Question;Please;see instructions on the answer sheet provided before completing the quiz.;Question;1 (3 points?25 minutes);The following partial information is available from the;A&O Company?s income statement for the year ended 2014;Sales;$;940,000;All operating expenses except depreciation;624,000;Depreciation expense;60,000;Loss on sale of equipment;26,000;Income tax expense;42,000;Net Income;145,000;In addition, partial information from A&O?s Balance;Sheets for the year ending 2013 and 2014 is as follows;2013;2014;Accounts Receivable;$94,000;$67,000;Accounts Payable for operating expenses;41,000;51,000;Income Taxes Payable;8,500;4,000;Instructions;a);Direct Method: Calculate;cash received in 2014 from customers.;b);Direct Method: Calculate;cash paid for operating expenses in 2014;c);Indirect Method: Prepare;the operating activities section of the statement of cash flows.;Question;2 (3 points?25 minutes);A&O Corporation contracted to build an office;building for $50,000,000. Construction began in 2014 and is expected to be;completed in 2016. Data for 2014 and 2015 are;2014;2015;Costs incurred to date;$14,600,000;$30,600,000;Estimated costs to complete;25,400,000;9,400,000;Progress billings to date;13,900,000;30,000,000;Cash collected to date;13,000,000;29,300,000;A&O uses the;percentage-of-completion method.;Instructions;(a) Calculate the gross;profit recognized in 2014.;(b) Calculate the;gross profit recognized in 2015.;(c) Calculate the;revenue recognized in 2015.;(d) Prepare one journal entry to record the construction;expense, revenue, and gross profit in 2015;Question;3 (4 points?15 minutes);Select the best answer for each of the;following and write the letter corresponding to your answer in the answer sheet;provided.;1.;Assume that, at year-end;the fair value of investments held by VAP Co. is $104,000 and the carrying;amount is $110,000. There is a zero prior balance in fair value adjustment;account. Which of the following statements would be correct for the year-end;adjusting entry?;a.;VAP will debit $6,000 to;Unrealized Holding Gain or Loss- Income if the investment is in available for;sale debt securities;b.;VAP will credit $6,000 to;Unrealized Holding Gain or Loss- Income if the investment is in available for;sale debt securities;c.;VAP will debit $6,000 to;Unrealized Holding Gain or Loss- equity if the investment is in available for;sale debt securities;d.;VAP will credit $6,000 to;Unrealized Holding Gain or Loss- Income if the investment is in trading;securities;2.;Which of the following;statements is correct?;a.;Unrealized holding gains or;losses on held to maturity debt securities are reported as a separate component;of stockholders' equity;b.;Trading securities are;reported at fair value and available for sale debt securities are reported at;amortized cost;c.;Unrealized holding gains or;losses on available for sale debt securities are reported as a separate;component of stockholders' equity, but such gain or losses are not recognized;for held to maturity debt securities.;d.;Held to maturity debt;securities and available for sale debt securities are reported at amortized;cost.;3.;Unrealized holding gains;and losses on investments in equity securities accounted for using the;equity method are;a.;Recognized in net income;b.;Not recognized;c.;Recognized as other;comprehensive income and as a separate component of stockholders? equity;d.;All of the above statements;are incorrect.;4. Which;of the following statements is correct?;a.;A refund liability is;recorded by the consignee upon receipt of the goods on consignment.;b.;When goods are sold with a;right of return, the transaction is recorded as a repurchase agreement.;c.;Service type warranties are;recorded as a separate performance obligation.;d.;Assurance type warranties are recorded as a;separate performance obligation.;5. A;contract modification is accounted for using a prospective approach if;a.;The promised goods or;services are distinct.;b.;The company has the right;to receive an amount equal to the standalone price.;c.;The new products are not;priced at the proper standalone price or if they are not distinct.;d.;Both a and b are correct.;6.;When;using the indirect method to prepare the operating section of a statement of;cash flows, which of the following is subtracted from net income to compute;cash flow from operating activities?;a. Decrease;in accounts receivable.;b. Gain;on sale of land.;c. Amortization;of patent.;d. Increase;in accounts payable.;7.;Under the quantitative;test, a segment is considered reportable if;a.;Both the segment revenues are;10% or more of the combined revenues (excluding intersegment revenue) of all;segments, and the Identifiable assets are 10% or more of the combined assets;of all segments.;b.;Both the segment revenues;are 10% or more of the combined revenues (excluding intersegment revenue) of;all segments, and the net profit (loss) is 10% or more of the combined net;profit or loss.;c.;The absolute amount of a;segment's profit or loss is 10% or more of the greater (in absolute amount) of;the combined operating profit of all segments or the combined operating loss of;all segments that reported a loss.;d.;Both a and b are correct.;8.;Which of the following statements is correct, with;respect to interim reporting?;a. Under the discrete approach each interim;period is treated as an integral part of the annual report;b. Under the integral approach each interim;period is treated as an integral part of the annual report;c. Under the integral approach each interim;period is treated as a separate accounting period;d. All of the above statements are incorrect;Question;4 (5 points?20 minutes);Show computations for each of the;following, and clearly show your final answer using the answer sheet provided.;1. VAP company enters into a contract;with a customer to build a factory for $1,000,000 on January 10, 2014 with a performance bonus of $100,000;if the factory is completed by August 31, 2014. The bonus is reduced by $10,000;each week that completion is delayed. VAP commonly includes these completion;bonuses in its contracts and, based on prior experience, estimates the;following completion outcomes;Completed by;Probability;August 31, 2014;80%;September 7, 2014;10%;September 14, 2014;7%;September 21, 2014;3%;Show;calculations to determine the transaction price for this contract.;2.;PVP;Company sells products to customers with an unconditional right of return if;they are not satisfied. The right of returns extends 30 days. On March 10;2014, a customer purchases $20,000 of products (cost $12.000) paying cash.;Assuming that based on prior experience estimated returns are 4%, prepare the;journal entries to record (1) the sale and (2) cost of goods sold and the;estimated inventory returns.;3.;The following information;is provided for A&E Company, which uses the equity method.;?;On January 1, 2014, A&E;Company acquired 100,000 shares of PVP, Inc. (representing 30 percent ownership;and significant influence) common stock at a cost of $15 per share.;?;For the year 2014, PVP;Inc. reported net income of $500,000.;?;On January 28, 2015, PVP;Inc. announced and paid a cash dividend of $100,000.;?;For the year 2015, PVP Inc.;reported a net loss of $100,000.;Calculate;the balance in the Investment in PVP Stock account as of the end of 12/31/2015.;4.;On December 31, 2014;A&E Co. provided the following information regarding its trading;securities;Investments;Cost;Fair Value;Unrealized gain/(loss);A company;$40,000;$36,000;B company;$25,000;$20,000;C company;$25,000;$30,000;Totals;Previous;market adjustment balance;$;1,000);Show;computations and prepare an adjusting journal entry on December 31, 2014.;5.;AM;Company provided the following information on selected transactions during 2014;Dividends;paid to preferred stockholders $ 150,000;Loans made to other corporations 500,000;Proceeds from issuing bonds 900,000;Proceeds from issuing preferred stock 1,050,000;Proceeds from sale of equipment 1,000,000;Purchase of land by issuing bonds 300,000;Show calculations for net cash provided (used) by (a) investing;activities and (b) financing activities during 2014.
Paper#38818 | Written in 18-Jul-2015Price : $37