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Kaplan Mt482 quiz 4

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Question;Question 1.1.Which of the following steps are required to adjust LIFO to FIFO?(Points: 2) 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 2.2.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:(Points: 2) $ 540,000$ 440,000$ 524,000$ 506,000Question 3.3.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:(Points: 2) 2 years7 years14 years34 yearsQuestion 4.4.The following information can be found in Manufacturer Company's financial statements.If Manufacturer used FIFO its Net Income for fiscal 2006 would be:(Points: 2) $ 165,000$ 149,000$ 135,000$ 131,000Question 5.5.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.(Points: 2) I, II, III and IVII, III and IVI, II and IIIII and IVQuestion 6.6.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?(Points: 2) 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 7.7.LIFO liquidation occurs when:(Points: 2) 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 8.8.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?(Points: 2) 3,205,2713,566,9183,893,0004,096,430Question 9.9.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:(Points: 2) Option AOption BOption COption DQuestion 10.10.For Control Furniture Co.,LIFO Reserve in Year 2006 $91 millionLIFO Reserve in Year 2005 $82 millionTax Rate is 35%.To restate Year 2006 LIFO inventories to a FIFO basis, we use the following analytical entry:(Points: 2) Option AOption BOption COption D

 

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