79%

Question 1

equity method JE for sub’s income

Answer 1

inv in sub
(equity in earnings)

Question 2

equity method JE for fair value premiums:

Answer 2

equity in earnings
(inv in sub)

Question 3

JE for retirement of shares:

Answer 3

common stock
apic-common stock
(treasury stock)
(apic-treasury stock)

Question 4

when reconciling govt-wide financial statements, principal payments on debt need to be

Answer 4

added back

expenditures - principal
cash

Question 5

where is equity in earnings reported?

Answer 5

income statement

Question 6

what impacts equity in earnings every year?

Answer 6

sub’s income, sub’s dividends, amortization of premium

Question 7

how does a loss from discontinued operations impact net income?

Answer 7

decrease

Question 8

how are all expenses in a not-for-profit classified?

Answer 8

without donor restrictions

Question 9

on the statement of cash flows, interest payments on bonds is classified as

Answer 9

operating activities

Question 10

when a 3 year purchase commitment is canceled after 1 year, how much of the loss is accounted for?

Answer 10

entire purchase commitment (not just for the current year)

Question 11

what are items on the book that need to be applied to the bank balance?

Answer 11

+deposits in transit
- outstanding checks

Question 12

what are items on the bank reconciliation that need to be applied to the book?

Answer 12

+bank collections
+ interest income
- service charges
- insufficient charges

Question 13

where are hospitals reported on GWFS?

Answer 13

business-type activities, part of enterprise fund

Question 14

when is revenue earned on gift cards?

Answer 14

when redeemed or expired/lapsed

Question 15

are nonvoting shares relevant to determining majority voting interest?

Answer 15

no

Question 16

how are discontinued operations that occur mid year usually reported?

Answer 16

included in NI and disclosed in interim reporting

Question 17

what is the pro-rata basis in a short term loan with a maturity less than 12 months?

Answer 17

12 months

Question 18

what is the pro-rata basis in a short term loan with a maturity less than 12 months?

Answer 18

12 months

Question 19

what are the intercompany inventory elimination journal entries?

Answer 19

interco-sales
(interco-cogs)
(cogs - sub)
(ending inventory - sub)

Question 20

what must be eliminated in intercompany inventory?

Answer 20

profit

sum of cogs-sub and ending inventory-sub

Question 21

how is purchase of treasury stock classified on the statement of cash flows?

Answer 21

financing outflow

Question 22

due to a decline in market price at the end of Q2, Apple incurred an inventory loss. market price is expected to return to previous levels by the end of the year, but did not. when should the inventory loss be recorded?

Answer 22

at the end of Q4

Question 23

multiplier for:
50% stock dividend
3 for 1 stock split

Answer 23

1.5
3

Question 24

when land is held for resale, what is it reclassified as?

Answer 24

current asset

Question 25

how much cash is available if there is an overdraft of ($10,000) after writing a check for $50,000?

Answer 25

$40,000