...CHAPTER 3 ADJUSTING THE ACCOUNTS SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM’S TAXONOMY Item | SO | BT | Item | SO | BT | Item | SO | BT | Item | SO | BT | Item | SO | BT | Exercises | 1. | 1 | AP | 10. | 2 | AP | 19. | 2,3 | AP | 28. | 2,3 | AP | *37. | 5 | AP | 2. | 1 | AP | 11. | 2 | AP | 20. | 2,3 | AP | 29. | 2,3,4 | AP | *38. | 5 | AP | 3. | 1 | AP | 12. | 2 | AP | 21. | 2,3 | AP | 30. | 2,3,4 | AP | *39. | 5 | AP | 4. | 1 | AP | 13. | 2,3 | C | 22. | 2,3 | AP | 31. | 3 | AP | *40. | 5 | AP | 5. | 1 | AP | 14. | 2,3 | C | 23. | 2,3 | AP | 32. | 3 | AP | *41. | 5 | AP | 6. | 1 | AP | 15. | 2,3 | AN | 24. | 2,3 | AP | 33. | 3 | AP | | | | 7. | 1,2 | AP | 16. | 2,3 | AN | 25. | 2,3 | AP | 34. | 3 | AP | | | | 8. | 1,2 | AP | 17. | 2,3 | AP | 26. | 2,3 | AP | 35. | 4 | AP | | | | 9. | 1,2 | AP | 18. | 2,3 | AP | 27. | 2,3 | AP | 36. | 4 | AP | | | | Note: C = Comprehension AN = Analysis AP = Application * This topic is dealt with in an Appendix to the chapter. SUMMARY OF QUESTIONS BY LEVEL OF DIFFICULTY (LOD) Item | SO | LOD | Item | SO | LOD | Item | SO | LOD | Item | SO | LOD | Item | SO | LOD | Exercises | 1. | 1 | M | 10. | 2 | E | 19. | 2,3 | E | 28. | 2,3 | H | *37. | 5 | M | 2. | 1 | E | 11. | 2 | M | 20. | 2,3 | E | 29. | 2,3,4 | H | *38. | 5 | H | 3. | 1 | M | 12. | 2 | H | 21. | 2,3 | E | 30. | 2,3,4 | H | *39. | 5 | H | 4. | 1 | E | 13. | 2,3 | H | 22. | 2,3 | M | 31. | 3 | E | *40....
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...Tax—Corporations Schedule D—Capital Gains and Losses Schedule G (Form 1120)—Information on Certain Persons Owning the Corporation’s Voting Stock Form 1125-E—Compensation of Officers Attachment—Supporting Details 9 11 12 13 14 15 16 17 18 19 20 21 INFORMATION FOR INSTRUCTORS CORPORATION PRACTICE SET (2013-2014 EDITION) No More Ice, Inc. Following are details on some of the calculations in the solution. Observations are made on areas which the students may find more difficult. You can reduce the difficulty of the practice set if you so choose by providing your students “clues” (or even the solutions) in some or all of these areas. Paragraph references are to the facts for the practice set. 1. Computation of Cost of Goods Sold (Form 1125-A). Amounts for beginning and ending inventories and for cost of goods sold are provided. Students must “back into” the cost of purchases; e.g., Cost of Goods Sold ........................................................................... Inventory Adjustment Beginning Inventory ........................................ $500,247 Ending Inventory ............................................. 605,599 Cost of Purchases .............................................................................. $5,143,732 105,352 $5,249,084 Easy 2. Para. 5. Bad Debts (Form 1120, p. 1, ln. 15). The reserve method is not allowable for Federal income tax...
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...ACCOUNTING INFORMATION SYSTEM IFRS questions are available at the end of this chapter. TRUE/FALSE AnswerNo.Description F1.Recording transactions. T2.Nominal accounts. F3.Real (permanent) accounts. F4.Internal event example. F5.Liability and stockholders’ equity accounts. F6.Debits and credits. F7.Steps in accounting cycle. T8.Purpose of trial balance. T9.General journal. F10.Posting and trial balance. T11.Adjusting entries for prepayments. T12.Example of accrued expense. F13.Book value of depreciable assets. T14.Reporting ending retained earnings. F15.Post-closing trial balance. F16.Closing entries and Income Summary. F17.Posting closing entries. F*18.Accrual basis accounting. F*19.Purpose of reversing entries. F*20.Adjusted trial balance. MULTIPLE CHOICE—Conceptual AnswerNo.Description d21.Purpose of an accounting system. d22.Necessity of accounting records. d23.Purpose of an accounting system. d24.Book of original entry. d25.Purpose of trial balance. d26.Identification of a real account. b27.Identification of a temporary account. a28.Temporary vs. permanent accounts. c29.Meaning of debit. c30.Double-entry system. a31.Effect on stockholders’ equity. a32.Transaction analysis. a33.Accounting equation. b34.Accounting process vs. accounting cycle. d35.Accounting cycle steps. d36.Criteria for recording events. d37.Identification...
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...7, 8, 9, 10, 11, 12, 16, 17 1, 8, 13 3, 6, 7 1, 2, 4, 6, 7 1, 2, 4, 5 1, 2, 3, 4, 5, 6 Questions 2, 4, 6, 7, 8, 9, 12, 13, 15, 21, 22, 23 Brief Exercises Exercises 8 Concepts Problems for Analysis 3 1, 2, 3, 4 2. c. 2, 10 1, 2, 10 3 1, 2 d. e. f. g. 3. 2, 8, 14 9 2, 3, 5, 8, 14 2, 5 3 1, 2 1, 5 Correction of an error. a. Comprehensive. 8, 9, 10 8, 15, 16, 18, 19, 20, 21 9, 15, 17, 18 7, 17, 18 22, 23 3, 6, 7, 8, 9, 10 1, 6, 8 2, 10 11, 12 1, 2 2, 3, 4 b. c. *4. Depreciation. Inventory. 6, 7 10 11, 12 Changes between fair value and equity methods. *This material is dealt with in an Appendix to the chapter. Copyright © 2010 John Wiley & Sons, Inc. Kieso, Intermediate Accounting, 13/e, Solutions Manual (For Instructor Use Only) 22-1 ASSIGNMENT CLASSIFICATION TABLE (BY LEARNING OBJECTIVE) Learning Objectives 1. Identify the types of accounting changes. 2. Describe the accounting for changes in accounting principles. 3. Understand how to account for retrospective accounting changes. 4. Understand how to account for impracticable changes. 5. Describe the accounting for changes of estimates. 6. Identify changes in a reporting entity. 7. Describe the accounting for correction of errors. 6, 7, 8, 10 7, 8, 9, 15, 16, 17, 18, 19, 20, 21 1, 2, 3, 6, 7, 8, 9, 10 4, 5, 9 6, 7, 8, 9, 10,...
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...Student Cases with Solutions to accompany Accounting & Auditing Research: Tools & Strategies (7th edition) NOTE: In addition to the in-chapter and end-of-chapter exercises which serve as short cases you will find the following short cases arranged by course title that can also be utilized as short cases that require the student to access the authoritative literature to address the issue presented in the case. Other excellent sources of longer and more detailed cases include the Deloitte Trueblood cases (www.deloitte.com/more/DTF/cases_subj.htm), as well as the AICPA cases (www.aicpa.org). A topical listing of the cases is presented with the case and solution following the listing. Topical Index of Student Cases INTERMEDIATE ACCOUNTING Cases Case 1: Reporting acquisition and repayment transactions in the Statement of Cash Flows Case 2: Recording a forfeited payment Case 3: Revenue and expense recognition associated extended warranties Case 4: Accounting for “due on demand” note payable Case 5: Purchase of a controlling interest with a greenmail premium Case 6: Revenue recognition in the construction industry Case 7: Accrual and measurement of interest payments Case 8: Recognition of an asset transfer when title has not yet been received Case 9: Capitalization of interest and property taxes on a construction project Case 10: Deferred compensation and life insurance policy recognition Case 11: Reporting earnings per share balances...
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.... College students, especially freshmen, are a group particularly prone to stress (D'Zurilla & Sheedy, 1991) due to the transitional nature of college life (Towbes & Cohen, 1996). They must adjust to being away from home for the first time, maintain a high level of academic achievement, and adjust to a new social environment. College students, regardless of year in school, often deal with pressures related to finding a job or a potential life partner. These stressors do not cause anxiety or tension by themselves. Instead, stress results from the interaction between stressors and the individual's perception and reaction to those stressors (Romano, 1992). The amount of stress experienced may be influenced by the individual's ability to effectively cope with stressful events and situations (D'Zurilla & Sheedy, 1991). If stress is not dealt with effectively, feelings of loneliness and nervousness, as well as sleeplessness and excessive worrying may result (Wright, 1967). It is important that stress intervention programs be designed to address stress of college students. However, in order to design an effective intervention, the stressors specific to college students must be determined (Wright, 1967). The Student Stress Survey (SSS) was used to determine the major sources of stress among college students. The scale consisted of 40 potentially stressful situations. The scale addressed interpersonal, intrapersonal, academic, and environmental sources of stress. The items in the scale...
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...E-Business (QRT2) Task 3 Proposal for Online Business Expansion Part III Website Design and Cost Estimates David Woodruff MBA-07/01/14 ID# 000401226 Cell: 801-709-4382 Time zone: Mountain dwoodr5@wgu.edu The Canard House is a small 12 room, family owned bed and breakfast planned to operate in conjunction with This is the Place Heritage Park (TITP) in Salt Lake City, UT. The inn is a reconstruction of a historic mansion and embodies the traditional charm and hospitality of a bygone era. The company operates as an independent partner with TITP and benefits from tourism, weddings and other special events held at the park. While there are several bed & breakfasts and boutique inns within Salt Lake City, none can boast a finer location than the Canard House. The inn provides a unique historical setting in a prime location within close proximity to events, dining and transportation. It has unobstructed views of both the Salt Lake Valley and Wasatch mountain range, and is situated in a 450 acre preserve surrounded by picturesque and historic structures. Currently, all advertising has been done by the in-house marketing department. The department is overwhelmed by having to create campaigns for five separate entities within the umbrella of the “This is the Place Heritage Foundation”. Consequently effective online marketing and sales for the Canard House have been sluggish at best. To help bolster growth and sales, consultants...
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...Managerial Finance – Problem Review Set – Cost of Capital – with solutions 1) |If a firm's marginal tax rate is increased, this would, other things held constant, lower the cost of debt used to calculate its WACC. | | | | | | | | | | |b. |A Division B project with a 12% return. | |c. |A Division A project with an 11% return. | |d. |A Division A project with a 9% return. | |e. |A Division B project with an 11% return. | 5) |Vang Inc. estimates that its average-risk projects have a WACC of 10%, its below-average...
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...of the members of the group. The adjustment columns contain the consolidation worksheet entries that adjust the left-hand columns to form the consolidated financial statements. The adjustment entries have no effect on the actual financial records of the parent and its subsidiaries. At acquisition date, an acquisition analysis is undertaken. The key purposes of this analysis are to determine the fair values of the identifiable assets, liabilities and contingent liabilities of the subsidiary, and to calculate any goodwill or gain on bargain purchase arising from the business combination. From this analysis, the main consolidation worksheet adjustment entries at acquisition date are the business combination valuation entries, to adjust carrying amounts of the subsidiaries’ assets and liabilities to fair value, and the pre-acquisition entries. In preparing consolidated financial statements in periods subsequent to acquisition date, the consolidation worksheet will contain valuation entries and pre-acquisition entries. However, these entries are not necessarily the same as those used at acquisition date. If there are changes to the assets and liabilities of the subsidiaries since acquisition date, or there have been movements in pre-acquisition equity, changes must be made to these entries. 2. DEMONSTRATION PROBLEMS Demonstration Problem 1 On 1 July 2007, Oslo Ltd acquired 100% of the issued shares of Helsinki Ltd on a cum div. basis. The fair value of the consideration...
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...same. Both distributions are fully taxable as dividends to Jeff and John in the amount of $100,000 each. John takes a $100,000 FMV basis in the land he receives. b. AAA, January 1 $125,000 Current year ordinary income $40,000 Capital gain on distribution of land 30,000 70,000 AAA before distribution $195,000 Minus: Cash distribution ( 97,500) Noncash distribution ( 97,500) AAA, December 31 $ -0- AE&P, January 1 $ 30,000 Minus: Remainder of cash and property distributions ( 5,000) AE&P, December 31 $ 25,000 Of each distribution, $97,500 is nontaxable assuming the shareholder has sufficient basis in his stock. The remaining $2,500 of each distribution is a dividend included in the shareholder’s gross income. John takes a $100,000 FMV basis in the land he receives. Jeff’s stock basis: Basis, January 1 $100,000 Plus: Allocable share of current year ordinary income and gain 35,000 Predistribution basis $135,000 Minus: Cash distribution from AAA ( 97,500) Basis, December 31 $ 37,500 John’s stock basis: Basis, January 1 $ 80,000 Plus: Allocable share...
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...for the year ended December 31, 2009. The balance sheet currently reads that there is a balance of $2,000 in the current tax liability account and $800 in the deferred tax liability account. Their income statement reads $2,000 in current tax expense and $200 in the deferred tax expense account. The management has identified two deductions for which tax law is not clear as to whether these tax positions should reduce the company’s tax liability for the year 2009. Management is confident that all other tax positions will be sustained by the taxing authority and that all of the deductions should be reflected in the financial statements. Management is facing two issues in determining whether this tax position would hold up in court. Some adjustments must be made to make sure their financial statements comply with ASC 740-10. Issue 1: Issue one is that Bricks & Mortar has implemented a certain tax strategy that resulted in a $40 reduction in taxes payable. Management believes that they overstated income by $100 due to accuracy-related errors. There are two defenses the company can take to avoid a possible penalty. They will have to prove that they have substantial authority and/or reasonable cause and good faith to avoid being penalized. If enough evidence is provided to support their defense against the penalty they will being accruing interest in the period they claim their position. If they do not have sufficient evidence to support the substantial authority and/or reasonable...
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...CHAPTER 7 DEDUCTIONS AND LOSSES: CERTAIN BUSINESS EXPENSES AND LOSSES SOLUTIONS TO PROBLEM MATERIALS 1. An account receivable can give rise to a bad debt deduction if income arising from the creation of the account receivable was previously included in gross income. 7. Jack should be concerned with the following issues: • Should this be treated as a worthless security? • Should this be treated as a theft loss? • Does the theft loss create an NOL? • Can the NOL be carried back three years? 10. Some courts have held that termite damage over periods of up to 15 months after infestation constituted a sudden event and was, therefore, deductible as a casualty loss. However, the current position of the IRS is that termite damage is not deductible (it is not considered a sudden event). 11. Casualty losses are not allowed for a decline in the value of the property. Losses are allowed only for actual damage. 13. Mary should include the recovery as gross income in her 2014 tax return, but only to the extent of the tax benefit in the prior year. Mary’s deduction in the prior year would have been $3,900 computed as follows: Amount of loss $ 8,000 Less: $100 floor (100) 10% * 40,000 (4,000) Deduction $ 3,900 Therefore, Mary must include $3,900 in gross income in 2014. 15. If no insurance claim is filed for a loss on business use property, the taxpayer is still permitted a loss deduction. 16. The cost of repairs can be used as a method for measuring...
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...A CRITICAL APPRAISAL ADJUSTMENT PROGRAMME IN NIGERIA Structural Adjustment is the Wrong Policy F. E. Ogbimi* he incorrect perception of a problem can lead to the development of poor theories to solve it. This explains why, a decade after implementing Structural Adjustment Programs (SAP) advanced by the World Bank and the International Monetary Fund (IMF), many African countries have still not made measurable progress. Africa is much worse off today than it was a decade ago because African economists and the world bodies have a poor perception of the African economic problem and so designed SAP—a program which cannot stimulate growth. Why do Structural Adjustment Programs lack growth elements and what should be done to stimulate rapid development? Introduction Most African nations are implementing SAP, an economic `panacea' inspired by the World Bank and the IMF. The objectives of a Structural Adjustment Program are largely the same for most African nations, because the world bodies presume that African economies are at the same level of development and are experiencing similar problems. The stated objectives of the Nigerian SAP are to: • restructure and diversify the productive base of the economy • achieve fiscal stability and positive balance of payments • set the basis for a sustained non-inflationary or minimal inflationary growth, and • reduce the dominance of unproductive investments in the public sector.1 The corresponding program instruments include...
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...deficit resulting from a recession can actually help stabilize an economy. 2. Describe how adjustments in wages and prices take the economy from the short-run equilibrium to the long-run equilibrium. 3. Explain why a system of marketable pollution permits leads to less costly pollution abatement and a higher concentration of polluted areas than a command-and-control system. 4. Although GDP per capita is the most commonly used measure of a country’s success, many economists believes it does not give an accurate measure of a nation’s economic well-being. Some studies have concluded that that GDP is not the best measure of well-being, and although it may be the best available on a timely basis, other factors need to be considered in addition to GDP to give a more accurate picture of economic well-being and the disparity of well-being between nations. Clearly identify at least three such factors that in your view should be included in the GDP calculations. Explain and illustrate how they will help to improve the GDP as a tool for measuring the well-being of a nation. Describe the impact of public goods and externalities on the functioning of an economy. • Use the dynamics of the labor market to anticipate wage rate and labor supply changes. • Analysis of the key macroeconomic phenomena: GDP, unemployment, inflation. • Use technology and information resources to research issues in economics Solution: 1) Explain how an increased federal budget deficit resulting from a recession can...
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...FINANCIAL ACCOUNTABILITY AND REPORTING - SOLUTIONS SUBMISSION EIGHT DUE END OF WEEK9 – DUE MONDAY 9AM - SOLUTIONS QUESTION ONE Part A Describe two principle differences in the presentation contents / format of The Statement Of Comprehensive Income under AASB 101 Presentation Of Financial Statements classify expenses under nature as opposed to function. Provide examples as part of your answer. Part B An entity’s financial year end is 30 June 2013. On 3 July 2013, a major flood hit the entity’s manufacturing facilities, resulting in a loss of $20 million. Unfortunately, only $10 million of the amount could be claimed back from insurance company due to selective coverage of policy. Discuss, in accordance with AASB 110 Events after the Reporting Date, the following independent scenarios: a) The loss has a material effect on the financial statements of the entity but the business continues to operate. b) The loss is so significant as to threaten the entities continued operations. Part C Describe the two basic and two additional indicators used to determine an entity’s functional currency as stated in AASB 121 The Effects of Changes in Foreign Exchange Rates. (2+3+3=8 marks) QUESTION ONE Part A Two major differences • Expenses are grouped by nature such as depreciation , salaries across departments as opposed to function grouped under tasks such as administrative ...
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