of the SEC and the FASB in the setting of accounting standards.Q 1–9 Explain the role of the auditor in the financial reporting process.Q 1–10 List three key provisions of the Sarbanes-Oxley Act of 2002. Order your list from most important to least important in terms of the likely long-term impact on the accounting profession and financial reporting.Q 1–11 Explain what is meant by a dverse economic consequences of new or changed accounting standards.Q 1–12 Why does the FASB undertake a series of elaborate information-gathering steps before issuing a substantive accounting standard?Q 1–13 What is the purpose of the FASB’s conceptual framework project?Q 1–14 Discuss the terms r elevance and f aithful representation as they relate to financial accounting information.Q 1–15 What are the components of relevant information? What are the components of faithful representation?Q 1–16 Explain what is meant by: The benefits of accounting information must exceed the costs.Q 1–17 What is meant by the term m ateriality in financial reporting?。
中级财务会计第十二版基索 英文版答案
中级财务会计第十二版基索英文版答案1、He runs so fast that no one can _______ him. [单选题] *A. keep upB. keep awayC. keep up with(正确答案)D. keep on2、I paint a lot of pictures. [单选题] *A. 评论B. 注意C. 悬挂D. 画(正确答案)3、51．People usually ________ the prices before they buy something. [单选题] * A．receiveB．payC．spendD．compare(正确答案)4、—Would you like some milk?—Yes, just _____, please. [单选题] *A. a little(正确答案)B. littleC. a fewD. few5、20．Jerry is hard-working. It’s not ______ that he can pass the exam easily. [单选题] * A．surpriseB．surprising (正确答案)C．surprisedD．surprises6、The weather forecast says that we’ll have occasional rain tomorrow. [单选题] *A. 偶尔的B. 不停的C. 少量的(正确答案)D. 不可预测的7、I usually do some ____ on Sundays. [单选题] *A. cleaningsB. cleaning(正确答案)C. cleansD. clean8、12．Who will ________ the Palace Museum after Shan Jixiang retires? [单选题] * A．in chargeB．in charge ofC．be in charge of (正确答案)D．be in the charge of9、Jeanne's necklace was _____ 500 francs at most. [单选题] *A. worthyB. costC. worth(正确答案)D. valuable10、Leave your key with a neighbor ___ you lock yourself out one day [单选题] *A. ever sinceB. even ifC. soon afterD. in case(正确答案)11、My brother will come to see me tomorrow. I’ll meet?_______ at the airport. [单选题] *A. herB. youC. him(正确答案)D. them12、_____ the plan carefully,he rejected it. [单选题] *A. To have consideredB.To considerC. Having considered(正确答案)D. Considering13、I always make my daughter ______ her own room.（）[单选题] *A. to cleanB. cleaningC. cleansD. clean(正确答案)14、We had a(an)_____with him about this problem last night. [单选题] *A.explanationB.impressionC.exhibitionD.discussion(正确答案)15、My daughter is neither slim nor fat and she’d like a _______ skirt. [单选题] *A. largeB. medium(正确答案)C. smallD. mini16、32．Mr. Black is ______ now, so he wants to go to a movie with his son. [单选题] * A．busyB．free(正确答案)C．healthyD．right17、We should _______ a hotel before we travel. [单选题] *A. book(正确答案)B. liveC. stayD. have18、His new appointment takes（）from the beginning of next month. [单选题] *A. placeB. effect(正确答案)C. postD. office19、A small village cuts across the river. [单选题] *A. 切B. 穿过(正确答案)C. 划船D. 踢20、Tom sits _______ Mary and Jane. [单选题] *A. amongB. between(正确答案)C. onD. next21、In fact, Beethoven did something brave than dying. [单选题] *A. 勇敢(正确答案)B. 冒险C. 可怕D. 奇妙22、I hope Tom will arrive _______ to attend the meeting. [单选题] *A. in timesB. on time(正确答案)C. at timesD. from time to time23、How _______ Grace grows! She’s almost as tall as her mother now. [单选题] *A. cuteB. strongC. fast(正确答案)D. clever24、—______is my notebook？—Look! It’s in your schoolbag.（）[单选题] *A. WhatB. WhichC. Where(正确答案)D. How25、I’d?like _______ the English club. [单选题] *A. to join inB. joinC. to join(正确答案)D. join in26、42．—________ meat do you want?—Half a kilo. [单选题] * A．How much(正确答案)B．How manyC．WhatD．Which27、Our school is beautiful. How about _______? [单选题] *A. theirs(正确答案)B. theirC. theyD. them28、Many young people like to _______ at weekends. [单选题] *A. eat out(正确答案)B. eat upC. eat onD. eat with29、The museum is _______ in the northeast of Changsha. [单选题] *A. sitB. located(正确答案)C. liesD. stand30、____ China is ____ old country with ____ long history. [单选题] *A. /, an, a(正确答案)B. The, an, aC. /, an, /D. /, the, a。
中级财务会计-英文版复习提纲-1
Chapter 9 &10Property, Plant and Equipment一、Acuisition1.购买取得：purchase price less any trade discount, less cash discounts available(现金折扣不计入取得成本，不包括在固定资产的入账价值——享受现金折扣则扣除；若不享受则作为费用)✓Devon Company purchases a machine with a contract price of $100,000 on terms of 2/10, n/30. The company does not take the cash discount and incurs transportation costs of $2,500, as well as installation and testing costs of $3,000. Sales taxes total $5,000 on the purchase. During installation, uninsured damages of $500 are incurred. What is the cost of the machine?Contract price $100,000Discount not taken (2,000)Transportation cost 2,500Installation and testing 3,000Sales tax 5,000Cost of machine $108,500•Dr. Machine 108,500•Discounts Lost 2,000•Repair Expense 500•Cr. Cash 111,000•Note: The company does not include the $500 damage as part of the cost of the machinery because it was not a necessary cost.2.Lump-sum purchase 一揽子采购：按公允价值分配，记录cost✓ A company pays $120,000 for land and a building. The land and building are appraised at $50,000 and $75,000, respectively.3.Deferred payments 延期付款：1)首先比较资产的公允价值（the fair value of the assets）与票据的公允价值(the fair value of the liability)哪个更可靠，record可靠的那个2)如果二者均没有，则用现值记录。
中级会计(英文版)
Chapter 7 Investments
Investment classification
The investor lacks significant influence over the investee: 响 •p 对 资 资 缺
● Equity ownership （
股权） < 20%
On June 30, 2012: Dr. Cash 42,000 Discount on bond investment 4,991 Cr. Investment revenue 46,991 33,367-4,664=28,703 (700-28,703)*0.7%=46,991 On Dec. 31, 2012: Dr. Cash 42,000 Discount on bond investment 5,340 Cr. Investment revenue 47,340 ………………………. See Graphic 7-4 P274
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Case study
Illustration 7-1
We sell those bonds for $725,000 on January 15, 2012
On Jan. 15, 2012: Dr. Cash 725,000 Discount on bond investment 28,703 Cr. Investment in bonds 700,000 Gain on sale of investments 53,703
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Investment classification
The investor lacks significant influence over the investee:
中级财务会计英计算题word精品文档51页
中级财务会计英计算题第五章各种报表数据填写Ex. 5-116—Statement of cash flows ratios.Financial statements for Hilton Company are presented below:Hilton CompanyBalance SheetDecember 31, 2010Assets Liabilities & Stockholders’ EquityCash $ 40,000 Accounts payable $ 20,000 Accounts receivable 35,000 Bonds payable 50,000 Buildings and equipment 150,000Accumulated depreciation—buildings and equipment (50,000) Common stock 65,000 Patents 20,000 Retained earnings 60,000$195,000 $195,000Hilton CompanyStatement of Cash FlowsFor the Year Ended December 31, 2010Cash flows from operating activitiesNet income $50,000 Adjustments to reconcile net income to net cashprovided by operating activities:Increase in accounts receivable $(16,000)Increase in accounts payable 8,000Depreciation—buildings and equipment 15,000Gain on sale of equipment (6,000)Amortization of patents 2,000 3,000 Net cash provided by operating activities 53,000 Cash flows from investing activitiesSale of equipment 12,000Purchase of land (25,000)Purchase of buildings and equipment (48,000)Net cash used by investing activities (61,000) Cash flows from financing activitiesPayment of cash dividend (15,000)Sale of bonds 40,000Net cash provided by financing activities 25,000 Net increase in cash 17,000 Cash, January 1, 2010 23,000 Cash, December 31, 2010 $40,000 At the beginning of 2010, Accounts Payable amounted to $12,000 and Bonds Payable was $10,000.InstructionsCalculate the following for Hilton Company:a. Current cash debt coverage ratiob. Cash debt coverage ratioc. Free cash flowSolution 5-116Net cash provided by operatingactivitiesa. Current cash debt coverage ratio =——————————————————A verage current liabilities$53,000 $53,000= ——————————— = ————= 3.3 : 1($12,000 + $20,000) ÷ 2$16,000Net cash provided by operating activitiesb. Cash debt coverage ratio =——————————————————Average total liabilities$53,000 $53,000= ——————————— = ———— = 1.2 : 1($22,000 + $70,000) ÷ 2$46,000c. Free cash flow = Net cash provided by operating activities –capital expenditures and dividends= $53,000 – *$73,000 – $15,000 = $(35,000)*$25,000 + $48,000Pr. 5-118—Balance sheet presentation.The following balance sheet was prepared by the bookkeeper for Kraus Company as of December 31, 2010.Kraus CompanyBalance Sheetas of December 31, 2010Cash $ 80,000 Accounts payable $ 75,000 Accounts receivable (net)52,200 Long-term liabilities 100,000 Inventories 57,000 Stockholders' equity 218,500 Investments 76,300Equipment (net) 96,000Patents 32,000$393,500 $393,500 The following additional information is provided:1. Cash includes the cash surrender value of a life insurance policy$9,400, and a bank overdraft of $2,500 has been deducted.2. The net accounts receivable balance includes:(a) accounts receivable—debit balances $60,000;(b) accounts receivable—credit balances $4,000;(c) allowance for doubtful accounts $3,800.3. Inventories do not include goods costing $3,000 shipped out onconsignment. Receivables of $3,000 were recorded on these goods.4. Investments include investments in common stock, trading $19,000and available-for-sale $48,300, and franchises $9,000.5. Equipment costing $5,000 with accumulated depreciation $4,000 isno longer used and is held for sale. Accumulated depreciation on the other equipment is $40,000.InstructionsPrepare a balance sheet in good form (stockholders' equity details can be omitted.)Solution 5-118Kraus CompanyBalance SheetAs of December 31, 2010AssetsCurrent assetsCash $ 73,100 (1) Trading securities 19,000Accounts receivable $ 57,000 (2)Less: Allowance for doubtful accounts 3,800 53,200Inventories 60,000 (3) *Equipment held for sale 1,000 (4) Total current assets 206,300 InvestmentsAvailable-for-sale securities 48,300Cash surrender value 9,400 57,700 Property, plant, and equipmentEquipment 135,000 (5)Less accumulated depreciation 40,000 95,000 Intangible assetsPatents 32,000Franchises 9,000 41,000Total assets $400,000Liabilities and Stockholders' EquityCurrent liabilitiesAccounts payable $ 79,000 (6) Bank overdraft 2,500 Total current liabilities 81,500 Long-term liabilities 100,000Total liabilities 181,500 Stockholders' equity 218,500 Total liabilities and stockholders' equity $400,000(1) ($80,000 – $9,400 + $2,500)(2) ($60,000 – $3,000)(3) ($57,000 + $3,000)(4) ($5,000 – $4,000)(5) ($96,000 + $40,000 – $5,000 + $4,000)(6) ($75,000 + $4,000)*An alternative is to show it as an other asset.Pr. 5-119—Balance sheet presentation.Given the following account information for Leong Corporation, prepare a balance sheet in report form for the company as of December31, 2010. All accounts have normal balances.Equipment 40,000Interest Expense 2,400 Interest Payable 600 Retained Earnings ? Dividends 50,400 Land 137,320 Inventory 102,000 Bonds Payable 78,000 Notes Payable (due in 6 months)14,400 Common Stock 60,000 Accumulated Depreciation - Eq.10,000 Prepaid Advertising 5,000 Revenue 331,400 Buildings 80,400 Supplies 1,860 Taxes Payable 3,000 Utilities Expense 1,320 Advertising Expense 1,560 Salary Expense 53,040 Salaries Payable 900 Accumulated Depr. - Bld. 15,000 Cash 30,000 Depreciation Expense,Building & Equipment 8,000Solution 5-119*$331,400 - $53,040 - $8,000 - $2,400 - $1,560 - $1,320Pr. 5-120—Statement of cash flows preparation.Selected financial statement information and additional data for Stanislaus Co. is presented below. Prepare a statement of cash flows for the year ending December 31, 2010December 312009 2010 Cash ..........................$42,000 $63,000Accounts receivable (net) ..... 84,000 151,200Inventory .....................168,000 201,600Land .......................... 58,800 21,000Equipment .....................504,000 789,600TOTAL ...................$856,800 $1,226,400 Accumulated depreciation ......$84,000 $115,600Accounts payable .............. 50,400 86,000Notes payable - Short-term .... 67,200 29,400Notes payable - Long-term .....168,000 302,400Common stock ..................420,000 487,200Retained earnings ............. 67,200 205,800TOTAL ...................$856,800 $1,226,400 Additional data for 2010:1. Net income was $235,200.2. Depreciation was $31,600.3. Land was sold at its original cost.4. Dividends of $96,600 were paid.5. Equipment was purchased for $84,000 cash.6. A long-term note for $201,600 was used to pay for an equipmentpurchase.7. Common stock was issued to pay a $67,200 long-term note payable.Solution 5-120Stanislaus Co.Statement of Cash FlowsFor the year ended December 31, 2010Net Income $235,200 Cash flow from operating activitiesDepreciation expense 31,600Increase in accounts receivable(67,200)Increase in inventory (33,600)Increase in accounts payable 35,600Decrease in short-term notes payable (37,800)(71,400)Net cash provided by operating activities163,800Cash flow from investing activitiesPurchase equipment (84,000)Sale of land 37,800Net cash used by investing activities (46,200)Cash flow from financing activitiesPayment of cash dividend (96,600)Net cash used by financing activities (96,600)Net increase in cash 21,000Cash at beginning of year 42,000Cash at end of the year 63,000Noncash investing and financing activitiesPayment of long-term note payable with issuance of $67,200 of common stockPr. 5-121—Statement of cash flows preparation.Selected financial statement information and additional data for Johnston Enterprises is presented below. Prepare a statement of cash flows for the year ending December 31, 2010Johnston EnterprisesBalance Sheet and Income Statement DataDecember 31, December 31,20102009___Current Assets:Cash $153,000 $119,000Accounts Receivable 238,000 306,000Inventory 391,000 340,000 Total Current Assets 782,000 765,000 Property, Plant, and Equipment 1,241,000 1,122,000 Less: Accumulated Depreciation (476,000) (442,000) Total Assets $1,547,000 $1,445,000 Current Liabilities:Accounts Payable $187,000 $102,000Notes Payable 51,000 68,000Income Tax Payable 85,000 76,500Total Current Liabilities 323,000 246,500 Bonds Payable 340,000 391,000 Total Liabilities 663,000 637,500 Stockholders' Equity:Common Stock 510,000 467,500Retained Earnings 374,000 340,000 Total Stockholders' Equity 884,000 807,500 Total Liabilities & Stockholders' Equity$1,547,000$1,445,000Sales 1,615,000 $1,513,000 Less Cost of Goods Sold 731,000 731,000 Gross Profit 884,000 782,000 Expenses:Depreciation Expense 153,000 136,000Salary Expense 391,000 357,000Interest Expense 34,000 34,000Loss on Sale of Equipment 17,000 0 Income Before Taxes 289,000 255,000 Less Income Tax Expense 119,000 102,000 Net Income $170,000 $153,000 Additional Information:During the year, Johnston sold equipment with an original cost of$153,000 and accumulated depreciation of $119,000 and purchased new equipment for $272,000.Solution 5-121Johnston EnterprisesStatement of Cash FlowsFor the Year Ended December 31, 2010 Net Income $ 170,000 Cash flow from operating activitiesDepreciation expense 153,000Loss on sale of equipment 17,000Decrease in accounts receivable 68,000Increase in inventory (51,000)Increase in accounts payable 85,000Decrease in notes payable (17,000)Increase in tax payable 8,500 263,500 Net cash provided by operating activities433,500Cash flow from investing activitiesSale of equipment 17,000Purchase of equipment (272,000)Net cash used by investing activities (255,000) Cash flow from financing activitiesRetirement of bonds payable (51,000)Issuance of common stock 42,500Payment of dividends (136,000)**Net cash used by financing activities (144,500)Net increase in cash 34,000Beginning cash 119,000Cash at end of year $153,000**Beginning R/E Net income Dividends Ending R/E$340,000 $170,000 Dividends $374,000Dividends $136,000考点二：第七章应收票据，协价议价，摊销表Pr. 7-139—Amortization of discount on note.On December 31, 2010, Green Company finished consultation servicesand accepted in exchange a promissory note with a face value of$400,000, a due date of December 31, 2013, and a stated rate of 5%,with interest receivable at the end of each year. The fair valueof the services is not readily determinable and the note is notreadily marketable. Under the circumstances, the note is consideredto have an appropriate imputed rate of interest of 10%.The following interest factors are provided:Interest Rate Table Factors For Three Periods 5% 10%Future Value of 1 1.15763 1.33100Present Value of 1 .86384 .75132Future Value of Ordinary Annuity of 1 3.15250 3.31000Present Value of Ordinary Annuity of 1 2.72325 2.48685 Instructions(a) Determine the present value of the note.(b) Prepare a Schedule of Note Discount Amortization for GreenCompany under the effective interest method. (Round to wholedollars.)Solution 7-139(a) Present value of interest = $20,000 × 2.48685=$ 49,737Present value of maturity value = $400,000× .75132 = 300,528$350,265(b) Green CompanySchedule of Note Discount AmortizationEffective Interest Method5% Note Discounted at 10% (Imputed)Cash Effective Unamortized PresentInterest Interest Discount Discount Value Date (5%) (10%) Amortized Balanceof Note12/31/10 $49,735 $350,26512/31/11 $20,000 $ 35,027 $15,027 34,708 365,29212/31/12 20,000 36,529 16,529 18,179 381,82112/31/13 20,000 38,179* 18,179 0 400,000 $60,000 $109,735 $49,735*$3 adjustment to compensate for rounding.*Pr. 7-142—Bank reconciliation.Benson Plastics Company deposits all receipts and makes all paymentsby check. The following information is available from the cash records:MARCH 31 BANK RECONCILIATIONBalance per bank $26,746Add: Deposits in transit 2,100Deduct: Outstanding checks (3,800)Balance per books $25,046Month of April ResultsPer Bank Per BooksBalance April 30 $27,995 $28,855April deposits 10,784 13,889April checks 11,600 10,080April note collected (not included in April deposits) 3,000 -0-April bank service charge 35 -0-April NSF check of a customer returned by the bank(recorded by bank as a charge) 900 -0-Instructions(a) Calculate the amount of the April 30:1. Deposits in transit2. Outstanding checks(b) What is the April 30 adjusted cash balance? Show all work.*Solution 7-142(a) 1. Deposits in transit, $5,205 [$13,889 –($10,784 –$2,100)]2. Outstanding checks, $2,280 [$10,080 –($11,600 –$3,800)](b) Adjusted cash balance at April 30, $30,920($27,995 + $5,205 – $2,280) OR ($28,855 + $3,000 –$35 –$900)考点三：永续盘存和实地盘存Ex. 8-152—FIFO and LIFO periodic inventory methods.The Rock Shop shows the following data related to an item of inventory:Inventory, January 1 100 units @ $5.00Purchase, January 9 300 units @ $5.40Purchase, January 19 70 units @ $6.00Inventory, January 31 120 unitsInstructions(a) What value should be assigned to the ending inventory using FIFO?(b) What value should be assigned to cost of goods sold using LIFO? Solution 8-152(a) 70 @ $6.00 = $42050 @ $5.40 = 270$690(b) 70 @ $6.00 =$ 420280 @ $5.40 = 1,512$1,932Ex. 8-153—Perpetual LIFO.A record of transactions for the month of May was as follows:Purchases Sales May 1(balance) 400 @ $4.20 May 3 300 @ $7.004 1,300 @ $4.10 6 1,000 @ 7.008 800 @ $4.30 12 900 @ 7.5014 700 @ $4.40 18 400 @ 7.5022 1,200 @ $4.50 25 1,400 @ 8.0029 500 @ $4.55Assuming that perpetual inventory records are kept in dollars, determine the inventory using LIFO.Solution 8-153100 @ $4.20 =$ 420 200 @ $4.10 = 820 100 @ $4.40 = 440 500 @ $4.55 = 2,275$3,955Ex. 8-154—Perpetual LIFO and Periodic FIFO.Matlock Corporation sells item A as part of its product line. Information as to balances on hand, purchases, and sales of item A are given in the following table for the first six months of 2010.QuantitiesUnit Price Date Purchased Sold Balance of PurchaseJanuary 11 ——400 $2.50January 24 1,300 —1,700 $2.60February 8 —300 1,400 —March 16 —560 840 —June 11 600 —1,440 $2.75 Instructions(a) Compute the ending inventory at June 30 under the perpetual LIFOinventory pricing method.(b) Compute the cost of goods sold for the first six months underthe periodic FIFO inventory pricing method.Solution 8-154(a) 400 @ $2.50 = $1,000440 @ $2.60 = 1,144600 @ $2.75 = 1,6501,440 $3,794(b) 400 @ $2.50 = $1,000460 @ $2.60 = 1,196860 $2,196考点四：LCM和毛利率法Ex. 9-139—Lower-of-cost-or-market.Determine the proper unit inventory price in the following independent cases by applying the lower of cost or market rule.Circle your choice.1 2 3 4 5Cost $8.00 $10.50 $12.00 $6.00 $7.20 Net realizable value 8.85 10.00 12.20 4.25 6.90 Net realizable value less normal profit8.15 9.00 11.40 3.75 6.00 Market replacement cost 7.90 10.10 12.50 4.00 5.40 Solution 9-139Case 1 $ 8.00 Case 4 $4.00Case 2 $10.00 Case 5 $6.00Case 3 $12.00Ex. 9-140—Lower-of-cost-or-market.Determine the unit value that should be used for inventory costingfollowing "lower of cost or market value" as described in ARB No.43.A B C DE FCost $2.35 $2.48 $2.25 $2.54$2.34 $2.43Replacement cost 2.26 2.55 2.20 2.52 2.32 2.46Net realizable value 2.50 2.50 2.50 2.50 2.50 2.50Net realizable value less normal profit 2.30 2.30 2.30 2.30 2.30 Solution 9-140Case A $2.30 Case D $2.50Case B $2.48 Case E $2.32Case C $2.25 Case F $2.43Ex. 9-141—Lower-of-cost-or-market.Assume in each case that the selling expenses are $8 per unit andthat the normal profit is $5 per unit. Calculate the limits for eachcase. Then enter the amount that should be used for lower of costor market.Selling ReplacementPrice Upper Limit Cost Lower LimitCost LCM(a) $54 $______ $38 $______ $43 $______(b) 47 ______ 36 ______ 40 ______(c) 56 ______ 39 ______ 40 ______(d) 47 ______ 42 ______ 40 ______ Solution 9-141Upper Limit L ower Limit LCM(a) $46 $41 $41(b) 39 34 36(c) 48 43 40(d) 39 34 39Ex. 9-142—Lower-of-cost-or-market.The December 31, 2010 inventory of Gwynn Company consisted of four products, for which certain information is provided below.Replacement Estimated Expected Normal Profit ProductOriginal Cost Cost Disposal CostSelling Priceon SalesA $25.00 $22.00 $6.50 $40.00 20%B $42.00 $40.00 $12.00 $48.00 25%C $120.00 $115.00 $25.00 $190.00 30%D $18.00 $15.80 $3.00 $26.00 10% InstructionsUsing the lower-of-cost-or-market approach applied on an individual-item basis, compute the inventory valuation that shouldbe reported for each product on December 31, 2010.Solution 9-142Lower-of-Designated Cost-or-Product Ceiling Floor Market Cost Market A $40.00 – $6.50 $33.50 – $8.00= $33.50 = $25.50 $25.50 $25.00 $25.00B $48.00 – $12.00 $36.00 – $12.00= $36.00 = $24.00 $36.00 $42.00 $36.00C $190.00 – $25.00$165.00 – $57.00= $165.00 = $108.00 $115.00 $120.00 $115.00D $26.00 – $3.00 $23.00 – $2.60= $23.00 = $20.40 $20.40 $18.00 $18.00 Ex. 9-143—Lower-of-cost-or-market.At 12/31/10, the end of Jenner Company's first year of business, inventory was $4,100 and $2,800 at cost and at market, respectively. Following is data relative to the 12/31/11 inventory of Jenner: Original NetNet RealizableAppropriateCost Replacement RealizableValue LessInventoryItem Per Unit Cost Value Normal Profit ValueA $ .65 $ .45B .45 .40C .70 .75D .75 .65E .90 .85Selling price is $1.00/unit for all items. Disposal costs amount to 10% of selling price and a "normal" profit is 30% of selling price. There are 1,000 units of each item in the 12/31/11 inventory. Instructions(a) Prepare the entry at 12/31/10 necessary to implement thelower-of-cost-or-market procedure assuming Jenner uses a contra account for its balance sheet.(b) Complete the last three columns in the 12/31/11 schedule abovebased upon the lower-of-cost-or-market rules.(c) Prepare the entry(ies) necessary at 12/31/11 based on the dataabove.(d) How are inventory losses disclosed on the income statement? Solution 9-143(a) Loss Due to Market Decline of Inventory . 1,300Allowance to Reduce Inventory to Market . 1,300 Solution 9-143 (Cont.)(b) Original Net Net RealizableAppropriateCost Replacement RealizableValue Less InventoryItem Per Unit Cost ValueNormal Profit ValueA $ .65 $ .45 $ .90 $ .60 $ .60B .45 .40 .90 .60 .45C .70 .75 .90 .60 .70D .75 .65 .90 .60 .65E .90 .85 .90 .60 .85$3.45 $3.25**$3.25 × 1,000 = $3,250(c) Allowance to Reduce Inventory to Market . 1,300Cost of Goods Sold ...................... 1,300 Loss Due to Market Decline of Inventory . (200)Allowance to Reduce Inventory to Market . 200 (Cost of inventory at 12/31/07 = $7,250)ORA student can record a recovery of $1,100.(d) Inventory losses can be disclosed separately (below gross profitin operating expenses) or they can be shown as part of cost of goods sold.Ex. 9-145—Gross profit method.An inventory taken the morning after a large theft discloses $60,000 of goods on hand as of March 12. The following additional data is available from the books:Inventory on hand, March 1 $ 84,000Purchases received, March 1 – 11 63,000Sales (goods delivered to customers) 120,000Past records indicate that sales are made at 50% above cost. InstructionsEstimate the inventory of goods on hand at the close of business on March 11 by the gross profit method and determine the amount of the theft loss. Show appropriate titles for all amounts in your presentation.Solution 9-145Beginning Inventory $ 84,000 Purchases 63,000 Goods Available 147,000 Goods Sold ($120,000 ÷ 150%) 80,000Estimated Ending Inventory 67,000 Physical Inventory 60,000 Theft Loss $ 7,000 Ex. 9-146—Gross profit method.On January 1, a store had inventory of $48,000. January purchases were $46,000 and January sales were $90,000. On February 1 a fire destroyed most of the inventory. The rate of gross profit was 25% of cost. Merchandise with a selling price of $5,000 remained undamaged after the fire. Compute the amount of the fire loss, assuming the store had no insurance coverage. Label all figures. Solution 9-146Beginning Inventory $ 48,000 Purchases 46,000 Goods available 94,000 Cost of sale ($90,000 ÷ 125%) (72,000) Estimated ending inventory 22,000 Cost of undamaged inventory ($5,000 ÷ 125%) (4,000) Estimated fire loss $18,000 Ex. 9-147—Gross profit method.Utley Co. prepares monthly income statements. Inventory is counted only at year end; thus, month-end inventories must be estimated.All sales are made on account. The rate of mark-up on cost is 20%. The following information relates to the month of May.Accounts receivable, May 1 $21,000 Accounts receivable, May 31 27,000 Collections of accounts during May 90,000 Inventory, May 1 45,000 Purchases during May 58,000 InstructionsCalculate the estimated cost of the inventory on May 31.Solution 9-147Collections of accounts $ 90,000 Add accounts receivable, May 31 27,000 Deduct accounts receivable, May 1 (21,000) Sales during May $ 96,000 Inventory, May 1 $ 45,000 Purchases during May 58,000 Goods available 103,000 Cost of sales ($96,000 ÷ 120%) (80,000) Estimated cost of inventory, May 31 $ 23,000 Pr. 9-149—Gross profit method.On December 31, 2010 Felt Company's inventory burned. Sales and purchases for the year had been $1,400,000 and $980,000,respectively. The beginning inventory (Jan. 1, 2010) was $170,000;in the past Felt's gross profit has averaged 40% of selling price. InstructionsCompute the estimated cost of inventory burned, and give entriesas of December 31, 2010 to close merchandise accounts.Solution 9-149Beginning inventory $ 170,000Add: Purchases 980,000Cost of goods available 1,150,000Sales $1,400,000Less 40% (560,000) 840,000Estimated inventory lost $ 310,000Sales ............................................ 1,400,000 Income Summary ............................. 1,400,000 Cost of Goods Sold ............................... 840,000Fire Loss ........................................ 310,000 Inventory .................................. 170,000 Purchases .................................. 980,000考点利息资本化Ex. 10-133—Capitalization of interest.On March 1, Mocl Co. began construction of a small building. The following expenditures were incurred for construction:March 1 $ 75,000 April 1 $ 74,000May 1 180,000 June 1 270,000July 1 100,000The building was completed and occupied on July 1. To help pay for construction $50,000 was borrowed on March 1 on a 12%, three-year note payable. The only other debt outstanding during the year was a $500,000, 10% note issued two years ago.Instructions(a) Calculate the weighted-average accumulated expenditures.(b) Calculate avoidable interest.Solution 10-133(a) CapitalizationWeighted-AverageDate Expenditures Period Accum. Expend.March 1 $ 75,000 4/12 $25,000April 1 74,000 3/12 18,500May 1 180,000 2/12 30,000June 1 270,000 1/12 22,500July 1 100,000 0 0$96,000(b)Weighted-Average AvoidableAccum. Expend. Rate Interest$50,000 .12 $ 6,00046,000 .10 4,600$96,000 $10,600Pr. 10-139—Capitalization of interest.During 2010, Barden Building Company constructed various assets ata total cost of $8,400,000. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2010 were $5,600,000. The company had the following debt outstanding atDecember 31, 2010:1. 10%, 5-year note to finance construction of various assets,dated January 1, 2010, with interest payable annually on January1 $3,600,0002. 12%, ten-year bonds issued at par on December 31, 2004, with interestpayable annually on December 31 4,000,000 3. 9%, 3-year note payable, dated January 1, 2009, with interest payableannually on January 1 2,000,000 InstructionsCompute the amounts of each of the following (show computations).1. Avoidable interest.2. Total interest to be capitalized during 2010.Solution 10-1391. Weighted AverageAccumulated Applicable AvoidableExpenditures Interest Rate Interest$3,600,000 .10 $360,0002,000,000 .11* 220,000$5,600,000 $580,000 = Avoidable Interest*Computation of weighted average interest rate:Principal Interest12% ten-year bonds $4,000,000 $480,0009% 3-year note 2,000,000 180,000$6,000,000 $660,000Weighted average interest rate = $660,000 ÷ $6,000,000 = 11%.2. Actual interest cost during 2010:Con struction note, $3,600,000 × .10$ 360,00012% ten-year bonds, $4,000,000 × .12480,0009% three-year note, $2,000,000 × .09 180,000$1,020,000The interest cost to be capitalized is $580,000 (the lesser of the $580,000 avoidable interest and the $1,020,000 actual interest).Pr. 10-140—Capitalization of interest.Early in 2010, Dobbs Corporation engaged Kiner, Inc. to design and construct a complete modernization of Dobbs's manufacturing facility. Construction was begun on June 1, 2010 and was completed on December 31, 2010. Dobbs made the following payments to Kiner, Inc. during 2010:Date PaymentJune 1, 2010 $3,600,000August 31, 2010 5,400,000December 31, 2010 4,500,000In order to help finance the construction, Dobbs issued the following during 2010:1. $3,000,000 of 10-year, 9% bonds payable, issued at par on May 31,2010, with interest payable annually on May 31.2. 1,000,000 shares of no-par common stock, issued at $10 per shareon October 1, 2010.In addition to the 9% bonds payable, the only debt outstanding during 2010 was a $750,000, 12% note payable dated January 1, 2006 and due January 1, 2016, with interest payable annually on January 1. InstructionsCompute the amounts of each of the following (show computations):1. Weighted-average accumulated expenditures qualifying for capitalization of interest cost.2. Avoidable interest incurred during 2010.3. Total amount of interest cost to be capitalized during 2010. Solution 10-1401. Weighted-AverageCapitalization Accumulated Date Expenditures Period ExpendituresJune 1 $3,600,000 7/12 $2,100,000August 31 5,400,000 4/12 1,800,000December 31 4,500,000 0 0$3,900,0002. Weighted-AverageAccumulated Appropriate AvoidableExpenditures Interest Rate Interest$3,000,000 .09 $270,000900,000 .12 108,000$3,900,000 $378,0003. Actual interest incurred during 2010:9% bonds payable, $3,000,000 × .09 × 7/12$157,50012% note payable, $750,000 × .12 90,000$247,500The interest cost to be capitalized is $247,500 (the lesser of the $378,000 avoidable interest and the $247,500 actual interest cost).折旧方法Ex. 11-129—Calculate depreciation.A machine which cost $200,000 is acquired on October 1, 2010. Its estimated salvage value is $20,000 and its expected life is eight years.InstructionsCalculate depreciation expense for 2010 and 2011 by each of the following methods, showing the figures used.(a) Double-declining balance(b) Sum-of-the-years'-digitsSolution 11-129(a) 2010: 25% × $200,000 × ¼= $12,5002011: 25% × $187,500= $46,875(b) 2010: 8/36 × $180,000 × ¼= $10,0002011: 8/36 × $180,000 × ¾= $30,000 7/36 × $180,000 × ¼= 8,750$38,750Ex. 11-130—Calculate depreciation.。
中级财务会计英模拟试题
中级财务会计英模拟试题（分录部分）考点一：应付账款与应付票据Ex. 13-68—Notes payable.On August 31, Fargo Co. partially refunded $270,000 of its outstanding 10% note payable made one year ago to Arma State Bank by paying $270,000 plus $27,000 interest, having obtained the $297,000 by using $78,600 cash and signing a newone-year $240,000 note discounted at 9% by the bank.Instructions(1) Make the entry to record the partial refunding. Assume Fargo Co. makes reversingentries when appropriate.(2) Prepare the adjusting entry at December 31, assuming straight-line amortizationof the discount.Solution 13-68(1) Notes Payable ........................................................................ 270,000Interest Expense ............................................................................ 27,000Discount on Notes Payable (9% × $240,000) ............................... 21,600Notes Payable ................................................................... 240,000Cash .................................................................................. 78,600 (2) Interest Expense (1/3 × $21,600) .................................................. 7,200Discount on Notes Payable ............................................... 7,200 Pr. 13-75—Accounts and Notes Payable.Described below are certain transactions of Beacon Company for 2004:1. On May 10, the company purchased goods from Jay Company for $90,000, terms2/10, n/30. Purchases and accounts payable are recorded at net amounts. Theinvoice was paid on May 18.2. On June 1, the company purchased equipment for $120,000 from Nolan Company,paying $40,000 in cash and giving a one-year, 9% note for the balance.3. On September 30, the company discounted at 10% its $240,000, one-yearzero-interest-bearing note at First State Bank.Instructions(a) Prepare the journal entries necessary to record the transactions above usingappropriate dates.(b) Prepare the adjusting entries necessary at December 31, 2004 in order toproperly report interest expense related to the above transactions. Assumestraight-line amortization of discounts.(c) Indicate the manner in which the above transactions should be reflected in theCurrent Liabilities section of Beacon Company's December 31, 2004 balancesheet.Solution 13-75(a) May 10, 2004Purchases/Inventory ...................................................................... 88,200Accounts Payable .............................................................. 88,200 May 18, 2004Accounts Payable .......................................................................... 88,200Cash .................................................................................. 88,200 June 1, 2004Equipment ...................................................................................... 120,000Cash .................................................................................. 40,000Notes Payable ................................................................... 80,000 Solution 13-75 (cont.)September 30, 2004Cash ............................................................................................. 216,000Discount on Notes Payable ........................................................... 24,000Notes Payable ................................................................... 240,000 (b) Interest Expense ............................................................................ 4,200Interest Payable ($80,000 × .09 × 7/12) ........................... 4,200 Interest Expense ............................................................................ 6,000Discount on Notes Payable ($24,000 × 3/12) ................... 6,000 (c) Current LiabilitiesInterest payable $ 4,200 Note payable—Nolan Company 80,000 Note payable—First State Bank $240,000Less: Discount on note 18,000 222,000$306,200考点二：股票的出售再出售Ex. 15-78—Treasury stock.Camby Corporation's balance sheet reported the following:Capital stock outstanding, 5,000 shares, par $30 per share $150,000 Paid-in capital in excess of par 80,000 Retained earnings 100,000 The following transactions occurred this year:(a) Purchased 80 shares of capital stock to be held as treasury stock, paying $60 pershare.(b) Sold 60 of the shares of treasury stock at $65 per share.(c) Sold the remaining shares of treasury stock at $50 per share.InstructionsPrepare the journal entry for these transactions under the cost method of accounting for treasury stock.(a) Treasury Stock 4,800Cash ............................................................................................ 4,800 (b) Cash ..................................................................................................... 3,900Treasury Stock .............................................................................. 3,600Paid-in Capital from Treasury Stock (300)(c) Cash ....................................................................................................... 1,000Paid-in Capital from Treasury Stock (200)Treasury Stock .............................................................................. 1,200 Ex. 15-79—Treasury stock.Gagne Company's balance sheet shows:Common stock, $20 par $3,000,000Paid-in capital in excess of par 1,050,000Retained earnings 750,000InstructionsRecord the following transactions by the cost method.(a) Bought 4,000 shares of its common stock at $29 a share.(b) Sold 2,000 treasury shares at $30 a share.(c) Sold 800 shares of treasury stock at $26 a share.Solution 15-79(a) Treasury Stock ........................................................................... 116,000Cash ...................................................................................... 116,000 (b) Cash .................................................................................................... 60,000Treasury Stock ...................................................................... 58,000Paid-in Capital from Treasury Stock ..................................... 2,000 (c) Cash .................................................................................................... 20,800Paid-in Capital from Treasury Stock .................................................. 1,600Retained Earnings (800)Treasury Stock ...................................................................... 23,200 Ex. 15-80—Treasury stock.In 2003, Nichols Co. issued 200,000 of its 500,000 authorized shares of $10 par value common stock at $35 per share. In January, 2004, Nichols repurchased 10,000shares at $30 per share. Assume these are the only stock transactions the companyhas ever had.Instructions(a) What are the two methods of accounting for treasury stock?(b) Prepare the journal entry to record the purchase of treasury stock by the cost method.(c) 3,000 shares of treasury stock are reissued at $33 per share. Prepare the journalentry to record the reissuance by the cost method.Solution 15-80(a) The two methods of accounting for treasury stock are the cost method and the parvalue method.(b) Treasury Stock ................................................................................... 300,000Cash ...................................................................................... 300,000 (c) Cash ............................................................................................... 99,000Paid-in Capital from Treasury Stock ..................................... 9,000Treasury Stock ...................................................................... 90,000 Pr. 15-88—Treasury stock transactions.The original sale of the $50 par value common shares of Eddy Company was recorded as follows:Cash ............................................................................................... 290,000Common Stock ................................................................... 250,000Paid-in Capital in Excess of Par ........................................ 40,000 InstructionsRecord the treasury stock transactions (given below) under the cost method:Transactions:(a) Bought 500 shares of common stock as treasury shares at $62.(b) Sold 120 shares of treasury stock at $60.(c) Sold 60 treasury shares at $68.Solution 15-88(a) Treasury Stock ........................................................................................... 31,000Cash ................................................................................................. 31,000 (b) Cash .......................................................................................................... 7,200Retained Earnings (240)Treasury Stock ................................................................................. 7,440 (c) Cash .......................................................................................................... 4,080Paid-in Capital from Treasury Stock (360)Treasury Stock ................................................................................. 3,720 考点三：投资与债券溢价购买Ex. 17-66—Investment in debt securities at premium.On April 1, 2004, Sean Co. purchased $360,000 of 6% bonds for $374,175 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2009.Instructions(a) Prepare the journal entry on April 1, 2004.(b) The bonds are sold on November 1, 2005 at 103 plus accrued interest. Amortizationwas recorded when interest was received by the straight-line method (by months andround to the nearest dollar). Prepare all entries required to properly record the sale.Solution 17-66(a) Available-for-Sale Securities ............................................................... 374,175Interest Revenue ($360,000 × .06 × 1/4) ............................................ 5,400Cash ...................................................................................... 379,575 (b) Interest Revenue ($14,175 × 4 ÷ 63) .. (900)Available-for-Sale Securities (900)Cash ($360,000 × .06 × 1/3) ............................................................... 7,200Interest Revenue ................................................................... 7,200 Cash .................................................................................................... 370,800Gain on Sale of Securities (900)Available-for-Sale Securities ................................................. 369,900 $374,175 – [($14,175 ÷ 63) × 19]考点四：长期工程合同——完工百分比Ex. 18-69—Journal entries—percentage-of-completion.Grant Construction Company was awarded a contract to construct an interchange at the junctionof U.S. 94 and Highway 30 at a total contract price of $6,000,000. The estimated total costs to complete the project were $4,500,000.Instructions(a) Make the entry to record construction costs of $2,700,000, on construction inprocess to date.(b) Make the entry to record progress billings of $1,500,000.(c) Make the entry to recognize the profit that can be recognized to date, on apercentage-of-completion basis.Solution 18-69(a) Construction in Process ................................................................................ 2,700,000Materials, Cash, Payables, Etc. ........................................................ 2,700,000 (b) Accounts Receivable—Construction in Process ............................................ 1,500,000Billings on Construction in Process ................................................. 1,500,000 (c) Construction Expenses .................................................................................. 2,700,000Construction in Process (60% complete) ...................................................... 900,000Revenue from Long-Term Contracts ................................................ 3,600,000考点五:应税所得——所得税分录Ex. 19-52—Deferred income taxes.Nott Co. at the end of 2004, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows:Pretax financial income $300,000Extra depreciation taken for tax purposes (750,000)Estimated expenses deductible for taxes when paid 600,000Taxable income $150,000Use of the depreciable assets will result in taxable amounts of $250,000 in each of the next three years. The estimated litigation expenses of $600,000 will be deductible in 2007 when settlementis expected.Instructions(a) Prepare a schedule of future taxable and deductible amounts.(b) Prepare the journal entry to record income tax expense, deferred taxes, and income taxespayable for 2004, assuming a tax rate of 40% for all years.Solution 19-52(a) 2005 2006 2007TotalFuture taxable (deductible) amountsExtra depreciation $250,000 $250,000 $250,000 $750,000Litigation (500,000) (500,000) (b) Income Tax Expense ($60,000 + $300,000 – $240,000) .............................. 120,000Deferred Tax Asset ($600,000 × 40%) ......................................................... 240,000Deferred Tax Liability ($750,000 × 40%) ........................................ 300,000Income Tax Payable ($150,000 × 40%) .......................................... 60,000 Ex. 19-53—Deferred income taxes.Earl Co. at the end of 2004, its first year of operations, prepared a reconciliation between pretaxfinancial income and taxable income as follows:Pretax financial income $500,000Estimated expenses deductible for taxes when paid 800,000Extra depreciation (900,000)Taxable income $400,000Estimated warranty expense of $530,000 will be deductible in 2005, $200,000 in 2006, and$70,000 in 2007. The use of the depreciable assets will result in taxable amounts of $300,000 ineach of the next three years.Instructions(a) Prepare a table of future taxable and deductible amounts.(b) Prepare the journal entry to record income tax expense, deferred income taxes, and incometaxes payable for 2004, assuming an income tax rate of 40% for all years.Solution 19-53(a) 2005 2006 2007TotalFuture taxable (deductible) amountsWarranties $(530,000) $(200,000) $(70,000) $(800,000)Excess depreciation 300,000 300,000 300,000 900,000 (b) Income Tax Expense [$160,000 + ($360,000 – $320,000)] ......................... 200,000Deferred Tax Asset ($800,000 × 40%) ......................................................... 320,000Deferred Tax Liability ($900,000 × 40%) ........................................ 360,000Income Tax Payable ($400,000 × 40%) .......................................... 160,000PROBLEMSPr. 19-59—Differences between accounting and taxable income and the effect on deferred taxes.The following differences enter into the reconciliation of financial income and taxableincome of Hatley Company for the year ended December 31, 2004, its first year of operations. The enacted income tax rate is 30% for all years.Pretax accounting income $450,000Excess tax depreciation (300,000)Litigation accrual 45,000Unearned rent revenue deferred on the books but appropriatelyrecognized in taxable income 25,000 Interest income from New York municipal bonds (10,000)Taxable income $210,0001. Excess tax depreciation will reverse equally over a four-year period, 2005-2008.2. It is estimated that the litigation liability will be paid in 2008.3. Rent revenue will be recognized during the last year of the lease, 2008.4. Interest revenue from the New York bonds is expected to be $10,000 each year until theirmaturity at the end of 2008.Instructions(a) Prepare a schedule of future taxable and (deductible) amounts.(b) Prepare a schedule of the deferred tax (asset) and liability.(c) Since this is the first year of operations, there is no beginning deferred tax asset or liability.Compute the net deferred tax expense (benefit).(d) Prepare the journal entry to record income tax expense, deferred taxes, and the incometaxes payable for 2004.Solution 19-59(a) 2005 2006 2007 2008 TotalFuture taxable (deductible) amounts:Depreciation $75,000 $75,000 $75,000 $75,000 $300,000 Litigation (45,000) (45,000) Unearned rent (25,000) (25,000) (b) Future Taxable(Deductible) DeferredTaxTemporary Differences Amounts Tax Rate (Asset) LiabilityDepreciation $300,000 30% $90,000Litigation (45,000) 30% $(13,500)Unearned rent (25,000) 30% ( 7,500)Totals $180,000 $(21,000)$90,000(c) Deferred tax expense $90,000Deferred tax benefit (21,000)Net deferred tax expense $69,000Solution 19-59(cont.)(d) Income Tax Expense ($63,000 + $69,000) ................................................... 132,000Deferred Tax Asset ...................................................................................... 21,000Deferred Tax Liability ..................................................................... 90,000Income Tax Payable ($210,000 ×30%) .......................................... 63,000 Pr. 19-61—Interperiod tax allocation with change in enacted tax rates.Norway Company purchased equipment for $270,000 on January 2, 2003, its first day of operations. For book purposes, the equipment will be depreciated using the straight-line methodover three years with no salvage value. Pretax financial income and taxable income are asfollows:2003 2004 2005Pretax financial income $156,000 $170,000 $180,000Taxable income 120,000 170,000 216,000The temporary difference between pretax financial income and taxable income is due to the useof accelerated depreciation for tax purposes.Pr. 19-61(cont.)Instructions(a) Prepare the journal entries to record income taxes for all three years (expense, deferrals,and liabilities) assuming that the enacted tax rate applicable to all three years is 30%.(b) Prepare the journal entries to record income taxes for all three years (expense, deferrals,and liabilities) assuming that the enacted tax rate as of 2003 is 30% but that in the middleof 2004, Congress raises the income tax rate to 35% retroactive to the beginning of 2004.Solution 19-61(a) 2003 2004 2005TotalBook depreciation $ 90,000 $90,000 $90,000 $270,000Tax depreciation 126,000 90,000 54,000 270,000Temporary difference $ (36,000) $ -0- $36,000$ -0-2003 Income Tax Expense ...................................................................... 46,800Deferred Tax Liability ($36,000 × .30) ................................ 10,800Income Tax Payable ($120,000 × .30) ................................ 36,000 2004 Income Tax Expense ...................................................................... 51,000Income Tax Payable ($170,000 × .30) .............................. 51,000 2005 Income Tax Expense ...................................................................... 54,000Deferred Tax Liability ..................................................................... 10,800Income Tax Payable ($216,000 × .30) .............................. 64,800 (b) 2003 Income Tax Expense ...................................................................... 46,800Deferred Tax Liability ($36,000 × .30) ................................ 10,800Income Tax Payable ($120,000 × .30) .............................. 36,000 2004 Income Tax Expense ...................................................................... 61,300Deferred Tax Liability ....................................................... 1,800*Income Tax Payable ($170,000 × .35) .............................. 59,500 2005 Income Tax Expense ...................................................................... 63,000Deferred Tax Liability ..................................................................... 12,600Income Tax Payable ($216,000 × .35) .............................. 75,6002005*Future taxable amount $36,000Deferred tax @ 30% 10,800Deferred tax @ 35% 12,600Adjustment $ 1,800Pr. 19-62—Deferred tax asset.Yarman Inc. began business on January 1, 2003. Its pretax financial income for the first 2 yearswas as follows:2003 $ 95,0002004 180,000The following items caused the only differences between pretax financial income and taxable income.1. In 2003, the company collected $90,000 of rent; of this amount, $30,000 was earned in 2003;the other $60,000 will be earned equally over the 2004-2005 period. The full $90,000 was included in taxable income in 2003.2. The company pays $5,000 a year for life insurance on officers.3. In 2004, the company terminated a top executive and agreed to $60,000 of severance pay.The amount will be paid $20,000 per year for 2004-2006. The 2004 payment was made. The $60,000 was expensed in 2004. For tax purposes, the severance pay is deductible as it is paid. The enacted tax rates existing at December 31, 2003 are:2003 30% 2005 40%2004 35% 2006 40%Instructions(a) Determine taxable income for 2003 and 2004.(b) Determine the deferred income taxes at the end of 2003, and prepare the journal entry torecord income taxes for 2003.(c) Prepare a schedule of future taxable and (deductible) amounts at the end of 2004.(d) Prepare a schedule of the deferred tax (asset) and liability at the end of 2004.(e) Compute the net deferred tax expense (benefit) for 2004.(f) Prepare the journal entry to record income taxes for 2004.(g) Show how the deferred income taxes should be reported on the balance sheet atDecember 31, 2004.Solution 19-62(a) 2003 2004Pretax financial income $95,000 $180,000Permanent differences:Life insurance 5,000 5,000100,000 185,000 Temporary differences:Rent 60,000 (30,000)Severance pay -0- 40,000 Taxable income $160,000 $195,000Solution 19-62(cont.)(b) 2003 2004 TotalFuture taxable (deductible) amounts:Rent $(30,000) $(30,000) $(60,000) Tax rate 35% 40%Deferred tax (asset) liability $(10,500) $(12,000) $(22,500) at end of2003Income Tax Expense ($48,000 – $22,500) ................................................... 25,500Deferred Tax Asset ...................................................................................... 22,500Income Tax Payable ($160,000 × 30%) .................................... 48,000 (c) 2005 2006 TotalFuture taxable (deductible) amounts:Rent $(30,000) $(30,000)Severance pay (20,000) $(20,000) (40,000)(d) Future Taxable(Deductible) TaxDeferred TaxTemporary Difference Amounts Rate (Asset) Liability Rent $(30,000) 40% $(12,000)Severance pay (40,000) 40% (16,000)Totals $(70,000) $(28,000)(e) Deferred tax asset at end of 2004 $(28,000)Deferred tax asset at beginning of 2004 (22,500)Net deferred tax (expense) for 2004 $ (5,500)(f) Income Tax Expense ($68,250 – $5,500) ..................................................... 62,750Deferred Tax Asset ...................................................................................... 5,500Income Tax Payable ($195,000 × 35%) .......................................... 68,250 (g) The deferred income taxes should be reported on the December 31, 2004balance sheet as follows:Current assetsDeferred tax asset ($50,000* × 40%) $20,000Other assetsDeferred tax asset ($20,000 × 40%) $8,000*$30,000 + $20,000计算题部分：考点一：实际利率法票据贴现——effective interestPr. 14-70—Bond interest and discount amortization.Logan Corporation issued $600,000 of 8% bonds on October 1, 2004, due on October1, 2009. The interest is to be paid twice a year on April 1 and October 1. The bondswere sold to yield 10% effective annual interest. Logan Corporation closes its books annually on December 31.Instructions(a) Complete the following amortization schedule for the dates indicated. (Round all answersto the nearest dollar.) Use the effective interest method.Debit Credit Carrying AmountCredit Cash Interest Expense Bond Discountof BondsOctober 1, 2004 $553,668 April 1, 2005October 1, 2005(b) Prepare the adjusting entry for December 31, 2005. Use the effective interest method.(c) Compute the interest expense to be reported in the income statement for the year endedDecember 31, 2005.Solution 14-70(a) Debit Credit Carrying AmountCredit Cash Interest Expense Bond Discountof BondsOctober 1, 2004 $553,668 April 1, 2005 $24,000 $27,684 $3,684 557,352 October 1, 2005 24,000 27,868 3,868 561,220 (b) Interest Expense ($561,220 × 10% × 3/12)........................................................ 14,031Interest Payable (1/2 × $24,000) ........................................................ 12,000Discount on Bonds Payable ($14,031 – $12,000) ............................. 2,031 (c) $13,842 (1/2 of $27,684)27,86814,031$55,741Pr. 14-69—Bond discount amortization.On June 1, 2004, Janson Bottle Company sold $1,000,000 in long-term bonds for$877,600. The bonds will mature in 10 years and have a stated interest rate of 8%and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. Thebonds are to be accounted for under the effective interest method.Instructions(a) Construct a bond amortization table for this problem to indicate the amount ofinterest expense and discount amortization at each May 31. Include only the firstfour years. Make sure all columns and rows are properly labeled. (Round to thenearest dollar.)(b) The sales price of $877,600 was determined from present value tables.Specifically explain how one would determine the price using present value tables.(c) Assuming that interest and discount amortization are recorded each May 31, prepare theadjusting entry to be made on December 31, 2006. (Round to the nearest dollar.)Solution 14-69(a) Debit Credit Carrying AmountDate Credit Cash Interest Expense Bond Discount ofBonds6/1/04 $877,6005/31/05 $80,000 $87,760 $7,760 885,3605/31/06 80,000 88,536 8,536 893,8965/31/07 80,000 89,390 9,390 903,2865/31/08 80,000 90,328 10,328 913,614(b) (1) Find the present value of $1,000,000 due in 10 years at 10%.(2) Find the present value of 10 annual payments of $80,000 at 10%.Add (1) and (2) to obtain the present value of the principal and the interestpayments.Solution 14-69(cont.)(c) Interest Expense ........................................................................ 52,144*Interest Payable ............................................................................. 46,666**Discount on Bonds Payable ........................................................... 5,478 *7/12 ⨯ $89,390 (from Table) = $52,144**7/12 ⨯ 8% ⨯ $1,000,000 = $46,666考点二：奖票的费用如何计算，未兑换时估计奖票的负债如何计算Ex. 13-74—Premiums.Balley Co. includes one coupon in each bag of dog food it sells. In return for 3 coupons, customers receive a dog toy that the company purchases for $1.50 each.Balley's experience indicates that 60 percent of the coupons will be redeemed. During2004, 100,000 bags of dog food were sold, 12,000 toys were purchased, and 45,000 coupons were redeemed. During 2005, 120,000 bags of dog food were sold, 16,000toys were purchased, and 60,000 coupons were redeemed.InstructionsDetermine the premium expense to be reported in the income statement and the estimatedliability for premiums on the balance sheet for 2004 and 2005.Solution 13-7420042005Premium expense $30,000 (1) $36,000 (3) Estimated liability for premiums 7,500 (2) 13,500 (4)(1) 100,000 × .6 = 60,000; 60,000 ÷ 3 = 20,000; 20,000 × $1.50 = $30,000.(2) 45,000 ÷ 3 = 15,000; 20,000 – 15,000 = 5,000; 5,000 × $1.50 = $7,500.(3) 120,000 × .6 = 72,000; 72,000 ÷ 3 = 24,000; 24,000 × $1.50 = $36,000.(4) 60,000 ÷ 3 = 20,000; 5,000 + 24,000 – 20,000 = 9,000; 9,000 × $1.50 = $13,500.考点三：债券的发行价格Ex. 14-62—Bond issue price and premium amortization.On January 1, 2004, Lowry Co. issued ten-year bonds with a face value of $2,000,000and a stated interest rate of 10%, payable semiannually on June 30 and December 31.The bonds were sold to yield 12%. Table values are:Present value of 1 for 10 periods at 10% ................................................. .386Present value of 1 for 10 periods at 12% ................................................. .322Present value of 1 for 20 periods at 5% ................................................... .377Present value of 1 for 20 periods at 6% ................................................... .312Present value of annuity for 10 periods at 10% ...................................... 6.145Present value of annuity for 10 periods at 12% ...................................... 5.650Present value of annuity for 20 periods at 5% ........................................ 12.462Present value of annuity for 20 periods at 6% ........................................ 11.470 Instructions。
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9. What was the Committee on Accounting Procedure, and what were its accomplishments and failings?
14. How are FASB discussion memoranda and FASB exposure drafts related to FASB “statements”?
15. Distinguish between FASB “statements of financial accounting standards” and FASB “statements of financial accounting concepts.”
CONCEPTS FOR ANALYSIS
CA1-1 (Financial Accounting) Alan Rodriquez has recently completed his first year of studying accounting. His instructor for next semester has indicated that the primary focus will be the area of financial accounting.
21. What is the purpose of the Governmental Accounting Standards Board?
22. What are some possible reasons why another organization, such as the Governmental Accounting Standards Board, should not issue financial reporting standards?
18. The chairman of the FASB at one time noted that “the flow of standards can only be slowed if (1) producers focus less on quarterly earnings per share and tax ben-
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9. Understand issues related to ethics and financial accounting. Financial accountants are called on for moral discernment and ethical decision making. Decisions sometimes are difficult because a public consensus has not emerged to formulate a comprehensive ethical system that provides guidelines in making ethical judgments.
6. Of what value is a common set of standards in financial accounting and reporting?
7. What is the likely limitation of “general-purpose financial statements”?
efits and more on quality products, and (2) accountants and lawyers rely less on rules and law and more on professional judgment and conduct.” Explain his comment.
27. What is the “expectations gap”? What is the profession doing to try to close this gap?
28. The Sarbanes-Oxley Act was enacted to combat fraud and curb poor reporting practices. What are some key provisions of this ld it be advantageous for U.S. GAAP and International GAAP to be the same?
31. How are financial accountants challenged in their work to make ethical decisions? Is technical mastery of GAAP not sufficient to the practice of financial accounting?
3. How does accounting help the capital allocation process?
4. What are some of the major challenges facing the accounting profession?
5. What are the major objectives of financial reporting?
26. One writer recently noted that 99.4 percent of all companies prepare statements that are in accordance with GAAP. Why then is there such concern about fraudulent financial reporting?
Instructions (a) Differentiate between financial accounting and managerial accounting. (b) One part of financial accounting involves the preparation of financial statements. What are the financial statements most frequently provided? (c) What is the difference between financial statements and financial reporting?
12. If you had to explain or define “generally accepted accounting principles or standards,” what essential characteristics would you include in your explanation?
25. If you were given complete authority in the matter, how would you propose that accounting principles or standards should be developed and enforced?
10. For what purposes did the AICPA in 1959 create the Accounting Principles Board?
11. Distinguish among Accounting Research Bulletins, Opinions of the Accounting Principles Board, and Statements of the Financial Accounting Standards Board.
16. What is Rule 203 of the Code of Professional Conduct?
17. Rank from the most authoritative to the least authoritative, the following three items: FASB Technical Bulletins, AICPA Practice Bulletins, and FASB Standards.
13. In what ways was it felt that the statements issued by the Financial Accounting Standards Board would carry greater weight than the opinions issued by the Accounting Principles Board?
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20 • Chapter 1 Financial Accounting and Accounting Standards
Questions • 19
QUESTIONS
1. Differentiate broadly between financial accounting and managerial accounting.
2. Differentiate between “financial statements” and “financial reporting.”