Question: Match the items in the left-hand

> For each of the following seven cases, work the case twice and select the best answer. First assume that the foreign currency is the functional currency; then assume that the U.S. dollar is the functional currency. 1. Certain balance sheet accounts in a

> Harris Inc. had the following transactions: 1. On May 1, Harris purchased parts from a Japanese company for a U.S. dollar equivalent value of $8,400 to be paid on June 20. The exchange rates were 2. On July 1, Harris sold products to a Brazilian custom

> Select the correct answer for each of the following questions. 1. The following information applies to Denton Inc.’s sale of 10,000 foreign currency units under a forward contract dated November 1, 20X5, for delivery on January 31, 20X6

> A indicates that the item relates to Appendix 11A. On November 1, 20X6, Smith Imports Inc. contracted to purchase teacups from England for £30,000. The teacups were to be delivered on January 30, 20X7, with payment due on March 1, 20X7. On N

> Jerber Electronics Inc. sold electrical equipment to a Dutch company for 50,000 guilders (G) on May 14, with collection due in 60 days. On the same day, Jerber entered into a 60-day forward contract to sell 50,000 guilders at a forward rate of G1 = $0.54

> Are there any book-tax differences that may arise in an acquisition that do not require the inclusion of a deferred tax asset or liability in the net identifiable assets acquired?

> Choose the correct answer for each of the following questions. 1. On November 15, 20X3, Chow Inc., a U.S. company, ordered merchandise FOB shipping point from a German company for €200,000. The merchandise was shipped and invoiced on Dec

> Select the correct answer for each of the following questions. 1. Dale Inc., a U.S. company, bought machine parts from a German company on March 1, 20X1, for €30,000, when the spot rate for euros was $0.4895. Dale’s yea

> Suppose the direct foreign exchange rates in U.S. dollars are 1 British pound = $1.60 1 Canadian dollar = $0.74 Required: a. What are the indirect exchange rates for the British pound and the Canadian dollar? b. How many pounds must a British company pa

> Pie Corporation paid $319,500 to acquire 90 percent ownership of Slice Company on April 1, 20X2. At that date, the fair value of the non controlling interest was $35,500. On January 1, 20X2, Slice reported these stockholders’ equity bal

> Pole Manufacturing Corporation issued stock with a par value of $67,000 and a market value of $503,500 to acquire 95 percent of Spencer Corporation’s common stock on August 30, 20X1. At that date, the fair value of the non controlling interest was $26,50

> The following 20X2 consolidated statement of cash flows is presented for Printing Company and its subsidiary, Sons Delivery: Printing acquired 60 percent of the voting shares of Sons Delivery in 20X1 at underlying book value. At that date, the fair val

> Pagle Corporation holds 80 percent of Standard Company’s common shares. The companies report the following balance sheet data for December 31, 20X1: An 8 percent annual dividend is paid on the Pagle preferred stock and a 12 percent di

> Poppy Corporation owns 60 percent of Seed Company’s common shares. Balance sheet data for the companies on December 31, 20X2, are as follows: The bonds of Poppy Corporation and Seed Company pay annual interest of 8 percent and 10 perc

> Poison Corporation holds 70 percent of Snake Company’s voting common shares but none of its preferred shares. Summary balance sheets for the companies on December 31, 20X1, are as follows: Neither of the preferred issues is convertibl

> Polly Corporation owns 80 percent of Sonny Corporation’s stock and 90 percent of Daughter Company’s stock. The companies file a consolidated tax return each year and in 20X5 paid a total tax of $80,000. Each company is

> What is the basis of accounting in the proprietary funds? Why?

> Pond Corporation holds 75 percent of the voting shares of Spring Services Company. During 20X7, Pond sold inventory costing $60,000 to Spring Services for $90,000, and Spring Services resold one-third of the inventory in 20X7. The remaining inventory was

> Pro Corporation purchased 11,000 shares of Schroeder Corporation on January 1, 20X3, at book value. At that date, the fair value of the non controlling interest was equal to percent of Schroeder’s book value. On December 31, 20X8, Schr

> Plant Advertising Corporation acquired 60 percent of Seed Manufacturing Company’s shares on December 31, 20X1, at underlying book value of $180,000. At that date, the fair value of the non controlling interest was equal to 40 percent of

> Peel Corporation purchased 60 percent of Split Products Company’s shares on December 31, 20X7, for $210,000. At that date, the fair value of the non controlling interest was $140,000. On January 1, 20X9, Peel purchased an additional 20

> Pepper Home Builders Inc. acquired 80 percent of Salty Concrete Works stock on January 1, 20X3, for $360,000. At that date, the fair value of the non controlling interest was $90,000. Salty Concrete’s balance sheet contained the followi

> Stake Company reported the following summarized balance sheet data as of December 31, 20X2: Stake issues 4,000 additional shares of its $10 par value stock to its shareholders as a stock dividend on April 20, 20X3. The market price of Stakeâ&#128

> Pond Corporation holds 75 percent of the voting shares of Spring Services Company. Assume Pond accounts for this investment using the equity method. During 20X7, Pond sold inventory costing $60,000 to Spring Services for $90,000, and Spring Services reso

> Currently, you are an experienced senior working at a public accounting firm. For the upcoming busy season, you have a new client, a publicly traded corporation. You have not worked with the manager of this client assignment before. You hope to impress t

> Title III of SOX specifies requirements for the membership of the audit committee and its authority. All publicly traded firms must follow SOX. Required: a. Explain the role of the audit committee as SOX specifies, with regard to the annual audit conduc

> The following footnote was abstracted from a recent annual report of Johnson & Johnson Company: Footnote 7: Foreign Currency Translation For translation of its international currencies, the Company has determined that the local currencies of its inte

> Are all expenditures encumbered?

> The Statements of Governmental Accounting Standards are the final step in the GASB’s decision making process. Standard setting has a number of specific steps with open and thorough study of the issues and public participation and input encouraged through

> The Mattfield v. Kramer Brothers court case presents a number of the interesting legal issues that often arise from the dissolution of a partnership. The case was heard in the Supreme Court of the State of Montana in 2005 and decided on May 31, 2005, as

> Obtain a copy of the Uniform Partnership Act of 1997 [UPA of 1997] for answering this case question. The UPA of 1997 can be obtained from your university’s general library, law library, or the Internet. You are in a group that is considering forming a pa

> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations 1. General partner 2. Note payable to a partner 3. Recognition of neither bonus nor goodwill 4. Drawing account 5. L

> How are dividends that are paid to the parent’s preferred shareholders and to the subsidiary’s preferred shareholders treated in computing consolidated EPS?

> Following are descriptions of several independent situations. 1. Rockford Company has a subsidiary in Argentina. The subsidiary does not have much debt because of the high interest costs resulting from the average annual inflation rate exceeding 100 perc

> Why do VHWOs not report all pledges received in the period in the assets without donor restrictions section of the statement of activities? Identify what is not included.

> Explain how an expenditure may be classified by (1) function, (2) activity, and (3) object within a governmental unit’s financial statements.

> How are discontinued operations reported on an interim basis?

> A reconciliation schedules is a required disclosure in the government wide financial statements. What are the purpose and content of these reconciliation schedules?

> A forward exchange contract may be used (a) to manage an exposed foreign currency position, (b) to hedge an identifiable foreign currency commitment, (c) to hedge a forecasted foreign currency transaction, or (d) to speculate in foreign currency markets.

> Define the following terms: (a) local currency unit, (b) recording currency, and (c) reporting currency.

> Define the following features of a partnership: (a) separate business entity, (b) agency relationship, and (c) partner’s joint and several liability.

> Why is there interest in the adoption of a single set of high-quality accounting standards?

> Palace Corporation owns 80 percent of the common shares and 70 percent of the preferred shares of Surf Company, all purchased at underlying book value on January 1, 20X2. At that date, the fair value of the non controlling interest in Surfâ€&#

> On January 1, 20X1, Par Company purchased all the outstanding stock of South Bay Company, located in Canada, for $120,000. On January 1, 20X1, the direct exchange rate for the Canadian dollar (C$) was C$1 = $0.80. South Bay’s book value on January 1, 20X

> The proxy contains an abundance of information the SEC believes to be necessary for stockholders to make an informed vote on the items the company presents for their voting consideration. This case provides opportunities to analyze the proxy of a publicl

> The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information: 1. The partnership’s trial balance on June 30, 20X1, is 2. The partners share profits and losses

> C. Eastwood, A. North, and M. West are manufacturers’ representatives in the architecture business. Their capital accounts in the ENW partnership for 20X1 were as follows: Required: For each of the following independent income-sharing

> Following are four independent transactions or events that relate to a local government and a voluntary health and welfare organization: 1. Made a disbursement of $25,000 from the general fund assets without donor restrictions for the cash purchase of ne

> Give the term(s) that is (are) described in each of the following numbered statements. 1. This is the set of financial statements that presents the governmental unit’s infrastructure assets and long-term debt. 2. At the present time, this body has the au

> A partnership involves an association between two or more persons to carry on a business as co-owners for profit. Items 1 through 10 relate to partnership agreements. The statement of facts for Parts A and B are followed by numbered sentences that state

> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations 1. Dissolution A. Sale of partnership assets, payment of its creditors, and distribution of any remaining assets to

> Select the correct answer for each of the following questions. 1. When property other than cash is invested in a partnership, at what amount should the noncash property be credited to the contributing partner’s capital account? a. Cont

> At the end of the second quarter of 20X1, Malta Corporation assembled the following information: 1. The first quarter resulted in a $90,000 loss before taxes. During the second quarter, sales were $1,200,000; purchases were $650,000; and operating expens

> Apple Corporation acquires 80 percent of Berry Corporation’s common shares on January 1, 20X2. On January 2, 20X2, Berry acquires 60 percent of Coco Corporation’s common stock. Information on company book values on the

> Solo Co. Ltd. located in Mexico City is a wholly owned subsidiary of Partner Inc., a U.S. company. At the beginning of the year, Solo’s condensed balance sheet was reported in Mexican pesos (MXP) as follows: During the year, the compa

> Refer to the information given in P12-23 and P12-27 for Palermo and its subsidiary, Salina Ranching. Assume that the U.S. dollar is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investment in Salina

> Refer to the information given in P12-23 and P12-26 for Palermo and its subsidiary, Salina Ranching. Assume that the U.S. dollar is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investment in Salina

> Refer to the information in P12-23. Assume the U.S. dollar is the functional currency. Required: a. Prepare a schedule re measuring the December 31, 20X3, trial balance of Salina Ranching from Australian dollars to U.S. dollars. b. Prepare a schedule pr

> Refer to the information given in P12-23 and P12-24 for Palermo and its subsidiary, Salina Ranching. Assume that the Australian dollar (A$) is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investmen

> Refer to the information given in P12-23 for Palermo and its subsidiary, Salina Ranching. Assume that the Australian dollar (A$) is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investment in Salina

> Palermo Inc. purchased 80 percent of the outstanding stock of Salina Ranching Company, located in Australia, on January 1, 20X3. The purchase price in Australian dollars (A$) was A$200,000, and A$40,000 of the differential was allocated to plant and equi

> Refer to the information in P12-21. Assume that the dollar is the functional currency. Required: a. Prepare a schedule re measuring Silva Company’s December 31, 20X4, trial balance from reals to dollars. b. Prepare a schedule providing

> On January 1, 20X4, Plum Corporation acquired Silva Company, a Brazilian subsidiary, by purchasing all its common stock at book value. Silva’s trial balances on January 1, 20X4, and December 31, 20X4, expressed in Brazilian reals (BRL),

> Refer to the information given in P12-17 and your answer to part a of P12-18. Required: Prepare a schedule providing a proof of the re measurement gain or loss. For this part of the problem, assume that the Norwegian subsidiary had the following monetar

> Sink Corporation prepared the following summarized balance sheet on January 1, 20X1: Plumber Company acquires 80 percent of Sink Corporation’s common stock on January 1, 20X1, for $80,000. At that date, the fair value of the common sh

> Refer to the information presented in P12-17 and your answer to part a of P12-17. Required: Prepare a schedule providing a proof of the translation adjustment. Data from P12-17: On January 1, 20X5, Pirate Company acquired all of the outstanding stock

> Refer to the information in P12-17. Assume the U.S. dollar is the functional currency, not the krone. Required: a. Prepare a schedule re measuring the trial balance from Norwegian kroner into U.S. dollars. b. Assume that Pirate uses the fully adjusted e

> On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $151,200. Ship’s net assets on the date of acquisition were 700,000 kroner (NKr). On January 1, 20X5, the book and

> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations A. Hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm com

> On November 3, 20X2, PRD Corporation acquired 2 JRS Company bonds ($1,000 face value) at a cost of 105. PRD classifies them as available-for-sale securities. On this same date, PRD decides to hedge against a possible decline in the value of the securitie

> Mega Company believes the price of oil will increase in the coming months. Therefore, it decides to purchase call options on oil as a price risk-hedging device to hedge the expected increase in prices on an anticipated purchase of oil. On November 30, 20

> Select the correct answer for each of the following questions. 1. According to ASC 815, which of the following is not an underlying? a. A security price. b. A monthly average temperature. c. The price of a barrel of oil. d. The number of foreign currenc

> On December 1, 20X1, Micro World Inc. entered into a 120-day forward contract to sell 100,000 Australian dollars (A$). Micro World’s fiscal year ends on December 31. The direct exchange rates follow: Required: Prepare all journal entr

> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations A. Exchange rate for immediate delivery of currencies. B. Imports and exports whose prices are stated in a foreign c

> Maple Company had the following export and import transactions during 20X5: 1. On March 1, Maple sold goods to a Canadian company for C$30,000, receivable on May 30. The spot rates for Canadian dollars were C$1 = $0.65 on March 1 and C$1 = $0.68 on May 3

> Select the correct completion of each of the following items. 1. Which of the following steps in the acquisition of goods and services occurs first? a. Appropriation b. Encumbrance c. Budget d. Expenditure 2. What account is used to earmark the fund ba

> Globe Shipping, a U.S. company, is an importer and exporter. The following are some transactions with foreign companies. 1. Globe sold blue jeans to a South Korean importer on January 15 for $7,400, when the exchange rate was South Korean won (KRW)1 = $0

> Tex Hardware sells many of its products overseas. The following are some selected transactions. 1. Tex sold electronic subassemblies to a firm in Denmark for 120,000 Danish kroner (Dkr) on June 6, when the exchange rate was Dkr 1 = $0.1750. Collection wa

> Princeton Products Corporation acquired 90 percent ownership of Stanford Company on October 20, 20X2, through an exchange of voting shares. Princeton Products issued 8,000 shares of its $10 par stock to acquire 27,000 shares of Stanfordâ€&#153

> Stage Company operates on a calendar-year basis, reporting its results of operations quarterly. For the first quarter of 20X1, Stage reported sales of $240,000 and operating expenses of $180,000 and paid dividends of $10,000. On April 1, 20X1, Parachute

> Protecto Corporation purchased 60 percent of Strand Company’s outstanding shares on January 1, 20X1, for $24,000 more than book value. At that date, the fair value of the noncontrolling interest was $16,000 more than 40 percent of Stran

> Following are the consolidated balance sheet accounts of Primer Inc. and its subsidiary, Sore Corporation, as of December 31, 20X6 and 20X5. Additional Information: 1. On January 20, 20X6, Primer issued 10,000 shares of its common stock for land having

> Using the data presented in P10-20: a. Prepare a worksheet to develop a consolidated statement of cash flows for 20X4 using the direct method of computing cash flows from operations. b. Prepare a consolidated statement of cash flows for 20X4. Data from

> Point Company holds 80 percent ownership of Shoot Company. The consolidated balance sheets as of December 31, 20X3, and December 31, 20X4, are as follows: The 20X4 consolidated income statement contained the following amounts: Point acquired its inve

> Using the data presented in P10-18: a. Prepare a worksheet to develop a consolidated statement of cash flows for 20X3 using the direct method of computing cash flows from operations. b. Prepare a consolidated statement of cash flows for 20X3. Data from

> Pear Corporation acquired 75 percent ownership of Sugar Company on January 1, 20X1, at underlying book value. At that date, the fair value of the non controlling interest was equal to 25 percent of the book value of Sugar Company. Consolidated balance sh

> Select the correct response for each of the following. 1. Which of the following accounts could be included in an enterprise fund’s statement of net position? 2. Customers’ meter deposits that cannot be spent for no

> Putter Corporation owns 70 percent of the voting common stock of Sand Company. At December 31, 20X1, the companies reported the following: During 20X1, Sand sold inventory costing $70,000 to Putter for $100,000, and Putter resold 40 percent of the inve

> Plug Corporation holds 80 percent of Socket Company’s common stock. The following balance sheet data are presented for December 31, 20X7: Socket reported net income of $115,000 in 20X7 and paid dividends of $60,000. Its bonds have an

> Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail Stores. The companies’ balance sheets as of December 31, 20X4, were as follows: Short Retail’s 8 percent preferred stock is convert

> Poom Manufacturing used cash to acquire 75 percent of the voting stock of Satellite Industries on January 1, 20X3, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 25 percent of Satellite’s book value. Po

> 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 to 30 percent of Solid Company’s boo

> 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: Additional Information: 1. The current and future effectiv

> 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 of the stock of First Boston. All acquisitions were mad

> 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 Saul’s book value. The balance shee

> 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, the fair value of the non controlling interest was eq

> 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 goods sold of $160,000 and $95,000, respectively. Power’s

> 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.

> Reread the aggregate demand shock example (event #3) in Section 13.5. Suppose the parameters of the AS and AD curves take the following values:

> Reread the inflation shock example (event #1) in Section 13.5. Suppose the size of the shock is