• Q : Journalize the declaration-two independent assumptions....
    Accounting Basics :

    Journalize the declaration of a 15% stock dividend on December 10, 2010, for the following two independent assumptions.

  • Q : Name the pattern of return on equity implied by assumptions....
    Accounting Basics :

    I assume that sales grow at the rate of inflation, capital expenditures are equal to depreciation, and that net profit margins and working capital to sales ratios stay constant."What pattern of retu

  • Q : Generate forecasts of the outlays....
    Accounting Basics :

    What factors are likely to drive a firm's outlays for new capital (such as plant, property, and equipment) and for working capital (such as receivables and inventory)? What ratios would you use to h

  • Q : What is the random walk model....
    Accounting Basics :

    John Right, an analyst with Stock Pickers Inc., claims, "It is not worth my time to develop detailed forecasts of sales growth, profit margins, etcetera, to make earnings projections. I can be almos

  • Q : Supplies expense account problem....
    Accounting Basics :

    Indus Company has a Supplies account balance of $900 on January 1, 2009. During 2009, it purchased $4,000 of supplies. As of December 31, 2009, a supplies inventory shows $750 of supplies available.

  • Q : Discuss the feasibility of geralds compensation agreement....
    Accounting Basics :

    1. Discuss the feasibility of Gerald's compensation agreement. 2. Discuss the company obiligation to Gerald for the $12 million in stock options. What course of action should the company take? Geral

  • Q : Firm overstate or understate its income statement....
    Accounting Basics :

    Assume that an entity treated sales tax, shipping charges, and installation costs on acquired equipment as an expense rather than as part of the cost of the asset. Would the firm overstate or unders

  • Q : Investment account-net income and retained earnings....
    Accounting Basics :

    Judd mistakenly recorded these transactions using the fair value method rather than the equity method of accounting. What effect would this have on the investment account, net income, and retained e

  • Q : Problem using an electronic spreadsheet....
    Accounting Basics :

    Mr. James runs a retail shop. Calculate the net income or net loss in reference to the following transactions that occurred during the month of January. Solve this problem using an electronic spread

  • Q : Capable of making a moral decision....
    Accounting Basics :

    Should the asbestos companies be held morally responsible in the sense of being capable of making a moral decision about the ill effects of asbestos exposure? Or does it makes sense to consider only

  • Q : Effect on the price and quantity of minivans....
    Accounting Basics :

    Consider the market for minivans. For each of the events listed here, identify which of the determinants of demand or supply are affected. Also indicate whether demand or supply increases or decreas

  • Q : Compute ed after-tax income....
    Accounting Basics :

    He uses the $5,700 standard deduction in computing taxable income for 2010. The personal exemption amount for 2010 is $3,650. Johnson Company is Ed's only source of income. Compute Ed's after-tax in

  • Q : Revenue reported from this transaction....
    Accounting Basics :

    Lawton Company collected $8,400 in May of 2006 for 4 months of service which would take place from October of 2006 through January of 2007. The revenue reported from this transaction during 2006 wou

  • Q : Overhead allocation based on volume....
    Accounting Basics :

    Which of the following statements about overhead allocation based on volume alone is correct?

  • Q : Excess of fair value of total assets....
    Accounting Basics :

    In a business combination accounted for as an acquisition, how should the excess of fair value of net assets acquired over the consideration paid be treated?

  • Q : Company exceeds the fair values of identifiable net assets....
    Accounting Basics :

    If the value implied by the purchase price of an acquired company exceeds the fair values of identifiable net assets, the excess should be:

  • Q : Preparation of a consolidated workpaper....
    Accounting Basics :

    What is the amount needed to establish reciprocity under the cost method in the preparation of a consolidated workpaper on December 31, 2011?

  • Q : Non-controlling interest in the net income....
    Accounting Basics :

    Scooter Company, a 70%-owned subsidiary of Pusher Corporation, reported net income of $240,000 and paid dividends totaling $90,000 during Year 3. Year 3 amortization of differences between current f

  • Q : Excess of fair value of identifiable net assets....
    Accounting Basics :

    In a business combination accounted for as an acquisition, how should the excess of fair value of identifiable net assets acquired over implied value be treated?

  • Q : Controlling interest in the consolidated net income basics....
    Accounting Basics :

    All excess was attributable to plant assets with a 10-year life. SealCoat Company made $50,000 in 2010 and paid no dividends. Primer Company's separate income in 2010 was $625,000. The controlling i

  • Q : Noncontrolling interest share problem....
    Accounting Basics :

    The noncontrolling interest's share of the selling affiliate's profit on intercompany sales is considered to be realized under:

  • Q : Profit on inventory acquired....
    Accounting Basics :

    In determining controlling interest in consolidated income in the consolidated financial statements, unrealized intercompany profit on inventory acquired by a parent from its subsidiary should:

  • Q : What amount of gain should company record....
    Accounting Basics :

    What amount of gain should P Company record on its books in 2011?

  • Q : Upstream intercompany sale of nondepreciable assets....
    Accounting Basics :

    In years subsequent to the upstream intercompany sale of nondepreciable assets, the necessary consolidated workpaper entry under the cost method is to debit the:

  • Q : Percentage by the subsidiary reported net income....
    Accounting Basics :

    In the year an 80% owned subsidiary sells equipment to its parent company at a gain, the noncontrolling interest in consolidated income is calculated by multiplying the noncontrolling interest perce

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