50. On February 10, 20x6, Shirona Corporation purchased $17,432 of stocks classified as FVPL securities. On December 31, 20x6, the market value of these securities was $18,341. Which of the following is true of Shirona? ( ) a. Shironas net income for 20x6 has decreased by $909 due to the value change of the securities. b. Shironas net income for 20x6 is unaffected by the value change of the securities. c. Shironas book value of the securities is $18,341 as of 1/1/20x7. d. None of the above is true.

51. On July 17, 20x6, Shando Corporation purchased $27,250 of stocks classified as FVOCI securities. On December 31, 20x6, the market value of these securities was $25,340. Which of the following is true of Shando? ( ) a. Shandos equity has decreased by $1,910 due to the value change of the securities in 20x6. b. Shandos net income for 20x6 is unaffected by the value change of the securities. c. Shandos book value of unrealized holding loss for the securities is $1,910 as of 1/1/20x7. d. All of the above are true.

52. Sky Co. was holding FVOCI securities in its portfolio. The securities were originally purchased for $12,500 on January 15, 20x3. The market value of the portfolio was $13,000 at 12/31/20x3, $15,000 at 12/31/20x4, and $14,500 at 12/31/20x5. On January 25, 20x6, the company sold the entire portfolio for $16,000. Which of the following is true of Sky Co.? ( ) a. The balance sheet as of 1/1/20x4 showed $500 unrealized holding gains in the equity. b. The balance sheet as of 1/1/20x5 showed $2,000 unrealized holding gains in the equity. c. The income statement for 20x6 showed $1,500 gains from sale of securities. d. All of the above are true.

53. A long-term assets book value is equal to: ( ) a. acquisition cost less accumulated depreciation b. acquisition cost plus residual value of the asset c. present value of forecasted future cash flows of the asset less accumulated depreciation d. present value of forecasted future cash flows of the asset plus residual value of the asset.

54. How are advertising costs and research & development costs typically handled? ( ) a. capitalized and will appear as long-lived assets b. capitalized and will appear as current assets c. expensed in the period incurred d. capitalized and will appear within the stockholders equity section

55. Laupa Corporation has determined that the value of one of their machines is impaired. According to the most recent financial statement, the cost of the machine is $48,000 and accumulated depreciation is $12,000. Based upon an analysis of future cash flows conducted by a company accountant with cooperation from the marketing department, it has been determined that the machine will create $5,000 cash flows annually for the remaining useful life of 3 years. Assuming the discount rate is 7%, determine the amount of impairment loss that may be recognized. a. $0 ( ) b. $22,878.42 c. $26,927.56 d. None of the above

56. The Portland Companys most recent financial statements indicate that their plant and equipment have an original cost of $21,000,000. Assuming that accumulated depreciation is $12,000,000, and the annual SL depreciation is $1,500,000, what must be the average age of these assets? The company always purchases new plant & equipment. ( ) a. 6 years b. 8 years c. 14 years d. None of the above Use the following information to complete problems

57~59. Radio station WSHL-FM purchases a new frequency modulation transmitter for $17,000. The transmitter is expected to have an expected life of five years at which time it is expected to have a salvage value of $2,000. The transmitter was purchased on January 1 of year 1.

57. Assuming that WSHL-FM uses the sum-of-the-years digits method, determine the amount of depreciation expense for year 1 and year 2: ( ) a. year 1: $3,000, year 2: $3,000 b. year 1: $6,800, year 2: $4,080 c. year 1: $5,000, year 2: $4,000 d. year 1: $4,000, year 2: $4,000

58. Assume that WSHL-FM feels that the units-of-production-method is the most appropriate method to determine depreciation. Assuming that WSHL-FM has determined that the transmitter will have an expected life of 30,000 broadcasting hours determine the amount of depreciation expense during year one and year two. Assume that the transmitter will have a salvage value of $2,000 at the end of its life. The transmitter was used for 10,000 hours during year 1 and for 5,000 during year 2. ( ) a. year 1: $3,000, year 2: $3,000 b. year 1: $6,800, year 2: $4,080 c. year 1: $5,000, year 2: $4,000 d. year 1: $5,000, year 2: $2,500

59. Assume that on January 1 of year 2, WSHL-FM received notification from the Federal Communications Commission indicating that analog FM transmitters will no longer be allowed. Effective immediately, all radio stations must purchase new upgraded digital transmitters. Accordingly, WSHL-FMs current transmitter is deemed to be worth $2,000, which is the net value to be realized if it is sold now. Assuming that WSHL-FM has been using straight-line depreciation, what is the amount of the write-off required on January 1 of year two to recognize the impaired value? ( ) a. $12,000 b. $14,000 c. $17,000 d. $15,000

60. If the coupon rate of a bond is greater than the going market interest rate, we say that the bond is issued at a: ( ) a. face value b. premium c. discount d. default