On January 1, 2015, W. Poon Inc. purchased equipment with a cost of HK$4,668,000 a useful life of 12 years and no salvage value. The company uses straight-line depreciation. At December 31, 2015, the company determines that impairment indicators are present. The fair value less cost to sell the asset is estimated to be Hk$4,620,000. The assets value-in-use is estimated to be HK$4,305,000. There is no change in the assets useful life or salvage value. The 2015 income statement will report Loss on Impairment of a. HK$0. b. HK$341,000. c. HK$48,000. d. HK$26,000 Question 22 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text The failure to record a purchase of merchandise on account even though the goods are properly included in the physical inventory results in a. an understatement of liabilities and an overstatement of equity b. an overstatement of assets and net income c. an understatement of cost of goods sold and liabilities and an overstatement of assets d. an understatement of assets and net income. Question 23 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Lewis Company traded machinery with a book value of $190,000 and a fair value of $180,000. It received in exchange from Timmons Company a machine with a fair value of $200,000. Lewis also paid cash of $20,000 in the exchange. Timmonss machine has a book value of $190,000. What amount of gain or loss should Lewis recognize on the exchange? a. $1,000 loss b. $10,000 loss c. $20,000 gain d. $ -0-. Question 24 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text The primary purpose of the statement of cash flows is to provide information Select one: a. that is useful in assessing cash flow prospects. b. about the operating, investing, and financing activities of a company during a period. c. about the cash receipts and cash payments of a company during a period. d. about the entity's ability to meet its obligations, its ability to pay dividends, and its needs for external financing. Question 25 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Depreciation is normally computed on the basis of the nearest a. day and to the nearest cent. b. full month and to the nearest dollar c. day and to the nearest dollar d. full month and to the nearest cent Question 26 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Black Corporation had a 1/1/15 balance in the Allowance for Doubtful Accounts of $12,000. During 2015, it wrote off $8,640 of accounts and collected $2,520 on accounts previously written off. The balance in Accounts Receivable was $240,000 at 1/1 and $288,000 at 12/31. At 12/31/15, Black estimates that 5% of accounts receivable will prove to be uncollectible. What should Black report as its Allowance for Doubtful Accounts at 12/31/15? Select one: a. $8,280 b. $5,880 c. $14,400 d. $5,760 Question 27 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text The net income for Akira Industries for 2016 was 302,000. During 2016, depreciation on plant assets was 114,000, amortization of patent was 50,000, and the company incurred a loss on sale of plant assets of 27,000. What is the net cash flow from operating activities? Select one: a. 493,000 b. 339,000 c. 439,000 d. 111,000 Question 28 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Sauder Corporation reports the following information: Net income HK$750,000 Depreciation expense 210,000 Increase in accounts receivable 90,000 Sauder should report cash provided by operating activities of a. HK$450,000. b. HK$1,050,000. c. HK$870,000. d. HK$630,000 Question 29 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text The third step in the process for revenue recognition is to Select one: a. allocate transaction price to the separate performance obligations. b. recognize revenue when each performance obligation is satisfied. c. determine the transaction price d. identify the separate performance obligations in the contract. Question 30 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text The following information is available for Naab Company for 2015: Freight-in $ 30,000 Purchase returns 75,000 Selling expenses 150,000 Ending inventory 260,000 The cost of goods sold is equal to 400% of selling expenses. What is the cost of goods available for sale? Select one: a. $890,000 b. $860,000. c. $600,000. d. $815,000. Question 31 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Ecker Company purchased a new machine on May 1, 2007 for $176,000. At the time of acquisition, the machine was estimated to have a useful life of ten years and an estimated salvage value of $8,000. The company has recorded monthly depreciation using the straight-line method. On March 1, 2016, the machine was sold for $24,000. What should be the loss recognized from the sale of the machine? a. $11,600 b. $3,600. c. $0. d. $8,000 Question 32 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text How should research and development costs be accounted for, according to an IASB Statement? a. Must be expensed in the period incurred unless it can be clearly demonstrated that the expenditure will have alternative future uses or unless contractually reimbursable. b. Must be capitalized when incurred and then amortized over their estimated useful lives. c. May be either capitalized or expensed when incurred, depending upon the materiality of the amounts involved d. Must be expensed in the period incurred. Question 33 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text A change accounting principle that the cumulative effect of the change for prior periods be shown as an adjustment to a. beginning retained earnings for the earliest period presented. b. comprehensive income for the earliest period presented c. stockholders equity for the period in which the change occurred d. net income for the period in which the change occurred Question 34 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text In 2015, Esther Corporation reported net income of $1,000,000. It declared and paid preference dividends of $250,000 and ordinary share dividends of $100,000. During 2015, Esther had a weighted average of 250,000 ordinary shares outstanding. Compute Esther's 2015 earnings per share. a. $2.60 b. $4.00 c. $5.00 d. $3.00 Question 35 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Operating losses incurred during the start-up years of a new business should be a. accounted for and reported like the operating losses of any other business. b. written off directly against retained earnings c. capitalized as a deferred charge and amortized over five years. d. capitalized as an intangible asset and amortized over a period not to exceed 20 years. Question 36 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Marle Construction enters into a contract with a customer to build a warehouse for $850,000 on March 30, 20155 with a performance bonus of $50,000 if the building is completed by July 31, 2015. The bonus is reduced by $10,000 each week that completion is delayed. Marle commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability July 31, 2015 65% August 7, 2015 25% August 14, 2015 5% August 21, 2015 5% The transaction price for this transaction is Select one: a. $895,000 b. $552,500 c. $585,000 d. $850,000 Question 37 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text When inventory is misstated, its presentation lacks? a. Comparability. b. Relevance. c. Faithful representation. d. All of the choices are correct. Question 38 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Use the following information (in thousands): Sales revenue 300,000 Gain on sale of equipment 90,000 Cost of goods sold 164,000 Interest expense 16,000 Selling & administrative expenses 30,000 Income tax rate 30% Determine the amount of income before taxes. a. 76,000 b. 60,000 c. 180,000 d. 196,000 Question 39 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Malrom Manufacturing Company acquired a patent on a manufacturing process on January 1, 2014 for $4,000,000. It was expected to have a 10 year life and no residual value. Malrom uses straight-line amortization for patents. On December 31, 2015, the recoverable amount of the patent was estimated to be $2,720,000. At what amount should the patent be carried on the December 31, 2015 balance sheet? a. $3,600,000 b. $3,200,000 c. $4,000,000 d. $2,720,000 Question 40 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Winsor Co. records purchases at net amounts. On May 5 Winsor purchased merchandise on account, $16,000, terms 2/10, n/30. Winsor returned $1,200 of the May 5 purchase and received credit on account. At May 31 the balance had not been paid. The amount to be recorded as a purchase return is a. $1,224. b. $1,080. c. $1,176. d. $1,200. Question 41 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Use of the sum-of-the-years'-digits method a. results in residual value being ignored b. All of these answer choices are correct. c. means the book value should not be reduced below residual value d. means the denominator is the years remaining at the beginning of the year. Question 42 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text The total amount of patent cost amortized to date is usually a. reflected as credits in the Patent account b. shown in a separate Accumulated Patent Amortization account which is shown contra to the Patent account. c. shown in the current income statement d. reflected as a contra property, plant and equipment item Question 43 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text A machine with a five-year estimated useful life and an estimated 10% residual value was acquired on January 1, 2013. The depreciation expense for 2015 using the double-declining balance method would be original cost multiplied by a. 40% 40%. b. 90% 60% 40%. c. 60% 60% 40%. d. 90% 40% 40%. Question 44 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Laventhol Corporation had accounts receivable of 100,000 at 1/1. The only transactions affecting accounts receivable were sales of 900,000 and cash collections of $850,000. The accounts receivable turnover is Select one: a. 6.6 b. 6.0 c. 9.0 d. 7.2 Question 45 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Arreaga Corp. has a tax rate of 40 percent and income before non-operating items of $262,000. It also has the following items (gross amounts). Unusual loss $ 37,000 Discontinued operations loss 101,000 Gain on disposal of equipment 8,000 Change in accounting principle increasing prior year's income 53,000 What is the amount of income tax expense Arreaga would report on its income statement? a. $104,800 b. $74,000 c. $93,200 d. $111,200 Question 46 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text The following information on selected cash transactions for 2016 has been provided by Mancuso Company: Proceeds from sale of land $160,000 Proceeds from long-term borrowings 400,000 Purchases of plant assets 144,000 Purchases of inventories 680,000 Proceeds from sale of Mancuso ordinary shares 240,000 What is the cash provided (used) by investing activities for the year ended December 31, 2016, as a result of the above information? Select one: a. $160,000. b. $256,000. c. $16,000 d. $800,000. Question 47 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text During 2015, Eldred Corporation acquired a mineral mine for $1,500,000 of which $200,000 was ascribed to land value after the mineral has been removed. Geological surveys have indicated that 10 million units of the mineral could be extracted. During 2015, 1,500,000 units were extracted and 1,200,000 units were sold. What is the amount of depletion expensed for 2015? a. $130,000. b. $156,000 c. $195,000. d. $180,000 Question 48 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Vivian, Inc had net sales in 2015 of 700,000. At December 31, 2015, before adjusting entries, the balances in selected accounts were: accounts receivable 125,000 debit, and allowance for doubtful accounts 1,200 debit. Vivian estimates that 2% of its net accounts receivable will prove to be uncollectable. What is the cash realizable value of the receivables reported on the statement of financial position at December 31, 2015? Select one: a. 112,200 b. 111,000 c. 109,800 d. 122,500 Question 49 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text The IASB's standard-setting structure includes all of the following except: Select one: a. IFRS Comparison Committee b. IFRS Advisory Council c. IFRS Interpretations Committee d. Trustees Question 50 Not yet answered Marked out of 1.00 Not flaggedFlag question Question text Which inventory costing method most closely approximates current cost for ending inventory? a. LIFO b. Specific identification c. FIFO d. Average