Gia02 tb chapter 06 - Intermediate Accounting 2E - Gordon - TB PDF

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Intermediate Accounting, 2e Chapter 6 Statements of Financial Position and Cash Flows and the Annual Report 6 The Statement of Financial Position 1) The balance sheet reflects the financial position of an entity over a period of time. Answer: FALSE Diff: 1 Var: 1 Objective: 6 GAAP AACSB: Application...

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Intermediate Accounting, 2e (Gordon/Raedy/Sannella) Chapter 6 Statements of Financial Position and Cash Flows and the Annual Report 6.1 The Statement of Financial Position 1 )Thebal anc es he e tr e flec t st hefinanc i a lpos i t i onofa nent i t yoveraper i odoft i me . Ans wer :F ALSE Di ff:1 Va r :1 Obj e c t i ve :6. 1 I FRS/GAAP:GAAP AACSB:Appl i c a t i onofknowl e dge

2 )S ol venc yi same as ur eofafir m' sabi l i t yt opa yi t sobl i ga t i onsast heyma t ur e . Ans we r :TRUE Di ff:1 Var : 1 Obj e c t i ve :6. 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

3 )Afir mt ha tr e s pondsqui c kl yt oune xpe c t e dc i r c ums t a nc e se xhi bi t sahi ghl e ve loffinanc i a lfle xi bi l i t y . Ans we r :TRUE Di ff:1 Var :1 Obj e c t i ve :6. 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

4 )Ther e l e vanc eoft heba l anc es he e ti sl i mi t e dbe c aus emanya s s e t sar er e c or de da thi s t or i c alc os t s . Ans we r :TRUE Di ff:1 Var :1 Obj e c t i ve :6. 1 I FRS/GAAP:GAAP AACSB:Appl i c a t i onofknowl e dge

5 )Whi c hoft hef ol l owi ngi sno tac as hflo w me as ur e ? A)pr ofit a bi l i t y B)s ol ve nc y C)l i qui di t y D)financ i a lfle x i bi l i t y Ans we r :A Di ff:1 Var :1 Obj e c t i ve :6. 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 Copyr i ght©201 9Pe ar s onEduc a t i on,I nc .

6 )I fa nent i t yc a nbor r ow f undst ome e tanune xpe c t e dfina nc i alc r i s i s ,i te xhi bi t shi gh__ ___ __ _. A)l i qui di t y B)s ol ve nc y C)s t abi l i t y D)financ i a lfle x i bi l i t y Ans we r :D Di ff:1 Var :1 Obj e c t i ve :6. 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

7 )Whi c hoft hef ol l owi ngi sno tal i mi t a t i onoft hebal a nc es hee t ? A)Ma nybal a nc es he eta c c ount sa r er e por t e da thi s t or i c alc os ti ns t e adofmar ke tval ue sorl i qui da t i on val ues . B)Anumbe rofa s s et sa ndl i abi l i t i e s ,s uc ha shuma nc a pi t a landr e put a t i on,a r enotr e por t e dont he bal a nc es hee t . C)Manybal anc es he e ta c c ount sa r ebas e dupones t i ma t e sa soppos e dt ode t e r mi nabl eamount s . D)Ma nyoft hebal a nc e sa r er e por t e da tt he i rl i qui da t i onval ues . Ans we r :D Di ff:1 Var :1 Obj e c t i ve :6. 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

8 )Whi c hoft hef ol l owi ngbe s tde s c r i be st hec onc e ptofl i qui di t y ? A)I ti same a s ur eofana s s e t ' sa bi l i t yt obequi c kl yc onver t e dt oc a s hwi t houtr i s kofl os s . B)I ti same as ur eofafir m' sl ongt e r ma bi l i t yt opa yi t sobl i ga t i onsa st he yma t ur e . C)I ti ndi c a t esane nt i t y' sabi l i t yt or e s pondt oune xpe c t e dne e ds D)I ti ndi c a t e safir m' sabi l i t yt ot a keadva nt a geofoppor t uni t i esbyt aki ngac t i onst ha ta l t ert heamount s a ndt i mi ngofc as hflows . Ans we r :A Di ff:1 Var :1 Obj e c t i ve :6. 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

9 )Li s tt hr e ear e a si nwhi c ht hebal a nc es hee tpr ovi de si mpor t a nti nf or ma t i ont ofinanc i a ls t a t e me nt us e r s . Ans we r :1. Thebal anc es he e ts umma r i z esec onomi cr e s our c e sandobl i ga t i onst ha ti mpa c tt hee nt i t y' s a bi l i t yt oge ne r a t ef ut ur ec as hflows . 2 .Thebal a nc es hee ti sus e f uli na s s e s s i nga ne nt i t y' sr a t eofr e t ur noni t si nve s t me nt s . 3 .Thebal a nc es hee tai dsi na s s e s s i ngt her i s ka s s oc i a t e dwi t hanent i t yb ypr ovi di ngi nput sf orc a s hflow me a s ur e s . Di ff:1 Var :1 Obj e c t i ve :6. 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

2 Copyr i ght©201 9Pe ar s onEduc a t i on,I nc .

1 0)Li s tande xpl a i nt hr e ec ommonc as hflo w me as ur esbas e duponbal anc es he e ti nf or ma t i on. Ans we r : 1 .Li qui di t yi same a s ur eofana s s e t ' sabi l i t yt obequi c kl yc onve r t e dt oc as hwi t houtr i s kofl os s . 2 .Sol v enc yi same as ur eofafir m' sl ong t e r m abi l i t yt opa yi t sobl i ga t i onsa st he yma t ur e . 3 .Fi na nc i a lfle xi bi l i t yi ndi c a t e sane nt i t y' sabi l i t yt or e s pondt oune xpec t e dne edsa ndoppor t uni t i esby t a ki nga c t i onst ha ta l t e rt heamount sandt i mi ngofc a s hflows . Di ff:2 Var :1 Obj e c t i ve :6. 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 1)Wha tar et hr e el i mi t a t i onsa s s oc i a t e dwi t ht hebal anc es he e t ? Ans we r : 1 .Ma nyba l anc es hee ta c c ount sar er e por t e da thi s t or i c alc os ti ns t e a dofma r ke tval ue sorl i qui da t i on val ues ;t hi sl i mi t st her e l e va nc eofi nf or ma t i oni nt heba l anc es hee t . 2 .Anumberofas s e t sandl i abi l i t i e s , s uc hashumanc api t a landr e put a t i on,a r enotr e por t e dont he bal a nc es hee t . 3 .Ma nyba l anc es hee ta c c ount sar ebas e dupone s t i ma t e sasoppos e dt ode t e r mi na bl ea mount s . Di ff:2 Var :1 Obj e c t i ve :6. 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

6.2 Balance Sheet Classification 1 )Cur r e ntas s e t sa r et hos et ha tafir me xpe c t st oc onver ti nt oc as hwi t hi noneye arori t sope r a t i ngc yc l e , whi c he ve ri sl onge r . Ans we r :TRUE Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

2 )Pr e pai de xpe ns e sa r enor ma l l yr e por t e da sc ur r e ntas s e t s . Ans we r :TRUE Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

3 )I nor de rt obeac a s he qui va l ent , a ni nve s t me ntmus tha veama t ur i t yda t eoft hr e emont hsorl e s s whe npur c has e d. Ans we r :TRUE Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

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4 )Landhe l df orr e s a l ei sc l a s s i fie daspr ope r t y ,pl a nt , ande qui pme nt . Ans we r :F ALSE Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

5 )Thepor t i onofl ongt e r m de btt ha tma t ur e sdur i ngt hec omi ngye ari sc l a s s i fie dasac ur r e ntl i a bi l i t y . Ans we r :TRUE Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

6 )I FRSs pe c i fie st ha tbi ol ogi c alas s et ss houl dber e por t e dont hebal anc es hee t . Ans we r :TRUE Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:I FRS AACSB:Appl i c a t i onofknowl e dge

7 )TheI FRSde fini t i onofc ur r e ntl i abi l i t i e sdi ffe r sf r om t hede fini t i onofc ur r e ntl i a bi l i t i e sunde rGAAP . Ans we r :TRUE Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

8 )Ac c umul a t e dot he rc ompr e he ns i vei nc omea ppe a r sonanent i t y' si nc omes t a t e me nt . Ans we r :F ALSE Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

9 )Whi c hoft hef ol l owi ngi sac ur r e nta s s e t ? A)t r e as ur ybi l la c qui r e dwi t h2mont hst oma t ur i t y B)l andhe l df ori nve s t me nt C)e qui pme nt D)goodwi l l Ans we r :A Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

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1 0)Whi c hoft hef ol l o wi ngi sno tac a s he qui val e nt ? A)c omme r c i a lpa pe rac qui r e dwi t h7 5da yst oma t ur i t y B)bonds i nki ngf und C)mone ymar ke tf unds D)t r e as ur ybi l lac qui r e dwi t h30da yst oma t ur i t y Ans we r :B Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 1)Whi c hoft hef ol l o wi ngi sno tac ur r e ntl i abi l i t y? A)i nc omet axpa yabl e B)ac c ount spa yabl e C)s ubs c r i pt i onsc ol l e c t e doneye ari nadvanc e D)bonds i nki ngf und Ans we r :D Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 2)Whi c hoft hef ol l o wi ngi sno tac ompone ntofs ha r e hol de r s ' e qui t y? A)Re t a i ne dEa r ni ngs B)Pai di nCa pi t a l C)Ac c r ue dLi a bi l i t i e s D)Ac c umul a t e dOt he rCompr e he ns i veI nc ome Ans we r :C Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 3)Whi c hoft hef ol l o wi ngi sano tac ompone ntofs ha r e hol de r s ' e qui t y? A)CommonSt oc k B)Di vi de ndsPa ya bl e C)Addi t i ona lPai di nCa pi t a l D)Tr e as ur ySt oc k Ans we r :B Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

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1 4)Whe r edoe sAc c umul a t e dOt he rCompr e he ns i veI nc omea ppe ar ? A)ont hebal a nc es he e ti nt hes har e hol de r s ' e qui t ys e c t i on B)ont hebal anc es he eti nt hel ong t e r ml i abi l i t i e ss e c t i on C)ont hei nc omes t a t e me nta f t e rne ti nc ome D)ont hebal a nc es he e ta sal ongt e r ma s s e t Ans we r :A Di ff:1 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 5)Cl as s i f yt hef ol l owi nga c c ount sasas s e t s( A) ,l i a bi l i t i e s( L) , ors ha r e hol de r s ' e qui t y( S E)a ndwhe t her t he yar ec ur r e nt( C) ,nonc ur r ent( NC) , ornotappl i c abl e( N/A) . Ac c ount Me r c handi s eI nvent or y Une ar ne dRe nt( oneye arl e as e ) Pr e pai dI ns ur anc e BondsPa yabl e( duei n5ye a r s ) I nve s t me nti nBCompa ny( t obehe l d 5ye ar s ) Goodwi l l Addi t i onalPa i di nCa pi t a l Ac c umul a t e dOt he rCompr e he ns i ve I nc ome Equi pme nt I nc omeTaxPa ya bl e

A,L,SE

C, NC, N/ A

A,L,SE A L A L

C, NC, N/ A C C C NC

Ans we r : Ac c ount Me r c handi s eI nvent or y Une ar ne dRe nt( oneye arl e as e ) Pr e pai dI ns ur anc e BondsPa yabl e( duei n5ye a r s ) I nve s t me nti nBCompa ny( t obehe l d 5ye ar s ) Goodwi l l Addi t i onalPa i di nCa pi t a l Ac c umul a t e dOt he rCompr e he ns i ve I nc ome Equi pme nt I nc omeTaxPa ya bl e

A

NC

A SE

NC N/A

SE

N/A

A L

NC C

Di ff:2 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 6)Cl as s i f yt hef ol l owi nga c c ount sasas s e t s( A) ,l i a bi l i t i e s( L) , ors ha r e hol de r s ' e qui t y( S E)a ndwhe t her t he yar ec ur r e nt( C) ,nonc ur r ent( NC) , ornotappl i c abl e( N/A) . Ac c ount Ac c ount sRe c e i vabl e Ac c ount sPa yabl e Suppl i es

A,L, SE

C, NC, N/ A

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BondsPa yabl e( duei n1 0ye ar s ) I nve s t me nti nACompany ( t obes ol di n6mont hs ) Copyr i ght Addi t i onalPa i di nCa pi t a l Re t a i ne dEar ni ngs La nd Wa ge sPa ya bl e Ans we r : Ac c ount Ac c ount sRe c e i vabl e Ac c ount sPa yabl e Suppl i es BondsPa yabl e( duei n1 0ye ar s ) I nve s t me nti nACompany ( t obes ol di n6mont hs ) Copyr i ght Addi t i onalPa i di nCa pi t a l Re t a i ne dEar ni ngs La nd Wa ge sPa ya bl e

A,L, SE A L A L

C, NC, N/ A C C C NC

A

C

A SE SE A L

NC N/A N/A NC C

Di ff:2 Var :1 Obj e c t i ve :6. 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

6.3 Balance Sheet Presentation and Format 1 )Ther e por tf or ma toft heba l anc es he e tl i s t sas s et sont hel e f ts i dea ndl i abi l i t i esands t oc khol de r s ' e qui t yont her i ghts i deoft hes t a t e me nt . Ans we r :F ALSE Di ff:1 Var :1 Obj e c t i ve :6. 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

7 Copyr i ght©201 9Pe ar s onEduc a t i on,I nc .

2 )Theac c ountf or ma toft heba l anc es he e tl i s t sas s e t sont hel e f ts i deandl i abi l i t i esands t oc khol de r s ' e qui t yont her i ghts i deoft hes t a t e me nt . Ans we r :TRUE Di ff:1 Var :1 Obj e c t i ve :6. 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

3 )Whe npr e pa r i ngabal anc es he e tus i ngI FRS,ac ompa nyma yc hoos et ol i s tnonc ur r e ntas s e t sfir s t . Ans we r :TRUE Di ff:1 Var :1 Obj e c t i ve :6. 3 I FRS/GAAP:I FRS AACSB:Appl i c a t i onofknowl e dge

4 )Ac ompanyr epor t i ngunde rI FRSma yl i s ti t sa s s e t si nei t he ri nc r e a s i ngorde c r e a s i ngor de rof l i qui di t y . Ans we r :TRUE Di ff:1 Var :1 Obj e c t i ve :6. 3 I FRS/GAAP:I FRS AACSB:Appl i c a t i onofknowl e dge

5 )Ac ompanyr epor t i ngunde rI FRSmus tl i s ti t sl i abi l i t i e si nor de rofl i qui di t yf ore ac hgr oupi ng . Ans we r :F ALSE Di ff:1 Var :1 Pa geRe f :2 32 Obj e c t i ve :6. 3 I FRS/GAAP:I FRS AACSB:Appl i c a t i onofknowl e dge

6 )Whi c hoft hef ol l owi ngs t a t eme nt sr e gar di ngba l anc es he e tpr e s e nt a t i oni st r ue ? A)I FRSdoe snotpr es c r i bet heor de r i ngofl i a bi l i t i e swi t hi nc ur r e nta ndnonc ur r e ntgr oups . B)Theac c ountf or ma tl i s t sl i a bi l i t i e sa nds ha r e hol de r s ' equi t ydi r e c t l ybe l ow t heas s e t s . C)Ther e por tf or ma tl i s t sl i abi l i t i esands har e hol de r s ' e qui t yont her i ghts i deoft hes t a t e me nt . D)U. S. GAAPa l l owsa s s e t st obel i s t e di nei t he ri nc r e as i ngorde c r e as i ngor de rofl i qui di t y . Ans we r :A Di ff:1 Var :1 Obj e c t i ve :6. 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

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7 )He ndr i c ks onCor por a t i on' st r i alba l anc ef orJ ul y31, t hee ndofi t sfis c a lye a r , i nc l ude dt hef ol l owi ng a c c ount s : Ac c ount sRe c e i vabl e I nve nt or i e s Copyr i ght I nve s t me nt s Pr e pai dI ns ur anc e No t er e c e i vabl e ,duei nt woye ar s Cas hi nBank

$ 2 1, 00 0 57, 00 0 18, 00 0 4 1, 000 6 , 0 00 74 , 0 00 4 , 5 00

I nve s t me nt sar et r e as ur ybi l l st ha twe r epur c ha s e di nMa yandma t ur eonAugus t1 5. Pr e pa i di ns ur anc e i sat hr e e ye arpol i c yt ha twaspur c ha s e donJ ul y31 . Theamountt ha ts houl dbec l as s i fie da sc ur r e nta s s et si nt heJ ul y31ba l anc es he e ti s__ ___ ___ . A)$1 29 , 5 00 B)$1 25, 50 0 C)$8 2, 00 0 D)$1 99, 5 00 Ans we r :B Ex pl a na t i on:Ca s hi nBank$4 , 5 00+Ac c ount sRe c e i vabl e$ 21, 0 00+I nve nt or i es$57 , 0 00+I nve s t me nt s $ 41 , 0 00+Pr e pa i dI ns ur a nc e$ 2, 00 0( $6, 00 0/3ye ar s )=$ 125 , 5 00 Di ff:2 Var :1 Obj e c t i ve :6. 3 I FRS/GAAP:GAAP AACSB:Appl i c a t i onofknowl e dge

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8 )We bbCor por a t i on' st r i albal a nc ef orJ ul y31 ,t hee ndofi t sfis c a lye ar , i nc l ude dt hef ol l o wi ngac c ount s : Ac c ount sRe c e i vabl e I nve nt or i e s Fr anc hi s e I nve s t me nt s Pr e pai dI ns ur anc e No t eRe c e i va bl e Cas hi nBank

$ 3 4, 00 0 52, 00 0 38, 00 0 4 8, 000 5 , 0 00 96 , 0 00 6 , 0 00

Thei nve s t me nt sa c c ountc ons i s t sofma r ke t a bl es ec ur i t i e sofwhi c hma na ge mentpl a nst os e l lhal fofby De c e mbe r31 .Ther e s toft hes ec ur i t i e swi l lbehe l dl onge rt ha noneye a r .Pr e pa i di ns ur a nc ei sat woye ar pol i c yt ha twa spur c ha s e donJ ul y3 1.Thenot er e c e i v abl ei sa ni ns t a l l me ntnot et ha twi l lbepa i di nt hr e e e qua li ns t a l l me nt sonDe c e mbe r31ofe a c hye a r . Theamountt ha ts houl dbec l as s i fie da sc ur r e nta s s et si nt heJ ul y31ba l anc es he e ti s__ ___ ___ . A)$1 50 , 5 00 B)$1 53, 00 0 C)$1 80 , 5 00 D)$2 14, 5 00 Ans we r :A Ex pl a na t i on:Cas hi nBa nk$6, 0 00+Ac c ount sRe c e i vabl e$3 4, 00 0+I nve nt or i e s$5 2, 00 0+No t eRe c e i vabl e $ 32 , 0 00( $ 9 6, 00 0/3)+I nv es t ment s$2 4, 00 0( $48 , 0 00 /2 ) +Pr e pai dI ns ur anc e$2 , 5 00( $5, 0 00/2 )=$1 50 , 5 00 Di ff:2 Var :1 Obj e c t i ve :6. 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 0 Copyr i ght©2019Pe ar s onEduc a t i on,I nc .

9 )Gl ove rCor por a t i on' st r i alba l anc ef orDe c e mber3 1,t hee ndofi t sfis c a lye ar , i nc l ude dt hef ol l owi ng a c c ount s : Ac c ount sPa yabl e Di vi de ndsPa ya bl e BondPa yabl e ,ma t ur i ngi n9ye a r s S al a r i e sPa ya bl e No t ePa yabl e ,duei n1ye a r No t epa yabl e , duei n5ye a r s

$ 40 , 0 00 22 , 000 36, 00 0 9, 00 0 30, 0 00 60, 0 00

Theamountt ha ts houl dbec l as s i fie da sc ur r e ntl i abi l i t i e sonGl ove r ' sDe c embe r3 1bal a nc es he e ti s _ __ ___ __. A)$7 1, 00 0 B)$7 9, 000 C)$1 01 , 0 00 D)$1 61, 0 00 Ans we r :C Ex pl a na t i on:Ac c ount sPa yabl e$40 , 0 00+Di vi de ndsPa yabl e$22, 00 0+Sal a r i e sPa yabl e$9, 00 0+Not e s Pa ya bl e$30 , 0 00=$10 1, 00 0 Di ff:2 Var :1 Obj e c t i ve :6. 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 1 Copyr i ght©2019Pe ar s onEduc a t i on,I nc .

1 0)Ande r s onCor por a t i on' st r i alba l anc ef orDe c e mbe r3 1, t hee ndofi t sfis c alye ar , i nc l ude dt he f ol l owi ngac c ount s : Ac c ount sPa yabl e Di vi de ndsPa ya bl e BondPa yabl e ,ma t ur i ngi n9ye a r s S al a r i e sPa ya bl e No t ePa yabl e ,duei n1ye a r No t epa yabl e , duei n5ye a r s

$ 47 , 0 00 10 , 000 54, 00 0 1 0, 00 0 15, 0 00 70, 0 00

Thebondpa yabl ei sas e r i a lbondwi t he qua la mount sofpr i nc i pa lma t ur i nge a c hye ar . Thenot epa ya bl e duei n5ye ar sha se qua lpr i nc i pa lpa yme nt sduee ac hye ar . Theamountt ha ts houl dbec l as s i fie da sc ur r e ntl i abi l i t i e sonAnde r s on' sDe c embe r31ba l anc es he eti s _ __ ___ __. A)$8 6, 00 0 B)$9 6, 000 C)$1 02 , 0 00 D)$1 50, 0 00 Ans we r :C Ex pl a na t i on:Ac c ount sPa yabl e$47 , 0 00+Di vi de ndsPa yabl e$10, 00 0+BondsPa ya bl e$ 6, 000( $ 54, 0 00/9 ) +Sa l ar i e sPa yabl e$10 , 0 00+Not ePa yabl e ,duei noneye a r$1 5, 000+Cur r e ntPor t i onNot ePa yabl e ,duei n 5ye a r s$ 14 , 0 00( $7 0, 000 /5 )=$1 02 , 0 00. Di ff:2 Var :1 Obj e c t i ve :6. 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 2 Copyr i ght©2019Pe ar s onEduc a t i on,I nc .

1 1)Pr e s e nt e dbe l ow ar es e l e c t e da c c ount sf orSanMar c osCor por a t i onf orDe c e mbe r31oft hec ur r ent ye a r .

Ac c ount sRe c e i vabl e —t r a de Bui l di ngandEqui pme nt Cas hi nBank—ope r a t i ng I nt e r e s tRe c e i vabl e — duei n1mont h I ns t a l l me ntRe c e i v abl e s — duei n6mont hs Me r c handi s eI nvent or y La nd No t e sRe c e i va bl e —l ongt e r m Pe t t yCas h Pr e pai dExpe ns e s —c ur r e nt Suppl i es Pa t e nt Ac c ount sPa yabl e —t r a de Ac c umul a t e dDe pr e c i a t i on Addi t i onalPa i di nCapi t a l Al l owa nc ef orUnc ol l ec t i bl eAc c ount s Cas hDi vi de ndsPa ya bl e CommonSt oc k—$ 1pa rval ue I nc omeTaxPa ya bl e No t e sPa yabl e —2ye a r s Re t a i ne dEar ni ngs Une ar ne dRe ve nue s —2ye a r s Cas hDi vi de ndsDe c l a r e d Se r vi c eRe venue Ope r a t i ngExpe ns es TOTALS

De bi t $7 30 1 , 0 30 59 4 5 7 0 3 5 31 0 5 35 1 8 4 2 2 9 70

Cr e di t

635 2 35 61 0 65 7 0 5 5 95 9 10 7 5 95 2 50 5 78 2 00 $3 , 4 23

$3 , 4 23

Wha ta r ec ur r e ntas s e t sf orSanMa r c osCor por a t i on? A)$9 63 B)$1 , 0 28 C)$1 , 010 D)$1 , 4 33 Ans we r :A Ex pl a na t i on:Ac c ount sRe c e i va bl e$7 30–Al l owa nc ef orUnc ol l ec t i bl eAc c ount s$65+Ca s hi nBa nk$ 59+ I nt e r e s tRe c e i vabl e$45+I ns t a l l me ntRec e i vabl e s$70 +Me r c handi s eI nve nt or y$ 35+Pe t t yCas h$1 8+ Pr e pai dExpe ns e s–c ur r e nt$42+Suppl i e s$2 9=$ 9 63 Di ff:2 Var :1 Obj e c t i ve :6. 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 3 Copyr i ght©2019Pe ar s onEduc a t i...