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❶The net income has translated into a substantial increase in cash and cash equivalents by the year-end. Exam 1 - Acct - Fall with solution - covers present value, troubled debt, serial bonds, leases and long-term construction accounting.

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Most importantly, they proposed to eliminate the requirement for stock option expensing of the five highest paid executives. However, they made it a point to require companies to explain the dilutive effect of stock options to investors in greater detail. Among the requirements, companies must include plain English explanations about how their specific compensation plans can alter the value of a share. In addition, the bill would require the SEC and secretary of state to regularly investigate and report on the effects of stock option compensation plans.

The bill gives companies the freedom to keep stock options out of expense reporting, but strengthens the reporting requirements delivered to investors to ensure that information is not hidden. What is the effect upon carrying value and earnings for each of the situations above? Assume that these situations are unrelated.

The carrying value will be based on the original cost of the asset, so if a balance sheet were prepared today, it would be based on the actual cost of the asset.

In a volatile market, the fair value of securities can vary significantly, but it is the cost paid that is reported. Recent regulations allow for the account called Net Unrealized Holdings Gains and Losses to be debited for 4, and the accounting Fair Market Value to be credited by 4, What are earnings before income tax?

Municipal bond interest, which is the interest earned on bonds issued by a city, state, or county, is recognized as revenue for GAAP purposes. How would this be handled for tax purposes? Register Are you a student or a teacher? I am a student I am a teacher. Create an account today.

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Password must be at least 8 characters long. Password may only be 56 characters long. Password Confirm Password confirm is required. Password confirm must be at least 8 characters long. Password confirm may only be 56 characters long. Password confirm does not match password. Unlimited access to all video lessons Lesson Transcripts Tech support. Ignore income tax considerations. Gain on Sale of Equipment Accumulated Amortization - Trademark Indicate the effect — Understated U , Overstated O , No Effect NE — that each of the errors for each independent situation has on net income and net income.

Wages payable wer not recorded at Dec. The wages were recorded when paid in Equipment purchased in was expensed c. Equipment purchased in was expensed d. Ending inventory at Dec. Patent amortization was not recorded in f. Ending inventory not recorded Dec. Merchandise purchased in not recorded or counted ending inventory in and remained unsold as at Dec. Accrued interest on notes payable not recorded in and remained unsold as at Dec.

Supplies on hand not counted at the end of Dec. Statement of Cash Flows 1. The following is Nale Corp. On December 31, Nale entered into a capital lease for an office building. Nale follows IFRS, so the company has adopted the policy of classifying interest received and interest paid as operating cash flows.

Nale declared and paid cash dividends as follows: Prepare a statement of cash flows for Nale Corp for the year ended December 31, , using the indirect method in good form always include proper disclosures.

Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense a Gain on sale of equipment b Equity in earnings of Tessila Ltd. Proceeds from sale of equipment Loan to Newcastle Corp. Principal collected of loan receivable Net cash used by investing activities 32, , 37, Cash flows from financing activities: Non-cash investing and financing activities: During the year Nale Corp.

Net Income of Tessila Ltd. Percentage owned by Nale Corp. Undistributed earnings of Tessila Ltd. Comparative statements for Gardinia Ltd. Prepare a statement of cash flows using the direct method in good form always include proper disclosures and analyze the cash flow results. Does the company have any options regarding how it classifies interest and dividends paid on the cash flows statement? Cash received from customers 1 Paid for goods and services 2 Paid to and on behalf of employees Interest paid Income taxes paid 3 Net cash provided by operating activities Cash flows from investing activities: Cash and cash equivalents: Cash and cash equivalents consist of cash on hand, account balances with banks and investments in Canada treasury bills with maturities of 60 days.

Cash and cash equivalents included in the statement of cash flows comprise the following balance sheet accounts amounts in thousands of dollars: The net income has translated into a substantial increase in cash and cash equivalents by the year-end.

Gardinia Ltd was able to make significant investments in buildings and equipment without going further into debt. Shareholders were given stock dividends instead of cash dividends, allowing Gardinia Ltd to retain the cash for future investments or for improved liquidity.


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Intermediate Accounting II (ACCT /) Winter, Exam 2 Solutions Question 1 (1) The proceeds from issuing $5,, of bonds on January 1, , with annual cash interest The final $, of the bonds mature on December 31, , six years from the date of issue.

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View Notes - Intermediate Accounting Final Exam Solutions from ACCT at Baker College. Questi on 1 Which of the following does not have an effect on the cost-to-retail ratio when the lower of75%(8). ACCT Intermediate Financial Accounting II Practice Final Examination with Solutions Instructions: 1. This practice exam is intended to provide a sample of various learning concepts covered after the midterm exam.

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Intermediate Accounting II Final Exam & Model Answer. By Dr. Hemeda Abdelmageed · Updated about 6 years ago. Already tagged. 1. Already tagged. 1. Other Albums. Cover Photos. 2 photos. 33 photos. Intermediate Accounting II امتحان التخلف. Acct - Intermediate Financial Accounting II. Warning: GAAP changes over the years and I have NOT made adjustments to the solutions attached to old exams. Exam 1, Acct Spring_ (pdf) (with solution - covers present value, troubled debt - creditors only, serial.