Question 4(2 points)

A firm has a weighted average number of 20,000 common shares selling at an average of $10 throughout the year and 11,000, 10 percent cumulative, $100 par value preferred shares. If the firm earns $210,000 after taxes, what is its Basic EPS?

Question 4 options:

$5.00 / share.

$7.50 / share.

$10.00 / share.

$10.50 / share.

Question 5(2 points)

If a company uses the equity method to account for an investment in another company, which of the following is true?

Question 5 options:

Income is combined proportionate to ownership.

Income to the investing company consists of actual dividends, interest, or capital gains.

All of the investee's income is included in the investor's income except for income relating to intra-entity transactions.

Income of the investee is included in the investor's income but reduced by any dividends paid to the investor.

Question 12(2 points)

Which of the following statements about segment reporting is NOT correct?

Question 12 options:

A reportable segment is a component of a business that has a minimum of 5% of revenues, combined identifiable assets, or operating profit.

Accounting rules do not strictly define what constitutes a reportable segment.

Companies that operate in more than one foreign country must disclose information on their foreign operations.

The computation of segment profit is one of the weaknesses of segment reporting requirements.

Question 13(2 points)

A city government has a nine year capital lease for property being used within the general fund. The lease was signed on January 1, Year 4, minimum lease payments total $90,000 but have a current present value of $69,000. Annual payments are $10,000, the effective interest rate is 10% and the first payment is made on December 31, Year 4.

When the lease is recorded on January 1, Year 4, which accounts are credited?

Fund-Based Statements Government-Wide Statements

Question 13 options:

Other Fin. Sources - $69,000 Capital Lease Obligation - $69,000

Lease Payable - $69,000 Other Financing Sources - $69,000

Other Financing Uses - $10,000 Capital Lease Liability - $10,000

No Entry Capital Lease Liability - $10,000

Question 17(2 points)

A US company with the US dollar as its functional currency is preparing to report consolidated financial statements for Year One. At the end of that year, because of a foreign subsidiary, the company has a translation adjustment account with an $18,000 credit balance. In addition, the US company had a receivable for 100,000 lira from a customer in Italy. This receivable was worth $11,000 when it was established on November 9. However, the currency exchange rates changed, and it was worth $14,000 when paid by the customer on January 30 of Year Two. The 100,000 lira receivable was worth $13,000 on December 31, Year One. What gain appears in this company's consolidated income statement for Year One?

Question 17 options:

$2,000

$-0-

$18,000

$21,000

Question 18(2 points)

FASB ASC 958 Not-for-Profit Entities, requires which of the following financial statements for private not-for-profit organizations?

Question 18 options:

Statement of financial position, statement of activities, and a statement of cash flows.

Balance sheet and income statement.

Statement of cash flows, statement of revenues expenses and changes in net assets, and a statement of financial position.

Balance sheet income statement for each fund.