Berful Industries, a US corporation using US GAAP accounting standards, asks your advice in preparing its year end financial statements Indicate your answer by checking the appropriate line next to your selected answer Berful is planning to acquire another company this year, and hopes to avoid the recognition of goodwill Will the recognition of goodwill reduce the net income of Berful in the year of acquisition Yes No Berful is reducing the dividends it declares Will this increase net income in the year declared Yes No Berful plans to acquire land to use as a future plant site Will the company depreciate the land when it is used as a building site for a new plant Yes No Berful purchased a patent from another company this year, believing that the patents value was grossly understated It intends to value the patent for balance sheet purposes at its fair market value Is this correct Yes No Berful is being sued in court in a contract dispute Its attorneys indicate that it is likely that the firm will lose when the court renders its verdict next year Is this loss required to be reported this year or next year This year Next year Berful plans to purchase treasury stock this year, and to classify it as a current asset on its balance sheet carried at its historical cost Is this correct Yes No

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Posted on Aug 12, 2020

Berful Industries, a US corporation using US GAAP accounting standards, asks your advice in preparing its year-end financial statements. Indicate your answer by checking the

Berful Industries, a US corporation using US GAAP accounting standards, asks your advice in preparing its year-end financial statements. Indicate your answer by checking the appropriate line next to your selected answer.

Berful is planning to acquire another company this year, and hopes to avoid the recognition of goodwill. Will the recognition of goodwill reduce the net income of Berful in the year of acquisition? Yes _____ No _____

Berful is reducing the dividends it declares. Will this increase net income in the year declared? Yes _____ No _____

Berful plans to acquire land to use as a future plant site. Will the company depreciate the land when it is used as a building site for a new plant? Yes _____ No _____

Berful purchased a patent from another company this year, believing that the patent’s value was grossly understated. It intends to value the patent for balance sheet purposes at its fair market value. Is this correct? Yes _____ No _____

Berful is being sued in court in a contract dispute. Its attorneys indicate that it is likely that the firm will lose when the court renders its verdict next year. Is this loss required to be reported this year or next year? This year _____ Next year _____

Berful plans to purchase treasury stock this year, and to classify it as a current asset on its balance sheet carried at its historical cost. Is this correct? Yes _____ No _____

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Berful is going to select straightline depreciation for the new assets it acquires this year instead of the sumoftheyearsdigits method Does this incre... blur-text-image