Intermediate accounting ifrs edition kieso weygandt warfield test bank

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These videos align with the most important intermediate accounting concepts and help students answer problems that are similar to ones they will encounter in their homework assignments. Easy Assessment: Algorithmic, multiple-choice test bank questions make student assessment simple to create and assign.

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Practice Made Simple: In addition to adaptive practice and learning objective level practice, an end-of-chapter practice assignment includes additional exercises, brief exercises, and problems to ensure students have many opportunities for additional practice. When pension expense exceeds cash funding, the difference is deducted from investing activities on the statement of cash flows. The FASB requires companies to classify all income taxes paid as operating cash outflows.

Under GAAP, the purchase of land by issuing stock will be shown as a cash outflow under investing activities and a cash inflow under financing activities. All of these are true concerning the statement of cash flows. An increase in inventory balance would be reported in a statement of cash flows using the indirect method reconciliation method as a n a. A statement of cash flows typically would not disclose the effects of a. When preparing a statement of cash flows indirect method , which of the following is not an adjustment to reconcile net income to net cash provided by operating activities?

A change in interest payable b. A change in dividends payable c. A change in income taxes payable d. All of these are adjustments. Test Bank for Intermediate Accounting, Sixteenth Edition Declaration of a cash dividend on common stock affects cash flows from operating activities under the direct and indirect methods as follows: a. In reporting unusual items on a statement of cash flows indirect method , the a.

Which of the following is shown on a statement of cash flows? A stock dividend b. A stock split c. An appropriation of retained earnings d. How should significant noncash transactions be reported in the statement of cash flows according to FASB Statement No.

They should be incorporated in the statement of cash flows in a section labeled, "Significant Noncash Transactions. Such transactions should be incorporated in the section operating, financing, or investing that is most representative of the major component of the transaction.

These noncash transactions are not to be incorporated in the statement of cash flows. They may be summarized in a separate schedule at the bottom of the statement or appear in a separate supplementary schedule to the financials.

They should be handled in a manner consistent with the transactions that affect cash flows. Item Ans. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Harlan Mining Co. The loss on sale was incorrectly charged to cost of sales. All depreciation expense is in the selling expense category. The net cash provided by operating activities is a. The Accounting Information System Test Bank for Intermediate Accounting, Sixteenth Edition Under the direct method, the cash received from customers is a.

During , Stout Inc. Hager Company sold some of its plant assets during The information concerning the sale of the plant assets should be shown on Hager's statement of cash flows indirect method for the year ended December 31, , as a n a.

This transaction should be shown on the statement of cash flows indirect method as a n a. Depreciation expense for was a. Equipment purchased during was a. When the equipment was sold, the Buildings and Equipment account received a credit of a. The book value of the buildings and equipment at December 31, was a. The accounts payable at December 31, were a. The balance in the Retained Earnings account at December 31, was a.

Capital stock plus any additional paid-in capital at December 31, was a. A cash dividend was declared and paid. The amount of the cash dividend was a. The stock dividend should be reported on the statement of cash flows indirect method as a. Stock dividends are not shown on a statement of cash flows.

In its statement of cash flows for the year ended December 31, , what amount should Dunlop report as proceeds from issuance of bonds payable? The net cash provided by operating activities would be reported at a. In preparing Titan Inc. Howell, Inc. In addition, the company experienced the following changes in the account balances listed below: Decreases Accounts receivable In the statement of cash flows for the year ended December 31, , for Naley Company: The net cash provided by operating activities was a.

The net cash provided used by investing activities was a. The net cash provided used by financing activities was a. Test Bank for Intermediate Accounting, Sixteenth Edition Alex Company prepares its statement of cash flows using the direct method for operating activities. Alex Company prepares its statement of cash flows using the direct method for operating activities.

Accounts receivable and accounts payable relate to merchandise held for sale in the normal course of business. The allowance for bad debts was the same at the end of and , and no receivables were charged against the allowance.

Accounts payable are recorded net of any discount and are always paid within the discount period. The proceeds from the note payable were used to finance the acquisition of property, plant, and equipment.

Capital stock was sold to provide additional working capital. Test Bank for Intermediate Accounting, Sixteenth Edition What amount of cash was collected from accounts receivable? The allowance for bad debts was the same at the end of The Accounting Information System 3 - 39 and , and no receivables were charged against the allowance. What amount of cash was paid on accounts payable to suppliers during ?

The amount to be shown on the cash flow statement as net cash provided by investing activities would total what amount? The amount to be shown on the cash flow statement as net cash provided by financing activities would total what amount?

The net cash provided used by financing activities during is a. As a result of these transactions, net cash flows from operating activities would be calculated indirect method by adjusting net income with a a. On the statement of cash flows indirect method , the receipts from insurance companies should a.

On the statement of cash flows indirect method , the flood loss should a. There were no other transactions affecting long-term investments in Foxx Corp. Depreciation charged to operations in was a. Nagel Co. What amount of cash disbursements for insurance would be reported in Nagel's net cash provided by operating activities presented on a direct basis?

In a statement of cash flows, what amount is included in investing activities for the above transaction? Cash payment b. Acquisition price c. Zero d. In a statement of cash flows, what amount is included in financing activities for the above transaction? Smiley's net cash used in investing activities for was a. Smiley's net cash used in financing activities for was a. Answer Derivation Compare the direct method and the indirect method by explaining each method. The difference between cash revenues and cash expenses is cash net income, which is equal to the net cash flow from operating activities.

The indirect method involves adjusting accrual net income to a cash basis. This is done by starting with accrual net income and adding or subtracting noncash items included in net income. Examples of adjustments include depreciation, amortization, other noncash expenses and revenues, gains and losses, and changes in the balances of current assets and current liabilities during the year.

Indicate for each of the following what should be disclosed on a statement of cash flows indirect method. If not disclosed, write "Not shown. For an item that is added to net income, write "Add," and for an item that is deducted from net income, write "Deduct.

Show the amount, too. Indicate for each of the following what should be disclosed on a statement of cash flows SCF indirect method.

There is more than one answer for some items. A tornado damaged a building and its contents. Show calculation of the cash dividend and indicate how it and the stock dividend would be shown on the SCF. Show the amount also. Instructions What three items would be shown on a statement of cash flows indirect method from this information?

Show your calculations. Milner Co. Presented below is the income statement of Cowan, Inc. Instructions Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows: a using the indirect method. Use the indirect method. The balance sheets for Kinder Company showed the following information. Additional information concerning transactions and events during are presented below. Instructions Using the format provided on the next page, prepare a statement of cash flows using the indirect method for for Kinder Company.

Note that X in the following statement of cash flows identifies a dollar amount and the letters A through F identify specific items which appear in the major sections of the statement prepared using the indirect method. Use the code A through F from above. If the item is not required to be reported in the body of the statement of cash flows, write the word "none" in the blank.

Assume that generally accepted accounting principles have been followed in determining net income and that there are no short-term securities which are considered cash equivalents. After the retirement of an officer, the insurance policy was canceled, and a cash settlement was received by the firm.

These proceeds were in excess of the book value of the policy. Decrease in Retained Earnings Appropriated for Self-insurance. Accrued estimated income taxes for the period. These taxes will be paid next year.

Amortization of premium on bonds payable. Premium amortized on investment in bonds. The book value of trading securities was reduced to fair value. Purchase of available-for-sale securities. Declaration of stock dividends not yet issued. Issued preferred stock in exchange for equipment.

The Accounting Information System 3 - 65 Ex. Bad debts under allowance method estimated and recorded for the period receivables classified as current. Gain on disposal of old machinery. Payment of cash dividends previously declared in a prior period. Trading securities are sold at a loss. Two-year notes issued at discount for a patent. Amortization of Discount on Notes Receivable long-term. A and C None At the end of , Diego Company made four adjusting entries for the following items: 1.

In the normal situation, to facilitate subsequent entries, the adjusting entry or entries that may be reversed is are a. Entry No. On September 1, , Loo Co. The first payment for interest and principal was made on September 1, At December 31, , Lowe should record accrued interest payable of a.

Eaton Co. The service contracts are for a one-year, two-year, or three-year period. Cash receipts from contracts are credited to Unearned Service Revenue. In November and December , Lane Co. What amount should Lane report in its income statement for subscriptions revenue? On June 1, , Nott Corp. The amount held in escrow is to be returned to Horn after all principal and interest payments have been made.

Interest on the note is payable on the first day of each month beginning July 1, Horn made timely payments through November 1, On January 2, , Nott received payment of the first principal installment plus all interest due. Allen Corp. The first interest and principal payment was made on October 1, Colaw Co.

Overtime pay, however, is paid in the next biweekly period. Colaw accrues salaries expense only at its December 31 year end. Remaining work days in were December 29, 30, 31, on which days there was no overtime. Assuming a five-day work week, Colaw should record a liability at December 31, for accrued salaries of a. Tolan Corp. Royalties are payable semiannually on March 15 for sales in July through December of the prior year, and on September 15 for sales in January through June of the same year.

What amount of revenue pertaining to the 2, outstanding gift certificates should be deferred at December 31, ? Compared to the accrual basis of accounting, the cash basis of accounting overstates income by the net increase during the accounting period of the a. Gregg Corp. Additional information was as follows: Accounts receivable June 30, Rp , Accounts receivable June 30, 1,, Uncollectible accounts written off during the fiscal year 26, Under the cash basis, Gregg should report revenue of a.

Rp 1,, Jim Yount, M. During , Dr. Yount collected Rp , from his patients. At December 31, , Dr. Yount had accounts receivable of Rp 50, Yount had accounts receivable of Rp 70, and unearned revenue of Rp 10, On the accrual basis, how much was Dr. Rp , The following information is available for Ace Company for Disbursements for purchases Increase in trade accounts payable Decrease in merchandise inventory Costs of goods sold for was a.

Provide clear, concise answers for the following. What is the accrual basis of accounting? What is an accrued expense? What is accrued revenue? What is a prepaid expense? What is unearned revenue? State the rule that indicates which adjusting entries for prepaid and unearned items should be reversed. Solution 1. The accrual basis of accounting recognizes revenue when the performance obligation will be satisfied and recognizes expenses in the period incurred.

An accrued expense is incurred, but will be paid in the future. Accrued revenue is earned, but will be collected in the future. A prepaid expense is paid, but will be incurred in the future. Unearned revenue is collected, but in the performance obligation will be satisfied in the future.

Adjusting entries that create an asset or a liability account should be reversed. This would include prepaid and unearned items originally recorded in a revenue or expense account.

In the space provided at the right, write the word or phrase that is defined or indicated. Revenue,expense and dividend accounts. A revenue recognized, but not collected. Asset, liability, and equity accounts. International financial reporting standards require the use of accruals and deferrals in the determination of income. How is income determined under the accrual basis of accounting? Include in your answer what constitutes an accrued item and a deferred prepaid item, and give appropriate examples of each.

Solution Accrual accounting recognizes and reports the effects of transactions and other events in the time periods to which they relate rather than only when cash is received or paid. Accrual accounting attempts to match revenues and the expenses associated with those revenues in order to determine net income for an accounting period. An accrued item is an item of revenue or expense that has been recognized or incurred during the period, but has not yet been collected or paid in cash.

An example of an accrued revenue is rent for the last month of an accounting period that has been recognized by a landlord but not yet paid by the tenant. An example of an accrued expense is salaries incurred for the last week of an accounting period that are not payable until the subsequent accounting period. A deferred unearned or prepaid item is an item of revenue or expense that has been received or paid in cash, but has not yet been recognizedor consumed. An example of a deferred revenue is unearned subscription revenue collected in advance of being earned.

An example of a deferred expense is an insurance premium paid at the end of an accounting period which will provide insurance coverage for the first six months of the subsequent period. Present, in journal form, the adjustments that would be made on July 31, , the end of the fiscal year, for each of the following. Supplies Expense Interest Receivable Interest Revenue Reed Co.

Record the following transactions in the desired manner and give the adjusting entry on December 31, Two entries for each part. Prepaid Insurance Insurance Expense Using the information from the adjusted trial balance, you are to prepare for the month ending December 1.

Accounts Receivable Accumulated Depreciation—Equipment Accounts Payable Unearned Revenue Share Capital—Ordinary Retained Earnings Service Revenue Depreciation Expense Rent Expense Revenues Service revenue Expenses Depreciation expense Rent expense Supplies expense Total expenses Net loss Retained earnings, December Less: Net loss Less: Accumulated depreciation—equipment Accounts receivable Total assets Equity and Liabilities Equity Share capital—ordinary Retained earnings Liabilities Accounts payable Unearned revenue Total liabilities Total equity and liabilities Contrast the cash basis of accounting with the accrual basis of accounting.

Under the cash basis of accounting, the effects of transactions and other events are recognized and reported only when cash is received or paid. Under the accrual basis of accounting, these effects are recognized and reported in the time periods to which they relate, regardless of the time of the receipt or payment of cash. Because no attempt is made under the cash basis of accounting to match revenues and the expenses associated with those revenues, cash basis financial statements are not in accordance with international financial reporting standards.

Show the computation of sales salaries on an accrual basis for The records for Todd Inc. Show the computation of the amount of expense that should be reported on the income statement. The records for Kiley Company showed the following for Jan. Show the computation of the amount of revenue that should be reported on the income statement. Show the computation of revenue for the year on a cash basis. Accounts Receivable , 3. Accumulated Depreciation—Equipment , 4.

Allowance for Doubtful Accounts 20, 5. Bonds Payable , 6. Cash , 7. Equipment , 8. Insurance Expense 30, 9. Interest Expense 10, Inventory , Prepaid Rent , Retained Earnings , Salaries and Wages Expense , Share Capital—Ordinary 60, All of the above accounts have their standard or normal debit or credit balance.

Prepare adjusting journal entries at year end, December 31, , based on the following supplemental information. The equipment has a useful life of 20 years with no salvage value. Straight-line method being used. If the account title would appear on the income statement, do not put the number in any of the classifications. Solution Part A. Interest Expense Interest Payable Prepaid Rent Salaries and Wages Expense Salaries and Wages Payable Part B. Property, plant, and equipment—3, 7 b.

Current assets—2, 4, 6, 10, 12 c. Equity—13, 15 d. Non-current liabilities—5 e. Current liabilities—1, Data relating to the balances of various accounts affected by adjusting or closing entries appear below. The entries which caused the changes in the balances are not given. You are asked to supply the missing journal entries which would logically account for the changes in the account balances. You are to provide the missing adjusting entry that must have been made, assuming reversing entries are not made.

You are to prepare the missing adjusting entry. During , one piece of equipment was sold. You are to provide the missing adjusting entry. You are to prepare the missing adjusting entry that must have been made, assuming reversing entries are not made. Both dividends were properly charged to retained earnings.

You are to provide the missing closing entry. Bad Debt Expense Allowance for Doubtful Accounts Income Summary The following trial balance was taken from the books of Fisk Corporation on December 31, At year end, the following items have not yet been recorded.

Instructions a Prepare the necessary adjusting entries. Solution a Adjusting Entries a. Cost of Goods Sold What should be the ending balance in accounts receivable, assuming all accounts are deemed collectible?

Transaction information is missing from each item below. Instructions Prepare the entry to record the missing information for each account. Consider each independently. Accounts Receivable: Jan. Prepare the entry to record sales. Allowance for Doubtful Accounts: Jan. Prepare the entry to record bad debt expense.

Accounts Payable: Jan. Prepare the entry to record payments on account. Interest Receivable: Jan.