Questions and Answers of Accounting Principles IFRS

Contrast the effects of a cash dividend and a share dividend on a company’s statement of financial position.
Use the equity section of an annual report and identify the major components.InstructionsSelect a well-known company, search the Internet for its most recent annual report, and then answer the
The equity section of Ahab SA at December 31 is as follows.Ahab SAStatement of Financial Position (partial)EquityShare capital—preference, cumulative, 10,000 shares authorized, 5,000shares issued
On June 1, Federia Ltd. issues 4,500 no-par ordinary shares at a cash price of HK$6 per share. Journalize the issuance of the shares assuming the shares have a stated value of HK$2 per share.
The treasury shares purchased in Question 13 are resold by Luz A/S for €13,000. What effect does this transaction have on(a) Net income,(b) Total assets,(c) Retained earnings,(d) Total equity?
Luz A/S purchases 1,000 shares of its own previously issued €5 par value ordinary shares for €9,000. Assuming the shares are held in the treasury, what effect does this transaction have on(a) Net
Why are ordinary shares usually not issued at a price that is less than par value?
What factors help determine the market price of shares?
Which is the better investment—ordinary shares with a par value of W5,000 per share, or ordinary shares with a par value of W20,000 per share? Why?
Data pertaining to Pelmar Co. are presented in BE12.9. Instead of payment from personal assets, assume that Fernetti receives €24,000 from partnership assets in withdrawing from the firm.
Your roommate argues that partnership assets should be revalued in situations like those in Question 21. Why is this generally not done?
The financial statements of Apple are presented in Appendix D. The complete annual report, including the notes to the fi nancial statements, is available at the company’s website.InstructionsRefer
Briefly describe some of the similarities and differences between GAAP and IFRS with respect to the accounting for liabilities.
The financial statements of TSMC appear in Appendix A. The complete annual report, including the notes to the fi nancial statements, is available at the company’s website.InstructionsRefer to
Presented below is a list of possible transactions.1. Purchased inventory for €80,000 on account (assume perpetual system is used).2. Issued an €80,000 note payable in payment on account (see
Diaz SLU was organized on January 1. During the first year of operations, the following plant asset expenditures and receipts were recorded in random order.InstructionsAnalyze the foregoing
Presented below are two independent transactions. Both transactions have commercial substance.1. Global Co. exchanged old trucks (cost £64,000 less £22,000 accumulated depreciation) plus cash of
Match the statement with the term most directly associated with it.a. Goodwillb. Intangible assetsc. Development expenses d. Amortizatione. Franchisesf. Development costs1. ______ Rights,
At the end of its first year of operations, Brianna Industries chose to use the revaluation framework allowed under IFRS. Brianna’s ledger shows Equipment £480,000 and Accumulated
At the end of its fi rst year of operations, Brianna Industries chose to use the revaluation framework allowed under IFRS. Brianna’s ledger shows Equipment £480,000 and Accumulated
Mandall Ltd. constructed a warehouse for £280,000. Mandall estimates that the warehouse has a useful life of 20 years and no residual value. Construction records indicate that £40,000 of the cost
You are comparing two companies in the same industry. You have determined that Lam Ltd. depreciates its plant assets over a 40-year life, whereas Shuey Ltd. depreciates its plant assets over a
What is revaluation of plant assets? When should revaluation be applied?
Hilda and Tim Piwek own Campus Fashions. From its inception, Campus Fashions has sold merchandise on either a cash or credit basis, but no credit cards have been accepted. During the past several
Nestlé’s financial statements are presented in Appendix B. Financial statements of Delfi Limited are presented in Appendix C.Instructionsa. Based on the information in these financial statements,
Nestlé’s fi nancial statements are presented in Appendix B. Financial statements of Delfi Limited are presented in Appendix C.Instructionsa. Based on the information in these financial statements,
CAF AG sells office equipment and supplies to many organizations in the city and surrounding area on contract terms of 2/10, n/30. In the past, over 75% of the credit customers have taken advantage
Presented below are two independent situations.Instructionsa. On April 2, Jennifer Elston uses her IKEA (SWE) credit card to purchase merchandise from an IKEA store for €1,500. On May 1, Elston is
Compute interest and find the maturity date for the following notes. Date of Maturity Annual Total Note Terms Date Principal Interest Rate Interest а. April 1 b. July 2 c. March 7 60 days 30 days ?
What is the difference between an account receivable and a note receivable?
Yi Ltd. has the following opening account balances in its general and subsidiary ledgers on January 1 and uses the periodic inventory system. All accounts have normal debit and credit balances
Koto Merchants uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledgers for
The post-closing trial balance for Horner Autos is shown below.The subsidiary ledgers contain the following information: (1) accounts receivable—B. Hannigan €2,500, I. Kirk €7,500, and T.
Presented below are the purchases and cash payments journals for Adhikari Group for its first month of operations (amounts in thousands).In addition, the following transactions have not been
Selected accounts from the chart of accounts of Meng Enterprises are shown below.The cost of all merchandise sold was 60% of the sales price. During January, Meng completed the following transactions
Presented below is information related to Chiu Wai Electronics for its first month of operations (amounts in thousands). Determine the balances that appear in the accounts payable subsidiary ledger.
Indicate whether each of the following debits and credits is included in the cash receipts journal. (Use “Yes” or “No” to answer this question.)a. Debit to Sales Revenue.b. Credit to
The financial statements of Apple are presented in Appendix D. The complete annual report, including the notes to its financial statements, is available at the company’s website.
Briefly describe some of the similarities and differences between GAAP and IFRS with respect to the accounting for inventories.
Zambian Co. uses a periodic inventory system. Its records show the following for the month of May, in which 68 units were sold.InstructionsCompute the ending inventory at May 31 and cost of goods
Early in 2020, Lausanne Clocks switched to a just-in-time inventory system. Its sales, cost of goods sold, and inventory amounts for 2019 and 2020 are shown below.Determine the inventory turnover and
Guo Hardware sells three different categories of tools (small, medium, and large). The cost and net realizable value of its inventory of tools are as follows.Determine the value of the company’s
Data for Tatung Electronics are presented in BE6.3. Compute the cost of the ending inventory under the LIFO method, assuming there are 420 units on hand.BE6.3In its first month of operations, Tatung
No financial decision-maker should ever rely solely on the financial information reported in the annual report to make decisions. It is important to keep abreast of financial news. This activity
No financial decision-maker should ever rely solely on the financial information reported in the annual report to make decisions. It is important to keep abreast of fi nancial news. This activity
J. Zheng, a former professional tennis star, operates Zheng’s Tennis Shop at the Yalong River Resort. At the beginning of the current season, the ledger of Zheng’s Tennis Shop showed Cash
Vree Distributors completed the following merchandising transactions in the month of April. At the beginning of April, the ledger of Vree showed Cash of €8,000 and Owner’s Capital of
Explain where each of the following items would appear on an income statement:(a) Gain on sale of equipment,(b) Interest expense,(c) Casualty loss from vandalism,(d) Cost of goods sold,(e)
Most companies have established home pages on the Internet, e.g., Gitanjali Group (IND) and Wumart (CHN).InstructionsExamine the home pages of any two companies and answer the following questions.a.
Nestlé’s financial statements are presented in Appendix B. Financial statements for Delfi Limited are presented in Appendix C.Instructionsa. Based on the information contained in these financial
The following are the major statement of financial position classifications.Intangible assets (IA)
What standard classifications are used in preparing a classified statement of financial position?
The financial statements of TSMC are presented in Appendix A at the end of this textbook. The complete annual report, including the notes to the financial statements, is available at the company’s
The fi nancial statements of TSMC are presented in Appendix A at the end of this textbook. The complete annual report, including the notes to the fi nancial statements, is available at the
The following data are taken from the comparative statements of financial position of Newman Billiards Club, which prepares its financial statements using the accrual basis of accounting.Members are
The adjusted trial balance for Matusiak OAO is given in E3.17.InstructionsPrepare the income and owner’s equity statements for the year and the statement of financial position at August 31.E3.17The
Selected accounts of Al-Kazaz Interiors are shown as follows.InstructionsAfter analyzing the accounts, journalize (a) the July transactions and (b) the adjusting entries that were made on July 31.
Hwang Ltd. has the following balances in selected accounts on December 31, 2020.Accounts Receivable NT$ .................................................. –0–Accumulated Depreciation—Equipment
Below is a list of concepts in the left column, with a description of the concept in the right column. There are more descriptions provided than concepts. Match the description of the concept to the
Below is a list of concepts in the left column, with a description of the concept in the right column. There are more descriptions provided than concepts. Match the description of the concept to the
The financial statements of Apple Inc. are presented in Appendix D. The complete annual report, including the notes to its financial statements, is available at the company’s website.
If you haven’t already done so, in the not-too-distant future you will prepare a résumé. In some ways, your résumé is like a company’s annual report. Its purpose is to enable others to
Much information about specific companies is available on the Internet. Such information includes basic descriptions of the company’s location, activities, industry, financial health, and financial
Nestlé’s financial statements are presented in Appendix B. Financial statements for Delfi Limited are presented in Appendix C.Instructionsa. Based on the information contained in the financial
The financial statements of TSMC are presented in Appendix A. The notes accompanying the statements contain the following selected accounts. The complete annual report, including the notes to the
The bookkeeper for J.L. Kang Equipment Repair made a number of errors in journalizing and posting, as described below.1. A credit posting of $525 to Accounts Receivable was omitted.2. A debit posting
Tom Rast engaged in the following activities in establishing his photography studio, Picture This!:1. Opened a bank account in the name of Picture This! and deposited £6,500 of his own money into
For each of the following accounts, indicate the effects of(a) A debit and(b) A credit on the accounts(c) The normal balance of the account.1. Accounts Payable.2. Advertising Expense. 3. Service
An analysis of transactions for Kang & Co. was presented in E1.8.InstructionsPrepare an income statement and an owner’s equity statement for August and a statement of financial position at
An analysis of the transactions made by Kang & Co., a public accounting firm, for the month of August is shown below. The expenses were £560 for rent, £4,800 for salaries and wages, and £400
Selected transactions for Spring Cruises are listed below.1. Made cash investment to start business.2. Paid monthly rent.3. Purchased equipment on account.4. Billed customers for services
a. The following are users of financial statements.Customers ................................... Financial regulatorsTax authorities ........................... Store managerLabor unions
a. The following are users of financial statements.Customers ................................... Financial regulatorsTax authorities ........................... Store managerLabor unions
Using a financial calculator, solve for the unknowns in each of the following situations.(a) On June 1, 2016, Jennifer Lawrence purchases lakefront property from her neighbor, Josh Hutcherson, and
Gleason Enterprises issued 6%, 8-year, $2,500,000 par value bonds that pay interest semiannually on October 1 and April 1. The bonds are dated April 1, 2017, and are issued on that date. The
Assume the same information as BEG-13 except that the discount rate is 12% instead of 10%. In this case, how much can Dempsey expect to receive from the sale of these bonds?BEG-13Dempsey Railroad
Messi Company is considering an investment that will return a lump sum of $900,000 6 years from now. What amount should Messi Company pay for this investment to earn an 8% return?
For each of the following cases, indicate(a) What interest rate columns(b) What number of periods you would refer to in looking up the discount rate.(1) In Table 3 (present value of 1):(2) In Table 4
Bates Company issued $1,000,000, 10-year bonds and agreed to make annual sinking fund deposits of $78,000. The deposits are made at the end of each year into an account paying 6% annual interest.
For each of the following cases, indicate(a) What interest rate columns(b) What number of periods you would refer to in looking up the future value factor.(1) In Table 1 (future value of 1):(2) In
Refer back to E26-10 to address the following.Instructions Prepare a memo to Maria Fierro, your supervisor. Show your calculations from E26-10 (a) and (b). In one or two paragraphs, discuss
Waterways Corporation puts much emphasis on cash flow when it plans for capital investments. The company chose its discount rate of 8% based on the rate of return it must pay its owners and
Recently, Mike Cichanowski, owner and CEO of Current Designs, received a phone call from the president of a brewing company. He was calling to inquire about the possibility of Current Designs
The management of Shatner Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a component of the
From the time you first entered school many years ago, instructors have been measuring and evaluating you by imposing standards. In addition, many of you will pursue professions that administer
Waterways Corporation uses very stringent standard costs in evaluating its manufacturing efficiency. These standards are not “ideal” at this point, but management is working toward that as a
Using the information in P25-5A, compute the overhead controllable variance and the overhead volume variance.Hart Labs, Inc. provides mad cow disease testing for both state and federal governmental
Using the information in P25-3A, compute the overhead controllable variance and the overhead volume variance. Standard (per unit) 8 yards at $4.40 per yard Cost Element Actual $375,575 for 90,500
Using the information in P25-2A, compute the overhead controllable variance and the overhead volume variance. Costs and Production Data Actual Standard Raw materials unit cost $2.25 $2.10 Raw
Using the information in P25-1A, compute the overhead controllable variance and the overhead volume variance.P25-1ARogen Corporation manufactures a single product. The standard cost per unit of
Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,900 units of Product B was received. The standard cost of one unit of
Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2017.Overhead is applied on the basis of standard machine hours. Three hours of machine
Fisk Company uses a standard cost accounting system. During January, the company reported the following manufacturing variances.In addition, 8,000 units of product were sold at $8 per unit. Each unit
Green Pastures is a 400-acre farm on the outskirts of the Kentucky Bluegrass, specializing in the boarding of broodmares and their foals. A recent economic downturn in the thoroughbred industry has
The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 4,000 kayaks during 2017. Each kayak will require 54 pounds
Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The
Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The
Clarke Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2017, are as shown below.In addition, Clarke incurs $180,000 of
Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2017. The following data were used in
The Dinkle and Frizell Dental Clinic provides both preventive and orthodontic dental services. The two owners, Reese Dinkle and Anita Frizell, operate the clinic as two separate investment centers:

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