3. Which of the following subsequent (post-balance sheet events) would require adjustment of the balance sheet amounts?a) Loss of plant as a result of fire.b) Fluctuations in the quoted market prices of available-for-sale securities held as an investment.c) Large sale of assets after year-end.d) Actual loss damages paid on a large lawsuit filed before year-end for which no adjustment was made at year-end becausethe amount was not reasonably estimable.e) None of the above.

The correct answer is:d) Actual loss damages paid on a large lawsuit filed before year-end for which…

Answered: 3. Which of the following subsequent…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

Which of the following is not considered a permanent difference? Select one: a. Interest received on government obligations. b. Fines resulting from violating the law. c . Percentage depletion of natural resources. d. Stock-based compensation expense.
Which of the following is NOT correct? i. Initial allowance is claimable in the year the qualifying expenditure is incurred; however, it can be deferred to another year. ii. Annual allowance is not given in the year of disposal. iii. Annual allowance may be granted if a qualifying asset is temporarily out of use. iv. Capital allowance is granted instead of depreciation for all assets.
5. During the end of the year, YGX Company presented the following information: Equipment Accumulated depreciation However, the equipment is found to be impaired due to obsolescence as well as physical damage. At year-end, the company has determined the following information related to the equipment: Undiscounted net cash inflows Fair value less cost of disposal Value in use or discounted net cash inflows a. 1,500,000 b. 2,000,000 9,000,000 3,500,000 What amount should be reported as impairment loss for the year? c. 500,000 d. 0 4,500,000 3,500,000 3,000,000
You are the lead partner overseeing the audit for Camo Ltd, a privately owned company. The completion of the audit report is pending for the income year 2020 and you have noted several situations with possible actions. The situations are as follows: 1. Camo Corporation carries its property, plant, and equipment accounts at current market values. Current market values exceed historical cost by a highly material amount, and the effects are pervasive throughout the financial statements. 2. Management of Camo Corporation refuses to allow you to observe, or make, any counts of inventory. The recorded book value of inventory is highly material. 3. You were unable to confirm accounts receivable with Camo's customers. However, because of detailed sales and cash receipts records, you were able to perform reliable alternative audit procedures. 4. One week before the end of fieldwork, you discover that the audit manager on the Camo engagement owns a material amount of Camo's common stock. 5. You…
3. S1: An entity shall measure a noncurrent asset or disposal group classified as held for sale at the lower of carrying amount and recoverable amount.S2: A noncurrent asset that is to be abandoned shall not be classified as held for sale because it is unlikely that the noncurrent asset will be sold within twelve months. A. Both statements are true B. Both statements are false C. Only statement 1 is true D. Only statement 2 is true 4. In order for a noncurrent asset to be classified as held for sale, the sale must be highly probable, which requires the following, except * A. The asset must be actively marketed at a sales price that is reasonable in relation to the fair value. B. Presence of an active marketing program C. Marketing program or plan is unlikely to be significantly changed or withdrawn D. Commitment to a plan to sell the asset O E. None of them
In the case study of Company XYZ's challenges in accounting for goodwill and intangible assets impairment, which factor poses a risk to the value of intangible assets such as patents and software? A) Technological advancements B) Annual amortization C) Lack of impairment testing D) Economic stability
In a client currently using straight-line method for all depreciable assets acquires a new class of depreciable assets to initiate a new product line and begins to depreciate these assets on an accelerated basis, the auditor should A. Add a separate explanatory paragraph to the reportB. Express an adverse opinionC. Express the opinion subject to the effect of new depreciation methodD. Express thee opinion with no modification for the accounting change
IFRS requires annual reviews of long-lived assets (other than goodwill) for reversal indicators. A loss may be reversed up to the newly estimated recoverable amount, not to exceed the initial carrying amount adjusted for depreciation. This is a significant departure from GAAP, so what are the financial statement implications? Is it a good thing or bad?
A company made a material error in calculating and reporting amortization expense in Year 1. The error was discovered in Year 2. The item should be reported as a prior period adjustment:
Changing the method used to calculate depreciation from method 1 to method 2 in one year, then back to method 1 in the next, and then back again to method 2, is a violation of which qualitative characteristic?
TRUE OR FALSE? The prior period will be affected if during the current year the management of an entity decides to classify a non currrent asset as held for sale.
PREPARE A REVISED STATEMENT OF FINANCIAL POSITION GIVEN THE AVAILABLE INFORMATION. ASSUME THAT THE ACCUMULATED DEPRECIATION BALANCE FOR THE BUILDINGS IS 172000 AND FOR THE EQUIPMENT, 117000. THE ALLOWANCE FOR DOUBTFUL ACCOUNTS HAS A BALANCE OF 29000. THE PENSION LIABILITY IS CONSIDERED A NON-CURRENT LIABILITY. (LIST CURRENT ASSETS IN REVERSE ORDER OF LIQUIDITY. LIST PROPERTY, PLANT, AND EQUIPMENT IN ORDER OF BUILDINGS AND EQUIPMENT. ENTER ACCOUNT NAME ONLY AND DO NOT PROVIDE THE DESCRIPTIVE INFORMATION PROVIDED IN THE QUESTION.)

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