Question: Suppose the direct foreign exchange rates in

> Select the correct response for each of the following. 1. A client has joined other creditors of Jet Company in a composition agreement seeking to avoid a bankruptcy proceeding against Jet. Which statement describes the composition agreement? a. It prov

> The following is a list of selected account balances in the operating fund without donor restrictions for Pleasant School: Required: Prepare a statement of activities for Pleasant School’s unrestricted operating fund for the year ende

> Select the correct response for each of the following. 1. On January 2, 20X2, a not-for-profit botanical society received a gift of an exhaustible fixed asset with an estimated useful life of 10 years and no salvage value. The donor’s

> Select the correct answer for each of the following questions. 1. Which of the following statements is correct? I. In the government wide financial statements, internal service fund activities are reported in the Governmental Activities column. II. The

> Select the correct answer for each of the following 1. On December 31, 20X1, Tiffin Township paid a contractor $2,000,000 for the total cost of a new firehouse built in 20X1 on township owned land. Financing was by means of a $1,500,000 general obligati

> On August 1, 20X6, the City of Rockhaven received $1,000,000 from a prominent citizen to establish a private-purpose trust fund. The donor stipulated that the cash be permanently invested and that the earnings from the investments be spent to support loc

> Mountain View City is preparing its government wide financial statements for the year. As of the year-end, the city has determined the following information for its capital assets, exclusive of its infrastructure assets: Cost of capital assets acquired

> Select the correct response to each of the following. 1. The government wide financial statements use the a. Economic resources measurement focus and the accrual basis of accounting. b. Current financial resources measurement focus and the accrual basis

> Prepare journal entries for Iron City’s general fund for the following, including any adjusting and closing entries on December 31, 20X1 (the end of the fiscal year): a. Acquired a three-year fire insurance policy for $5,400 on September 1, 20X1. b. Orde

> Select the correct answer for each of the following items. 1. The primary focus in accounting and reporting for governmental funds is a. Income determination. b. Flow of financial resources. c. Capital maintenance. d. Transfers relating to proprietary a

> Refer to the pre closing trial balance in Exercise 17–10. Assume that the balances on December 31, 20X0, were as follows: Fund Balance—Assigned for Encumbrances ……….$28,000 Fund Balance—Unassigned …………………………………..91,000 Required: Prepare a general fund–

> Select the correct answer for each of the following questions. 1. One difference between accounting for a governmental (not-for-profit) unit and a commercial (for-profit) enterprise is that a governmental unit should a. Not record depreciation expense i

> Select the correct answer for each of the following questions. 1. On January 1, 20X7, the partners of Casey, Dithers, and Edwards, who share profits and losses in the ratio of 5:3:2, decided to liquidate their partnership. On this date, its condensed ba

> Select the correct answer for each of the following questions: 1. On December 31, 20X7, Judy is a fully vested participant in a company-sponsored pension plan. According to the plan’s administrator, Judy has at that date the non forfei

> Select the correct answer for each of the following questions. (Note: The following information is for questions 1, 2, and 3.) The balance sheet for the partnership of Joan, Charles, and Thomas, whose shares of profits and losses are 40, 50, and 10 perce

> Select the correct answer for each of the following questions. 1. On May 1, 20X1, Cathy and Mort formed a partnership and agreed to share profits and losses in the ratio of 3:7, respectively. Cathy contributed a parcel of land that cost her $10,000. Mor

> Select the correct answer for each of the following questions. (The following balance sheet is for the partnership of Alex, Betty, and Claire in questions 1 and 2.) Cash ………â€&brvbar

> In the GMP partnership (to which Elan seeks admittance), the capital balances of Mary, Gene, and Pat, who share income in the ratio of 6:3:1, are Mary …………………………….$240,000 Gene ……………………………….120,000 Pat …………………………………..40,000 Required: a. If no goodwill

> The partnership agreement of Angela and Dawn has the following provisions: 1. The partners are to earn 10 percent on the average capital. 2. Angela and Dawn are to earn salaries of $25,000 and $15,000, respectively. 3. Any remaining income or loss is to

> Select the correct answer for each of the following questions. 1. Which of the following statements concerning the prospectus required by the Securities Act of 1933 is correct? a. The prospectus is a part of the registration statement. b. The prospectus

> Select the correct answer for each of the following questions. 1. A major impact of the Foreign Corrupt Practices Act of 1977 is that registrants subject to the Securities Exchange Act of 1934 are required to a. Keep records that reflect the transaction

> Select the correct answer for each of the following questions. 1. Form 10-K is filed with the SEC to update the information a company supplied when filing a registration statement under the Securities and Exchange Act of 1934. Form 10-K is a report that

> Select the correct answer for each of the following questions. 1. In the registration and sales of new securities issues, the SEC a. Endorses a security’s investment merit by allowing its registration to “go effective.” b. Provides a rating of the invest

> Select the correct answer for each of the following questions. 1. Two interesting and important topics concerning the SEC are the role it plays in the development of accounting principles and the impact it has had and will continue to have on the accoun

> Select the correct answer for each of the following questions. 1. According to ASC 270 and 740, income tax expense in an income statement for the first interim period of an enterprise’s fiscal year should be computed by applying the a.

> Select the correct answer for each of the following questions. 1. Which of the following is an inherent difficulty in determining the results of operations on an interim basis? a. Cost of sales reflects only the amount of product expense allocable to re

> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations A. Method used to restate a foreign entity's financial statement when the local currency unit is the functional curr

> Select the correct answer for each of the following questions. 1. Barbee Corporation discloses supplementary operating segment information for its two reportable segments. Data for 20X5 are available as follows: Additional 20X5 expenses are as follows

> Following are seven independent cases on how accounting facts might be reported on an individual company’s interim financial reports. 1. Bean Company was reasonably certain it would have an employee strike in the third quarter. As a result, the company s

> Refer to the data in Exercise E12-5, but now assume that the exchange rates were as follows: SFr $ January 1 ………………

> Refer to the data in Exercises E12-5 and E12-7. Required: a. Prepare a proof of the re measurement gain or loss computed in Exercise E12-7. b. How should this re measurement gain or loss be reported on Popular Creek’s consolidated fina

> Refer to the data in Exercise E12-5, but assume that the dollar is the functional currency for the foreign subsidiary. Required: Prepare a schedule re measuring the December 31, 20X1, trial balance from Swiss francs to dollars. Data from E12-5: On Jan

> Refer to the data in Exercise E12-5. Required: a. Prepare a proof of the translation adjustment computed in Exercise E12-5. b. Where is the translation adjustment reported on Popular Creek’s consolidated financial statements and its fo

> On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 60,000. SunTime’s December 31, 20X1, trial balance in SFr is as follows: Addi

> Use the following information for questions 1, 2, and 3. Bartell Inc., a U.S. company, acquired 90 percent of the common stock of a Malaysian company on January 1, 20X5, for $160,000. The net assets of the Malaysian subsidiary amounted to 680,000 ringgit

> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations 1. Remeasurement gain or loss 2. Translation adjustment 3. Current rate method A. The currency of the primary econom

> The following information should be used for questions 1, 2, and 3. Select the best answers under each of two alternative assumptions: (a) the LCU is the functional currency and the translation method is appropriate or (b) the U.S. dollar is the function

> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations 1. Reportable operating segment 2. 10 percent significance rules 3. Revenue test for material foreign country C. Inc

> Indicates that the item relates to “Additional Considerations.” Pole Company sold inventory to South Ltd., an English subsidiary. The goods cost Pole $8,000 and were sold to South for $12,000 on November 27, payable in British pounds. The goods are still

> On December 31, 20X2, your company’s Mexican subsidiary sold land at a selling price of 3,000,000 pesos. The land had been purchased for 2 million pesos on January 1, 20X1, when the exchange rate was 10 pesos to 1 U.S. dollar. The exchange rate for 1 U.S

> Refer to the data in Exercise E12-5, but now assume that the exchange rates were as follows: SFr $ January 1 ………………

> 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

> 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

> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations 1. Proprietary funds A. Trust and agency funds. 2. Modified accrual method B. Fiscal and accounting entities of a go

> 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