
ACC 305 ACC305 Week 5 MidTerm
ACC 305 Week 5 MidTerm
Multiple Choice Question 35
In computing the service cost component of pension expense, the FASB concluded that
Multiple Choice Question 98
Harrison Company owns 20,000 of the 50,000 outstanding shares of Taylor, Inc. common stock. During 2015, Taylor earns $1,000,000 and pays cash dividends of $800,000.
Harrison should report investment revenue for 2015 of
Multiple Choice Question 78
Kiner, Inc. began work in 2014 on a contract for $16,800,000. Other data are as follows:
 |
 |
2014 |
 |
2015 |
Costs incurred to date |
 |
$7,200,000 |
 |
$11,200,000 |
Estimated costs to complete |
 |
4,800,000 |
 |
- |
Billings to date |
 |
5,600,000 |
 |
16,800,000 |
Collections to date |
 |
4,000,000 |
 |
14,400,000 |
If Kiner uses the percentage-of-completion method, the gross profit to be recognized in 2014 is
Multiple Choice Question 91
Fryman Furniture uses the installment-sales method. No further collections could be made on an account with a balance of $24,000. It was estimated that the repossessed furniture could be sold as is for $7,200, or for $8,400 if $400 were spent reconditioning it. The gross profit rate on the original sale was 40%. The loss on repossession was
Multiple Choice Question 24
In a defined-contribution plan, a formula is used that
Multiple Choice Question 64
Dexter purchases equipment from Ray Company for a price of $5,000,000 and chooses Ray to do the installation. Ray doesn't charge for the installation of equipment. The price of the installation service is estimated to have a fair value of $60,000. Assuming the transaction to be multiple-deliverable arrangement, compute the amount to be allocated to installation.
Multiple Choice Question 25
In a defined-benefit plan, a formula is used that
Multiple Choice Question 33
In selecting an accounting method for a newly contracted long-term construction project, the principal factor to be considered should be
Multiple Choice Question 78
On January 1, 2015, Newlin Co. has the following balances:
Projected benefit obligation |
 |
$ |
2,100,000 |
Fair value of plan assets |
 |
 |
1,800,000 |
The settlement rate is 10%. Other data related to the pension plan for 2015 are:
Service cost |
 |
$ |
180,000 |
Amortization of prior service costs due to increase in benefits |
 |
 |
60,000 |
Contributions |
 |
 |
300,000 |
Benefits paid |
 |
 |
135,000 |
Actual return on plan assets |
 |
 |
237,000 |
Amortization of net gain |
 |
 |
18,000 |
The fair value of plan assets at December 31, 2015 is
Multiple Choice Question 35
In accounting for a long-term construction-type contract using the percentage-of-completion method, the gross profit recognized during the first year would be the estimated total gross profit from the contract, multiplied by the percentage of the costs incurred during the year to the
Multiple Choice Question 70
The following information for Cooper Enterprises is given below:
 |
 |
 |
December 31, 2015 |
 |
||||||
Assets and obligations |
 |
 |
 |
 |
||||||
 |
Plan assets (at fair value) |
 |
 |
$400,000 |
 |
|||||
 |
Accumulated benefit obligation |
 |
 |
740,000 |
 |
|||||
 |
Projected benefit obligation |
 |
 |
800,000 |
 |
|||||
Other Items |
 |
 |
 |
 |
||||||
 |
Pension asset / liability, January 1, 2015 |
 |
 |
20,000 |
 |
|||||
 |
Contributions |
 |
 |
240,000 |
 |
|||||
 |
Accumulated other comprehensive loss |
 |
 |
335,800 |
 |
There were no actuarial gains or losses at January 1, 2015. The average remaining service life of employees is 10 years.
The amortization of Other Comprehensive Loss for 2016 is:
Multiple Choice Question 53
A seller is using the cost-recovery method for a sale. Interest will be earned on the future payments. Which of the following statements is not correct?
Multiple Choice Question 47
Gains and losses that relate to the computation of pension expense should be
Multiple Choice Question 49
The method most commonly used to report defaults and repossessions is
Multiple Choice Question 39
APB Opinion No. 21Â specifies that, regarding the amortization of a premium or discount on a debt security, the
IFRS Multiple Choice Question 07
Rushia Company has an available-for-sale investment in the 10%, 10-year bonds of Pear Company The investment’s carrying value is $3,200,000 at December 31, 2014. On January 9, 2015, Rushia learns that Pear Company has lost its primary manufacturing facility in an uninsured fire. As a result, Rushia determines that the investment is impaired and now has a fair value of $2,300,000. In June, 2016, Pear Company has succeeded in rebuilding its manufacturing facility, and its prospects have improved as a result.
If Rushia Company determines that the fair value of the investment is now $3,900,000 and is using U.S. GAAP for its external financial reporting, which of the following is true?
Multiple Choice Question 29
Equity securities acquired by a corporation which are accounted for by recognizing unrealized holding gains or losses as other comprehensive income and as a separate component of stockholders' equity are
Multiple Choice Question 38
An available-for-sale debt security is purchased at a discount. The entry to record the amortization of the discount includes a
Multiple Choice Question 72
Patton Company purchased $900,000 of 10% bonds of Scott Company on January 1, 2015, paying $846,225. The bonds mature January 1, 2025; interest is payable each July 1 and January 1. The discount of $53,775 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity.
On July 1, 2015, Patton Company should increase its Debt Investments account for the Scott Company bonds by
Multiple Choice Question 51
All of the following are procedures for the computation of deferred income taxes except to
Multiple Choice Question 50
A deferred tax liability is classified on the balance sheet as either a current or a noncurrent liability. The current amount of a deferred tax liability should generally be
Multiple Choice Question 46
Accounting for income taxes can result in the reporting of deferred taxes as any of the following except
Multiple Choice Question 78
At the beginning of 2015; Elephant, Inc. had a deferred tax asset of $10,000 and a deferred tax liability of $15,000. Pre-tax accounting income for 2015 was $750,000 and the enacted tax rate is 40%. The following items are included in Elephant’s pre-tax income:
Interest income from municipal bonds |
$Â 60,000 |
||
Accrued warranty costs, estimated to be paid in 2016 |
$130,000 |
||
Operating loss carryforward |
$Â 95,000 |
||
Installment sales revenue, will be collected in 2016 |
$Â 65,000 |
||
Prepaid rent expense, will be used in 2016 |
$Â 30,000 |
The ending balance in Elephant, Inc’s deferred tax liability at December 31, 2015 is
Multiple Choice Question 83
Larsen Corporation reported $100,000 in revenues in its 2014 financial statements, of which $33,000 will not be included in the tax return until 2015. The enacted tax rate is 40% for 2014 and 35% for 2015. What amount should Larsen report for deferred income tax liability in its balance sheet at December 31, 2014?