Intermediate Accounting

On January 1, 2015, Yancey, Inc. signs a 10-year noncancelable lease agreement to lease a storage building from Holt Warehouse Company From the lessor's viewpoint, what type of lease is involved?

Sales-type lease

Beak Corporation sells 200 shares of common stock being held as an investment. The shares were acquired six months ago at a cost of $25 a share. Beak sold the shares for $40 a share. The entry to record the sale is

CASH 8000 GAIN ON SALES OF STOCK IN INVESTMENTS 3000 STOCK INVESTMENTS 5000

On January 1, 2015, Yancey, Inc. signs a 10-year noncancelable lease agreement to lease a storage building from Holt Warehouse Company

Capital lease

On January 1, 2015, Yancey, Inc. signs a 10-year noncancelable lease agreement to lease a storage building from Holt Warehouse Company.

Capital lease

On January 1, 2015, Yancey, Inc. signs a 10-year noncancelable lease agreement to lease a storage building from Holt Warehouse Company. From the lessee's viewpoint, what type of lease exists in this case?

Capital lease

On January 1, 2015, Yancey, Inc. signs a 10-year noncancelable lease agreement to lease a storage building from Holt Warehouse Company. Collectibility of lease payments is reasonably predictable and no important uncertainties surround the amount of costs yet to be incurred by the lessor.

Capital lease

Palmer Co. had a deferred tax liability balance due to a temporary difference at the beginning of 2014 related to $900,000 of excess depreciation.

Decrease by $22,500

Which of the following differences would result in future taxable amounts?

Expenses or losses that are tax deductible BEFORE they are recognized in financial income.

Which of the following is the correct matching concerning the appropriate accounting for long-term stock investments?

LESS THAN 20% - COST METHOD

The accounting problem in a lump sum issuance is the allocation of proceeds between the classes of securities. An acceptable method of allocation is

either the proportional method or the incremental method.

Slack Inc. borrowed $320,000 on April 1. The note requires interest at 12% and principal to be paid in one year. How much interest is recognized for the period from April 1 to December 31?

$0. $38,400. $25,600. $28,800.*************************************

A company offers a cash rebate of $2 on each $6 package of batteries sold during 2014. Historically, 10% of customers mail in the rebate form. During 2014, 6,000,000.

$1,200,000; $1,200,000 $1,200,000; $780,000****************************** $780,000; $780,000 $420,000; $780,000

On December 31, 2015, Kuhn Corporation leased a plane from Bell Company for an eight-year period expiring December 30, 2022. Equal annual payments of $300,000 are due on December 31 of each year, beginning with December 31, 2015.

$1,460,528.************************ $1,760,528. $1,636,580. $1,584,476.

On December 31, 2015, Kuhn Corporation leased a plane from Bell Company for an eight-year period expiring December 30, 2022. Equal annual payments of $300,000 are due on December 31 of each year, beginning with December 31, 2015.

$1,760,528. $1,636,580. $1,584,476. $1,460,528.**************

On December 31, 2015, Kuhn Corporation leased a plane from Bell Company for an eight-year period expiring December 30, 2022. Equal annual payments of $300,000 are due on December 31 of each year, beginning with December 31, 2015.

$1,760,528. $1,636,580. $1,584,476. $1,460,528.************************

A company gives each of its 50 employees (assume they were all employed continuously through 2014 and 2015) 12 days of vacation a year if they are employed at the end of the year.

$100,800; $140,400 $115,200; $144,000 $100,800; $144,000*********************** $115,200; $140,400

In Alona Company, net income is $285,000. If accounts receivable increased $140,000 and accounts payable decreased $40,000, net cash provided by operating activities using the indirect method is:

$105,000.************** $185,000. $385,000. $465,000.

Glavine Company issues 6,000 shares of its $5 par value common stock having a fair value of $25 per share and 9,000 shares of its $15 par value preferred stock having a fair value of $20 per share for a lump sum of $297,000.

$118,800 $135,000*********************** $150,000 $162,000

Glavine Company issues 6,000 shares of its $5 par value common stock having a fair value of $25 per share and 9,000 shares of its $15 par value preferred stock having a fair value of $20 per share for a lump sum of $297,000. The proceeds allocated to the common stock is

$118,800 $135,000*********************************** $150,000 $162,000

On December 31, 2014, the stockholders' equity section of Arndt, Inc., was as follows:On March 31, 2015, Arndt declared a 10% stock dividend, and accordingly 900 additional shares were issued,

$135,800.********************* $143,000. $144,800. $152,000.

Accounts receivable arising from sales to customers amounted to $40,000 and $55,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $180,000.

$180,000. $195,000. $220,000. $165,000.**************************

Parton owes $2 million that is due on February 28. The company borrows $1,600,000 on February 25 (5-year note)

$2,000,000. $0. $1,600,000.******************** $400,000.

Excom manufactures high-end whole home electronic systems. The company provides a one-year warranty for all products sold. The company estimates that the warranty cost is $225 per unit sold and reported a liability for estimated warranty costs $7.8 million at the beginning of this year.

$2,800,000. $4,500,000. $12,300,000.*********************************** $13,500,000.

In Ramon Company, Treasury Stock increased $20,000 from a cash purchase, and Retained Earnings increased $80,000 as a result of net income of $120,000 and cash dividends paid of $40,000. Net cash used by financing activities is:

$20,000. $40,000. $120,000. $60,000.*************************

The consolidated worksheet shows Excess of Cost Over Book Value of Subsidiary of $210,000. Management of the parent company determines that the market values for subsidiary company plant assets are $90,000 higher than book values.

$210,000. $120,000.********** $90,000. $0.

The consolidated worksheet shows Excess of Cost Over Book Value of Subsidiary of $210,000. Management of the parent company determines that the market values for subsidiary company plant assets are $90,000 higher than book values. In the consolidated balance sheet, goodwill will be reported at

$210,000. $120,000.************************* $90,000. $0.

The following data are available for Alamo Corporation. Net cash provided by investing activities is:

$285,000.******************* $260,000. $305,000. $425,000.

Manning Company issued 10,000 shares of its $5 par value common stock having a fair value of $25 per share and 15,000 shares of its $15 par value preferred stock having a fair value of $20 per share for a lump sum of $530,000. How much of the proceeds would be allocated to the common stock?

$289,091 $250,000*********************** $240,909 $289,091 $281,563

Accounts receivable arising from sales to customers amounted to $86,000 and $77,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $290,000.

$290,000. $299,000.********************************** $213,000. $280,000.

On January 1, Martinez Inc. issued $5,000,000, 11% bonds for $5,325,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31.

$308,550 $307,500********************** $289,250 $275,000

Craig borrowed $350,000 on October 1, 2014 and is required to pay $360,000 on March 1, 2015. What amount is the note payable recorded at on October 1, 2014 and how much interest is recognized from October 1 to December 31, 2014?

$350,000 and $0. $350,000 and $6,000.********************* $360,000 and $0. $350,000 and $10,000.

Dunn, Inc. uses the accrual method of accounting for financial reporting purposes and appropriately uses the installment method of accounting for income tax purposes. Installment income of $1,800,000 will be collected in the following years when the enacted tax rates are:

$450,000************************ $513,000 $567,000 $630,000

Yurman Co. sells major household appliance service contracts for cash. The service contracts are for a one-year, two-year, or three-year period. Cash receipts from contracts are credited to unearned service contract revenues. This account had a balance of $720,000

$540,000. $495,000.***************************** $360,000. $330,000.

Pisa, Inc. leased equipment from Tower Company under a four-year lease requiring equal annual payments of $172,076, with the first payment due at lease inception.

$615,533************************ $545,456 $569,937 $600,000

Gage Co. purchases land and constructs a service station and car wash for a total of $360,000. At January 2, 2014, when construction is completed, the facility and land on which it was constructed are sold to a major oil company for $400,000 and immediately leased from the oil company by Gage.

$64,000 $65,098 $73,490 $61,490************************

Metcalf Company leases a machine from Vollmer Corp. under an agreement which meets the criteria to be a capital lease for Metcalf. The six-year lease requires payment of $136,000 at the beginning of each year, including $20,000 per year for maintenance

$679,008. $651,548. $579,154.********************* $555,732.

Metcalf Company leases a machine from Vollmer Corp. under an agreement which meets the criteria to be a capital lease for Metcalf. The six-year lease requires payment of $136,000 at the beginning of each year, including $20,000 per year for maintenance

$679,008. $651,548. $579,154.*************************** $555,732.

Ferguson Company has the following cumulative taxable temporary differences: The tax rate enacted for 2015 is 40%, while the tax rate enacted for future years is 30%.

$7,500,000. $5,580,000.************************ $4,020,000. $2,100,000.

Roxy Co., which has a taxable payroll of $600,000, is subject to FUTA tax of 6.2% and a state contribution rate of 5.4%.

$70,200 $49,200 $24,000 $16,800**********************************

Ale Company has other operating expenses of $80,000. There has been a decrease in prepaid expenses of $6,000 during the year, and accrued liabilities are $5,000 larger than in the prior period. What were Ale's cash payments for operating expenses?

$81,000 $82,000 $69,000******************** $80,000

Nickerson Corporation began operations in 2013. There have been no permanent or temporary differences to account for since the inception of the business. The following data are available:In 2015, Nickerson had an operating loss of $1,860,000.

$819,000************************ $747,000 $744,000 $558,000

Hopkins Co. at the end of 2014, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows:

$900,000.

The following information is available for Kessler Company after its first year of operations:

$95,000 $100,000 $85,000 $75,000************************

On January 2, 2014, Gold Star Leasing Company leases equipment to Brick Co. with 5 equal annual payments of $80,000 each, payable beginning January 2, 2014.

Lease Liability 56062 Interest Payable 23938 Cash 80 000

Which of the following is the correct matching concerning the appropriate accounting for long-term stock investments?

Less than 20% - Cost Method

Which of the following features of preferred stock makes it more like a debt than an equity instrument?

Redeemable

Taxable income of a corporation differs from pretax financial income because of

YES YES

On January 1, 2015, Dean Corporation signed a ten-year noncancelable lease for certain machinery. The terms of the lease called for Dean to make annual payments of $150,000 at the end of each year for ten years with the title passing to Dean at the end of this period.

interest expense of $80,521 and depreciation expense of $67,101

Note disclosures for long-term debt generally include all of the following except

names of specific creditors.