Kahoot Ch 8-9, 11

On Jan. 1, 2020, a machine costs $800,000 with an estimated useful life of 5 years and salvage value of $50,000. In 2021, what is the depreciation expense using the double declining balance method?

$192,000

True or false: a sale of a plant asset at less than cost requires that a company recognize a loss in the income statement?

False

Where is accumulated other comprehensive income generally listed in the balance sheet?

in the shareholders' equity section below retained earnings

For what is the coupon rate used to compute?

interest payments paid to bondholders during the life of the bond issue

Proceeds received from the sale of long-term depreciable assets most likely appear where in the statement of cash flows?

investing cash flows

For small stock dividends, by what amount are retained earnings reduced?

market value of the dividend

At what point is an asset considered to be impaired?

net book value is greater than the sum of undiscounted expected cash flows

How should intangible assets be disclosed on the balance sheet?

net of the costs already amortized

If a company feels that its shares are undervalued and it wants to send a signal to the market, the company may...

repurchase shares

A firm issues $30,000,000 of 10-year bonds and receives $29,500,000 in cash. What is true about the market rate?

the market rate exceeds the coupon rate

According to US GAAP, which criteria must be met in order to recognize a contingent liability?

the obligation is probable and estimatable

Which benefits do convertible preferred stockholders hold?

the securities carry a fixed dividend yield, the owner can convert the debt/equity security into another equity security, the securities carry a senior claimant position in bankruptcy

True or false: secured debt holders have a preferred position over other creditors?

true

If 5% bonds are issued at 101.75, this means that...

a $2,000 bond sold for $2,035

What does a decease in accrued wages liability lead to?

a decrease in cash flows from operations

The purpose of recording periodic depreciation of long-term PPE assets is to...

allocate asset costs over the periods benefited by use of the assets

What describes par value for stock?

an arbitrary amount set by the company for each share of stock

How is the gain (loss) on a plant asset sale calculated?

asset sale price - book value on balance sheet

What is the net book value of the company that is available to the common shareholders called?

book value per share

When a corporation has a right to redeem bonds in advance of the maturity date, the bond is known as?

callable

An estimate of how an asset will be used up over its useful life is known as what?

depreciation rate

What is required when calculating depreciation expense?

depreciation rate, useful life, salvage value

Employee equity-based compensation, such as stock options and restricted stock awards, are recorded at what value?

fair value

True or false: a re-issuance of treasury stock has the potential to yield a gain or loss in the income statement.

false

Which of the following doesn't affect the current liabilities section of the balance sheet? 1. sale of goods on credit 2. insurance bill to be paid next month 3. wages owed to employees but not yet paid 4. a probable legal obligation, due within 12 months

1

Which one of the following selections is not a component of contributed capital? 1. retained earnings 2. common stock 3. additional paid-in capital 4. all of the above

1

Which is not an item that should be included in the computation of other comprehensive income? 1. foreign currency translation adjustment 2. interest expense 3. unrealized gains (losses) 4. adjustments to pension plans

2

Which of the following doesn't represent a current liability? 1. purchase of equipment on credit 2. short-term loan 3. bond issue 4. accrual of taxes payable

3

Which of the following transactions that impacts current liabilities has a corresponding entry on the income statement? 1. payment to employees in March for wages earned in February 2. purchase inventory on credit on January 1 3. payment to XYZ on February 1 for a January 1 purchase 4. interest accrued on a note payable

4

True or false: changes in accounting estimates affect only the current and future periods' income statements?

True