Financial Reporting and Analysis
Final Test Solutions
Course Introduction
Financial Reporting and Analysis is a foundational course that introduces students to the principles, techniques, and regulatory framework underlying the preparation and interpretation of financial statements. Students will learn how businesses communicate financial information to external stakeholders through statements such as the balance sheet, income statement, and cash flow statement. The course emphasizes the application of accounting standards, analysis of financial ratios, and critical evaluation of a companys financial position and performance. Through case studies and real-world examples, students will develop the analytical skills necessary to interpret financial data and make informed decisions in both corporate and investment contexts.
Recommended Textbook
Advanced Accounting 9th Edition by Joe Ben Hoyle
Available Study Resources on Quizplus
19 Chapters
1679 Verified Questions
1679 Flashcards
Source URL: https://quizplus.com/study-set/3647
Page 2
Chapter 1: The Equity Method of Accounting for Investments
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/72552
Sample Questions
Q1) On January 1,2008,Spark Corp.acquired a 40% interest in Cranston Inc.for $250,000.On that date,Cranston's balance sheet disclosed net assets of $430,000.During 2008,Cranston reported net income of $100,000 and paid cash dividends of $30,000.Spark sold inventory costing $40,000 to Cranston during 2008 for $50,000.Cranston used all of this merchandise in its operations during 2008.Any excess cost over fair value is attributable to an unamortized trademark with a 20 year remaining life.
Required: Prepare all of Spark's journal entries for 2008 to apply the equity method to this investment.
Answer: 11ea88ab_df5f_e466_bb89_59022e7ca5e2_TB4174_00 11ea88ab_df5f_e467_bb89_03d70ef0647a_TB4174_00
Q2) Pursley,Inc.acquires 10% of Ritz Corporation on January 3,2008,for $80,000 when the book value of Ritz was $ 800,000.During 2008 Ritz reported net income of $125,000 and paid dividends of $30,000.On January 1,2009,Pursley purchased an additional 20% of Ritz for $325,000,giving Pursley the ability to significantly influence the operating policies of Ritz.Any excess of cost over book value is attributable to goodwill with an indefinite life.What journal entry(ies)is(are)required on January 1,2009?
Answer: 11ea88ab_df60_599e_bb89_cd0a7f1159e0_TB4174_00
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Consolidation of Financial Information
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/72541
Sample Questions
Q1) Which one of the following is a characteristic of a business combination that should be accounted for as an acquisition?
A)The combination must involve the exchange of equity securities only.
B)The transaction establishes an acquisition fair value basis for the company being acquired.
C)The two companies may be about the same size,and it is difficult to determine the acquired company and the acquiring company.
D)The transaction may be considered to be the uniting of the ownership interests of the companies involved.
E)The acquired subsidiary must be smaller in size than the acquiring parent.
Answer: B
Q2) Compute consolidated goodwill at date of acquisition.
A)$455.
B)$460.
C)$450.
D)$440.
E)$465.
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3:
Consolidations - Subsequent to the Date of Acquisition
Available Study Resources on Quizplus for this Chatper
122 Verified Questions
122 Flashcards
Source URL: https://quizplus.com/quiz/72540
Sample Questions
Q1) If the parent's net income reflected use of the partial equity method,what were the consolidated retained earnings on December 31,2010?
Answer: SHAPE \* MERGEFORMAT
11ea88ab_df38_10dc_bb89_9365a824df35_TB4174_00
Q2) Compute the December 31,2010,consolidated revenues.
A)$1,400,000.
B)$800,000.
C)$500,000.
D)$1,590,375.
E)$1,390,375.
Answer: A
Q3) What is the balance in Cale's investment in subsidiary account at the end of 2009?
A)$1,099,000.
B)$1,020,000.
C)$1,096,200.
D)$1,098,000.
E)$1,144,400.
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Consolidated Financial Statements and Outside Ownership
Available Study Resources on Quizplus for this Chatper
51 Verified Questions
51 Flashcards
Source URL: https://quizplus.com/quiz/72539
Sample Questions
Q1) Under the purchase methodof accounting for business combinations,which of the following statements is true about consolidated financial statements?
A)The accounting emphasis in preparing consolidated financial statements is placed on the business combination being formed
B)Holding control of a subsidiary provides the parent with an indivisible interest in that company
C)The objective of consolidated financial statements is to serve as a report to the stockholders of the parent company
D)The purchase method is a hybrid of the acquisition method and the pooling of interests method
E)The purchase method is no longer allowed for combinations occurring according to SFAS 141(R)
Q2) What is consolidated current assets as of January 2,2009?
A)$138,600
B)$134,400
C)$126,000
D)$140,000
E)$127,400
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Consolidated Financial StatementsIntercompany Asset Transactions
Available Study Resources on Quizplus for this Chatper
114 Verified Questions
114 Flashcards
Source URL: https://quizplus.com/quiz/72538
Sample Questions
Q1) What is the consolidated gain or loss on equipment for 2009?
A)$0.
B)$9,000 gain.
C)$9,000 loss.
D)$21,000 gain.
E)$21,000 loss.
Q2) King Corp.owns 85% of James Co.King uses the equity method to account for this investment.During 2009,King sells inventory to James for $500,000.The inventory originally cost King $420,000.At 12/31/09,25% of the goods were still in James' inventory. Required:
Prepare the Consolidation Entry TI and Consolidation Entry G for the consolidation worksheet.
Q3) With regard to the intercompany sale,which of the following choices would be a debit entry in the consolidated worksheet for 2010?
A)Retained earnings.
B)Cost of goods sold.
C)Inventory.
D)Investment Strickland Company.
E)Additional paid-in capital.
Page 7
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Variable Interest Entities,
intercompany
Debt,
Statement of Cash Flows, and Other Issues
Available Study Resources on Quizplus for this Chatper
115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/72537
Sample Questions
Q1) What is the controlling interest share of Thomas' net income for the year ended December 31,2009?
Q2) Knight's diluted earnings per share (rounded)is calculated to be
A)$5.62.
B)$3.26.
C)$3.11.
D)$5.03.
E)$4.28.
Q3) Where do dividends paid to the noncontrolling interest of a subsidiary appear on a consolidated statement of cash flows?
A)Cash flows from operating activities.
B)Cash flows from investing activities.
C)Cash flows from financing activities.
D)Supplemental schedule of noncash investing and financing activities.
E)They do not appear on the consolidated statement of cash flows.
Q4) When a company has preferred stock in its capital structure,what amount should be used to calculate noncontrolling interest in the preferred stock of the subsidiary when the company is acquired as a subsidiary of another company?
Q5) Prepare Panton's journal entry to recognize the impact of this transaction.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Consolidated Financial Statements - Ownership
Patterns and Income Taxes
Available Study Resources on Quizplus for this Chatper
115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/72536
Sample Questions
Q1) What is the noncontrolling interest in Gamma's income for 2009?
A)$0.
B)$9,600.
C)$10,000.
D)$19,200.
E)$20,000.
Q2) Which of the following statements is false concerning a father-son-grandson configuration?
A)This type of ownership pattern does not significantly alter the worksheet process.
B)Most worksheet entries are simply made twice.
C)The doubling of entries may seem overwhelming.
D)The individual consolidation procedures remain unaffected.
E)Consolidated financial statements are required for only the father and son companies.
Q3) Required:
Determine the noncontrolling interest in Lawrence Co.'s net income.
Q4) Required:
Using the treasury stock approach,prepare a schedule to show what is reported as the noncontrolling interest in Luvyn Corp.'s net income.
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Segment and Interim Reporting
Available Study Resources on Quizplus for this Chatper
114 Verified Questions
114 Flashcards
Source URL: https://quizplus.com/quiz/72535
Sample Questions
Q1) Combined segment revenues are calculated to be
A)$29,400.
B)$25,200.
C)$26,600.
D)$28,000.
E)$27,300.
Q2) Which of the following must be disclosed by a geographic segment according to SFAS 131?
A)Operating profit or loss.
B)Gross profit.
C)Total assets.
D)Revenues from external customers.
E)Revenues from internal customers.
Q3) What is the operating profit or loss for the VCRs segment?
A)$121,000 profit.
B)$121,000 loss.
C)$124,000 profit.
D)$124,000 loss.
E)$500,000 profit.
Q4) Compute the after-tax effect of Harrison's change in inventory method.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Foreign Currency Transactions and Hedging
Foreign Exchange Risk
Available Study Resources on Quizplus for this Chatper
90 Verified Questions
90 Flashcards
Source URL: https://quizplus.com/quiz/72534
Sample Questions
Q1) What is the amount of Adjustment to Accumulated Other Comprehensive Income for 2008 from these transactions?
A)$1,000.
B)$1,600.
C)$1,800.
D)$2,000.
E)$2,600.
Q2) What happens when a U.S.company sells goods denominated in a foreign currency and the foreign currency appreciates?
Q3) All of the following hedges are used for future purchase/sale transactions except
A)Forward contracts used as a fair value hedge of a firm commitment.
B)Options used as a fair value hedge of a firm commitment.
C)Hedge of a foreign currency denominated asset.
D)Forward cash flow hedges of a forecasted transaction.
E)Forward contracts used to hedge a foreign currency denominated liability.
Q4) Where can you find exchange rates between the U.S.dollar and most foreign currencies?
Q5) How is the fair value of a Forward Contract determined under SFAS 133?
To view all questions and flashcards with answers, click on the resource link above. Page 11
Q6) What amount will Coyote Corp.report on its 2009 financial statements for Sales?
Chapter 10: Translation of Foreign Currency Financial Statements
Available Study Resources on Quizplus for this Chatper
94 Verified Questions
94 Flashcards
Source URL: https://quizplus.com/quiz/72551
Sample Questions
Q1) Compute ending inventory for 2009 under the current rate method.
A)$13,950.
B)$14,100.
C)$14,400.
D)$14,850.
E)$15,150.
Q2) Prepare a balance sheet for this subsidiary in stickles and then translate these amounts into U.S.dollars.
Q3) A highly inflationary economy is defined as
A)Cumulative 5-year inflation in excess of 100%.
B)Cumulative 3-year inflation in excess of 100%.
C)Cumulative 5-year inflation in excess of 90%.
D)Cumulative 3-year inflation in excess of 90%.
E)Any country designated as a company operating in an underworld economy.
Q4) Prepare a statement of cash flows for this subsidiary in stickles and then translate these amounts into U.S.dollars.
Q5) Farley Brothers,a U.S.company,had a subsidiary in Italy.Under what conditions would the U.S.dollar be the functional currency for this subsidiary?
Q6) Contrast the purpose of remeasurement with the purpose of translation.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Worldwide Accounting Diversity and International Accounting Standards
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/72550
Sample Questions
Q1) What are the six key FASB initiatives to further convergence?
Q2) The financial statements of German and Japanese companies
A)usually overstate earnings.
B)usually overstate assets.
C)tend to underestimate earnings.
D)provide a realistic estimate of earnings.
E)do not include an income statement or the equivalent.
Q3) At what amount should the equipment be reported on the December 2008 balance sheet under IFRSs alternative treatment?
A)$200,000
B)$190,000
C)$173,500
D)$146,000
E)$140,000
Q4) What are the different ways IFRSs can be used?
Q5) What are the three authoritative pronouncements that make up the International Financial Reporting Standards (IFRSs)?
To view all questions and flashcards with answers, click on the resource link above. Page 13
Q6) What are recognition differences in international reporting and what would be an example of a difference?
Chapter 12: Financial Reporting and the Securities and Exchange Commission
Available Study Resources on Quizplus for this Chatper
74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/72549
Sample Questions
Q1) When must Form 8-K be filed with the SEC?
Q2) What was the purpose of the Securities Act of 1933?
Q3) Which statement is false regarding the Sarbanes-Oxley Act of 2002?
A)Regulates independent auditing and auditing standards.
B)Has five members appointed by the SEC.
C)Allows all members to be accountants,past or present.
D)is under the oversight and enforcement of the SEC.
E)is funded by fees levied on all publicly traded companies.
Q4) Briefly describe Regulation S-K.What is its purpose?
Q5) Which one of the following forms is used in connection with registration of securities of small businesses with less than $25 million of annual revenues and of voting securities held by nonaffliates.
A)S-8.
B)S-11.
C)S-4.
D)SB-1.
E)SB-2.
Q6) Name the two broad categories of filings with the SEC.
Page 14
Q7) What are the responsibilities of the SEC's Division of Corporation Finance?
Q8) What information needs to be included in Form 10-Q?
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 13: Accounting for Legal Reorganizations and Liquidations
Available Study Resources on Quizplus for this Chatper
82 Verified Questions
82 Flashcards
Source URL: https://quizplus.com/quiz/72548
Sample Questions
Q1) Which statement is false regarding the acceptance and confirmation of a reorganization plan?
A)The plan must be voted on by the creditors and the stockholders of the company.
B)A separate vote is required of each class of stockholders.
C)Any class of creditors that is not damaged by a reorganization is assumed to have accepted the plan without voting.
D)Even if creditors and stockholders approve of the plan,the court can reject the plan.
E)Acceptance of the plan requires the approval of two-thirds in number of claims and one-half in dollar amount of creditors that cast votes.
Q2) Which statement is false regarding a plan for reorganization?
A)The plan is the heart of every Chapter 7 bankruptcy.
B)The provisions of the plan specify the treatment of all creditors and equity holders upon approval by the Court.
C)The plan shapes the financial structure of the entity that emerges.
D)The plan may contain numerous provisions as solutions to financial difficulties.
E)The plan may contain provisions for changes in the management of the company.
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 14: Partnerships: Formation and Operation
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/72547
Sample Questions
Q1) Prepare the journal entries for the dissolution of Howell's partnership interest,assuming the goodwill method is to be applied.
Q2) What was Nolan's capital balance at the end of 2008?
A)$139,420.
B)$246,000.
C)$276,540.
D)$279,440.
E)$304,040.
Q3) Roberts retires and is paid $160,000 based on the terms of the original partnership agreement.If the goodwill method is used,what is the capital balance of Peter?
A)$20,000.
B)$60,000.
C)$110,000.
D)$120,000.
E)$230,000.
Q4) By what methods can a person gain admittance to a partnership?
Q5) Record the journal entry for the admission of Noris.Goodwill is not to be recorded.
Q6) How is accounting for a partnership different from accounting for a corporation?
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 15: Partnerships: Termination and Liquidation
Available Study Resources on Quizplus for this Chatper
73 Verified Questions
73 Flashcards
Source URL: https://quizplus.com/quiz/72546
Sample Questions
Q1) What is the preferred method of resolving a partner's deficit balance,according to the Uniform Partnership Act?
A)Partners never have a deficit balance.
B)The other partners must contribute personal assets to cover the deficit balance.
C)The partnership must sell assets in order to cover the deficit balance.
D)The partner with a deficit balance must contribute personal assets to cover the deficit balance.
E)The partner with a deficit balance contributes personal assets only if those personal assets exceed personal liabilities.
Q2) A partnership had the following account balances: Cash,$91,000;Other Assets,$702,000;Liabilities,$338,000;Polk,Capital (50% of profits and losses),$221,000;Garfield,Capital (30%),$143,000;Arthur,Capital (20%),$91,000.The company liquidated and $10,400 became available to the partners. Required: Who would have received the $10,400?
Q3) What is the role of the accountant during the liquidation process?
Q4) What should occur when a solvent partner has a deficit balance?
Q5) For a partnership,how should liquidation gains and losses be accounted for?
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 16: Accounting for State and Local Governments,
Part I
Available Study Resources on Quizplus for this Chatper
72 Verified Questions
72 Flashcards
Source URL: https://quizplus.com/quiz/72545
Sample Questions
Q1) Revenue from property taxes should be recorded in the General Fund
A)when received.
B)in the period for which the taxes are levied.
C)at the time of eligibility.
D)when they are available for recognition.
E)in the period in which they are consumed.
Q2) The board of commissioners of the city of Jarmaine adopted a General Fund budget for the year ending June 30,2008,which indicated revenues of $1,300,000,bond proceeds of $520,000,appropriations of $1,170,000,and operating transfers out of $390,000.
Required:
If this budget was formally integrated into the accounting records used to produce the Fund-Based Financial Statements,what was the required journal entry at the beginning of the year?
Q3) Generally,annual budgets are recorded within the following funds:
A)General fund and special revenue funds.
B)Capital projects funds and debt service fund.
C)Enterprise funds and internal service funds.
D)General Fund and Pension Trust Fund.
E)Agency Funds and General Fund.
Page 19
To view all questions and flashcards with answers, click on the resource link above.
Chapter 17: Accounting for State and Local Governments,part II
Available Study Resources on Quizplus for this Chatper
53 Verified Questions
53 Flashcards
Source URL: https://quizplus.com/quiz/72544
Sample Questions
Q1) Which of the following must be presented in the MD&A of a government?
A)A brief discussion of the basic financial statements.
B)Total assets.
C)Total liabilities.
D)Net assets.
E)An organization chart of government officials.
Q2) Drye Township has received a donation of a rare painting worth $1,000,000.For Drye's government-wide financial statements,three criteria must be met before Drye can opt not to recognize the painting as an asset.Which of the following is not one of the three criteria?
(1) )The painting is held for public exhibition,education,or research in furtherance of public service,rather than financial gain.
(2) )The painting is scheduled to be sold immediately at auction.
(3) )The painting is protected,kept unencumbered,cared for,and preserved.
A)Item 1 is not one of the three criteria.
B)Item 2 is not one of the three criteria.
C)Item 3 is not one of the three criteria.
D)All three items are required criteria.
E)None of the three items are required criteria.
Q3) Prepare a Statement of Activities
20
To view all questions and flashcards with answers, click on the resource link above.
Chapter 18: Accounting for Not-For-Profit Organizations
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/72543
Sample Questions
Q1) Record the journal entries that reflect all of this information.
Q2) Which entry would be the correct entry on the not-for-profit organization's books to record a donor's gift when power over the assets has been retainedby the donor?
A)debit expense-charitable contribution,credit cash.
B)debit refundable advance to charity,credit cash.
C)debit cash,credit liability to beneficiary.
D)debit cash,credit refundable advance.
E)debit cash,credit contribution revenue.
Q3) What financial statements would normally be prepared by a voluntary health and welfare organization?
Q4) The hospital estimated that contractual adjustments would reduce the amount collected from third-party payors to $1,710,000. Required:
Prepare the necessary journal entry to record the contractual adjustments.
Q5) What are the objectives of accounting for a voluntary health and welfare organization?
Q6) When is recognition of contributions of artworks and historical treasures not required?
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 19: Accounting for Estates and Trusts
Available Study Resources on Quizplus for this Chatper
74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/72542
Sample Questions
Q1) Prepare the journal entry to record the payment of the estate's liabilities for debts incurred prior to the decedent's death..
Q2) What guidelines must be followed to classify a transaction as associated with the principal of an estate or as an income transaction?
A)generally accepted accounting principles.
B)federal estate laws.
C)state estate laws.
D)the Internal Revenue Code.
E)the decedent's intentions or state laws.
Q3) An additional savings account of $15,600 was located by the executor. Prepare the journal entry to record the transaction.
Q4) During the current year,an estate generates the following income amounts: Rental income $10,000,Interest income 4,000,Dividend income 6,000.The rental income is conveyed immediately to the beneficiary stated in the decedent's will.Dividends of $2,000 are donated to the decedent's church.What amount of federal income tax must be paid by the estate?
Q5) Debts of $52,000 were discovered. Prepare the journal entry to record the transaction.
Q6) What is meant by estate accounting?
To view all questions and flashcards with answers, click on the resource link above. Page 22