Gia02 tb chapter 08 - Intermediate Accounting 2E - Gordon - TB PDF

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Intermediate Accounting, 2e (Gordon/Raedy/Sannella)Chapter 8 Revenue Recognition8 Revenue Recognition Overview1) The first step in the revenue recognition process is to determine the transaction price. Answer: FALSE Diff: 1 Var: 1 Objective: 8. IFRS/GAAP: GAAP AACSB: Application of knowledge2) Reven...

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Intermediate Accounting, 2e (Gordon/Raedy/Sannella) Chapter 8 Revenue Recognition 8.1 Revenue Recognition Overview 1 )Thefir s ts t e pi nt her e ve nuer e c o gni t i onpr oc e s si st ode t e r mi net het r a ns ac t i onpr i c e . Ans we r :F ALSE Di ff: 1 Va r :1 Obj e c t i ve :8 . 1 I FRS/GAAP:GAAP AACSB:Appl i c a t i onofknowl e dge

2 )Re ve nuer e c o gni t i onde al swi t ht hei s s ue soft i mi ngandme as ur eme ntofr e ve nue . Ans we r :TRUE Di ff: 1 Va r : 1 Obj e c t i ve :8 . 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

3 )Thefinals t e pi nt her e ve nuer e c ogni t i onpr oc e s si st heal l oc a t i onoft het r ans a c t i onpr i c et ot he per f or manc eobl i ga t i on. Ans we r :F ALSE Di ff: 1 Va r : 1 Obj e c t i ve :8 . 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

4 )Thet i mi ngofr e ve nuer ec ogni t i oni sde pe nde ntupont hec ont r oloft hegoodbei ngi nt hehandsof _ __ ___ __. A)t hebuyer B)t hes el l e r C)t hemana ge me nt D)anyt hi r dpar t y Ans we r :A Di ff: 1 Va r : 1 Obj e c t i ve :8 . 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

5 )Re c ogni t i onofr e ve nuease a c hper f or manc eobl i ga t i oni ss a t i s fie di swhi c hs t e pi nt her e c ogni t i on pr oc e s s ? A)1s t B)3r d C)5t h D)4t h Ans we r :C Di ff: 1 Va r : 1 Obj e c t i ve :8 . 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

6 )Thel oc alMi niMar tma ke sc as hs al e sof$8, 00 0onApr i l5,2 019 .Thej our nale nt r yt or e c or dt he t r a ns ac t i onwoul dbet o___ ___ __ .Thefir m us e st hepe r i odi ci nve nt or ys ys t e m. A) Ca s h

8, 000 1 Copyr i ght©20 1 9Pe a r s onEduc a t i on, I nc .

Sal e sRe ve nue

8 , 000

B) S al e sRe ve nue Cas h

8, 000

C) Ac c ount sRe c ei vabl e Sal e sRe ve nue

8, 00 0

D) Ca s h Ac c ount sRec ei vabl e

8, 000

8, 00 0

8 , 000

8, 00 0

Ans we r :A Di ff: 2 Va r : 1 Obj e c t i ve :8 . 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

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7 )Abl es e l l sanddel i ve r sapi e c eofequi pmentt oS myt hef or$2, 00 0onAugus t1andt hee qui pme ntc os t $ 1, 30 0.Thes a l ei sac r edi ts a l e .How i st hi st r ans a c t i ona c c ount edf orunde raper i odi cs ys t e m of i nve nt or y ? A) S al e sRe ve nue 1, 300 Ac c ount sRec ei vabl e 1, 30 0 B) Ac c ount sRe c ei vabl e Sal e sRe ve nue

2, 00 0

C) S al e sRe ve nue Ac c ount sRec ei vabl e

2, 000

D) Ac c ount sRe c ei vabl e Sal e sRe ve nue

1, 30 0

2 , 000

2, 00 0

1 , 300

Ans we r :B Di ff: 2 Va r : 1 Obj e c t i ve :8 . 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

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8 )Abl es e l l sanddel i ve r sapi e c eofequi pmentt oS myt hef or$1, 80 0onAugus t1andt hee qui pme ntc os t $ 1, 20 0.Thes a l ei sac r edi ts a l e .How i st hi st r ans a c t i ona c c ount edf orunde raper pet ua ls ys t em of i nve nt or y ? A) S al e sRe ve nue 1, 200 Ac c ount sRe c ei va bl e 1, 20 0 B) Ac c ount sRe c ei vabl e S al e sRe ve nue Cos tofGoodsSol d I nve nt or y

1 , 8 00 1 , 8 00 $1, 20 0 $1 , 2 00

C) S al e sRe ve nue Ac c ount sRe c ei va bl e

1, 800

D) Ac c ount sRe c ei vabl e S al e sRe ve nue

1 , 2 00

1, 80 0

1 , 2 00

Ans we r :B Di ff: 2 Va r : 1 Obj e c t i ve :8 . 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

9 )Wha tar et hefivepr i nc i pa ls t epsi nt her e ve nuer e c ogni t i onpr oc e s s ? Ans we r :Thefivepr i nc i pals t e psi nt her e ve nuer ec ogni t i onpr oc es sar e: 1 .I de nt i f yt hec ont r a c torc ont r ac t swi t ht hec us t omer . 2 .I de nt i f yt hepe r f or ma nc eobl i ga t i onsi nt hec ont r ac t . 3 .De t er mi net het r a ns ac t i onpr i c e . 4 .Al l oc a t et het r ans ac t i onpr i c et ot hepe r f or ma nc eobl i ga t i ons . 5 .Re c ogni zer e ve nuewhe n, oras , i ts a t i s fie se ac hpe r f or manc eobl i ga t i on. Di ff: 2 Va r : 1 Obj e c t i ve :8 . 1 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

8.2 Step 1: Identify the Contract(s) with a Customer 1 )Appr ovalofac ont r ac tbyt hepa r t i e smus tbei nwr i t i ng. Ans we r :F ALSE Di ff: 1 Va r : 1 Obj e c t i ve :8 . 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

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2 )I fas e l l e rr e c e i vesc a s hbe f or et hea ppr opr i at et i met or e c ogni zer e ve nue ,t hes e l l e rs houl dt r e a tt he c ons i de r a t i onasal i abi l i t y . Ans we r :TRUE Di ff: 1 Va r : 1 Obj e c t i ve :8 . 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

3 )U. S .GAAPs et sahi ghert hr es hol df ort heas s e s s me ntofc ol l e c t i bi l i t yofc ons i de r a t i onf r om ac ont r a c t t hanI FRS. Ans we r :TRUE Di ff: 1 Va r : 1 Obj e c t i ve :8 . 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

4 )Whe nac ont r ac ti se xpe c t e dt oaffe c tt her i s k,t i mi ng, oramountoft hee nt i t y' sf ut ur ec as hflows , t he c ont r a c ti ss ai dt oha ve_ ___ __ __. A)nonc ommer c i als ubs t a nc e B)nos ubs t a nc e C)c omme r c i a ls ubs t a nc e D)nopr ofit Ans we r :C Di ff: 1 Va r : 1 Obj e c t i ve :8 . 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

5 )Unde rU. S.GAAP ,whe nac ont r ac tme et st hec ol l e c t i bi l i t yc r i t e r i on,t hi sme ans__ ___ __ _. A)t hes e l l erbe l i e ve si ti s50 %l i ke l yt oc ol l e c tt hec ons i der a t i oni nt hec ont r a c t B)t hes el l e rbe l i e ve si ti smor el i ke l yt hannott oc ol l e c tt hec ons i de r a t i oni nt hec ont r a c t C)t hes e l l e rbel i e ve si ti sl i ke l yt oc ol l e c tt hec ons i de r a t i oni nt hec ont r ac t D)t hes el l e rbel i e ve si ti sunl i ke l yt oc ol l e c tt hec ons i de r a t i oni nt hec ont r a c t Ans we r :C Di ff: 1 Va r : 1 Obj e c t i ve :8 . 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

6 )I fmul t i pl ec ont r ac t sar ene got i a t edasapac ka gea ndha veas i ngl ec omme r c i alobj e c t i ve , t hec ont r a c t s s houl dbec ombi ne danda c c ount e df oras__ ___ __ _. A)mul t i pl ec ont r ac t s B)as i ngl ec ont r ac t C)as s et s D)l i a bi l i t i es Ans we r :B Di ff: 2 Va r : 1 Obj e c t i ve :8 . 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

7 )I FRSde fine st hepr oba bl ec ol l e c t i onf r om ac r e di ts al eas__ ___ __ _. A)l i ke l yt obec ol l e c t ed B)mor el i ke l yt hannott obec ol l e c t ed C)a tl e as ta50% pr obabi l i t yofbei ngc ol l ec t ed D)atl e as ta4 5% pr obabi l i t yofbe i ngc ol l e c t e d Ans we r :B 5 Copyr i ght©20 1 9Pe a r s onEduc a t i on, I nc .

Di ff: 2 Va r : 1 Obj e c t i ve :8 . 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

8 )Wha tar et hefivec r i t er i at ha tmus tbeme tf orac ont r a c twi t hac us t ome rt oe xi s t ? Ans we r : 1 .Al lpar t i e sagr eet ot hec ont r ac tandc ommi tt ope r f or mi ngunde rt hec ont r a c t . 2 .Eac hpar t y' sr i ght sar ei de nt i fia bl e . 3 .Thepa yme ntt e r msa r ei de nt i fiabl e . 4 .Thec ont r ac thasc ommer c i als ubs t anc e . 5 .I ti spr oba bl et ha tt hes e l l e rwi l lc ol l e c tt hec ons i der a t i ont owhi c hi ti se nt i t l e d. Di ff: 2 Va r : 1 Obj e c t i ve :8 . 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

9 )De finet het e r m" c omme r c i a ls ubs t a nc e . " Ans we r :Ac ont r a c ti ss ai dt oha vec omme r c i als ubs t anc ei ft her i s k, t i mi ng, oramountoft hee nt i t y' s f ut ur ec as hflowsi se xpe c t edt oc ha ngeasar e s ul toft hec ont r a c t . Di ff: 1 Va r : 1 Obj e c t i ve :8 . 2 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

8.3 Step 2: Identify the Performance Obligations in the Contract 1 )Aper f or manc eobl i ga t i oni sapr omi s et ot r ans f e ragoodors e r vi c et ha ti sdi s t i nc t . Ans we r :TRUE Di ff: 1 Va r : 1 Obj e c t i ve :8 . 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

2 )Ag oodors er vi c emus tbee xpl i c i t l yi de nt i fie di nac ont r ac ti nor de rt oi de nt i f yape r f or manc e obl i ga t i on. Ans we r :F ALSE Di ff: 1 Va r : 1 Obj e c t i ve :8 . 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

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3 )J udgme ntma ybei nvol v edi nt hede t e r mi na t i onofwhet he rt hepr omi s et ode l i ve rt hegoodors e r vi c e i ss e par a t ef r om ot he rpr omi s e s . Ans we r :TRUE Di ff: 1 Va r : 1 Obj e c t i ve :8 . 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

4 )Aper f or manc eobl i ga t i oni sapr omi s et ot r ans f e ragoodors e r vi c et ha ti s___ ___ __ . A)i ndi s t i ngui s ha bl e B)di s t i nc t C)a va i l abl e D)nondes c r i pt Ans we r :B Di ff: 1 Va r : 1 Obj e c t i ve :8 . 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

5 )Abl es e l l sapi e c eofe qui pme ntt oSmyt hef or$ 1 , 80 0onAugus t1 .Theequi pmentc os t$10 00 .The e qui pmenti spi c kedupbySmyt heonAugus t10 .How ma nype r f or ma nc eobl i ga t i onsa r ei nc l ude di n t hi st r a ns ac t i on? A)1 B)2 C)3 D)4 Ans we r :A Di ff: 1 Va r : 1 Obj e c t i ve :8 . 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

6 )Abl es e l l sapi e c eofe qui pme ntt oSmyt hef or$ 1 , 80 0onAugus t1 .Theequi pmentc os t$1, 00 0. The e qui pmenti spi c kedupbySmyt heonAugus t10 .Thec ont r a c ta l s oi nc l ude sa12mont hs er vi c epl a n. How manype r f or manc eobl i ga t i onsar ei nc l ude di nt hi st r a ns ac t i on? A)1 B)2 C)3 D)4 Ans we r :B Di ff: 1 Va r : 1 Obj e c t i ve :8 . 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

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7 )Ay ac htde a l e rs e l l shi ghpe r f or ma nc eya c ht st oafflue ntc us t ome r s .Thes al eal s oi nc l ude sa9 0da y war r ant ya ga i ns tanyde f e c t si nwor kmans hi p.Thenumbe rofpe r f or ma nc eobl i ga t i onsf ore ac hyac hti s _ __ ___ __. A)1 B)2 C)3 D)4 Ans we r :A Di ff: 1 Va r : 1 Obj e c t i ve :8 . 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

8 )ABCpr ovi desapr oduc ta ndi ns t al l a t i ont obeus edi nc onj unc t i onwi t ht hebuye r ' spr oduc t i on s ys t e m.Thebuye r ' ss ys t em i sunus a bl ewi t houtABC' spr oduc t .Thepr oduc ta ndt hei ns t a l l a t i onar ean e x ampl eof__ ___ ___ . A)t hr e epe r f or ma nc eobl i ga t i ons B)nope r f or manc eobl i ga t i ons C)as i ngl epe r f or ma nc eobl i ga t i on D)t wope r f or ma nc eobl i ga t i ons Ans we r :C Di ff: 2 Va r : 1 Obj e c t i ve :8 . 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

9 )I ndet e r mi ni ngwhet he rt hepr omi s et ode l i ve rgoodsa nds e r vi c esi ss e par a t ef r om ot he rpr omi s e st he a c c ount a ntmus tof t e nr e l yon_ ___ __ __. A)pr of es s i onals ke pt i c i s m B)pr of e s s i onalj udgme nt C)pr of e s s i ona ls t andar ds D)s t andar dsofc onduc t Ans we r :B Di ff: 1 Va r : 1 Obj e c t i ve :8 . 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

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1 0)Ana ut omot i vemaga zi nec har ge sa nannua ls ubs c r i pt i onf e eof$ 30 0,wi t hc us t ome r spr epa yi ngt he f ee .Subs c r i be r sr ec e i ve50i s s ue sf ort hea nnualf e e . Thepubl i s herpr ovi de st hene ws ubs c r i ber swi t ha di s c ountc oupongoodf ora30pe r c e ntdi s c ountonar ac ec arr i dea tama j ort r a c k. Thel i s tpr i c eoft he r i deal onge x pe r i e nc ei s$ 2 00.Thec ompanye s t i ma t e st ha t3 5% oft hec ouponswi l lbeut i l i ze d. Wha ti s t henumbe rofpe r f or ma nc eobl i ga t i ons ? A)1 B)2 C)3 D)4 Ans we r :B Di ff: 2 Va r : 1 Obj e c t i ve :8 . 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 1)Abl eCompa nyent e r si nt oac ont r ac twi t hac us t ome rt opr o vi det hem wi t hana c c ount sr e c e i va bl e pr ogr am. Abl ewi l la l s opr ovi dei ns t al l a t i ons e r vi c e saspar toft hec ont r ac t .Thec us t ome ri sf r e et oenl i s t t hes e r vi c e sofanot he re nt i t yt oi ns t a l lt hes of t wa r e .Wha ti st henumberofper f or manc eobl i ga t i onsf or t hi sc ont r a c t ? A)0 B)1 C)2 D)3 Ans we r :C Di ff: 1 Va r : 1 Obj e c t i ve :8 . 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 2)Abl eCompa nyent e r si nt oac ont r ac twi t hac us t ome rt opr o vi det hem wi t hana c c ount sr e c e i va bl e pr ogr am. Abl ewi l la l s opr ovi dei ns t al l a t i ons e r vi c e saspar toft hec ont r ac t .Abl ewi l lma kes ur et ha t t hi spr ogr a m wi l lbei ns t a l l e ds ot ha ti twi l lbec us t omi z edandbeabl et oi nt e gr a t ewi t ht hec ompany' s ot he rpr ogr am modul e s .Whati st henumbe rofpe r f or manc eobl i ga t i onsf ort hi sc ont r ac t ? A)1 B)2 C)3 D)4 Ans we r :A Di ff: 1 Va r : 1 Obj e c t i ve :8 . 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

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1 3)Wha ta r et her e qui r e ment sf oragoodors e r vi c et obedi s t i nc t ? Ans we r :Ape r f or manc eobl i ga t i oni sc ons i de r e ddi s t i nc ti f : 1 .I tbe ne fit st hec us t omeroni t sownori nc onj unc t i onwi t hot he ra s s e t st ha tar er e adi l ya va i l abl et ot he c us t omer , and 2 .I ti ss epar a t e l yi de nt i fiabl ef r om ot he rpr omi s esi nt hec ont r ac t . Di ff: 1 Va r : 1 Obj e c t i ve :8 . 3 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

8.4 Step 3: Determine the Transaction Price 1 )Thet r a ns ac t i onpr i c ei st heamountofc ons i de r a t i ont hee nt i t ye xpe c t st obee nt i t l e dt oasar e s ul tof pr ovi di nggoodsors e r vi c e st ot hec us t ome r . Ans we r :TRUE Di ff: 1 Va r : 1 Obj e c t i ve :8 . 4 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

2 )Thet r a ns ac t i onpr i c ei sa l wa yst hepr i c es t a t edi nt hec ont r a c t . Ans we r :F ALSE Di ff: 1 Va r : 1 Obj e c t i ve :8 . 4 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

3 )Thee xpe c t e dval uea ppr oac hf orr e venuer e c ogni t i oni sa ppr opr i a t ewhe nva r i abl ec ons i der a t i oni s i nc l udedi nt hec ont r ac t . Ans we r :TRUE Di ff: 1 Va r : 1 Obj e c t i ve :8 . 4 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

4 )Thea mountofc ons i de r a t i ont ha ta ne nt i t ye xpe c t st obee nt i t l e dt oasar e s ul tofpr ovi di nggoodsor s e r vi c est oac us t omeri st he__ __ ___ _. A)pe r f or manc eobl i ga t i on B)e xpe c t edval ue C)t r a ns a c t i onpr i c e D)var i abl ec ons i de r a t i on Ans we r :C Di ff: 1 Va r : 1 Obj e c t i ve :8 . 4 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

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5 )Afinanc i ngc ompone nti sac c ount e df ors epa r a t e l yi nas a l esc ont r ac ti fde l i ve r yoc c ur si nadva nc eof pa ymentorpa yme ntoc c ur si na dvanc eofde l i ve r ybymor et han___ __ ___ . A)s i xmont hs B)oneye ar C)t woye ar s D)t hr eeye a r s Ans we r :B Di ff: 1 Va r : 1 Obj e c t i ve :8 . 4 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

6 )I fnonc as hc ons i de r a t i ons uc hass t oc kofapubl i c l yt r a de dc ompanyi sgi ve ni nar e ve nuec ont r a c t , t he nt hev al uet obeus e df ort het r ans ac t i onpr i c es houl dbe_ ___ __ __. A)f ai rva l ueofs t oc k B)bookval ueofs t oc k C)hi s t or i c alc os tofs t oc k D)ne tpr e s entval ueofr e ve nue Ans we r :A Di ff: 1 Va r : 1 Obj e c t i ve :8 . 4 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

7 )Wal kerCons ul t i nghe l pedMc Cal lRoof e r sputvar i ousc os ts a vi ngt e c hni que si nt opl ac e .Thec ont r a c t s pe c i fie st ha tWal ke rwi l lr e c e i veafla tf e eof$7 0, 000a ndanaddi t i ona l$ 17, 00 0i fMc Ca l la t t ai nsat a r ge t a mountofc os ts a vi ngs .Wal kere s t i ma t esa20 %c hanc et ha tMc Ca l lwi l lr e ac ht het ar getf orc os ts a vi ngs . As s umi ngt ha tWa l kerus est hee xpe c t e dva l ueappr oac h, wha ti st het r ans a c t i onpr i c ef ort hi spr oduc t ? A)$17 , 000 B)$70 , 0 00 C)$73 , 400 D)$87 , 000 Ans we r :C Ex pl ana t i on:$73 , 400=$7 0, 00 0+( $1 7, 000×0 . 2 ) Di ff: 1 Va r : 1 Obj e c t i ve :8 . 4 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 1 Copyr i ght©20 1 9Pe a r s onEduc a t i on, I nc .

8 )ABCCompanye nt er si nt oac ont r ac twi t hEdmondLi br a r yt ohe l pt hem s t r e a ml i net hei rpur c has i ng pr oc e s s .Thec ont r a c ts pe c i fie st ha tEdmondLi br a r ywi l lpa yABC$ 90 , 0 00i nt hef or m ofafix e df e epl us a naddi t i ona l$1 0, 00 0i ft hel i br a r yac hi e ve s$20 0, 00 0i nc os ts a vi ngs .ABCe s t i mat e sa55 %c ha nc et ha tt he l i br ar ywi l la c hi e vea$ 200 , 000s a vi ngs .As s umeABCe s t i ma t e st ha tt het r a ns a c t i onpr i c ei st hee xpe c t edva l uet r ans a c t i onpr i c e .Thet r a ns ac t i onpr i c ei sr ec or deda s__ ___ ___ .I gnor ea nyc ons t r a i nt sonvar i abl e c ons i de r a t i on. A)$90 , 000 B)$95 , 5 00 C)$10 0, 00 0 D)$84 , 500 Ans we r :B Ex pl ana t i on:$95 , 500=$9 0, 00 0+( $1 0, 000×0 . 5 5) Di ff: 2 Va r : 1 Obj e c t i ve :8 . 4 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

9 )Anaut omot i vemanuf ac t ur e r ,A2Aut o,pr ovi de sma i nt e na nc es e r vi c est oMa ko.I nex c hange ,A2Aut o r e c e i ve d60 0s har e sofMa ko' snopa rc ommons t oc k.Ma ko' sc ommons t oc ki sc ur r ent l yt r a di ngont he ope nma r ketf or$29pe rs har e .Thes t andal oneval ueoft hemai nt enanc epr ovi de dwa s$ 20 , 200 .Wha ti s t het r ans ac t i onpr i c eoft hi sc ont r ac t ? A)$17 , 400 B)$20 , 2 00 C)$19 , 200 D)Ca nnotbede t e r mi ne df r om t hei nf or ma t i ongi ve n. Ans we r :A Ex pl ana t i on:$17 , 400=60 0s ha r e s×$29 Di ff: 2 Va r : 1 Obj e c t i ve :8 . 4 I FRS/GAAP:GAAP AACSB:Appl i c a t i onofknowl e dge

1 0)Gr a yUni f or msi sawhol e s a l e rwhos e l l ss c hooluni f or mst or e t ai l e r s . OnAugus t1 ,Gr a yc ont r ac t s wi t hEx c e lSc hoolUni f or mst os e l l2, 0 00uni f or mst oExc e lt obede l i ve r e dSe pt e mbe r1. Thec ont r ac t pr i c ei ss e ta t$3 00ea c h. Thec ont r ac tpr ovi desf ora10 % vol umedi s c ounti fs a l ese x c e e d3 , 0 00uni f or ms . Thepr oba bi l i t yofs al e se xc e e di ng3 , 000uni f or msi se xpe c t edt obe7 1%.Us i ngt hemos t l i ke l ya mount a ppr oac h,t hec ons i de r a t i oni se s t i ma t e dt obe__ ___ __ _. A)$81 3, 00 0 B)$63 9, 00 0 C)$54 0, 00 0 D)$42 6, 00 0 Ans we r :C Ex pl ana t i on:$54 0, 00 0=2 , 000×$3 00×( 1 . 1 ) Di ff: 2 Va r : 1 Obj e c t i ve :8 . 4 I FRS/GAAP:GAAP/I FRS AACSB:Appl i c a t i onofknowl e dge

1 2 Copyr i ght©20 1 9Pe a r s onEduc a t i on, I nc .

1 1)Whi t eLa bsi sawhol e s a l erwhos e l l smi c r os c ope sf orus ei nhi ghs c hool st or e t a i l er s .OnAugus t1 Whi t ec ont r ac t swi t ht heXYZt os e l l1, 000mi c r os c ope st oXYZt obede l i ve r e dSe pt e mber1.Thec ont r ac t pr i c ei ss e ta t$3 70ea c h, wi t ha10% vol umedi s c ounti fs al e se xc e ed2 , 5 00mi c r os c ope swi t hi nt heye ar . Thepr oba bi l i t yofs al e se xc e e di ng2 , 500mi c r os c opesi se xpe c t e dt obe55 %. I gnor ea nyc ons t r a i nt son va r i abl ec ons i de r a t i on.Us i ngt hemos t l i ke l yamountappr oa c h,t hec ons i de r a t i ont ober e c ogni zedi s e s t i ma t edt obe__ __ ___ _. A)$33 3, 00 0 B)$3...