Loose-leaf For Auditing & Assurance Services: A Systematic Approach
11th Edition
ISBN: 9781260687637
Author: William F Messier Jr, Steven M Glover Associate Professor, Douglas F Prawitt Associate Professor
Publisher: McGraw-Hill Education
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Chapter 20, Problem 20.20MCQ
To determine
Concept Introduction:
The purpose of an issuer of the securities is to provide full and fair disclosure of registration statement while issuing the securities. Registration statements should include material misstatement which can affect the decision of investors while purchasing the securities.
To choose: The correct option for filling suit for misstatement in financial statements.
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As an auditor for the CPA firm of Hinkson and Calvert, you encounter the following situations in auditing different clients.
Pina Colada Corp. is a closely held corporation whose stock is not publicly traded. On December 5, the corporation acquired
land by issuing 3,000 shares of its $20 par value common stack. The owners' asking price for the land was $135,000, and the
fair value of the land was $115,500.
1.
2.
Cullumber Company is a publicly held corporation whose common stock is traded on the securities markets. On June 1, it
acquired land by issuing 19,500 shares of its $10 par value stock. At the time of the exchange, the land was advertised for sale
at $267,500. The stock was selling at $11 per share.
Prepare the journal entries for each of the situations above. (Credit account titles are automatically indented when amount is
entered. Do not indent manually. If no entry is required,…
A public company issues new shares must prepare a prospectus which must be registered with the Securities Commission Malaysia. The board of directors, headed by Godin, approved the prospectus to be issued on a rights issue for 10 million shares. It is later found that the prospectus contains information that is misleading and there is a material omission of information.
Who shall be liable for the misleading information and omission? Justify your answer.
(Must be in essay form, 800 words)
Management informed the auditor that they erroneously charged the acquisition of SMC shares to the account “Marketable Securities” when they never had any intention to dispose of this when in need of cash. These shares should be treated as securities @ FVOCI – noncurrent. The company recorded a 20,000 decline in market value of these shares and charged this to operating expenses.
Requirement: Prepare adjusting entries
Chapter 20 Solutions
Loose-leaf For Auditing & Assurance Services: A Systematic Approach
Ch. 20 - Prob. 20.1RQCh. 20 - Prob. 20.2RQCh. 20 - Prob. 20.3RQCh. 20 - Prob. 20.4RQCh. 20 - Prob. 20.5RQCh. 20 - Prob. 20.6RQCh. 20 - Prob. 20.7RQCh. 20 - Prob. 20.8RQCh. 20 - Prob. 20.9RQCh. 20 - Prob. 20.10RQ
Ch. 20 - Prob. 20.11RQCh. 20 - Prob. 20.12RQCh. 20 - Prob. 20.13RQCh. 20 - Prob. 20.14MCQCh. 20 - Prob. 20.15MCQCh. 20 - Prob. 20.16MCQCh. 20 - Prob. 20.17MCQCh. 20 - Prob. 20.18MCQCh. 20 - Prob. 20.19MCQCh. 20 - Prob. 20.20MCQCh. 20 - Prob. 20.21MCQCh. 20 - Prob. 20.22MCQCh. 20 - Prob. 20.23MCQCh. 20 - Prob. 20.24MCQCh. 20 - Prob. 20.25MCQCh. 20 - Prob. 20.26PCh. 20 - Prob. 20.27PCh. 20 - Prob. 20.28PCh. 20 - Prob. 20.29P
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