Gadubhai Hawkeye Games Inc. buy $100K worth of raw materials from suppliers but does not paysuppliers yet. Which of the following statement is correct?O The transaction decreases revenue.O The transaction increases stockholder's equity.O The transaction increases asset.O The transaction does not have impact on liabilities.

The accrual concept recognizes revenues and expenses when they are earned or incurred, regardless of…

Answered: Hawkeye Games Inc. buy $100K worth of…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter16: Property Transactions: Capital Gains And Losses

Section: Chapter Questions

Problem 23P

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A company should immediately recognize: A) any gain when it constructs a piece of equipment at a cost savings. B) any gain when it makes a bargain purchase. C) any gain when a company receives no cash for an asset received in an exchange. D) any loss when it ignorantly pays too much for an asset originally.
Which of the following statements is/are true? O In the case of flat-rate write-offs on receivables, the sales tax must also be corrected. All deposits are income effective. O If a company's profit is to be reported as high, administrative costs are taken into account when determining the production costs. O Compared to straight-line depreciation, declining-balance depreciation means that profits tend to be higher in the future.
Market risk is defined as the risk: Question 1Answer a. Incurred by granting loans to companies that do not hold a large market share. b. Incurred in the trading of assets and liabilities due to changes in interest rates, exchange rates and other asset prices. c. That a sudden surge in liability withdrawals may require FIs to liquidate assets at less than fair market prices. d. That an FI loses market share.
Which of the following transactions would result in an increase in capital employed? A. Paying a trade payable in cash B. Writing off a bad debt C. Purchasing on credit D. Repaying a loan E. Selling inventory at a profit F. Increasing the bank overdraft to purchase a non - current asset
For the example below, list and describe the input(s) (observable or unobservable) and valuation technique(s) used. Determine the appropriate classification in the fair value hierarchy. Company A invested in the common stock of a private furniture manufacturer, Company Z. Quoted prices are not available for Company Z’s stock. Company Z’s fair value is measured as the present value of future cash flow. The measurement requires management assumptions such as discount rate, the amount and the timing of future cash flow.
Unlimited liability meansa. there is no limit on the amount an owner canborrow.b. creditors will absorb any loss from nonpayment of debt.c. the business can borrow money for any typeof purchase.d. the owner is responsible for all businessdebts.e. stockholders can borrow money from thebusiness.
Which of the following statements is/are FALSE? A. Under IAS17, companies would often structure their leases as operating leases instead of finance leases as this provided lessees with a good source of off-balance-sheet funding. B. The capital maintenance concept has been put in place to protect creditors' interests from the risk that a business may go bankrupt and creditors may not be able to recover their claims. C. For business A (with closing inventory of £100m and profit of £20m) the impact of an X% change in closing inventory on profit is higher in proportionate terms than for business B (with closing inventory of £500m and profit of £200m). D. The total assets on the SOFP most often understate the value of the business, due to important intangible assets with subjective valuations missing from the SOFP and the assets shown on the SOFP appearing at their historical cost, when the cost model is used. E. Writing down the value of inventory on the SOFP and recognising increased cost…
Which of the following is not a reason a company would be willing to accept new business at a loss? A.) The company has the expectation that certain customers can influence other potential customers. B.) The company has the expectation that it will make up for it in later years and has the expectation that certain customers can influence other potential customers. C.) The company has the expectation that its estimates will prove incorrect and that the business will result in a profit. D.) The company has the expectation that it will make up for it in later years.
A gain or loss from one of the following transactions should not be included in determining income: a. receipt of interest from bank depositsb. sale of treasury sharesc. sale of plant and equipmentd. sale of product T Corporation’s retirement of its treasury shares resulted in the par value exceeding the cost. The difference should be: a. debited to APIC to the extent of the credit when the stock was issuedb. debited to retained earningsc. credited to APIC from previous treasury stock transactionsd. credited to APIC relating to the same issue Which of the following should be reported for capital stock? a. the shares authorizedb. the shares issuedc. the shares outstandingd. all of these
Compute the times interest ratio and use it to analyze liabilities. Show work
Identify whether the statement are True or False. 1. Insurance companies use replacement value as a basis to determine the appropriate insurance premium to be charged to their clients. * 2. To get book value per share, total liabilities are deducted from total assets, and the resulting figure is divided by total authorized shares * 3. For real properties, it is more important to look at the age of the asset than its size. * 4. Fair Market value is the term used to describe the value derived from the amounts reflected in the financial statements. * 5. Risk identification is important to allow investors to assess the impact of the risk on their investment. * 6. Brownfield investments are easier to evaluate as information is already available from prior years * 7. The book value method is a transparent approach since value can be easily verified by looking at the financial statements * 8. If there are no comparable assets found in the market, it is more appropriate to use the replacement…
1. On reporting date, they are measured at market value.2. Initially measured at purchase price, which is the fair value at purchase date.3. Initially recognized at purchase price plus transaction costs.4. Generally, dividends received or receivable are recorded as dividend revenue.5. Change in fair value is not recognized unless there is permanent impairment in value.6. Dividends received are reported as a decrease in the carrying amount of the investment.7. Impairment loss and reversal of impairment are not separately accounted for.8. Bonus issue is not separately recognized in a formal accounting entry.9. Any difference between the cost of investment and the share i the fair value of the net identifiable assets is amortized and is considered an adjustment to the recognized income from this investment.10. At the date of the disposal of the securities, the equity account accumulated in other comprehensive income may be transferred to another equity account.11. The income recognized in…

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