Imperial Food's checkbook balance on December 31, Year 1 was $122,400. In addition, Imperial held the following items in its safe on December 31: (1)...

1.Imperial Food’s checkbook balance on December 31, Year 1 was $122,400. In addition, Imperial held the following items in its safe on December 31:(1) A check for $600 from Brewster, Inc., received December 30, Year 1, which was not included in the checkbook balance.(2) A non-sufficient funds check from Star Company in the amount of $800 that had been deposited at the bank, but was returned for lack of sufficient funds on December 29. The check was to be redeposited on January 3, Year 2. The original deposit has been included in the December 31 checkbook balance.(3) Coin and currency on hand amounted to $1,500.The proper amount to be reported on Imperial Foods' balance sheet for cash at December 31, year 1 is:(Points: 10)a)$123,000 b)$122,800 c)$123,700 d)$122,400 2.Athens Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, Year 1. Its inventory at that date was $100,000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows:Inventory at PriceDate Current Prices IndexDecember 31, Year 2 $128,400 107December 31, Year 3 $145,000 125December 31, Year 4 $169,000 130What is the cost of the ending inventory at December 31, Year 3, under dollar-value LIFO?(Points: 10)a)$116,000 b)$117,120 c)$117,400 d)$145,000 3.Golden Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 30% on selling price is considered normal for each product.Specific data with respect to each product follows:Product #1 Product #2Historical cost..................$15.00.......$45.00Replacement cost...............17.00.........43.00Estimated cost to dispose.....5.00.........26.00Selling price.......................30.00.......100.00In pricing its ending inventory using the lower of cost or market, what unit values should Golden use for products #1 and #2, respectively?(Points: 10)a)$15.00 and $44.00 b)$16.00 and $44.00 c)$16.00 and $45.00 d)$17.00 and $46.00 4.A schedule of machinery owned by Rain Bird Manufacturing Company is as follows:EstimatedTotal Cost Salvage Value Life in YearsMachine A $450,000 $30,000 6Machine B 170,000 10,000 8Machine C 40,000 0 4Rain Bird computes composite depreciation on the straight-line method. What is the composite life of these assets?(Points: 10)a)6.2 b)6.6 c)6.0 d)7.5 5.Which of the following statements concerning the impairment of fixed assets is true?I. Impairment losses are shown on the income statement net of tax.II. An impairment loss is recognized if the present value of all expected future cash flows produced by the fixed asset is less than carrying value.III. To determine the amount of any impairment loss, fair value must be used.(Points: 10)a)I. b)II. c)III. d)I and II. 6.LoJo Developers Inc. purchased a coal mine for $10,000,000. As a condition of the purchase, LoJo agreed to restore the land after mining operations ceased. Restoration costs are estimated at $2,500,000. The proper accounting for these restoration costs is: (Points: 10)Expense them as incurred. Capitalize and depreciate them over the estimated life of the mine. Add them into the depletion base of the mine. Subtract them from the depletion base of the mine. 7.. Federal Manufacturers, Inc. purchased land with the intention of building its new administrative headquarters on the site. Which of the following costs should be charged to?I. Title and recording fees.II. Clearing of trees and grading.III. Interest on loan to purchase land.IV. Architect’s fees.V. Installation of sewage system.(Points: 10)a)I only. b)I and II only. c)I, II, III, and IV only. d)I, II, III, IV, and V. 11. Which of the following must exist for an impairment loss to be recognized under US GAAP?I. the carrying amount of the long lived assets is less than its fair value II. the carrying amount of the long lived asset is not recoverablea) ib) iic) both I and IId) neither I or ii1. Paul Parent is evaluating investment alternatives for saving for his infant daughters college education. He has estimated that he will need $225,000 upon her graduation from high school in 18 years. Paul has the following options: Locking in an 8 percent investment with a lump sum payment today Earning a 9 percent return based on annual even contributions over the next 18 years, or Locking in a 7 percent investment for $5,000 and earning a 10% return on even annual contributions. Paul has the relevant present value tables that show the following factors: …………………………………....…7%……. 8%……….…9%……….10% 45.599 0.180 8.201 Assuming Paul can afford any of these options, which alternative results in the lowest investment? a)Option 1. b) Option 2. c) Option 3. d) All three options are equally attractive.2..Lisa’s Boutique is renting prime store space at the Regional mall and just signed a five-year lease effective January 1, with the following terms: Refundable security deposit $1,500;Monthly lease payments $3,000;Lease bonus due at signing $18,000;Lisa has had to make significant renovations to the store prior to moving in. The renovations cost $50,000 and have a useful life of 8 years. Lisa’s Boutique will record occupancy expense for the year ended December 31, of :a) $51,100b) $49,600c) $49,900d) $45,8502.Quattro Corporation signed a lease from Cinco Leasing Company of July 1 Year 1, for equipment having a five-year useful life. The lease does not include any option to purchase the equipment at the end of the four-year lease term, nor does it include a provision for ownership transfer. Five equal payments of $10,000 per year are required by the term of the lease, with the first payment due upon signing. Quattro’s incremental borrowing rate is 8%, but its implicit interest rate is unknown. Present value of an annuity at 8% for 5 years = 3.993 Present value of an annuity at 8% for 4 years = 3.312 On its December 31, 20X3 financial statements, Quatto would display the following amounts in the indicated accounts:Equipment ; Accumulated Depreciation; Lease Payablea) $0;$0;$0b) $43,120; $5,390; $33,120c) $43,120; $4,312; $33,120d) $49,930; $6,241; $39,9304.Bush Corporation signed a lease for equipment from EZ Leasing Company on January 1, Year 1, for a period of ten years at $50,000 per year, including insurance of $3,000 and taxes of $2,000 per year. The equipment had a useful life of fifteen years. At the end of the lease, Bush will have the option of buying the equipment outright for a dollar. Bush's incremental borrowing rate is 8%, and the rate implicit in the lease (which is known to Bush) is 6%. Lease payments are due every year on December 31. The present value of an annuity for various terms and rates are as follows:6% 8%10 years 7.360 6.71015 years 9.712 8.559On its financial statements for the year ended June 30, Year 1, Bush will display the following:Accumulated Equipment ;Lease Depreciation; Accrued Payable; InterestA) $331,200; $11,040; $331,200; $ 9,936 B) $368,000; $18,400; $306,960; $ 11,040 C) $301.950; $10,065; $301,950; $ 12,078 D) $437,040; $14,568; $331,200 ;$ 9,936 5.Finance Here Sales & Service provides leased-based financing for its full line of commercial generators. Sales of the generators are properly accounted for as operating sales-type leases. Terms of the leases include return of the generators to Finance Here Sales & Service for resale in secondary markets. The company estimates that the non-guaranteed residual values on generators are equal to an average of 10 percent of the historical cost of the generators. Finance Here Sales & Service can expect that: A) Cost of goods sold will be equal to the historical cost of the generators sold. B) Cost of goods sold will be greater than the historical cost of the generators sold. C) Cost of goods sold will be less than the historical cost of the generators sold. D) The relationship of cost of goods sold and the historical cost of the generators cannot be determined.6.Dean manufacturing is planning to construct expanded facilities and will finance a portion of its new plant with proceeds from the sale of its current plant. To ensure that its operations will not be interrupted, Dean will sell its current plant and lease it back for the estimated 2 year construction period of its new facilities. Deans current plant is estimated to have a useful life of 25 years. Dean bought the plant 9 years ago for $200,000 and the asset has an accumulated depreciation of $140,000. Dean signed an agreement to sell the plant for $350,000 January 1 year 10 and Lease it back for $15,000 per year, deans incremental borrowing rate is 6%. Present value factors for annuity2 years- 6% =1.83323years-6%=12.30325 years-6%=12.783Dean uses GAAP On its December 31, year 10 financial statements Dean will defer Gain on the sale of its current plant in the amount of?A) $290,000B) $262,505C) $27,495D) $07.Septer Corporation issued 2,000 of its $1,000, 8% ten-year bonds dated July 1, Year 1. On September 1, Year 1, at a time when the market paid 9% for bonds of similar risk. The bonds were quoted at 94 and pay interest quarterly on September 30th and December 31st. What were the total proceeds of the bond issue at the time of saleA. $2,000,000 B. $1,880,000 C. $1,906,667 D. $1,893,333 8.Novastar Corporation issued 2,000 of its 1,000, 10% ten-year bonds dated July 1, Year 1, at a time when the market paid 9% for bonds of similar risk. Interest is payable annually. The bonds were properly carried at $2,134,000 upon issue. On its December 31, Year 1 financial statements, Novastar Corporation would display the following balances:Unamortized Accrued Interest ;Bonds Payable Premium Payable Expense A. $2,000,000 $126,060 $200,000 $192,060 B. $2,000,000 $130,030 $100,000 $ 96,030 C. $2,000,000 $141,940 $200,000 $192,060 D. $2,000,000 $137,970 $100,000 $ 96,030 9.Capius Corporation issued 2000 bonds in $1000 individual denominations. Each bond has twenty detachable warrants. The bonds and warrants were sold at 110. At the time the bond were issued each warrant had a market value to one percent of the face value of one bond. Capius will account for this transaction as:A) Bond payable with an unamortized premium and a credit to Additional Paid In Capital Warrants B) Bond payable with an unamortized premium and a debit to Additional Paid In Capital Warrants C) Bond payable with an unamortized discount and a credit to Additional Paid In Capital Warrants D) Bond payable with an unamortized discount and a debit to Additional Paid In Capital Warrants 10.On January 1, Year 1, Gearty Corporation loans Olinto Fabrix, Inc. $200,000 with a 10% simple interest note payable in ten years. Interest on the note is payable annually and the principal is due at the end of the term. On January 1, Year 3, Olinto has yet to pay any interest and approaches Gearty in the hope of renegotiating the terms. Gearty agrees, forgives the interest on the note accrued to date, and reduces the interest to 8 percent.The following present value amounts are available.Present Value of $1Present Value of an Annuity8%10%8%10%Eight years.540.4675.7675.335Ten years.463.3866.7106.145As a result of this troubled debt restructuring, Gearty should record:A) An extraordinary loss of $39,900. B) An extraordinary loss of $56,100. C) Bad debt expense of $64,480. D) A valuation allowance of $61,240.11.On December 31 year 1 Todd Corporation issued 500 of its 10% $1,000 bonds at 105. Todd Corporation uses IFRS. The bonds were issued through an underwriter to whom Todd paid bond issue costs of $15,000. On December 31 Year 1 balance sheet Todd should report the bond liability atA) $500,000B) $510,000C) $515,000D) $525,000D. 200,0003. Carter Components is computing the components of its pension expense for the year ended December 31. Carter has calculated that its service costs are $60,000 and has computed interest cost as $42,000. The average remaining service life of employees is 8 years. The return on $500,000 in plan assets was anticipated to be 8 percent but was actually 8.5 percent. The pension benefit obligation at the beginning of the year was $560,000 and, at the end of the year, $602,000. The company has an unrecognized gain of $60,000. To what extent will the unrecognized gain reduce current-year pension expense? (Points: 10) a)$25 b)$500 c)$750 d)$1,250 4. Gruber Enterprises started its defined benefit pension plan on January 1, 20X1. By the beginning of year 3, the company had accumulated $300,000 in pension plan assets and was already making benefit payment to its employees. During the year 3, Gruber paid out $20,000 in benefits and continued to contribute $70,000 to the plan. The plan assets had a fair market value of $377,000. What was the amount of the return on plan assets in year 3?a)$7,000b)$27,000c)$37,000d)$47,0006. Butterfield technologies has been named in lawsuits relative to product defects that may have caused injuries to one of its customers. the plaintiff has requested a settlement of $ 500,000. Butterfield's attorney has determined that an unfavorable settlement is probably but estimate that the liability range between $ 150,000 and $300,000, In connection with this liability, Butterfield should?A. record a liability for $ 500,000B. record a liability for $ 300,000C. record a liability for $ 150,000D. record no liability but disclosed pertinent liability exposure in the notes to the financial statement 7. Rubarb farms depreciates its assets at a faster rate for tax purposes than to GAAP financial statement purposes, and invest heavily in municipal bonds. in its first year of operation, the year ended Dec 31, year 1. Rubarb pretax financial income reconcile to its tax return income as follows:pretax financial income $ 200,000excess depreciation per tax return ( $ 40,000)Municipal bond interest ($ 10,000)Taxable income $ 150,000if the enacted tax rate for the current and future periods were 25%, Rubarb would record a deferred tax liability of?A. $2,500B. $10,000C. $ 12,500D. $ 37,500 8. White Industries started their operations on January 1, year 1 and recorded $400,000 in warranty expense during the year. Warranty expense was the only difference between the company's pretax financial income and its tax return income of $900,000. White will be required to pay these warranties at a rate of $100,000 per year beginning in year 2. Although White fully expects to earn in excess of $100,000 in year 2 and year 3, the company believes it is more likely than not that it will incur a loss after year 3. The enacted tax rate is 25% in current and future periods. What will White record as it's income tax expense in year 1? a) $100,000 b)$125,000 c)$175,000 d)$225,0009. Erika’s Surf Shop had taxable income in Year 2 of $500,000 and pretax financial income of $600,000. The company had a cumulative $200,000 difference between its taxable income and pretax financial statement income at December 31, Year 1. These differences were solely related to accelerated depreciation methods used for income tax purposes. The enacted tax rate increased to 30 percent in Year 2 compared to an enacted rate of 20 percent in the prior year. At December 31, Year 2, the company would record a deferred tax expense of: (Points: 10) a)$40,000 b)$50,000 c)$90,000 d)$150,00010. For the year ended December 31, Laramie Industries has a depreciation expense per its tax return greater than its financial statement tax expense, and had recorded warranty expense (associated with a one-year guarantee on its products) in its financial statements. Pretax income is less than tax return income as a result of these reconciling items. As a result of these transactions, Laramie will display: (Points: 10) a)A current deferred tax asset and a noncurrent deferred tax liability. b)A noncurrent deferred tax asset and a current deferred tax liability. c)A net current tax asset. d)A net noncurrent tax asset. 1. Big Brown Corporation's derivative investments had the following fair values at December 31, Year 1, and December 31, Year 2:12/31/Year 1 12/31/Year 2Speculative derivatives $280,000 $310,000Derivatives used as fair value hedges $600,000 $745,000Derivatives used as cash flow hedges $430,000 $510,000The derivatives used as fair value hedges and cash flow hedges were both considered highly effective in Year 2. What amount of gain from these derivative investments should Big Brown report in its Year 2 net income and other comprehensive income?Net Income OCI(Points: 10)a)$0 $255,000 b)$80,000 $175,000 c)$175,000 $80,000 d)$225,000 $04. Gregory’s on Ormond, Inc. grants its president 2,000 stock options on January 1, year 1 that gives him rights to purchase shares of the company for $40 per share on December 31,year 2. At the time the options were granted, fair value of the options totaled $20,000. At December 31, year 1 the company’s stock sold for $45 per share and at December 31, year 1 the selling price of the stock was $55 per share. On December 31, year 2, the president resigned from the company did not elect to exercise the options. In its year 2 financial statements, Gregory’s on Ormond would recognize compensation expense relative to the options of how much? a)(10000)b)0c)10000d)150005. X Co. had the following stock transactions during the fiscal year ended June 30, year 2: Beginning stick balance, July1, year 1 100,000 shares 2:1 stock split, September 30, year 1 Issuance of additional shares, January 1, year 2 50,000 shares Repurchase of shares, June 23, year 2 1,040 shares What was X Co's weighted average number of shares outstanding at June 30, year 2?a)151,040b)224,980c) 225,140d)251,0406. Simpson Corporation computed its diluted earnings per share for the year ended September 30. The company had 200, 000 shares outstanding at the beginning of the year, issued 60,000 shares at April1 , and reacquired 2,000 shares to be held in its treasury on July 1. The company also has 2,000 options outstanding exercisable at $40 per share. The average market price of Simpson's shares during the year was $50. The common stock equivalents added to the company's weighted average shares outstanding used for basic earnings per share was computed using the treasury stock methods. How many additional shares would Simpson include in its diluted earnings per share calculation?a)0b)400c)1,200d)1,6007. Indigo Corporation is preparing its statement of cash flows for the year ended Dec 31, using the indirect method and has developed the following data: 23,000 (58,000) 43,000 31,000 600,000 67,000 (49,000) 90,000 Based on the information developed about, Indigo Corporation would report net cash provided from financing activities in the amount of?a)551,000b)587,000c)618,000d)677,0008. Jones Fortune Company issued 10,000 shares of $15 par common stock on February 1, for $20 per share. The company bought back 2,000 shares when the share price fell to $16 per share on August 31and then resold 1,000 shares when the price rebounded to $22/share on December 15. Jones accounts for its treasury stock transaction using the cost method. What amount would Jones report as Common Stock in the equity section of its December 31 balance sheet?a)135,000b)140,000c)150,000d)190,0009. Twin House Inc. reported net income of $753,000 for the current year-ended December 31. Twin House’s financial statements reflected the following information.Depreciation expense $150,000Gain on sale of trading securities 6,000Goodwill impairment 75,000Decrease in accounts receivable 48,000Increase in inventory 33000Decrease in trading securities 50000Increase in available-for-sale securities 62,000Increase in accounts payable 70,000Decrease in taxes payable 15000Dividend paid 200,000Dividend received 27000What should Twin House report as net cash provided by operating activities on the statement of cash flows, assuming that twin house classifies the proceeds from the sale of the trading securities as an operating cash outflow.These are the four options for answersa)1,119,000b)1,092,000c)1,030,000d)892,000

1.Imperial Food’s checkbook balance on December 31, Year 1 was $122,400. In addition,Imperial held the following items in its safe on December 31:(1) A check for $600 from Brewster, Inc.,...