Question
1. Alec Company had 40,000 shares of common stock outstanding on January 1, 2018. On April 1, 2018, the company issued 20,000 shares of common
1. Alec Company had 40,000 shares of common stock outstanding on January 1, 2018. On April 1, 2018, the company issued 20,000 shares of common stock. The company had outstanding fully vested incentive stock options for 10,000 shares, exercisable at $10. The average market price of common stock for the year was $12. What rounded number of stock shares should be used in computing diluted earnings per share?
A. 46,667
B. 56,667
C. 65,000
D. 55,000
2. On June 4, Black Corporation issued $400 million worth of bonds for $386 million. During the same year, $1 million of the bond discount was amortized. In a statement of cash flows prepared by the indirect method, Black Corporation should report a/an
A. investing activity of $386 million.
B. deduction from net income of $1 million.
C. addition to net income of $1 million.
D. financing activity of $400 million.
3. Under IFRS, a deferred tax asset for stock options is
A. the portion of the options' intrinsic value earned to date times the tax rate.
B. the tax rate times the amount of compensation.
C. not created if the award is "in the money"that is, if it has intrinsic value.
D. created for the cumulative amount of the fair value of the options the company has recorded for compensation expense.
4. A change _______ would not be accounted for using the retrospective approach.
A. from the equity method of accounting for investments
B. of depreciation methods
C. from LIFO to FIFO inventory costing
D. in accounting for long-term construction contracts by recognizing revenue over time rather than when the contract is completed
5. Selected information from Gigantic Corporation's accounting records and financial statements for 2018 is as shown ($ in millions):
Cash paid to acquire a patent $28
Treasury stock purchased for cash 25
Proceeds from sale of land and buildings 45
Gain from the sale of land and buildings 26
Investment revenue received 5
Cash paid to acquire office equipment 40
Gigantic prepares its financial statements in accordance with IFRS. In its statement of cash flows, Gigantic most likely reports net cash outflows from investing activities of
A. $68 million. C. $38 million.
B. $28 million. D. $18 million.
6. A change _______ would not be accounted for using the prospective approach.
A. to LIFO from average costing for inventories
B. from application of the LCNRV rule from individual item costing to an aggregate costing approach
C. from double-declining balance to straight-line depreciation
D. from straight-line to double-declining balance depreciation
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started