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Wiley CPA Examination Review Outlines And Study Guides Volume 1 - 2012-2013 39th Edition Patrick R. Delaney, O. Ray Whittington - Solutions
Shore Co. records its transactions in US dollars. A sale of goods resulted in a receivable denominated in Japanese yen, and a purchase of goods resulted in a payable denominated in euros. Shore recorded a foreign exchange transaction gain on collection of the receivable and an exchange transaction
On November 30, 2009, Tyrola Publishing Company, located in Colorado, executed a contract with Ernest Blyton, an author from Canada, providing for payment of 10% royalties on Canadian sales of Blyton’s book. Payment is to be made in Canadian dollars each January 10 for the previous year’s
Ball Corp. had the following foreign currency transactions during 2010:• Merchandise was purchased from a foreign supplier on January 20, 2010, for the US dollar equivalent of$90,000. The invoice was paid on March 20, 2010, at the US dollar equivalent of $96,000.• On July 1, 2010, Ball borrowed
Hunt Co. purchased merchandise for £300,000 from a vendor in London on November 30, 2010. Payment in British pounds was due on January 30, 2011. The exchange rates to purchase one pound were as follows:November 30, December 31, 2010 2011 Spot-rate $1.65 $1.62 30-day rate 1.64 1.59 60-day rate 1.63
Lindy, a US corporation, bought inventory items from a supplier in Argentina on November 5, 2009, for 100,000 Argentine pesos, when the spot rate was $.4295. At Lindy’s December 31, 2009 year-end, the spot rate was $.4245. On January 15, 2010, Lindy bought 100,000 pesos at the spot rate of $.4345
On September 1, 2010, Cano & Co., a US corporation, sold merchandise to a foreign firm for 250,000 Botswana pula. Terms of the sale require payment in pula on February 1, 2011. On September 1, 2010, the spot exchange rate was $.20 per pula. At December 31, 2010, Cano’s year-end, the spot rate was
On September 1, 2010, Bain Corp. received an order for equipment from a foreign customer for 300,000 local currency units (LCU) when the US dollar equivalent was$96,000. Bain shipped the equipment on October 15, 2010, and billed the customer for 300,000 LCU when the US dollar equivalent was
Under IFRS a parent may exclude a subsidiary from consolidation only if all of the following conditions exist, excepta. It is wholly or partially owned and its owners do not object to nonconsolidation.b. It does not have any debt or equity instruments publicly traded.c. It has one class of stock.d.
Under IFRS the asset goodwill may be recognizeda. When it is acquired by purchase.b. When it is internally generated or acquired by purchase.c. When it is clear that it exists and has value.d. When it has future economic benefits.
Which of the following items should be treated in the same manner in both combined financial statements and consolidated statements?Different fiscal periods Foreign operationsa. No Nob. No Yesc. Yes Yesd. Yes No O. International Financial Reporting Standards (IFRS)
Which of the following items should be treated in the same manner in both combined financial statements and consolidated statements?Income taxes Noncontrolling interesta. No Nob. No Yesc. Yes Yesd. Yes No
Combined statements may be used to present the results of operations of Companies under common management Commonly controlled companiesa. No Yesb. Yes Noc. No Nod. Yes Yes
Mr. Cord owns four corporations. Combined financial statements are being prepared for these corporations, which have intercompany loans of $200,000 and intercompany profits of $500,000. What amount of these intercompany loans and profits should be included in the combined financial
Mr. and Mrs. Gasson own 100% of the common stock of Able Corp. and 90% of the common stock of Baker Corp.Able previously paid $4,000 for the remaining 10% interest in Baker. The condensed December 31, 2011 balance sheets of Able and Baker are as follows:Able Baker Assets $600,000 $60,000
The following information pertains to shipments of merchandise from Home Office to Branch during 2011:Home Office’s cost of merchandise $160,000 Intracompany billing 200,000 Sales by Branch 250,000 Unsold merchandise at Branch on December 31, 2011 20,000 In the combined income statement of Home
Ahm Corp. owns 90% of Bee Corp.’s common stock and 80% of Cee Corp.’s common stock. The remaining common shares of Bee and Cee are owned by their respective employees. Bee sells exclusively to Cee, Cee buys exclusively from Bee, and Cee sells exclusively to unrelated companies. Selected 2011
Selected data for two subsidiaries of Dunn Corp. taken from December 31, 2011 preclosing trial balances are as follows:Banks Co.debit Lamm Co.credit Shipments to Banks $ -- $150,000 Shipments from Lamm 200,000 --Intercompany inventory profit on total shipments -- 50,000 Additional data relating to
Mr. & Mrs. Dart own a majority of the outstanding capital stock of Wall Corp., Black Co., and West, Inc. During 2011, Wall advanced cash to Black and West in the amount of $50,000 and $80,000, respectively. West advanced$70,000 in cash to Black. At December 31, 2011, none of the advances was
On September 1, 2010, Phillips, Inc. issued common stock in exchange for 20% of Sago, Inc.’s outstanding common stock. On July 1, 2011, Phillips issued common stock for an additional 75% of Sago’s outstanding common stock.Sago continues in existence as Phillips’ subsidiary. How much of
When should an acquirer derecognize a contingent liability recognized as the result of an acquisition?a. When it becomes more likely than not that the firm will not be liable.b. When the contingency is resolved.c. At the end of the year of acquisition.d. When it is reasonably possible that the
On January 1, 2011, Post Inc. acquires Sam Company in a transaction properly accounted for as a business combination.Sam’s employees have share-based payments that will expire as a consequence of the business combination.In order to maintain employee morale, Post voluntarily replaces the awards
Able Corp. acquires Bailey Company in a transaction that is properly accounted for as a business acquisition. The acquisition contract and Bailey’s share-based compensation agreement require Able stock to be exchanged for Bailey common stock issued to Bailey’s employees as share-based payments.
Ross Corporation recorded a provisional amount for an identifiable asset at the date of its acquisition of Layton Inc.because the asset’s fair value was uncertain. Before the measurement period ends, Ross obtains new information that indicates that the asset was overvalued by $20,000. How should
When does the measurement period end for a business combination in which there was incomplete accounting information on the date of acquisition?a. When the acquirer receives the information or one year from the acquisition date, whichever occurs earlier.b. On the final date when all contingencies
On June 30, 2011, Wyler Corporation acquires Boston Corporation in a transaction properly accounted for as a business acquisition. At the time of the acquisition, some of the information for valuing assets was incomplete. How should Corporation Wyler, account for the incomplete information in
In a business acquisition, consideration transferred includes which of the following?I. The fair value of assets transferred by the acquirer.II. The fair value of the liabilities incurred by the acquirer.III. The fair value of contingent consideration transferred by the acquirer.IV. The fair value
In its December 31, 2011 consolidated balance sheet, what amount should Pare report as common stock?a. $ 50,000b. $100,000c. $137,500d. $150,000 Items are based on the following:On January 2, 2011, Pare Co. purchased 75% of Kidd Co.’s outstanding common stock. On that date, the fair value of the
In Pare’s December 31, 2011 consolidated balance sheet, what amount should be reported as noncontrolling interest in net assets?a. $30,000b. $35,000c. $38,750d. $40,000 Items are based on the following:On January 2, 2011, Pare Co. purchased 75% of Kidd Co.’s outstanding common stock. On that
In its December 31, 2011 consolidated statement of retained earnings, what amount should Pare report as dividends paid?a. $ 5,000b. $25,000c. $26,250d. $30,000 Items are based on the following:On January 2, 2011, Pare Co. purchased 75% of Kidd Co.’s outstanding common stock. On that date, the
In the December 31, 2011 consolidated balance sheet, noncontrolling interest should be reported ata. $200,000b. $213,000c. $233,000d. $263,000 Items are based on the following:On January 1, 2011, Ritt Corp. purchased 80% of Shaw Corp.’s $10 par common stock for $975,000. On this date, the
In the January 1, 2011 consolidated balance sheet, goodwill should be reported ata. $0b. $ 75,000c. $ 95,000d. $125,000 Items are based on the following:On January 1, 2011, Ritt Corp. purchased 80% of Shaw Corp.’s $10 par common stock for $975,000. On this date, the carrying amount of Shaw’s
Planet Company acquired a 70% interest in the Star Company in 2010. For the year ended December 31, 2011, Star reported net income of $80,000. During 2011, Planet sold merchandise to Star for $10,000 at a profit of $2,000.The merchandise remained in Star’s inventory at the end of 2011. For
P Co. purchased term bonds at a premium on the open market. These bonds represented 20% of the outstanding class of bonds issued at a discount by S Co., P’s wholly owned subsidiary. P intends to hold the bonds until maturity.In a consolidated balance sheet, the difference between the bond
Port, Inc. owns 100% of Salem, Inc. On January 1, 2011, Port sold Salem delivery equipment at a gain. Port had owned the equipment for two years and used a five-year straight-line depreciation rate with no residual value. Salem is using a three-year straight-line depreciation rate with no residual
Winston Co. owns 80% of the outstanding common stock of Foster Co. On December 31, 2010, Winston sold equipment to Foster at a price in excess of Winston’s carrying amount, but less than its original cost. On a consolidated balance sheet at December 31, 2010, the carrying amount of the equipment
Perez, Inc. owns 80% of Senior, Inc. During 2011, Perez sold goods with a 40% gross profit to Senior. Senior sold all of these goods in 2011. For 2011 consolidated financial statements, how should the summation of Perez and Senior income statement items be adjusted?a. Sales and cost of goods sold
Sun, Inc. is a wholly owned subsidiary of Patton, Inc.On June 1, 2011, Patton declared and paid a $1 per share cash dividend to stockholders of record on May 15, 2011.On May 1, 2011, Sun bought 10,000 shares of Patton’s common stock for $700,000 on the open market, when the book value per share
Wagner, a holder of a $1,000,000 Palmer, Inc. bonds, collected the interest due on March 31, 2011, and then sold the bonds to Seal, Inc. for $975,000. On that date, Palmer, a 75% owner of Seal, had a $1,075,000 carrying amount for the bonds. What was the effect of Seal’s purchase of Palmer’s
On January 1, 2011, Poe Corp. sold a machine for$900,000 to Saxe Corp., its wholly owned subsidiary. Poe paid $1,100,000 for this machine, which had accumulated depreciation of $250,000. Poe estimated a $100,000 salvage value and depreciated the machine on the straight-line method over twenty
During 2011, Pard Corp. sold goods to its 80%-owned subsidiary, Seed Corp. At December 31, 2011, one-half of these goods were included in Seed’s ending inventory. Reported 2011 selling expenses were $1,100,000 and $400,000 for Pard and Seed, respectively. Pard’s selling expenses included
Selected information from the separate and consolidated balance sheets and income statements of Pare, Inc. and its subsidiary, Shel Co., as of December 31, 2011, and for the year then ended is as follows:Pare Shel Consolidated Balance sheet accounts Accounts receivable $ 52,000 $ 38,000 $ 78,000
Parker Corp. owns 80% of Smith Inc.’s common stock.During 2011, Parker sold Smith $250,000 of inventory on the same terms as sales made to third parties. Smith sold all of the inventory purchased from Parker in 2011. The following information pertains to Smith and Parker’s sales for 2011:Parker
Clark Co. had the following transactions with affiliated parties during 2011:• Sales of $60,000 to Dean, Inc., with $20,000 gross profit. Dean had $15,000 of this inventory on hand at year-end. Clark owns a 15% interest in Dean and does not exert significant influence.• Purchases of raw
What amount should be reported as depreciation expense in Pirn’s 2011 consolidated income statement?a. $50,000b. $47,000c. $44,000d. $41,000 Items are based on the following:Scroll, Inc., a wholly owned subsidiary of Pirn, Inc., began operations on January 1, 2011. The following information is
In Pirn’s December 31, 2011, consolidating worksheet, how much intercompany profit should be eliminated from Scroll’s inventory?a. $30,000b. $20,000c. $10,000d. $ 6,000 Items are based on the following:Scroll, Inc., a wholly owned subsidiary of Pirn, Inc., began operations on January 1, 2011.
On January 1, 2011, Pane Corp. exchanged 150,000 shares of its $20 par value common stock for all of Sky Corp.’s common stock. At that date, the fair value of Pane’s common stock issued was equal to the book value of Sky’s net assets. Both corporations continued to operate as separate
On June 30, 2011, Purl Corp. issued 150,000 shares of its $20 par common stock for which it received all of Scott Corp.’s common stock. The fair value of the common stock issued is equal to the book value of Scott Corp.’s net assets.Both corporations continued to operate as separate businesses,
Matt Co. included a foreign subsidiary in its 2011 consolidated financial statements. The subsidiary was acquired in 2007 and was excluded from previous consolidations.The change was caused by the elimination of foreign ex622 change controls. Including the subsidiary in the 2011 consolidated
The determination of whether an interest holder must consolidate a variable interest entity is madea. By reassessing on an ongoing basis.b. When the interest holder initially gets involved with the variable interest entity.c. Every time the cash flows of the variable interest entity change.d.
Morton Inc., Gilman Co., and Willis Corporation established a special-purpose entity (SPE) (variable interest entity)to perform leasing activities for the three corporations.If at the time of formation the SPE is determined to be a variable interest entity subject to consolidation, which of the
It is generally presumed that an entity is a variable interest entity subject to consolidation if its equity isa. Less than 50% of total assets.b. Less than 25% of total assets.c. Less than 10% of total assets.d. Less than 10% of total liabilities.
Pride, Inc. owns 80% of Simba, Inc.’s outstanding common stock. Simba, in turn, owns 10% of Pride’s outstanding common stock. What percentage of the common stock cash dividends declared by the individual companies should be reported as dividends declared in the consolidated financial
A subsidiary was acquired for cash in a business combination on January 1, 2011. The consideration given exceeded the fair value of identifiable net assets. The acquired company owned equipment with a market value in excess of the carrying amount as of the date of combination. A consolidated
When a parent-subsidiary relationship exists, consolidated financial statements are prepared in recognition of the accounting concept ofa. Reliability.b. Materiality.c. Legal entity.d. Economic entity.
On January 1, 2011, Owen Corp. purchased all of Sharp Corp.’s common stock for $1,200,000. On that date, the fair values of Sharp’s assets and liabilities equaled their carrying amounts of $1,320,000 and $320,000, respectively. During 2011, Sharp paid cash dividends of $20,000.Selected
On January 1, 2011, Palm, Inc. purchased 80% of the stock of Stone Corp. for $4,000,000 cash. Prior to the acquisition, Stone had 100,000 shares of stock outstanding.On the date of acquisition, Stone’s stock had a fair value of$52 per share. During the year Stone reported $280,000 in net income
In Pard’s consolidated balance sheet, what was the carrying amount of the inventory that Spin purchased from Pard?a. $ 3,000b. $ 6,000c. $ 9,000d. $12,000
At December 31, 2011, what was the amount of Spin’s payable to Pard for intercompany sales?a. $ 3,000b. $ 6,000c. $29,000d. $32,000
What was the amount of intercompany sales from Pard to Spin during 2011?a. $ 3,000b. $ 6,000c. $29,000d. $32,000
Shep Co. has a receivable from its parent, Pep Co.Should this receivable be separately reported in Shep’s balance sheet and in Pep’s consolidated balance sheet?Shep’s balance sheet Pep’s consolidated balance sheeta. Yes Nob. Yes Yesc. No Nod. No Yes Items 28 through 30 are based on the
Wright Corp. has several subsidiaries that are included in its consolidated financial statements. In its December 31, 2011 trial balance, Wright had the following intercompany balances before eliminations:Debit Credit Current receivable due from Main Co. $ 32,000 Noncurrent receivable from Main Co.
In a business combination accounted for as an acquisition the appraised values of the identifiable assets acquired exceeded the acquisition price. How should the excess appraised value be reported?a. As negative goodwill.b. As additional paid-in capital.c. As a reduction of the values assigned to
Company J acquired all of the outstanding common stock of Company K in exchange for cash. The acquisition price exceeds the fair value of net assets acquired. How should Company J determine the amounts to be reported for the plant and equipment and long-term debt acquired from Company K?Plant and
A subsidiary, acquired for cash in a business combination, owned inventories with a market value greater than the book value as of the date of combination. A consolidated balance sheet prepared immediately after the acquisition would include this difference as part ofa. Deferred credits.b.
On April 1, 2011, Parson Corp. purchased 80% of the outstanding stock of Sloan Corp. for $700,000 cash. Parson determined that the fair value of the net identifiable assets was $800,000 on the date of acquisition. The fair value of Sloan’s stock at date of acquisition was $18 per share. Sloan had
On November 30, 2011, Parlor, Inc. purchased for cash at $15 per share all 250,000 shares of the outstanding common stock of Shaw Co. At November 30, 2011, Shaw’s balance sheet showed a carrying amount of net assets of$3,000,000. At that date, the fair value of Shaw’s property, plant and
Stockholders’ equity including noncontrolling interests should bea. $ 80,000b. $ 85,000c. $ 90,000d. $130,000 Items are based on the following:On January 1, 2011, Polk Corp. and Strass Corp. had condensed balance sheets as follows:Polk Strass Current assets $ 70,000 $20,000 Noncurrent assets
Noncurrent liabilities should bea. $115,000b. $109,000c. $104,000d. $ 55,000 Items are based on the following:On January 1, 2011, Polk Corp. and Strass Corp. had condensed balance sheets as follows:Polk Strass Current assets $ 70,000 $20,000 Noncurrent assets 90,000 40,000 Total assets $160,000
Current liabilities should bea. $50,000b. $46,000c. $40,000d. $30,000 Items are based on the following:On January 1, 2011, Polk Corp. and Strass Corp. had condensed balance sheets as follows:Polk Strass Current assets $ 70,000 $20,000 Noncurrent assets 90,000 40,000 Total assets $160,000 $60,000
Noncurrent assets should bea. $130,000b. $136,000c. $138,000d. $140,000 Items are based on the following:On January 1, 2011, Polk Corp. and Strass Corp. had condensed balance sheets as follows:Polk Strass Current assets $ 70,000 $20,000 Noncurrent assets 90,000 40,000 Total assets $160,000 $60,000
Current assets should bea. $ 90,000b. $ 99,000c. $100,000d. $102,000 Items are based on the following:On January 1, 2011, Polk Corp. and Strass Corp. had condensed balance sheets as follows:Polk Strass Current assets $ 70,000 $20,000 Noncurrent assets 90,000 40,000 Total assets $160,000 $60,000
With respect to the allocation of the cost of a business acquisition, ASC Topic 805 (SFAS 141[R]) requiresa. Cost to be allocated to the assets based on their carrying values.b. Cost to be allocated based on relative fair values.c. Cost to be allocated based on original costs.d. None of the above.
In accounting for a business combination, which of the following intangibles should not be recognized as an asset apart from goodwill?a. Trademarks.b. Lease agreements.c. Employee quality.d. Patents.
Lebow Corp. acquired control of Wilson Corp. by purchasing stock in steps. Which of the following regarding this type of acquisition is true?a. The cost of acquisition equals the amount paid for the previously held shares plus the fair value of shares issued at the date of acquisition.b. The
Kennedy Company is acquiring Ross Company in an acquisition. What date should be used as the acquisition date for the transaction?a. The date Kennedy signs the contract to purchase the business.b. The date Kennedy obtains control of Ross.c. The date that all contingencies related to the transaction
ASC Topic 805 (SFAS 141[R]) sets forth certain steps in accounting for an acquisition. Which of the following is not one of those steps?a. Prepare pro forma financial statements prior to acquisition.b. Determine the acquisition date.c. Identify the acquirer.d. Expense the costs and general expenses
Which of the following situations would require the use of the acquisition method in a business combination?a. The acquisition of a group of assets.b. The formation of a joint venture.c. The purchase of more than 50% of a business.d. All of the above would require the use of the acquisition method.
A business combination is accounted for appropriately as an acquisition. Which of the following should be deducted in determining the combined corporation’s net income for the current period?Direct costs of acquisition General expenses related to acquisitiona. Yes Nob. Yes Yesc. No Yesd. No No
On January 1, 2011, Lake Corporation acquired 100%of the outstanding common stock of Shore Corporation for$800,000. On the date of acquisition, the fair value of Shore’s net identifiable assets is $820,000. The book value of Shore Corporation’s net assets is $760,000. In Lake’s 2011 financial
Consolidated financial statements are typically prepared when one company has a controlling financial interest in another unlessa. The subsidiary is a finance company.b. The fiscal year-ends of the two companies are more than three months apart.c. The investee is in bankruptcy.d. The two companies
On December 31, 2011, Neal Co. issued 100,000 shares of its $10 par value common stock in exchange for all of Frey Inc.’s outstanding stock. The fair value of Neal’s common stock on December 31, 2011, was $19 per share.The carrying amounts and fair values of Frey’s assets and liabilities on
In the December 31, 2011 consolidated balance sheet, common stock should be reported ata. $3,000,000b. $3,500,000c. $4,000,000d. $5,000,000 Items are based on the following:On December 31, 2011, Saxe Corporation was acquired by Poe Corporation. In the business combination, Poe issued 200,000 shares
In the December 31, 2011 consolidated balance sheet, additional paid-in capital should be reported ata. $ 950,000b. $1,300,000c. $1,450,000d. $2,900,000 Items are based on the following:On December 31, 2011, Saxe Corporation was acquired by Poe Corporation. In the business combination, Poe issued
On August 31, 2011, Wood Corp. issued 100,000 shares of its $20 par value common stock for the net assets of Pine, Inc., in a business combination accounted for by the acquisition method. The market value of Wood’s common stock on August 31 was $36 per share. Wood paid a fee of$160,000 to the
Which of the following expenses related to the business acquisition should be included, in total, in the determination of net income of the combined corporation for the period in which the expenses are incurred?Fees of finders and consultants Registration fees for equity securities issueda. Yes
On April 1, 2011, Dart Co. paid $620,000 for all the issued and outstanding common stock of Wall Corp. The recorded assets and liabilities of Wall Corp. on April 1, 2011, follow:Cash $ 60,000 Inventory 180,000 Property and equipment (net of accumulated depreciation of $220,000) 320,000 Goodwill
Filigree Corporation prepares its financial statements in accordance with IFRS. Filigree acquired equipment by issuing 5,000 shares of its common stock. How should this transaction be reported on the statement of cash flows?a. As an outflow of cash from investing activities and an inflow of cash
Rice Corporation prepares its financial statements in accordance with IFRS. Rice must report amounts paid for interest on a note payable on the statement of cash flowsa. In operating activities.b. In financing activities.c. Either in operating activities or financing activities.d. Either in
Bee Co. uses the direct write-off method to account for uncollectible accounts receivable. During an accounting period, Bee’s cash collections from customers equal sales adjusted for the addition or deduction of the following amounts:Accounts written off Increase in accounts receivable balancea.
Net cash used in investing activities during 2010 wasa. $ 80,000b. $530,000c. $610,000d. $660,000 Items relate to data to be reported in the statement of cash flows of Debbie Dress Shops, Inc. based on the following information:Debbie Dress Shops, Inc.BALANCE SHEETS December 31 2010 2009 Assets
Net cash provided by financing activities for 2010 totaleda. $140,000b. $300,000c. $500,000d. $700,000 Items relate to data to be reported in the statement of cash flows of Debbie Dress Shops, Inc. based on the following information:Debbie Dress Shops, Inc.BALANCE SHEETS December 31 2010 2009
Cash payments during 2010 on accounts payable to suppliers amounted toa. $4,670,000b. $4,910,000c. $5,000,000d. $5,150,000 Items relate to data to be reported in the statement of cash flows of Debbie Dress Shops, Inc. based on the following information:Debbie Dress Shops, Inc.BALANCE SHEETS
Cash collected during 2010 from accounts receivable amounted toa. $5,560,000b. $5,840,000c. $6,140,000d. $6,400,000 Items relate to data to be reported in the statement of cash flows of Debbie Dress Shops, Inc. based on the following information:Debbie Dress Shops, Inc.BALANCE SHEETS December 31
Net cash provided by financing activities wasa. $ 20,000b. $ 45,000c. $150,000d. $205,000 Items are based on the following:The differences in Beal Inc.’s balance sheet accounts at December 31, 2010 and 2009, are presented below.Increase(Decrease)Assets Cash and cash equivalents $ 120,000
Net cash used in investing activities wasa. $1,005,000b. $1,190,000c. $1,275,000d. $1,600,000 Items are based on the following:The differences in Beal Inc.’s balance sheet accounts at December 31, 2010 and 2009, are presented below.Increase(Decrease)Assets Cash and cash equivalents $ 120,000
Net cash provided by operating activities wasa. $1,160,000b. $1,040,000c. $ 920,000d. $ 705,000 Items are based on the following:The differences in Beal Inc.’s balance sheet accounts at December 31, 2010 and 2009, are presented below.Increase(Decrease)Assets Cash and cash equivalents $ 120,000
Which of the following should not be disclosed in an enterprise’s statement of cash flows prepared using the indirect method?a. Interest paid, net of amounts capitalized.b. Income taxes paid.c. Cash flow per share.d. Dividends paid on preferred stock.D. Example of Statement of Cash Flows
Would the following be added back to net income when reporting operating activities’ cash flows by the indirect method?Excess of treasury stock acquisition cost over sales proceeds (cost method)Bond discount amortizationa. Yes Yesb. No Noc. No Yesd. Yes No
How should a gain from the sale of used equipment for cash be reported in a statement of cash flows using the indirect method?a. In investment activities as a reduction of the cash inflow from the sale.b. In investment activities as a cash outflow.c. In operating activities as a deduction from
In a statement of cash flows (using indirect approach for operating activities) an increase in inventories should be presented as a(n)a. Outflow of cash.b. Inflow and outflow of cash.c. Addition to net income.d. Deduction from net income.
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