Question: True Image Copier Company leases a multifunction

> The following are several figures reported for Allister and Barone as of December 31, 2021: Allister acquired 90 percent of Barone in January 2020. In allocating the newly acquired sub- sidiary’s fair value at the acquisition date, Alli

> What is the consolidated total for inventory at December 31? a. $240,000 b. $248,000 c. $250,000 d. $260,000

> What is the consolidated total for equipment (net) at December 31? a. $735,000 b. $740,000 c. $760,000 d. $765,000

> What is the consolidated total of noncontrolling interest appearing on the balance sheet? a. $85,500 b. $83,100 c. $87,000 d. $70,500

> What is the total of consolidated expenses? a. $30,000 b. $36,000 c. $37,500 d. $39,000

> What is the total of consolidated cost of goods sold? a. $140,000 b. $152,000 c. $132,000 d. $145,000

> What is the total of consolidated revenues? a. $500,000 b. $460,000 c. $420,000 d. $400,000

> Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated. On January 1, 2019, Thomson acquired a building with a 10-year life for $460,000. Thomson depreciated the building on the straight-line basis assuming no salvage value.

> Prior to 2018, Celgene Corporation, a biopharmaceutical company (with specialities in oncology, inflammation, and immunology) had owned a 9.6 percent equity interest in Juno Therapeutics Inc. (Juno). Juno is a scientific and manufacturing company special

> Assuming that Pride, in its internal records, accounts for its investment in Star using the equity method, what amount of retained earnings would Pride report on its January 1, 2021, consolidated balance sheet? a. $250,000 b. $286,000 c. $315,000 d. $360

> What is consolidated net income for 2021? a. $194,000 b. $197,500 c. $203,000 d. $238,000

> On January 1, 2020, Chamberlain Corporation pays $388,000 for a 60 percent ownership in Neville. Annual excess fair-value amortization of $15,000 results from the acquisition. On December 31, 2021, Neville reports revenues of $400,000 and expenses of $30

> On January 1, 2020, Bretz, Inc., acquired 60 percent of the outstanding shares of Keane Company for $573,000 in cash. The price paid was proportionate to Keane’s total fair value although at the date of acquisition, Keane had a total bo

> On January 1, 2020, Allan Company bought a 15 percent interest in Sysinger Company. The acquisition price of $184,500 reflected an assessment that all of Sysinger’s accounts were fairly valued within the company’s acco

> On July 1, 2021, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $720,000 in cash and equity securities. The remaining 30 percent of Atlanta’s shares traded closely near an average price

> Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2021: Gibson acquired 60 percent of Davis on April 1, 2021, for $528,000. On that date, equipment owned by Davis (with a five-year remaining life) was

> Adams Corporation acquired 90 percent of the outstanding voting shares of Barstow, Inc., on December 31, 2019. Adams paid a total of $603,000 in cash for these shares. The 10 percent non- controlling interest shares traded on a daily basis at fair value

> Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2021, for $802,720 cash. At the acquisition date, Sierra’s total fair value, including the noncontrolling interest, was assessed at $1,003,

> On January 1, 2020, Grand Haven, Inc., reports net assets of $760,000 although equipment (with a four-year remaining life) having a book value of $440,000 is worth $500,000 and an unrecorded patent is valued at $45,000. Van Buren Corporation pays $692,00

> ComWire Company manufactures wireless transponders for satellite applications. ComWire has recently acquired Martin Company, which is primarily known for its software communications development but also manufactures a specialty transponder under the trad

> The following information was extracted from quarterly reports for Walmart Inc. (amounts in millions): The following information was extracted from the notes to the financial statements in the Walmart Inc., Annual Report (for the fiscal year ended Januar

> Mini Golf Corporation is a fully owned foreign subsidiary of Fun Parks, Inc. Mini Golf operates in a foreign jurisdiction with a tax rate of 15% whereas Fun Parks, Inc. is a U.S. corporation that has a 35% tax rate. Mini Golf has earnings of $2,000,000 t

> Fashion Designs, Inc. (FD) is a manufacturer of high-end women’s clothing. The firm is involved in the manufacture and design of the clothing. FD has been in this business for many years and has historically reported strong earnings. However, its earning

> You have been tasked with understanding income tax reporting at T-Mobile US, Inc. and comparing it to that of AT&T. Use the following information from T-Mobile to address the questions. NOTE 10: Income Tax Income tax expense is summarized as follows

> Scene 1: Current guidance on uncertain tax positions requires that when an entity is making its assessment as to whether a tax position is more likely than not to be sustained, it must assume that the position will be examined by the relevant taxing auth

> Scene 1:The concept of the deferred tax liability (which is reported under both U.S. GAAP and IFRS) has been at the root of disagreement among financial statement users for quite some time. While some do believe that it is truly a liability, others do no

> In certain countries, the tax rate applied in a company’s tax return depends on whether the profits for the period are distributed or undistributed. Amounts are initially taxed at a higher rate, but a tax credit is received when amounts are distributed.

> Mini Golf Corporation is a fully owned foreign subsidiary of Fun Parks, Inc. Mini Golf operates in a foreign jurisdiction with a tax rate of 15% whereas Fun Parks, Inc. is a U.S. corporation that has a 35% tax rate. Mini Golf has earnings of $2,000,000 t

> Using the information in the Surfing the Standards Case 1, now assume that Multinational Corporation (Multinational) is an IFRS reporter. Required: a. Obtain and review the measurement guidance related to anticipated future tax credits in International

> Using the same information from P12-2, assume that Cupcakes-R-Us determines that the likelihood of the expected future cash flows under Estimate 1 is 70% and 30% under Estimate 2 Required a. Compute the carrying value of Cupcakes-R-Usâ€&#153

> Technique Technologies, Inc. started a defined-benefit plan this year. As part of the union agreement, it provided $560,000 in retroactive benefits to all employees for their prior years’ service. The company amortized $15,600 of these benefits during th

> Season Tyme Tea Company provided the following information related to its defined-benefit pension plan. Required : a. Compute the total pension cost for the year. b. Determine the ending balances of the plan assets and the projected benefit obligation

> Redo E19-9, assuming that Crystal Glass Works, Ltd. is an IFRS reporter and the expected return on plan assets is the same as the settlement rate. Crystal Glass reports service cost as an operating expense and all other pension expenses as non-operating.

> Colorado Closets, Inc. employs 50 employees earning an average of $1,000 per week. The company awards each employee two weeks of vacation per year. Vacation days neither accumulate nor vest if not taken in the year earned. During the current year, 45 of

> The following information is from the books of OZP Farms, Inc. regarding its employee stock options. The firm granted options on January 2, 2018, that permit employees to acquire 100,000 shares of $1.20 par value common stock at an exercise price of $4.8

> Assume that Bergamini Builders leases medical equipment from Saint Martin’s Machine Company. The lease term is for 7 years, and Bergamini must pay seven annual rentals of $40,000 beginning on January 1, 2019, of the current year and every January 1 after

> Using the same information presented in E18-7, complete the following requirements: Required: a. Prepare the entries for the lessor, SBE, for the first year of the lease. Determine the implicit rate. b. Would the accounting for the lessor change if

> On January 1, Gump Sales Company entered into an agreement to lease a piece of machinery for a period of 5 years from Smokey Boy Equipment (SBE). The machine is not specialized for Gump’s business needs, has a sales price of $70,000, and its useful life

> Fontana Company enters into a lease agreement on January 1, 2017, for nonspecialized equipment leased by Mindbender Insurance Company. The following data are relevant to the lease agreement: • The term of the lease is 4 years with no renewal or purchase

> On January 1, 2019, Holt National Bank (HNB) acquired a fleet of trucks to be leased to J Rivers Company. HNB paid $105,000 to acquire the vehicles, which is also the fair value of the fleet. The lease terms follow. • Annual rental payments of $36,272 a

> Advanced Computer Systems reported the following shareholders’ equity section as of the beginning of the current year: Advanced Computer issued 125,000 shares of its $.50 par common stock during the year. The market price of the shares

> Caye Comfort, Inc. manufactures a complete line of beds, cots, and futons. Caye Comfort leases a spring fabricating machine from Stein Spring Company for 3 years with no renewal or purchase options. The equipment has a fair value of $10,000 and title wil

> BabyClothing (BC) Enterprises leases digital imaging equipment from Sally Systems Leasing. The lease term is for 3 years and the economic life of the equipment is 5 years. The lease contract does not contain a purchase option and title will not be transf

> Plash Photo Company leased a digital reproduction machine on January 1, 2019. The following information was obtained from the lease contract: • The lease carries a term of 5 years. There is no renewal option and there is no transfer of ownership. • The

> Using the information provided in E18-20, assume now that Beachmont provides a guarantee of the residual value of $7,000 that will cover any unrecovered fair value by the lessor. Required: a. Determine the classification of the lease for the lessee.

> Magro Machinery allows its employees 10 paid sick days per year. If the employees do not take the sick days in any given year, the days accumulate. If an employee either leaves or is terminated, he or she will be paid in cash for the sick days. During th

> Beachmont Restaurants, Inc. enters into a lease for standard stoves and grills. The lease term is 3 years with no renewal or purchase options. There is no residual value guarantee, and the lease terms do not provide for a transfer of title. The economic

> Using the same facts as included in E18-1, now assume that the variable payments cannot be less than $2,000 per year. Required: Assuming that SouthSide allocates consideration based on relative standalone selling prices, determine the allocation of t

> Cardillo Capital enters into a lease agreement with Vincent Motors to lease a delivery van with a fair value of $55,000 under a 36-month (3-year) lease. The van has an estimated useful life of 8 years. No initial direct costs are incurred by the lessor.

> Mr. Kay Food Mart Inc., as lessee, enters into a lease agreement on July 1, 2018, to lease nonspecialized mobile refrigeration equipment from Pollet Products. The cost of the equipment to Pollet is $180,000. The following information is relevant to the l

> In 2018, Thom Inc. discovered an error in its 2015 financial statements. The firm recorded $8,500,000 of depreciation expense on its equipment instead of recording $9,500,000. Thom has a constant tax rate of 40% and reports 3 years of comparative income

> IFRS. Using the information provided in E18-15, assume now that Stewart Standard and Kane Kite are IFRS reporters. Required: a. Determine the lessor’s classification of the lease. b. Measure the right-of-use asset and the lease liability at January

> On January 1, 2019, Kane Kite Company leased a nonspecialized fabric-cutting machine from Stewart Standard, Inc. Under the terms of the lease, Kane Kite must pay $200,000 on January 1 of each year, starting in 2019, over a 9-year term. The lease terms do

> Carrie-Ann Fashions, Inc. entered into a 5-year lease with Reese Rentals to occupy an office building. The economic life of the building is 30 years. The building had a fair value of $8,500,000 and Carrie-Ann has an option to purchase the building at the

> Seal Container Corporation (SCC) signed a lease agreement on January 1, 2018, to lease new forklift equipment. The terms of the lease follow. • The lease has a term of 10 years. There are no purchase or renewal options. • SCC makes the annual lease pay

> Vanity Jewelers Incorporated signed a lease agreement on July 1, 2020, to lease diamond-polishing equipment from Whitehead Industries. The following information is relevant to the lease agreement. • The term of the lease is 7 years with no renewal optio

> Kloth Fabric Store operates in Philadelphia, Pennsylvania, where sales taxes are 7% of sales. Kloth collected $27,860 on sales made this month, including the sales price and sales taxes. The company uses a periodic inventory system. Prepare the journal e

> On January 1, 2018, Lima Leasing Company (LLC) acquired an airplane to be leased to LA Sky Company. LLC paid $950,000 to acquire the plane, which is also its fair value. The lease terms follow. • Annual rental payments of $190,000 are due January 1 of e

> On January 1, 2018, Temple Leasing Company (TLC) acquired a fleet of stock vehicles to be leased to Delaware River Company. TLC paid $275,000 to acquire the vehicles, which is also the fair value of the fleet. The lease terms follow. • Annual rental pay

> SouthSide Services leases several computer servers from Sharpe Computing Company. The lease agreement includes consulting and training updates. The standalone prices charged by Sharpe for each separate component are $850,000 for the servers and $150,000

> Using the same information provided in E17-8, assume that Meyer-Swift invested in tax-free municipal bonds. The bonds pay interest of $1,000 each year. In addition, a new tax law enacted at the beginning of Year 2 reduced the corporate tax rate to 30%.

> On June 1 of the current year, Tedesco Publishers collected $432,000 for 4-year online subscriptions to its Houston Style Magazine. Tedesco has a December 31 year-end. Prepare the journal entries required on the date Tedesco collects the subscriptions an

> Meyer-Swift Construction Equipment Manufacturers engaged in an installment sale with one of its major customers. The firm negotiated the terms of the installment sale for a specialized piece of equipment; full payment is required within 3 years. We prese

> J.W. Jones Markets, Inc. accepts prepaid grocery orders for home and commercial delivery. This year, the company collected $160,000 in advance orders and delivered $48,000 of the advance orders. The company paid $15,000 in insurance premiums for a policy

> Fortunes Hotel Associates reported the following income information for the current year: Required: a. Prepare the journal entry to record the tax provision for the current year. b. Are there any differences between the federal income tax rate and For

> Oliver Starshine Group provided the following income information from its first 3 years of operation. Oliver offers a 1-year warranty on its commercial floor polishing system. The company estimates its warranty cost at 10% of sales. Required: a. Comp

> Blue Collar Clothing, Inc. acquired a new fabric-cutting machine at the beginning of the current year. The machine cost $600,000 with no residual value expected. Blue Collar uses the straight-line method for financial reporting assuming a 6-year useful l

> Synthia Manufacturing Corporation reported pre-tax book income of $3,250,000 for the current year. • The change in the difference in the basis of plant assets is $430,000. The book basis is higher than the tax basis. • Of the Synthia’s pre-tax book inc

> Roth Tile and Carpets, Incorporated operates in Blue Bay, Wisconsin, where sales taxes are 6% of sales. Roth’s sales this month amounted to $2,560,500. The company uses a periodic inventory system. Prepare the journal entry to record sales for the curren

> Based on the information provided in E17-19, assume that Lewis Eagle Corporation reported the following income levels for both book and tax purposes for the following year. Assume that Lewis Eagle passed the more-likely-than-not test. Based on an analys

> Andre Company reported a $192,640 balance in its deferred tax liability account at the beginning of Year 5. The deferred tax liability was the result of using the straight-line method on its books and an accelerated depreciation method for tax purposes.

> Lewis Eagle Corporation concluded that it was able to exclude $2,500,000 in income from its current tax return. Income before the exclusion is $6,000,000. There are no book-tax differences. This income is subject to a 30% tax rate. Based on its technical

> In 2018, Meg Inc. discovered an error in its 2015 financial statements. The firm recorded $11,000,000 of depreciation expense on its equipment instead of recording $10,000,000. Meg has a constant tax rate of 40% and reports 3 years of comparative income

> On January 1, Jefferson Company acquired 25% of the outstanding voting shares of Tremont Corporation at a cost of $1,340,000 by acquiring 20,000 of the total 80,000 outstanding shares at a cost of $67 per share. During the year, Tremont reported $875,000

> IFRS. Prepare the journal entry needed to record the partial sale of the investment acquired in BE16-9. Assume that Turner sold 12,800 of the Fenwick shares for $47 per share in 2017 and the fair value of the remaining shares is $41 per share on December

> Using the information provided in E17-17, assume that in Year 8, DiVito determined that it is more likely than not that it will earn only $50,000 in the future to be used to offset the net operating loss carryforward. Required: a. Prepare the journal

> Sills Products acquired $2,960,000 face value, 5% bonds as a heldto-maturity investment on January 1 of the current year when the market rate of interest was 10%. Interest is paid annually each December 31. Sills purchased the bonds, which mature in 6 ye

> Ginger Spice Distributors acquired 14,500 shares of its own common shares at a cost of $64 per share. After 6 months, Ginger sold half of the shares in the open market at $70 per share. Prepare the journal entries to record the acquisition and sale of th

> Assume that Cornish Corporation has 2,500,000 shares of $3 par value common stock issued and outstanding. The company is authorized to issue 10 million shares. Due to increased share prices, the corporation decided to implement a 2-for-1 stock split. Pre

> Wonder Spring Water Company recently employed a consultant to revise its production and distribution procedures. In order to compensate the consultant, Wonder issued 1,000 shares of its $1 par value common stock. Those shares are not publicly traded, but

> Carlos Company decided to raise additional capital in the equity market. It engaged an underwriter to float a new common share issue. The issue consisted of 5,000 shares of $3 par value common stock. Carlos paid the underwriter 2% of the total issue pric

> At the beginning of the current year, Niles Corporation issued 1,600 shares of its own $2 par value common stock for $19 per share. Prepare the journal entry required to record the issuance of the shares.

> Perdido Products, Inc. issued 2,500 shares of its common stock. The common stock has a stated value of $10 per share and was issued at $24 per share. Prepare the journal entry required to record the issuance of the shares.

> On September 1, Year 1, Royal Corp., a newly formed company, had the following stock issued and outstanding: • Common stock, no par, $1 stated value, 5,000 shares originally issued for $15 per share. • Preferred stoc

> IFRS. Almonzo’s Flower Box, Inc., an IFRS reporter, operates a floral delivery service. The company has three delivery trucks. It recently signed a contract to make deliveries for two local florists. The delivery route for one of the florists has been un

> U.S. GAAP, IFRS. Match the U.S. GAAP term with the IFRS term. There may be more than one match, and responses may be repeated.

> DiVito Imported Provisions, Inc. reported pre-tax accounting income equal to its taxable income as follows: All tax changes are enacted into law as of the beginning of the year. No tax rate changes are known until the year of change. DiVito elects the c

> Using the information provided in BE15-13 and the following stockholders’ equity section of Oz Lollypop Company, adjust the balance sheet for the correction of the error. Data from BE15-13: In its audit of Oz Lollypop Company, Able and

> Is an annual impairment test required for all long-term operating assets? Explain

> Does recognizing an impairment loss on a long-term operating asset have the same effect on the financial statements as recording depreciation expense and amortization expense? Explain

> Can firms group all property, plant, and equipment for purposes of performing an impairment test? Explain

> Is the impairment test for tangible, long-term operating assets identical to the impairment test for intangible assets? Explain.

> How does a firm classify the acquisition of a plant asset by issuing common stock?

> In its audit of Oz Lollypop Company, Able and Ready, CPAs, discovered in 2018 that the firm had not recorded a $975,000 expense in 2014 (for both book and tax purposes). Oz never paid this amount due on the invoice it received. Assuming a constant tax ra

> Does the direct reporting format provide complete flexibility in terms of the line items to report in operating activities?

> How do firms classify interest paid and interest received on the statement of cash flows under IFRS?

> How do firms reclassify gains and losses on the disposal of property, plant, and equipment? Why is this reclassification appropriate?

> Hamilton Container Company reported the following income (loss) information for the first 4 years of its operations: There are no uncertainties about the realization of the net operating loss benefits. All tax rate changes were enacted as of the beginni

> What are the two different reporting formats for preparing the operating activities section of the statement of cash flows?

> Does a firm classify the acquisition of a plant asset by common stock issuance as both an investing and a financing activity on the cash flow statement in the year of acquisition?