Test Quiz: FAR MCQs

Jonn City entered into a capital lease for equipment during the year. How should the asset obtained through the lease be reported in Jonn City’s government-wide statement of net assets?

Jane Co. owns 90% of the common stock of Dun Corp. and 100% of the common stock of Beech Corp. On December 30, Dun and Beech each declared a cash dividend of $100,000 for the current year. What is the total amount of dividends that should be reported in the December 31 consolidated financial statements of Jane and its subsidiaries, Dun and Beech?

Lem Co., which accounts for treasury stock under the par value method, acquired 100 shares of its $6 par value common stock for $10 per share. The shares had originally been issued by Lem for $7 per share. By what amount would Lem’s additional paid-in capital from common stock decrease as a result of the acquisition?

In preparing Chase City’s reconciliation of the statement of revenues, expenditures, and changes in fund balances to the government-wide statement of activities, which of the following items should be subtracted from changes in fund balances?

Neron Co. has two derivatives related to two different financial instruments, instrument A and instrument B, both of which are debt instruments. The derivative related to instrument A is a fair value hedge, and the derivative related to instrument B is a cash flow hedge. Neron experienced gains in the value of instruments A and B due to a change in interest rates. Which of the gains should be reported by Neron in its income statement?

Assuming constant inventory quantities, which of the following inventory-costing methods will produce a lower inventory turnover ratio in an inflationary economy?

A nongovernmental not-for-profit organization received a $2 million gift from a donor who specified it be used to create an endowment fund that would be invested in perpetuity. The income from the fund is to be used to support a specific program in the second year and beyond. An investment purchased with the gift earned $40,000 during the first year. At the end of the first year, the fair value of the investment was $2,010,000. What is the net effect on temporarily restricted net assets at year end?

What are the components of the lease receivable for a lessor involved in a direct- financing lease?

When the effective interest method of amortization is used for bonds issued at a premium, the amount of interest payable for an interest period is calculated by multiplying the

In year 1, a company reported in other comprehensive income an unrealized holding loss on an investment in available-for-sale securities. During year 2, these securities were sold at a loss equal to the unrealized loss previously recognized. The reclassification adjustment should include which of the following?

A company enters into a three-year operating lease agreement effective January 1, year 1. The amounts due on the first day of each year are $25,000 in year 1, $30,000 in year 2, and $35,000 in year 3. What amount, if any, is the related liability on the first day of year 2?

If a city government is the primary reporting entity, which of the following is an acceptable method to present component units in its combined financial statements?

Which of the following statements correctly describes the proper accounting for nonmonetary exchanges that are deemed to have commercial substance?

The replacement cost of an inventory item is below the net realizable value and above the net realizable value less a normal profit margin. The inventory item’s original cost is above the net realizable value. Under the lower of cost or market method, the inventory item should be valued at

Encumbrances would not appear in which fund?

Roy City received a gift, the principal of which is to be invested in perpetuity with the income to be used to support the local library. In which fund should this gift be recorded?

During the current year, the Finn Foundation, a nongovernmental not-for-profit organization, received a $1,000,000 permanent endowment from Chris. Chris stipulated that the income must be used to provide recreational activities for the elderly. The endowment reported income of $80,000 in the current year. What amount of permanently restricted contribution revenue should Finn report at the end of the current year?

Which of the following transactions qualify as a discontinued operation?

Rowe Inc. owns 80% of Cowan Co.’s outstanding capital stock. On November 1, Rowe advanced $100,000 in cash to Cowan. What amount should be reported related to the advance in Rowe’s consolidated balance sheet as of December 31?

Which of the following activities should be excluded when governmental fund financial statements are converted to government-wide financial statements?

Pann, a nongovernmental not-for-profit organization, provides food and shelter to the homeless. Pann received a $15,000 gift with the stipulation that the funds be used to buy beds. In which net asset class should Pann report the contribution?

Grayson Co. incurred significant costs in defending its patent rights. Which of the following is the appropriate treatment of the related litigation costs?

On January 1, year 1, Newport Corp. purchased a machine for $100,000. The machine was depreciated using the straight-line method over a 10-year period with no residual value. Because of a bookkeeping error, no depreciation was recognized in Newport’s year 1 financial statements, resulting in a $10,000 overstatement of the book value of the machine on December 31, year 1. The oversight was discovered during the preparation of Newport’s year 2 financial statements. What amount should Newport report for depreciation expense on the machine in the year 2 financial statements?

Which of the following items would best enable Driver Co. to determine whether the fair value of its investment in Favre Corp. is properly stated in the balance sheet?

How should plan investments be reported in a defined benefit plan’s financial statements?

What is the purpose of reporting comprehensive income?

Which of the following is a component of other comprehensive income?

Nongovernmental not-for-profit organizations are required to provide which of the following external financial statements?

Which of the following characteristics of accounting information primarily allows users of financial statements to generate predictions about an organization?

Polk Co. acquires a forklift from Quest Co. for $30,000. The terms require Polk to pay $3,000 down and finance the remaining $27,000. On March 1, year 1, Polk pays the $3,000 down and accepted delivery of the forklift. Polk signed a note that requires Polk to pay principal payments of $1,000 per month for 27 months beginning July 1, year 1. What amount should Polk report as an investing activity in the statement of cash flows for the year ended December 31, year 1?

A company that is a large accelerated filer must file its Form 10-Q with the United States Securities and Exchange Commission within how many days after the end of the period?

Each of the following is a component of the changes in the net assets available for benefits of a defined benefit pension plan trust, except

The original cost of an inventory item is above the replacement cost. The inventory item’s replacement cost is above the net realizable value. Under the lower of cost or market method, the inventory item should be valued at

On January 1 of the current year, Barton Co. paid $900,000 to purchase two-year, 8%, $1,000,000 face value bonds that were issued by another publicly-traded corporation. Barton plans to sell the bonds in the first quarter of the following year. The fair value of the bonds at the end of the current year was $1,020,000. At what amount should Barton report the bonds in its balance sheet at the end of the current year?

The funded status of a defined benefit pension plan for a company should be reported in

Martin Pharmaceutical Co. is currently involved in two lawsuits. One is a class-action suit in which consumers claim that one of Martin’s best selling drugs caused severe health problems. It is reasonably possible that Martin will lose the suit and have to pay $20 million in damages. Martin is suing another company for false advertising and false claims against Martin. It is probable that Martin will win the suit and be awarded $5 million in damages. What amount should Martin report on its financial statements as a result of these two lawsuits?

The fair value for an asset or liability is measured as

Hudson Corp. operates several factories that manufacture medical equipment. The factories have a historical cost of $200 million. Near the end of the company’s fiscal year, a change in business climate related to a competitor’s innovative products indicated to Hudson’s management that the $170 million carrying amount of the assets of one of Hudson’s factories may not be recoverable. Management identified cash flows from this factory and estimated that the undiscounted future cash flows over the remaining useful life of the factory would be $150 million. The fair value of the factory’s assets is reliably estimated to be $135 million. The change in business climate requires investigation of possible impairment. Which of the following amounts is the impairment loss?

Which of the following is one of the three standard sections of a governmental comprehensive annual financial report?

A government makes a contribution to its pension plan in the amount of $10,000 for year 1. The actuarially-determined annual required contribution for year 1 was $13,500. The pension plan paid benefits of $8,200 and refunded employee contributions of $800 for year 1. What is the pension expenditure for the general fund for year 1?

Which of the following financial categories are used in a nongovernmental not-for-profit organization’s statement of financial position?

Burns Corp. had the following items:

Which of the following amounts would the statement of comprehensive income report as other comprehensive income or loss?

Which of the following transactions is included in the operating activities section of a cash flow statement prepared using the indirect method?

Tinsel Co.’s balances in allowance for uncollectible accounts were $70,000 at the beginning of the current year and $55,000 at year end. During the year, receivables of $35,000 were written off as uncollectible. What amount should Tinsel report as uncollectible accounts expense at year end?

Alta Co. spent $400,000 during the current year developing a new idea for a product that was patented during the year. The legal cost of applying for a patent license was $40,000. Also, $50,000 was spent to successfully defend the rights of the patent against a competitor. The patent has a life of 20 years. What amount should Alta capitalize related to the patent?

What type of bonds mature in installments?

The stockholders of Meadow Corp. approved a stock-option plan that grants the company’s top three executives options to purchase a maximum of 1,000 shares each of Meadow’s $2 par common stock for $19 per share. The options were granted on January 1 when the fair value of the stock was $20 per share. Meadow determined that the fair value of the compensation is $300,000 and the vesting period is three years. What amount of compensation expense from the options should Meadow record in the year the options were granted?

At the beginning of the year, the carrying value of an asset was $1,000,000 with 20 years of remaining life. The fair value of the liability for the asset retirement obligation was $100,000. At year end, the carrying value of the asset was $950,000. The risk-free interest rate was 5%. The credit-adjusted risk-free interest rate was 10%. What was the amount of accretion expense for the year related to the asset retirement obligation?

Blythe Corp. is a defendant in a lawsuit. Blythe’s attorneys believe it is reasonably possible that the suit will require Blythe to pay a substantial amount. What is the proper financial statement treatment for this contingency?

Giaconda, Inc. acquires an asset for which it will measure the fair value by discounting future cash flows of the asset. Which of the following terms best describes this fair value measurement approach?

A company owns a financial asset that is actively traded on two different exchanges (market A and market B). There is no principal market for the financial asset. The information on the two exchanges is as follows:

What is the fair value of the financial asset?

Brand Co. incurred the following research and development project costs at the beginning of the current year:

Equipment has a five-year life and is depreciated using the straight-line method. What amount should Brand record as depreciation for research and development projects at December 31?

How should NSB, Inc. report significant research and development costs incurred?

Kenn City obtained a municipal landfill and passed a local ordinance that required the city to operate the landfill so that the costs of operating the landfill, as well as the capital costs, are to be recovered with charges to customers. Which of the following funds should Kenn City use to report the activities of the landfill?

Which of the following funds would be reported as a fiduciary fund in Pine City’s financial statements?

Belle, a nongovernmental not-for-profit organization, received funds during its annual campaign that were specifically pledged by the donor to another nongovernmental not- for-profit health organization. How should Belle record these funds?

Ragg Coalition, a nongovernmental not-for-profit organization, received a gift of treasury bills. The cost to the donor was $20,000, with an additional $500 for brokerage fees that were paid by the donor prior to the transfer of the treasury bills. The treasury bills had a fair value of $15,000 at the time of the transfer. At what amount should Ragg report the treasury bills in its statement of financial position?

In year 2, the Nord Association, a nongovernmental not-for-profit organization, received a $100,000 contribution to fund scholarships for medical students. The donor stipulated that only the interest earned on the contribution be used for the scholarships. Interest earned in year 2 of $15,000 was used to award scholarships in year 3. What amount should Nord report as temporarily restricted net assets at the end of year 2?

Which of the following documents is typically issued as part of the due-process activities of the Financial Accounting Standards Board (FASB) for amending the FASB Accounting Standards Codification?

Palmyra Co. has net income of $11,000, a positive $1,000 net cumulative effect of a change in accounting principle, a $3,000 unrealized loss on available-for-sale securities, a positive $2,000 foreign currency translation adjustment, and a $6,000 increase in its common stock. What amount is Palmyra’s comprehensive income?

A company recently moved to a new building. The old building is being actively marketed for sale, and the company expects to complete the sale in four months. Each of the following statements is correct regarding the old building, except:

A company whose stock is trading at $10 per share has 1,000 shares of $1 par common stock outstanding when the board of directors declares a 30% common stock dividend. Which of the following adjustments should be made when recording the stock dividend?

Cuthbert Industrials, Inc. prepares three-year comparative financial statements. In year 3, Cuthbert discovered an error in the previously issued financial statements for year 1. The error affects the financial statements that were issued in years 1 and 2. How should the company report the error?

How should the acquirer recognize a bargain purchase in a business acquisition?

Bale Co. incurred $100,000 of acquisition costs related to the purchase of the net assets of Dixon Co. The $100,000 should be

Each of the following would be considered a Level 2 observable input that could be used to determine an asset or liability’s fair value, except

How should a nongovernmental not-for-profit organization classify gains and losses on investments purchased with permanently restricted assets?

At which of the following amounts should a nongovernmental not-for-profit organization report investments in debt securities?

Which of the following is the paramount objective of financial reporting by state and local governments?

A company is preparing its year-end cash flow statement using the indirect method. During the year, the following transactions occurred:

What is the company’s increase in cash flows provided by financing activities for the year?

A company has a 22% investment in another company that it accounts for using the equity method. Which of the following disclosures should be included in the company’s annual financial statements?

King, Inc. owns 70% of Simmon Co.’s outstanding common stock. King’s liabilities total $450,000, and Simmon’s liabilities total $200,000. Included in Simmon’s financial statements is a $100,000 note payable to King. What amount of total liabilities should be reported in the consolidated financial statements?

In the financial statements of employee benefit pension plans and trusts, the plan investments are reported at

A company should recognize goodwill in its balance sheet at which of the following points?

A company sponsors two defined benefit pension plans. The following information relates to the plans at year end:

What amount(s) should the company report in its balance sheet related to the plans?

An overfunded single-employer defined benefit postretirement plan should be recognized in a classified statement of financial position as a

Which of the following statements is correct as it relates to changes in accounting estimates?

On January 1, a company enters into an operating lease for office space and receives control of the property to make leasehold improvements. The company begins alterations to the property on March 1 and the company’s staff moves into the property on May 1. The monthly rental payments begin on July 1. The recognition of rental expense for the new offices should begin in which of the following months?

Markson Co. traded a concrete-mixing truck with a book value of $10,000 to Pro Co. for a cement-mixing machine with a fair value of $11,000. Markson needs to know the answer to which of the following questions in order to determine whether the exchange has commercial substance?

Which of the following is the proper treatment of the cost of equipment used in research and development activities that will have alternative future uses?

Which of the following local government funds uses the accrual basis of accounting?

Which of the following statements is the most significant characteristic in determining the classification of an enterprise fund?

How should a city’s general fund report the acquisition of a new police car in its governmental fund statement of revenues, expenditures and changes in fund balances?

Which of the following resources increases the temporarily restricted net assets of a nongovernmental, not-for-profit voluntary health and welfare organization?

Materiality and relevance are both defined by

According to the FASB conceptual framework, for financial reporting to be useful, it must

For a company to obtain a retail business license in a particular state, the company is required to pay the state the equivalent of three months of sales taxes on its projected retail sales. This amount is fully refundable after five years, provided the company has filed all required sales tax returns and paid all sales taxes due. Initially the company should report the payment related to this licensing requirement as

Which of the following assets or transactions is an element of comprehensive income?

(this question has been modified)
A company acquired an aircraft for $80 million, with the cost consisting of the airframe, $50 million; the engine, $20 million; and other components, $10 million. The company applies the cost model and uses the straight-line method of depreciation. The aircraft has a total estimated useful life of 20 years and no residual value.

The estimated useful lives of the components are as follows:

• Airframe: 10 years
• Engine: 5 years
• Other components: 10 years

Under IFRS, what amount should the company record as annual depreciation expense?

(unofficial CPA question)

If ABC corp purchases 25% of XYZ corp and uses the equity method of accounting. What effect does XYZ’s net income and dividends have on ABC’s balance sheet for the investment in XYZ?

Under IFRS, which of the following items is considered investment property?

In year 3, a company incurred $500,000 of legal costs defending several patents. Included in that amount was $400,000 of legal costs associated with successful outcomes and $100,000 of legal costs associated with unsuccessful outcomes. What amount of legal costs, if any, should the company expense for year 3?

Which of the following statements is correct regarding deferred revenues recorded by a company that provides services to customers?

A deferred tax liability may result from which of the following items?

When there is a change in the reporting entity, how should the change be reported in the financial statements?

Under IFRS, each of the following is a disclosure requirement related to the correction of a material prior-period error, except

Green Co. was preparing its year-end financial statements. Green had a pending lawsuit against a competitor for $5,000,000 in damages. Green’s attorneys indicate that obtaining a favorable judgement was probable and the amount of damages is reasonably estimated. Green incurred $100,000 in legal fees. The income tax rate was 30%. What amount, if any, should Green recognize as a contingency gain in its financial statements?

Which of the following items would be classified as a research and development cost?

Spring Corp. entered into a five-year lease agreement with Fall Corp. Spring, the lessee, paid an additional $5,000 nonrefundable lease bonus to Fall upon signing the operating lease agreement. When would Fall recognize in income the nonrefundable lease bonus paid by Spring?

The measurement focus of governmental fund accounting is on which of the following?

What is the primary purpose of the statement of activities of a nongovernmental not-for- profit organization?

Which of the following would a nongovernmental not-for-profit educational institution report as program services?

How should a nongovernmental not-for-profit organization report investments in its financial statements?

Accumulated other comprehensive income is reported in which of the following financial statements?

In January, Stitch, Inc. adopted the dollar-value LIFO method of inventory valuation. At adoption, inventory was valued at $50,000. During the year, inventory increased $30,000 using base-year prices, and prices increased 10%. The designated market value of Stitch’s inventory exceeded its cost at year end. What amount of inventory should Stitch report in its year-end balance sheet?

(this question has been modified)

Fern Co. has net income, before taxes, of $100,000, including $20,000 interest revenue from municipal bonds and $10,000 paid for officers’ life insurance premiums where the company is the beneficiary. The tax rate for the current year is 10%. What is Fern’s effective tax rate?

Titan’s monthly bank statement shows a balance of $12,000. Reconciliation of the statement with company books reveals the following information:

What is the net cash balance after the reconciliation?

This question had been modified:

Damon Co. purchased 100% of the outstanding common stock of Smith Co. in an acquisition by issuing 20,000 shares of its $1 par common stock that had a fair value of $10 per share and providing contingent consideration that had a fair value of $10,000 on the acquisition date. Damon also incurred $15,000 in direct acquisition costs. On the acquisition date, Smith had assets with a book value of $200,000, a fair value of $350,000, and related liabilities with a book and fair value of $100,000. What amount of gain should Damon report related to this transaction?

This question has been modified.

Chape Co. had the following information related to common and preferred shares during the year:

[table1 colalign=”left|right|right”]

Common shares outstanding; 1/1; 700,000;

Common shares repurchased; 3/31; 20,000;

Conversion of preferred shares; 6/30; 40,000;

[/table1]

Chape reported net income of $2,000,000 at December 31. What amount of shares should Chape use as the denominator in the computation of basic earnings per share?

This question has been modified.

On April 1, year 1, Hall Fitness Center leased its gym to Dunn Fitness Center under a two-year operating lease. Hall normally charges $3,000 per month to lease its gym, but as an incentive, Hall gave Dunn $2,000 a month discount off first year’s rent. Dunn’s rental payments were as follows:

[table1 colalign=”left|right|right”]

Year 1; 12 x $1,000; = $12,000

Year 2; 12 x $3,000; = $36,000

[/table1]

Dunn’s rent payments were due on the first day of the month, beginning on April 1, year 1. What amount should Dunn report as rent expense in its monthly income statement for April 1, year 2?

Orange Inc. made leasehold improvements to a property it was going to lease for 10 years. The estimated useful life of the improvements was 8 years. The costs for the improvements should be:

Not an official AICPA question.

Which of the following fund types do not appear in the government-wide financial statements?

This is not an official AICPA question.

In a business combination, the closing date is the same as which of the following:

When a business has one or more significant concentrations, which of the following requires a disclosure in the financial statements?

Not an official AICPA question.

Which of the following is not a criteria for a capital lease?

Not an official AICPA question.

If a pharmaceutical company donates medications to a non-profit healthcare organization that are essential to the organization’s operations, the donation would be classified as:

Which of the following financial statement is not required by all nonprofit organizations?

If a donor gave a gift to a nonprofit with specific instructions about how the gift is to be spent, but also specifies that the entire amount can be spent at any time, how is this gift classified by the nonprofit?

(this question has been modified)

Toigo Co. purchased merchandise from a vendor in England on November 20 for 100,000 British pounds. Payment was due in British pounds on January 20. The spot rates to purchase one pound were as follows:

• November 20: $2.00
• December 31: $1.50
• January 20: $1.30

How should the foreign currency transaction gain be reported on Toigo’s financial statements at December 31?

This question has been modified.

A company decided to sell an unprofitable division of its business. The company can sell the entire operation for $800,000, and the buyer will assume all assets and liabilities of the operations. The tax rate is 20%. The assets and liabilities of the discontinued operation are as follows:

[table1 colalign=”left|right”]

Buildings; $5,000,000;

Accumulated depreciation; 3,000,000;

Mortgage on buildings; 1,100,000;

Inventory; 500,000;

Accounts payable; 600,000;

Accounts receivable; 200,000;

[/table1]

What is the net after-tax loss on the disposal of the division?

Four years ago on January 2, Randall Co. purchased a long-lived asset. The purchase price of the asset was $250,000, with no salvage value. The estimated useful life of the asset was 10 years. Randall used the straight-line method to calculate depreciation expense. An impairment loss on the asset of $30,000 was recognized on December 31 of the current year. The estimated useful life of the asset at December 31 of the current year did not change. What amount should Randall report as depreciation expense in its income statement for the next year?

A company has a defined benefit pension plan for its employees. On December 31, year 1, the accumulated benefit obligation is $45,900, the projected benefit obligation is $68,100, and the fair value of the plan assets is $62,000. What amount, if any, related to the defined benefit plan should be recognized in the balance sheet at December 31, year 1?

This question has been modified.

A company’s activities for year 2 included the following:

[table1 colalign=”left|right”]

Gross sales; $3,000,000;

Cost of sales; 2,000,000;

Adj for prior-year understatement of amt. expense; 60,000;

Sales returns; 100,000;

Gain on sale of AFS securities; 100,000;

Unrealized gain on AFS securities; 50,000;

[/table1]

The company has a 10% effective income tax rate. What is the company’s net income for year 2?

Not an official AICPA question.

Black Inc issued ten year bonds with a face value of $100,000 and a stated rate of 8%. The bonds were issued at $90,000 to yield a 10% effective rate. What amount of interest expense should be reported for the end of year 2?

This question has been modified.

At the beginning of the year, Cann Co. started construction on a new $2 million addition to its plant. Total construction expenditures made during the year were $200,000 on January 1, $600,000 on July 1, and $1,200,000 on December 1. On January 1, the company borrowed $500,000 for the construction at 10%. The only other outstanding debt the company had was a 8% interest rate, long-term mortgage of $1,000,000, which had been outstanding the entire year. What amount of interest should Cann capitalize as part of the cost of the plant addition?

This question has been modified.

Bondholders of Balm Co. converted their bonds into 50,000 shares of $5 par value common stock. In Balm’s accounting records, the bonds had a par value of $575,000 and unamortized discount of $25,000 at the time of conversion. What amount of additional paid-in capital from the conversion should Balm record?

Wood Co.’s dividends on noncumulative preferred stock have been declared but not paid. Wood has not declared or paid dividends on its cumulative preferred stock in the current or the prior year and has reported a net loss in the current year. For the purpose of computing basic earnings per share, how should the income available to common stockholders be calculated?

Not an official AICPA question.

White Inc owes a bank $500,000 and one year of accrued interest at 10%. White is having financial difficulties and the bank agrees to restructure the loan to be $200,000 due in 10 years at the same 10% interest. What gain would White recognize on this debt restructuring?

A $100,000 bond was issued on March 1, 2017 at 103. The bond is due in 5 years. If the straight-line method is being used, what is the bond liability at December 31, 2017?

This question has been modified.

On January 1, year 1, Peabody Co. purchased an investment for $400,000 that represented 20% of Newman Corp.’s outstanding voting stock. For year 1, Newman reported net income of $60,000 and paid dividends of $20,000. At year end, the fair value of Peabody’s investment in Newman was $410,000. Peabody elected the fair value option for this investment. What amount should Peabody recognize in net income for year 1 attributable to the investment?

This question has been modified.

On June 19, Don Co., a U.S. company, sold and delivered merchandise on a 30-day account to Cologne GmbH, a German corporation, for 100,000 euros. On July 19, Cologne paid Don in full. Relevant currency exchange rates were:

[table1 colalign=”left|right|right”]

; June 19; July 19;

Spot rate; $.988; $.995;

30-day forward rate; $.990; $1.000;

[/table1]

What amount should Don record on June 19 as an account receivable for its sale to Cologne?

This question has been modified.

On January 1, Read, a nongovernmental not-for-profit organization, received $20,000 and an unconditional pledge of $20,000 for each of the next four calendar years to be paid on the first day of each year. The present value of an ordinary annuity for four years at a constant interest rate of 8% is 3.3. What amount of restricted net assets is reported in the year the pledge was received?

As of December 1, year 2 a company obtained a $1,000,000 line of credit maturing in one year on which it has drawn $250,000, a $750,000 secured note due in five annual installments, and a $300,000 three-year balloon note. The company has no other liabilities. How should the company’s debt be presented in its classified balance sheet on December 31, year 2 if no debt repayments were made in December?

A company’s first IFRS reporting period is for the year ended December 31, year 2. While preparing the year 2 statement of financial position, management identified an error in which a $90,000 loss accrual was not recorded. $40,000 of the loss accrual related to a year 1 event and $50,000 related to a year 2 event. What amount of loss accrual should the company report in its December 31, year 1, IFRS statement of financial position?

A company has the following items on its year-end trial balance:

What is the company’s gross profit?

Fenn Museum, a nongovernmental not-for-profit organization, had the following balances in its statement of functional expenses:

What amount should Fenn report as expenses for support services?

Abbott Co. is preparing its statement of cash flows for the year. Abbott’s cash disbursements during the year included the following:

What should Abbott report as total cash outflows for financing activities in its statement of cash flows?

A company calculated the following data for the period:

What amount should the company report as net cash provided by operating activities in its statement of cash flows?

Larkin Co. has owned 25% of the common stock of Devon Co. for a number of years, and has the ability to exercise significant influence over Devon. The following information relates to Larkin’s investment in Devon during the most recent year:

What is the carrying amount of Larkin’s investment in Devon at year end?

Marr Co. had the following sales and accounts receivable balances, prior to any adjustments at year end:

Marr uses 3% of accounts receivable to determine its allowance for uncollectible accounts at year end. By what amount should Marr adjust its allowance for uncollectible accounts at year end?

A manufacturer has the following per-unit costs and values for its sole product:

In accordance with IFRS, what is the per-unit carrying value of inventory in the manufacturer’s statement of financial position?

During the year, Hauser Co. wrote off a customer’s account receivable. Hauser used the allowance method for uncollectable accounts. What impact would the write-off have on net income and total assets?

On January 1, Fonk City approved the following general fund resources for the new fiscal period:

What amount should Fonk record as estimated revenues for the new fiscal year?