Questions from Financial Accounting

Q: What are some of the limitations of a trial balance?

What are some of the limitations of a trial balance?

Q: How do dividends affect owners’ equity? Are they treated as a

How do dividends affect owners’ equity? Are they treated as a business expense? Explain.

Q: What is the meaning of the term expenses? Does the payment

What is the meaning of the term expenses? Does the payment of cash by a business indicate that an expense has been incurred? Explain.

Q: The U.S. dollar strengthened against the European euro.

The U.S. dollar strengthened against the European euro. Will imports from Europe into the United States be more expensive or less expensive in U.S. dollars? Explain.

Q: Power Corporation owns 75 percent of Surge Company’s stock; no intercompany

Power Corporation owns 75 percent of Surge Company’s stock; no intercompany purchases or sales were made in 20X4. For the year, Power and Surge reported sales of $300,000 and $200,000 and cost of good...

Q: Planet Corporation held 80 percent of Sun Corporation’s outstanding common shares on

Planet Corporation held 80 percent of Sun Corporation’s outstanding common shares on December 31, 20X2, which it had acquired at underlying book value. When the shares were acquired,...

Q: Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying

Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the date of acquisition, the fair value of the noncontrolling interest was equal to 25 percent of...

Q: First Boston Corporation acquired 80 percent of Gulf side Corporation common stock

First Boston Corporation acquired 80 percent of Gulf side Corporation common stock on January 1, 20X5. Gulf side holds 60 percent of the voting shares of Paddock Company, and Paddock owns 10 percent o...

Q: Peace Corporation acquired 100 percent of Soft Inc. in a nontaxable

Peace Corporation acquired 100 percent of Soft Inc. in a nontaxable transaction on December 31, 20X1. The following balance sheet information is available immediately following the transaction: Addi...

Q: Powder Corporation acquired 70 percent of Solid Company’s stock on December 31

Powder Corporation acquired 70 percent of Solid Company’s stock on December 31, 20X7, at underlying book value. At that date, the fair value of the noncontrolling interest was equal...