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kaplan mt482 unit 4 quiz




Question;Which of the following steps are required to adjust LIFO to;FIFO?;Inventory needs to be calculated as reported;LIFO inventory plus LIFO reserve.;Increase deferred tax payable by LIFO reserve;times Tax rate.;Retained earnings need to be calculated as;reported retained earnings plus LIFO reserve times (1 - Tax rate).;All of the above.;Question 2. Question;The following information can be found in Manufacturer;Company's financial statements.;If Manufacturer used FIFO its retained earnings as of the;end of fiscal 2006 would be;$ 540,000;$ 440,000;$ 524,000;$ 506,000;Question 3. Question;Below is selected information taken from the balance sheet;of Huy Corporation as of 12/31/06.;The average age of Huy's depreciable assets as of 2006 is;2 years;7 years;14 years;34 years;Question 4. Question;The following information can be found in Manufacturer;Company's financial statements.;If Manufacturer used FIFO its Net Income for fiscal 2006;would be;$ 165,000;$ 149,000;$ 135,000;CORRECT $ 131,000;Question 5. Question;Under current US GAAP, goodwill is;I. amortized over a period not to exceed 40 years.;II. tested annually for impairment.;III. exclusive of separately identifiable intangible assets.;IV. recorded only upon purchase of another entity.;I, II, III and IV;II, III and IV;I, II and III;II and IV;Question 6. Question;Look Good Corporation has current assets of $1.1M and;current liabilities of $1M. It is close to year-end and it would like to;increase its current ratio. Which of the following will achieve this?;Encourage customers to pay their bills more;quickly.;Increase short-term borrowings by $0.1M.;Sold building for $0.2M in cash.;Liquidate some of its trading marketable;securities.;Question 7. Question;LIFO liquidation occurs when;a firm changes from LIFO to another inventory;method.;a firm experiences an increase in cost of raw;materials.;the LIFO reserves decline in value.;the quantity of goods sold is greater than the;quantity produced.;Question 8. Question;The following information can be found in ABC Co.'s;financial statements.;Assume a tax rate of 35%. Inventories valued using the LIFO;method represented approximately 80% of consolidated inventories.;What will be the retained earnings for 2005 if ABC used FIFO;valuation?;CORRECT 3,205,271;3,566,918;3,893,000;4,096,430;Question 9. Question;A firm has a current ratio greater than 1.0. If the firm's;ending inventory is understated by $3,000 and beginning inventory is overstated;by $5,000, the firm's net income (before taxes) and current ratio will be;Option A;Option B;Option C;Option D;Question 10. Question;For Control Furniture Co.;LIFO Reserve in Year 2006 $91 million;LIFO Reserve in Year 2005 $82 million;Tax Rate is 35%.;To restate Year 2006 LIFO inventories to a FIFO basis, we;use the following analytical entry;Option A;Option B;CORRECT Option C;Option D


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