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I Appendix I) 2015 Released AICPA Questions for Financial Accounting and Reporting

1 FASBs due process for setting accounting standards includes which of the following procedures

a The FASB can seek information about accounting and reporting issues by holding public forums usually based on an exposure draft

b The FASB delegates topics to the Financial Accounting Foundation for research and reporting

c The FASBs Emerging Issues Task Force ratifies amendments to the Accounting Standards Codification

d The FASB obtains approval from the International Accounting Standards Board in setting its agenda

2 Which of the following items should be shown as a component of comprehensive income

a Dividend paid to a shareholder b Foreign-currency translation adjustment c Additional capital contribution d Deferred revenue

3 Dunbam Co had the following activities during the year

Purchase of inventory $120000 Purchase of equipment 80000 Purchase of available-far-sale securities 60000 Purchase of treasury stock 70000 Issuance of common stock 150000

What amount should Dunbam report as cash provided (used) by investing activities in its statement of cash flows for the year

a $ (120000) b $ (140000) c $ (210000) d $150000

4 Savor Co had $100000 in accrual basis pretax income for the year At year end accounts receivable had increased by $10000 and accounts payable had decreased by $6000 from their prior year-end balances Under the cash basis of accounting what amount of pretax income should Savor report for the year

i $ 84000 b $ 96000 c $104000 ct $116000

S A firms ending inventory balance was overstated by $1000 Which of the following statements is correct according to a periodic inventory system

a The retained earnings were overstated by $1000 h The cost of goods sold was overstated by $1000 c The cost of goods available for sale was overstated by

$1000 d The gross margin was understated by $1000

1 The requirement is to identify a FASB due process procedure Answer (a) is correct because the FASB seeks information by holding public forumsroundtable discussions Usually the feedback s obtained to determine if a second exposure draft is necessary

2 The requirement is to identify the item that would be shown as a component of comprehensive income Answer (b) is correct because foreign-currency translation adjustments appear as a component of comprehensive income Answers (a) (c) and (d) are incorrect because they are not income or comprehensive income items

3 The requirement is to determine the amount of cash provided (used) by investing activities Answer (b) is correct because cash flow investing activities involve non-current assets and the only two items impacting non-current assets is the purchase of equipment and purchase of available-for-sale securities (80000) + (60000) = (140000)]

4 The requirement is to convert from the accrual basis to the cash basis for reporting income Answer (a) is correct because accrual basis income would be ~justed by a change in receivables and a change in payables ($100000 -10000 shy6000 == $84000)

5 The requirement is to determine the impact of an inventory error Answer (a) is correct because if ending inventory is overstated cost of goods sold is understated If cost of goods sold is understated retained earnings is overstated

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1186 Appendix D 2015 Released AICPA Questions for Financial Accounting and Reporting

6 Quick Co acquired the following assets from a liquidating competitor for a $200000 lump-sum purchase price

Competitors Fair valuecarrying amount

Inventory $ 70000 $ 50000 Land 40000 50000 Building 110000 150000

$220000 $250000

What amount should Quick report as the cost of the building

a $100000 b $120000 c $150000 d $200000

7 At the beginning of year 2 a company invested $40000 in a marketable equity security At that time the security was appropriately classified as an available-for-sale security At the end of year 2 the security had a fair value of $28500 The change in fair value is deemed temporary How should this change in fair value be reported in the financial statements

a As a realized loss of $11500 as part of net income b As a realized loss of $11500 as part of other

comprehensive income c As an unrealized loss of $11500 as part of net income d As an unrealized loss of $11 500 as part of other

comprehensive income

8 Anchor Co is experiencing financial difficulties Anchor negotiated a settlement of $100000 in debt owed to Bowden Inc in exchange for Anchors gross receivables of $100000 The receivables have an allowance for uncollectible accounts of $25000 The impact of this transaction on Anchors net income is a $25000

a Increase in bad debt expense b Gain on restructuring of payables c Loss on restructuring of payables d Decrease in bad debt expense

9 Aldrich Co distributes cash dividends to its shareholders during the current year The dividends are declared on March 9 and are payable to shareholders as of the date of record which is April 15 The dividends are actually paid on Ma~ 19 At which of the following dates would the dividends become a liability to Aldrich

a March 9 b April 15 c May 19 d December 31

6 The requirement is to value the cost of a building that was part of a lump-sum (basket) purchase Answer (b)is correct because each item ina lump-sum (basket) purchase is assigned its proportional share of the total fair value times the price paid [($1500001$250000) x $200000 =$120000]

7 The requirement is to determine how to account for an available-for-sale security temporary change in fair value Answer (d) is correct because temporary fair value changes for available-for-sale securities are considered unrealized and reported in other comprehensive income In this case the difference between $40000 and $28500 is a $11500 decrease which is reported as an unrealized loss as part of other comprehensive income

8 The requirement is to determine how to account for a $25000 net income change due to settling a payable with receivables Answer (b) is correct because the restructuring resulted in a gain after all accounts are removed from the books A journal entry helps to understand the transaction

Bowden Payable 100000 Allowance 25000

Receivables 100000 Gain 25000

9 The requirement is to determine when dividends become a liability Answer (a) is correct because dividends become a liability when declared and dividends were declared on March 9

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Appendix D 2015 Released AICPA Questions for Financial Accounting and Reporting 1187

10 In February Colt Corp sold merchandise to Sink Co for $lOOOO Colt is using the cost recovery method to account for this sale which had cost of goods sold of $2500 Colt received the following payments from Sink during the year

Date Amount June $1000 August 1500 October 200 December 700

$3400

What amounts of gross profit should Colt recognize in its June 30 and December 31 income statements

June 30 December 31

a $0 $0 b $0 $900 c $1000 $2400 d $1000 $3400

11 Harmony Co has a single-employer defined benefit pension plan Harmony should report a liability related to the plan equal to which of the following amounts

a The unfunded projected benefit obligation b The accumulated benefit obligation c The projected benefit obligation d The unfunded vested benefit obligation

t 12 Which of the following circumstances would result in a deferred tax asset for the current year

a Expenses that are recognized in financial income this year and deductible next year

b Expenses that are deductible this year and recognized in financial income next year

c Revenues that are recognized in financial income this year and taxable next year

d Revenues that are recognized in financial income this year but are not subject to taxation

13 Which of the following examples would require restatement of prior years financial statements

a A calculation change of warranty obligations based on updated claim information for the prior year

b A change from the income tax basis of accounting to the accrual basis

c An insurance premium that was due in the prior year but that lapsed because the policy was not paid

d An intangible asset with a remaining estimated amortization period of two years which is determined to be obsolete

14 The per-share amount must be reported on the face of a public companys income statement for which of the following items

a Income from continuing operations b Preferred stock dividend c US Treasury stock d Compensation effect of fair value on stock options

10 The requirement is to determine the amount of gross profit to recognize when using the cost recovery method Answer (b) is correct because under the cost recovery method gross profit is not recognized until costs are recovered Costs are recovered in June and August (zero gross profit in June) Thus all remaining receipts may be recognized as gross profit when received and $900 ($200 in October and $700 in December) gross profit is recognized in December

11 The requirement is to determine when to report a defined benefit pension liability Answer (a) is correct because a liability is reported for the amount that the projected benefit obligation exceeds the fair value of plan assets otherwise known as the unfunded projected benefit obligation

12 The requirement is to determine which circumstance results in a deferred tax asset Answer (a) is correct because with the exception of permanent differences when financial income is less than taxable income a deferred tax asset is created Answers (b) and (c) are incorrect because the circumstance results in financial income being greater than taxable income Answer (d) is incorrect because permanent differences do not result in deferred taxes

13 The requirement is to determine which example would result in a prior-period restatement Answer (b) is correct because errors result in prior period restatements Changes from a non-GAAP method to a GAAP method are considered an error Answers (a c and d) are incorrect because they are considered changes in estimates due to new information and changes in estimates do not require restatements

14 The requirement is to determine which item results in per-share reporting The correct answer is (a) because pershyshare amounts are required to be reported for income from continuing operations and net income A company may choose to report per-share amounts for discontinued operations Per-share amounts are not required for preferred stock dividends US Treasury stock or stock option impacts (Answers b c and d)


15 A foreign subsidiary of a US parent company should measure its assets liabilities and operations using

a The subsidiarys local currency b The subsidiarys functional currency c The US dollar d The best available spot rate

16 Which of the following is a criterion for classifying a lease as a capital lease by a lessee

a The lease term is equal to 75 or more of the estimated economic life of the leased property

b The present value of the minimum lease payments is 75 or more of the fair value of the leased property

c The lease agreement contains an option to purchase the leased prol6rty at its fair value at the end of the lease term

d The Jease agreement requires that title of the leased property remains with the lessor at the end of the lease term

17 Jensen performed legal services to assist Balm Co in accomplishing its initial organization Jensen accepted 1000 shares of $5 par common stock in Balm as payment for his services The Balm shares were not yet publicly traded but they had a book value of $4 per share Jensen provided 48 hours of service which is normally billed at $125 per hour By what amount should the common stock account increase

a $1000 b $4000 c $5000 d $6000

18 The following information relates to two projects performed by Miley Co during the year for laboratory research aimed at discovering new knowledge

Project Costs Likelihood that effort will result in future benefits

1 $100000 Probable II $ 50000 Reasonably possible

What should Miley report as research and development expenses in its income statement for the year

a $0 b $50000 c $100000 d $150000

15 The requirement is to determine how a foreign subsidiary of a US parent company should measure its assets liabilities and operations Answer (b) is correct because foreign subsidiaries should report in its functional currency which could be the foreign currency or the US dollar depending upon facts and circumstances

16 The requirement is to identify the correct capital lease criteria Answer (a) is correct because it meets one of the four lessee capital lease criteria (transfer of title from lessor to lessee bargain purchase option lease term greater than or equal to 75 of the economic life of the lased property present value of the minimum lease payments is greater than or equal to 90 of the fair value of the leased item) Answer (b) is incorrect because the percentage should be 90 not 75 Answer (c) is incorrect because it does not contain a bargain if the lessee can purchase the item at fair value Answer (d) is incorrect because it does not transfer title

17 The requirement is to determine the amount to record in common stock resulting from a transaction where services are exchanged for the stock Answer (c) is correct because common stock is always recorded at par value (1000 shares x $5share = $5000) regardless of the value of the transaction (48 x $135 = $6000)

18 The requirement is to determine the amount to be recorded as research and development expenses Answer (d) is correct because under US GAAP all internal non-software project costs regardless of future benefits are expensed as incurred ($100000 + $50000 = $150000)

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19 A company began developing computer software to bemiddot sold as a separate product on January 1 year 1 During the planning coding and testing phases the company incurred $1300000 of costs On June 30 year 1 the product was determined to be technologically feasible The company began producing product masters of the software and incurred an additional $750000 of costs from July 1 year 1 through September 30 year 1 After the software was available for release on October 1 year 1 the company incurred an additional $275000 of costs relating to maintenance and customer support What amount of software-related costs should be capitalized

a $275000 b $750000 c $1300000 d $2050000

20 Which basis of accounting is required for a citys government-wide financial statements

a Cash b Modified cash c Modified accrual d Accrual

21 A city government would report each of the following categories in its government-wide statement of net position except

a Governmental activities b Business-type activities c Fiduciary activities d Component units

22 Which of the following funds of a local government would report transfers to other funds as an other financing use

a Enterprise b Internal service c Pension trust d General

23 A storm damaged the roof of a nongovernmental notshyfor-profit organizations building A professional roofer repaired the roof at no charge How should the roof repairs be recognized in the statement of activities

a As an increase in expenses and an increase in contributions from donated services

b As an increase in the building account and an increase in unrestricted net assets

c As an increase in fixed assets and an increase in contributions from donated services

d No recognition is required in the financial statements but a note disclosure is required

19 The requirement is to determine the amount of software costs to capitalize Answer (b) is correct because only those costs between technological feasibility and market feasibility are to be capitalized and those costs as stated in the problem are $750000

20 The requirement is to identify the basis of accounting required for a citys government-wide financial statements Answer (d) is correct because the required basis is the accrual basis Answers (a) (b) and (c) are incorrect because the accrual basis is required

21 The requirement is to identify the category that is not required to be reported in the government-wide statement of net position Answer (c) is correct because fiduciary activities is not a required category of a government-wide statement of net position Answers (a) (b) and (d) are incorrect because governmental activities business-type activities and component units are all required categories of a governmentshywide statement of net position

22 The requirement is to identify the fund that would report transfers to other funds as an other financing use Answer (d) is correct because transfers to other funds as an other financing use would be reported in the general fund Answers ( a) (b) and (c) are incorrect because transfers to other funds as an other financing use would be reported in the general fund

23 The requirement is to identify how the roof repairs should be recognized in the statement of activities Answer (a) is correct because the repairs would be reported at fair value presented as an increase in expenses and increase in contributions from donated services Answer (b) is incorrect because the repairs are reported as an expense and as contributions from donated services Answer (c) is incorrect because the repairs are an expense Answer (d) is incorrect because the repairs should be reported in the statement at fair value

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24 A donor gives $10000 to a nongovernmental not-forshyprofit organization with instructions that it must be used to fund the organizations general operating expenses during the following fiscal year The donation will increase the organizations

a Unrestricted net assets b Temporarily restricted net assets c Restricted net assets d Restricted retained earnings

25 A nongovernmental not-far-profit organization provided the following data in regard to $500000 of donations received during the year

Purchase of investments to be held in $100000 perpetuity at the donors request

Future repairs to the organizations building 250000 and equipment at the donors request

General operations at the discretion of the 100000 board of directors

Specific program services as indicated by 50000 the donor

In order to properly reflect receipt of the donations net assets should increase in the amount of

a $400000 unrestricted and $100000 permanently restricted

b $150000 unrestricted $250000 temporarily restricted and $100000 permanently restricted

c $100000 unrestricted $300000 temporarily restricted and $100000 permanently restricted

d $100000 unrestricted and $400000 permanently restricted

26 Clear Cos trial balance has the following selected accounts

Cash (includes $10000 in bond-sinking fund $50000 for long-term bond payable)

Accounts receivable 20000 Allowance for doubtful accounts 5000 Deposits received from customers 3000 Merchandise inventory 7000 Unearned rent 1000 Investment in trading securities 2000

What amount should Clear report as total current assets in its balance sheet

a $$64000 b $67000 c $72000 d $74000

24 The requirement is to identify where the donation would be reported by the organization Answer (b) is correct because contributions that are time restricted are reported as temporarily restricted net assets Answer (a) is incorrect because the contribution is time restricted Answer (c) is incorrect because the contribution is time restricted but not permanently restricted Answer (d) is incorrect because notshyfor-profit organizations do not have retained earnings

25 The requirement is to identify the proper reporting of the donations Answer (c) is correct because the donation of $100000 for general operations is unrestricted the $300000 in donations for repairs and specific programs are temporarily restricted until spent and the donation restricted to purchase investments to be held in perpetuity is permanently restricted Answer (a) is incorrect because the donations for repairs and specific program services are temporarily restricted Answer (b) is incorrect because the donation for specific program services is temporarily restricted Answer (d) is incorrect because only the donation for investments to be held in perpetuity is permanently restricted

26 The requirement is to determine the value of total cunaIl assets from the selected items Answer (a) is correct Bond sinking funds should be considered non-current thus cash is $50000 - $10000 == $40000 Accounts receivable is neued by the allowance account ($20000 - $5000 =$15000) Deposits received from customers are considered unearned aDd unearned items are liabilities Inventory and trading securities are also considered current assets for a total of $64000= $50000 -10000 +20000 - 5000 +7000 +2000

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27 Martin Co had net income of $70000 during the year Depreciation expense was $10000 The following information is available

Accounts receivable increase $20000 Equipment gain on sale increase 10000 Nontrade notes payable increase 50000 Prepaid insurance increase 40000 Accounts payable increase 30000

What amount should Martin report as net cash provided by operating activities in its statement of cash flows for the year

a $0 b $40000 c $50000 d $100000

28 Which of the following should be disclosed in a summary of significant accounting policies

a Basis of consolidation b Concentration of credit risk of financial instruments c Composition of plant assets d Adequacy of pension plan assets in relation to vested

benefits

29 Each of the following events is required to be reported to the United States Securities and Exchange Commission on Form 8-K except

a The creation of an obligation under an off-balance sheet arrangement of a registrant

b The unregistered sale of equity securities c A change in a registrants certifying accountant d The quarterly results of operations and financial

condition of a registrant

30 Garcel Inc held unfinished inventory at a cost of $85000 with a sales value of $125000 The inventory will cost $10500 to complete The normal profit margin is 30 of sales The replacement cost of the inventory was $75000 What amount should Gareel report as inventory on balance sheet

a $114500 b $ 85000 c $ 77000 d $ 75000

31 Sea Manufacturing Corp is constructing a new factory building During the current calendar year Sea made the following payments to the construction company

January 2 $1000000 December 31 1000000

Sea has an 8 three-year construction loan of $3000000 What is the amount of interest costs that Sea may capitalize during the current year

a $0 b $80000 c $160000 d $240000

27 The requirement is to determine the net cash provided by operating activities Answer (b) is correct because $70000 + 10000 - 20000 - 10000 - 40000 + 30000 = $40000 The nontrade payable may be ignored

28 The requirement is to identify the item to be disclosed in a summary of significant accounting policies Answer (a) is correct and is the only item which is general in nature Answers (b c and d) are detailed and would each be disclosed in specific footnotes

29 The requirement is to determine which item would not result in an 8-k Answer (d) is correct because results of operations not quarterly operations are reported in the form 8-k

30 The requirement is to determine the value of the inventory to be reported on the balance sheet Answer (c) is correct because $77000 is the lower of cost or market

Cost = $85000

Replacement cost = $75000lt

Ceiling = selling price less cost to dispose = $125000 - 10500 = $114500

Floor =ceiling less normal profit margin =$114500 - 37500 (125000 x 30) = $77000

Market =$77000 (the middle of the ceiling replacement cost or floor) Lower of cost or market $77000

31 The requirement is to determine the amount of interest that can be capitalized Answer (b) is correct because the amount to capitalize is the lower of the actual interest or avoidable interest Avoidable interest $1000000 x 8 = $80000 and actual interest is $3000000 x 8 == $240000 Thus $80000 is to be capitalized

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1192 Appendix D 2015 ReleasedAICPA Questions for Financial Accounting and Reporting

32 Under IFRS which of the following statements about intangible assets is correct

a Internally generated goodwill cannot be recognized as an asset

b Intangible assets within a class may be measured differently using either the cost model or the revaluation model

c Research and development costs are capitalized as incurred

d Intangible assets with indefinite lives must be amortized annually

33 A note payable was issued in payment for services received The services had afair value less than the face amount of the note payable The note payable has no stated interest rate How should the note payable be presented in the statement of financial position

a At the face amount b At the face amount with a separate deferred asset for the

discount calculated at the imputed interest rate c At the face amount with a separate deferred credit for

the discount calculated at the imputed interest rate d At the face amount minus a discount calculated at the

imputed interest rate

34 Which of the following statements is correct regarding valuation allowances in accounting for income taxes

a The effect of a change in the opening balance of a valuation allowance that results from a change of circumstances ordinarily is included in income from operations

b Both deferred tax assets and deferred tax liabilities can be reduced by a valuation allowance

c Only negative evidence not positive evidence should be considered when determining whether a valuation allowance is needed

d A valuation allowance is necessary when the realistic probability standard of evidence is satisfied

35 A company issues $1500000 of par bonds at 98 on January 1 year 1 with a maturity date of December 31 year 30 Bond issue costs are $90000 and the stated interest rate of the bonds is 6 Interest is paid semiannually on January 1 and July 1 Ten years after the issue date the entire issue was called at 102 and canceled The company uses the straight-line method of amortization for bond discounts and issue costs and the result of this method is not materially different from the effective interest method The company should classify what amount as the loss on extinguishment of debt at the time the bonds are called

a $ 30000 b $ 50000 c $ 90000 d $110000

32 The requirement is to identify the correct IFRS intangible asset statement Answer (a) is correct because internally generated goodwill cannot be recognized as an asset since it cannot be measured reliably

33 The requirement is to determine how to record a note when it has been exchanged for services with a fair value less than the face amount of the note Answer (d) is correct because the imputed rate of interest must be recognized for notes without stated interest rates The note would be recorded net of the discount calculated at the imputed interest rate

34 The requirement is to determine which statement as it relates to valuation allowances is correct Answer (a) is correct because changes in valuation allowances impact income

35 The requirement is to determine the amount of loss on extinguishment of debt at the time the bonds are called Answer (d) is correct because the loss is $110000

At issuance

Cash laquo1500000 x 98) - 90000) $1380000 Bond Issue Costs 90000 Discount 30000

Bonds Payable $1500000

Discount amortization ($3000030) x 10 years = $10000 Bond Issue Cost amortization ($9000030) x 10 = $30000

Bond Call Bond Payable $1500000 Loss on extinguishment (plug) 110000

Discount (30000 - 10000) 20000 Bond Issue Cost (90000 - 30000) 60000 Cash (1500000 x 102) 1530000


36 On day 1 Clothes Co sells clothing to Link Corp for $40000 Clothes ships the clothing on day 1 and Link is obligated to pay Clothes within six months Link is given 12 months to return any of the clothing for a refund if they experience low demand Link is also given 18 months to exchange any clothing due to low demand At the time of sale Clothes cannot reasonably estimate returns but estimates $5000 in exchanged goods Clothes should recognize revenue for the aforementioned transaction

a On the day of the sale b Six months after the date of sale c 12 months after the date of sale d 18 months after the date of sale

37 At the beginning of year 1 a company amends its defined benefit pension plan for an additional $500000 in prior service cost The amendment covers employees with a lO-year average remaining service life At the end of year 1 what is the net entry to accumulated other comprehensive income ignoring income tax effects

a A $450000 debit b A $500000 debit c A $550000 credit d A $450000 credit

38 A company recorded a decommissioning liability and recognized the amount recorded as part of the cost of the related property After the property was fully depreciated the decommissioning liability was reviewed and adjusted How should this change in the decommissioning liability be recognized under IFRS

a The change in the liability is recognized in other comprehensive income

b The change in the liability is recognized in profit or loss

c The change in the liability is recognized as a change in the carrying amount of the property if the liability increases but is otherwise recognized in profit or loss

d The change in the decommissioning liability is not recognized until it is settled

39 A company incurred the following costs to complete a business combination in the current year

Issuing debt securities $30000 Registering debt securities 25000 Legal fees 10000 Due diligence costs 1000

What amount should be reported as current-year expenses not subject to amortization

a $ 1000 b $11000 c $36000 d $66000

36 The requirement is to determine when revenue should recognize when there is uncertainty related to the revenue amount Answer (c) is correct because 12 months after the sale date the company is aware of the return amount After 12 months the purchaser may only exchange items not return them

37 The requirement is to determine the net accumulative other comprehensive income amount when prior service cost is granted to employees Answer (a) is correct because the accumulated other comprehensive income account is first increased with a debit of $500000 for prior service cost (the projected benefit obligation is credited) The impact is assumed to impact the beginning of the year That amount is to be amortized over 10 years or $50000 per year Pension expense is debited for $50000 and accumulated other comprehensive is credited for $50000 The net effect is $450000 debit ($500000 - $500(0)

38 The requirement is to determine how a change in decommissioning liability is recognized given that asset is fully depreciated Answer (b) is correct because regardless of the use of the cost model or revaluation model a change in liability would exceed the carrying amount due to the asset being fully depreciated Thus the change is recognized in profit or loss

39 The requirement is to determine which acquisition costs should be expensed immediately Answer (b) is correct because acquisition related costs are norinally expensed with the exception of issuance costs and registration costs which are recognized in accordance with other US GAAP Thus $11000 should be expensed ($10000 + $1000)

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40 Based on the stock transactions below what is the weighted average number of shares outstanding as of December 3 I year 1 that should be used in the calculation of basic earnings per share in financial statements issued on March 1 year 2

Date Transactions January 1 year I April 1 year 1 June 1 year 1 February 15 year 2 March 15 year 2

Beginning balance 100000 Issued 30000 shares for cash 50 stock dividend 2 for 1 stock split Issued 40000 shares for cash

a 147500 b 183750 c 295000 d 36750041

41 Which of the following phrases best describes a Levell input for measuring the fair value of an asset or liability

a Inputs for the asset or liability based on the reporting entitys internal data

b Quoted prices for similar assets or liabilities in active markets

c Inputs that are principally derived from or corroborated by observable market data

d Unadjusted quoted prices for identical assets or liabilities in active markets

42 On June 1 year 1 ABC Co issued a 200000 euro purchase order for equipment to be supplied by a German company ABCs functional currency is the US dollar The equipment was delivered to ABC on November 1 year 1 and ABC recorded a payable due to the German company ABC paid for the equipment on January 31 year 2 The following are the exchange rates in effect

June I year 1 1 euro = 140 US dollars November I year 1 1 euro 150 US dollars December 31 year 1 1euro 135 US dollars January 31 year 2 1 euro 130 US dollars

Under IFRS what is the foreign currency gain or loss that ABC should record for the year ended December 31 year I

a A loss of $30000 b A loss of $20000 c A gain of $10000 d A gain of $30000

40 The requirement is to determine year I weighted average shares outstanding (WASO) after year 2 information is provided Answer (d) is correct because the only item in year 2 impacting year 1 is the 2 for stock split resulting in 367500 shares outstanding

111 100000 x 312 x 15 37500 411 130000 x 2112 x 15 = 32500 61 195000 x 7112 113750 WASO year 1 reported year 1 183750 Adjusted for year 2 stock split 183750 x 2 367500

41 The requirement is to determine which item is a levell input for measuring fair value Answer (d) is correct because unadjusted quoted prices for identical assets or liabilities in active markets are considered level I inputs Answers (a b and c) are considered level 2 and level 3 inputs

42 The requirement is to determine the transaction gainl loss under IFRS Answer (d) is correct Transaction gains and losses result from a difference between the functional currency and the currency the transaction is denominated in Since the US Dollar is the functional currency and the transaction is denominated in Euros the transaction must be adjusted for a gain or loss each reporting date Thus the gain is $30000

Delivery resulting in a recording of event 200000 x 15 $300000 December 31 value of event 200000 x 135 = $270000 Difference ($300000 - $270000 = $30000)

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43 A company leases a machine from Leasing Inc on January I year 1 The lease terms include a $100000 annual payment beginning January I year 1 The machines fair value is $500000 and the residual value is estimated at $20000 The company guarantees the residual value The useful life of the machine is six years and the lease term is five years The implicit rate of interest is 6 and is known by the company The following present value factors are provided

Five years Six years Present value of $1 at 6 07473 07050 Present value of an annuity due at 6 44651 52124 Present value of an ordinary annuity at 6 42124 49173

What is the value of the machine in the companys balance sheet at lease inception

a $446510 b $$$461456 c $520000 d $535340

44 Isle Co owned a copy machine that cost $5000 and had accumulated depreciation of $2000 Isle exchanged the copy machine for a computer that cost $4000 Isles future cash flows are not expected to change significantly as a result of the exchange What amount of gain or loss should Isle report and at what amount should it record the asset

a No gain or loss in the income statement $3000 asset in the balance sheet

b No gain or loss in the income statement $4000 asset in the balance sheet

c $1000 gain in the income statement $3000 asset in the balance sheet

d $1000 gain in the income statement $4000 asset in the balance sheet

45 On January 1 year I a company capitalized $100000 of costs for software that is to be sold The company amortizes the software costs on a straight-line basis over five years The carrying value of the software costs 011 January 1 year 3 was $60000 As of December 31 year 3 the estimated future gross revenue to be generated from the sale of the software is $23000 and the estimated future cost of disposing of the software is $8000 What amount should the company expense related to the software costs for the year ended December 31 year 3

a $18400 b $20000 c $37000 d $45000

46 Which of the following is a required part of a local governments managements discussion and analysis (MDampA) as part of its financial statements

a The MDampA should be presented with other required supplementary information

b The MDampA should compare current-year results to the prior year with emphasis on the current year

c The MDampA should include an analysis for each fund d The MDampA should present condensed financial

information from the fund financial statements

43 The requirement is to calculate the value of the leasel machinery at lease inception Answer (b) is correct because the value of the leaselmachine is equivalent to the present value of the minimum lease payment plus the present value of the guaranteed residual value $461456 = $446510 + $14960

PV annuity due 44651 x $100000 = $446510 PV of 1 $20000 x 07473 = $14960

44 The requirement is to determine the amount of gain or loss for a non-monetary exchange of assets Answer (a) is correct because when exchanging assets usually the event is recorded at the fair value of the item given up with thee exceptions In this situation the event lacks commercial substance and no cash is exchanged Therefore a gain would be deferred and the new asset is recorded at the book value of the asset given up

45 The requirement is to determine the software related expense Answer (d) is correct because the carrying amount is capped at the net realizable value of the asset ($23000 - $8000 = $15000) The carrying amount is currently at $60000 and the net realizable value is $15000 Thus $45000 needs to be expensed to meet the net realizable value requirement of $15000

46 The requirement is to identify the required part of a local governments managements discussion and analysis Answer (b) is correct because managements discussion and analysis includes a comparison of current-year results to the prior year Answers (a) (c) and (d) are incorrect because they are not required parts of a local governments managements discussion and analysis

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47 A city government reported a $9000 increase in net position in the motor pool internal service fund a $12000 increase in net position in the water enterprise fund and a $7000 increase in the employee pension fund The motor pool internal service fund provides service primarily to the police department What amount should the city report as the change in net position for business-type activities in its statement of activities

a $ 9000 b $12000 c $21000 d $28000

48 Land and other real estate held as investments by endowments in a governments permanent fund should be reported at

a Historical cost b The lower of cost and net realizable value c Fair value d Fair value less costs of disposal

49 A statement of financial position for a nongovernmental not-for-profit organization reports amounts for which of the following classes of net assets

a Current b Long-term c Permanently restricted d Temporarily unrestricted

50 A nongovernmental not-for-profit college has a portfolio of bond investments that had an original cost of $2000000 The colleges board of trustees voted to hold the principal of this fund intact in perpetuity and designated the earnings to reimburse faculty for travel to academic conferences During the year interest of $50000 was earned in cash The fair value of the bonds was $1980000 What amount should the college report as permanently restricted net assets at year end

a $0 b $1980000 c $2000000 d $2030000

47 The requirement is to determine the amount that the city should report as the change in net position for business-type activities Answer (b) is correct because only the water enterprise is a business-type activity which provides services to the general public for a fee Answers (a) (c) and (d) are incorrect because only the water enterprise is a business-type activity which provides services to the general public for a fee

48 The requirement is to identify how the land and other real estate held as investments should be reported Answer (c) is correct because land and other real estate held as investments are reported at fair value Answers (a) and (b) are incorrect because investments are reported at fair value Answer (d) is incorrect because there is no requirement to deduct the costs of disposal

49 The requirement is to identify the class of net assets that is reported in the statement of financial position Answer (c) is correct because the statement reports unrestricted temporarily restricted and permanently restricted net assets Answers (a) (b) and (d) are incorrect because the statement reports unrestricted temporarily restricted and permanently restricted net assets

50 The requirement is to determine the amount of permanently restricted net assets at year end Answer (a) is correct because an action by the board of trustees does not cause unrestricted assets to become restricted assets Only donor restrictions cause assets to be reported as restricted Answers (b) (c) and (d) are incorrect because an action by the board of trustees does not cause unrestricted assets to become restricted assets Only donor restrictions cause assets to be reported as restricted

I


Task-Based Simulation 1

Scroll down to complete all parts of this task Drake Inc has two loans recorded on its books Loan 1 was obtained on January 1 year 1 and Loan 2 was entered into on

January 1 year 2 Drakes year end is December 31 For the situations related to the loans below prepare the appropriate journal entries Each loan should be accounted for

independent of the other loan To prepare each entry

bull Using the options provided from the list in Column A below fill in the shaded cells with the appropriate account name An account may be used once or not at all for an entry

bull Enter the corresponding debit or credit amount in the appropriate column bull Round all amounts to the nearest dollar bull All rows may not be required to complete each entry bull If no Journal entry at all is needed select No entry required for one of the rows

Loan 1 is a 4 five-year balloon loan for $3000000 with interest due and paid annually on December 31 Drake records interest annually on December 31 Drake incorrectly recorded the journal entry for the year 1 interest expense and payment as a debit to accrued interest payable and a credit to cash Prepare the net journal entry to correct year 1 and properly record the interest attributable to the Joan as of and for the year ended December 31 year 2

Al J( fx

2

3

4

5

6

I


Loan 2 is an 8 $1000000 loan with interest due at)nually on December 31 Drake did not record or pay the required year 2 interest payment until January 1 year 3 Prepare thejoumal entry Drake should record at December 31 year 2

Al ~Ix

1

2

3

4

5

6

Solution to Task-Based Simulation 1 4 loan calculations Interest calculation 3000000 x 04 = 120000 Wrong entry recorded in year 1 Accrued interest payable 120000

Cash 120000

No expense was recorded To fix year 1 entry in year 2 (year 1 books are closed) Retained earnings 120000

Accrued interest payable 120000

To record year 2 interest expense

Interest expense 120000

Cash 120000

8 loan calculations Interest calculations 1000000 x 8 = 80000

Al ~Ix

I

2

3

4

5

6

I


Firm did not pay loan on December 31 but owed the money at that time

Interest expense 80000 Accrued interest payable 80000

Al x fx

1

2

3

4

5

6


Scroll down to complete all parts of this task FB Corp prepares its financial statements in accordance with FRS FB acquired 100 of the outstanding common stock of Skarlet Inc for $5500000 The purchase price included $300000 to reimburse the former shareholders of Skarlet for legal fees incurred to complete the acquisition The company also agreed to pay the seller an additional $1500000 if Skarlet generated $5000000 in net earnings during the first two years after acquisition At the acquisition date the fair value of the contingent consideration was $750000

For each of the acquisition items enter the amount that should be reflected in the line item on FBs consolidated financial statements as of the acquisition date Enter debit balances as positive values and credit balances as negative values If an item is not included in any line item enter zeros in each cell of the associated row

E9 bull rjx

Carrying amount Fair value at at acquisition acquisition

date date 2 Property plant and $4000000 $4200000

3 In-process 0 research costs

4 Legal fees 300000

5 Noncompete 0 agreement with former owners

6 Bonds payable 475000

7 Estimated postshy 0 acquisition

costs

8 Contingent 0 consideration

9 Total


In the shaded cell below enter the amount of goodwill recorded as of the acquisition date Enter the amount as a positive value

Bllefx

Solution to Task-Based Simulation 2

E9J( fx

2

3

4

5

6

7

8

9

Carrying Fair value at amount at acquisition

date date

$4000000 $4200000

In-process degresearch costs

Legal fees 300000

Noncompete 0 agreement with former owners

Bonds payable 475000

Estimated postshy degacquisition costs

Contingent 0 consideration

Total

BlICfx

1

IFRS and US GAAP are almost identical in the area of business acquisitions Similar to US GAAp under IFRS FB Corp would (1) record the acquired assets and liabilities at fair value (2) expense any acquisition related costs such as legal fees (3) ignore post acquisition costs when determining the values at acquisition (4) calculate goodwill as the difference between the net assets and the acquisition price less legal fees

Fair value of assetS $6070000 Fair value of liabilities $1200000 Net assets $4870000

Price paid for acquisition $5500000 - 300000 = $5200000 Goodwill $5200000 - $4870000 = $330000

bull



Researcb

Authoritative Literature Help

To prepare for the construction of its new headquarters Baker Co purchased a 500-acre plot of land on August 5 year 1 Baker purchased the land using 25 cash and financed the balance using a 9 loan from First Bank The company began preparation of the land for the construction of the building on January 30 year 2 Which section of the authoritative guidance explicitly states whether the year 1 interest on the bank loan qualifies for capitalization

Enter your response in the answer fields below Unless specifically requested your response should not cite implementation guidance Guidance on correctly structuring your response appears above and below the answer fields

Type the paragraph here Correctly formatted FASS ASC paragraphs are 12 or 3 digits followed in some cases by an upper case letter Note Correct paragraph responses appear in bold font in FASS ASC and do not include subparagraphs denoted by a lower case letter

FASB ASC 1--_- - 1-1----II shy - lt-I _--I


Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8

Correctly formatted response

835-20-15-8 is the best citation since it specifically discusses the land

bull


6 Quick Co acquired the following assets from a liquidating competitor for a $200000 lump-sum purchase price

Competitors Fair valuecarrying amount

Inventory $ 70000 $ 50000 Land 40000 50000 Building 110000 150000

$220000 $250000

What amount should Quick report as the cost of the building

a $100000 b $120000 c $150000 d $200000

7 At the beginning of year 2 a company invested $40000 in a marketable equity security At that time the security was appropriately classified as an available-for-sale security At the end of year 2 the security had a fair value of $28500 The change in fair value is deemed temporary How should this change in fair value be reported in the financial statements

a As a realized loss of $11500 as part of net income b As a realized loss of $11500 as part of other

comprehensive income c As an unrealized loss of $11500 as part of net income d As an unrealized loss of $11 500 as part of other

comprehensive income

8 Anchor Co is experiencing financial difficulties Anchor negotiated a settlement of $100000 in debt owed to Bowden Inc in exchange for Anchors gross receivables of $100000 The receivables have an allowance for uncollectible accounts of $25000 The impact of this transaction on Anchors net income is a $25000

a Increase in bad debt expense b Gain on restructuring of payables c Loss on restructuring of payables d Decrease in bad debt expense

9 Aldrich Co distributes cash dividends to its shareholders during the current year The dividends are declared on March 9 and are payable to shareholders as of the date of record which is April 15 The dividends are actually paid on Ma~ 19 At which of the following dates would the dividends become a liability to Aldrich

a March 9 b April 15 c May 19 d December 31

6 The requirement is to value the cost of a building that was part of a lump-sum (basket) purchase Answer (b)is correct because each item ina lump-sum (basket) purchase is assigned its proportional share of the total fair value times the price paid [($1500001$250000) x $200000 =$120000]

7 The requirement is to determine how to account for an available-for-sale security temporary change in fair value Answer (d) is correct because temporary fair value changes for available-for-sale securities are considered unrealized and reported in other comprehensive income In this case the difference between $40000 and $28500 is a $11500 decrease which is reported as an unrealized loss as part of other comprehensive income

8 The requirement is to determine how to account for a $25000 net income change due to settling a payable with receivables Answer (b) is correct because the restructuring resulted in a gain after all accounts are removed from the books A journal entry helps to understand the transaction

Bowden Payable 100000 Allowance 25000

Receivables 100000 Gain 25000

9 The requirement is to determine when dividends become a liability Answer (a) is correct because dividends become a liability when declared and dividends were declared on March 9

I




$3400


June 30 December 31

a $0 $0 b $0 $900 c $1000 $2400 d $1000 $3400





























a $1000 b $4000 c $5000 d $6000





a $0 b $50000 c $100000 d $150000





I

i

I



a $275000 b $750000 c $1300000 d $2050000

















I


















a $$64000 b $67000 c $72000 d $74000




I





a $0 b $40000 c $50000 d $100000



benefits






a $114500 b $ 85000 c $ 77000 d $ 75000




a $0 b $80000 c $160000 d $240000





Cost = $85000






I


















a $ 30000 b $ 50000 c $ 90000 d $110000





At issuance



















a $ 1000 b $11000 c $36000 d $66000





I





a 147500 b 183750 c 295000 d 36750041















bull





a $446510 b $$$461456 c $520000 d $535340







a $18400 b $20000 c $37000 d $45000











I



a $ 9000 b $12000 c $21000 d $28000






a $0 b $1980000 c $2000000 d $2030000





I









Al J( fx

2

3

4

5

6

I



Al ~Ix

1

2

3

4

5

6


Cash 120000





Cash 120000


Al ~Ix

I

2

3

4

5

6

I




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull




$3400


June 30 December 31

a $0 $0 b $0 $900 c $1000 $2400 d $1000 $3400





























a $1000 b $4000 c $5000 d $6000





a $0 b $50000 c $100000 d $150000





I

i

I



a $275000 b $750000 c $1300000 d $2050000

















I


















a $$64000 b $67000 c $72000 d $74000




I





a $0 b $40000 c $50000 d $100000



benefits






a $114500 b $ 85000 c $ 77000 d $ 75000




a $0 b $80000 c $160000 d $240000





Cost = $85000






I


















a $ 30000 b $ 50000 c $ 90000 d $110000





At issuance



















a $ 1000 b $11000 c $36000 d $66000





I





a 147500 b 183750 c 295000 d 36750041















bull





a $446510 b $$$461456 c $520000 d $535340







a $18400 b $20000 c $37000 d $45000











I



a $ 9000 b $12000 c $21000 d $28000






a $0 b $1980000 c $2000000 d $2030000





I









Al J( fx

2

3

4

5

6

I



Al ~Ix

1

2

3

4

5

6


Cash 120000





Cash 120000


Al ~Ix

I

2

3

4

5

6

I




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull










a $1000 b $4000 c $5000 d $6000





a $0 b $50000 c $100000 d $150000





I

i

I



a $275000 b $750000 c $1300000 d $2050000

















I


















a $$64000 b $67000 c $72000 d $74000




I





a $0 b $40000 c $50000 d $100000



benefits






a $114500 b $ 85000 c $ 77000 d $ 75000




a $0 b $80000 c $160000 d $240000





Cost = $85000






I


















a $ 30000 b $ 50000 c $ 90000 d $110000





At issuance



















a $ 1000 b $11000 c $36000 d $66000





I





a 147500 b 183750 c 295000 d 36750041















bull





a $446510 b $$$461456 c $520000 d $535340







a $18400 b $20000 c $37000 d $45000











I



a $ 9000 b $12000 c $21000 d $28000






a $0 b $1980000 c $2000000 d $2030000





I









Al J( fx

2

3

4

5

6

I



Al ~Ix

1

2

3

4

5

6


Cash 120000





Cash 120000


Al ~Ix

I

2

3

4

5

6

I




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull



a $275000 b $750000 c $1300000 d $2050000

















I


















a $$64000 b $67000 c $72000 d $74000




I





a $0 b $40000 c $50000 d $100000



benefits






a $114500 b $ 85000 c $ 77000 d $ 75000




a $0 b $80000 c $160000 d $240000





Cost = $85000






I


















a $ 30000 b $ 50000 c $ 90000 d $110000





At issuance



















a $ 1000 b $11000 c $36000 d $66000





I





a 147500 b 183750 c 295000 d 36750041















bull





a $446510 b $$$461456 c $520000 d $535340







a $18400 b $20000 c $37000 d $45000











I



a $ 9000 b $12000 c $21000 d $28000






a $0 b $1980000 c $2000000 d $2030000





I









Al J( fx

2

3

4

5

6

I



Al ~Ix

1

2

3

4

5

6


Cash 120000





Cash 120000


Al ~Ix

I

2

3

4

5

6

I




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull


















a $$64000 b $67000 c $72000 d $74000




I





a $0 b $40000 c $50000 d $100000



benefits






a $114500 b $ 85000 c $ 77000 d $ 75000




a $0 b $80000 c $160000 d $240000





Cost = $85000






I


















a $ 30000 b $ 50000 c $ 90000 d $110000





At issuance



















a $ 1000 b $11000 c $36000 d $66000





I





a 147500 b 183750 c 295000 d 36750041















bull





a $446510 b $$$461456 c $520000 d $535340







a $18400 b $20000 c $37000 d $45000











I



a $ 9000 b $12000 c $21000 d $28000






a $0 b $1980000 c $2000000 d $2030000





I









Al J( fx

2

3

4

5

6

I



Al ~Ix

1

2

3

4

5

6


Cash 120000





Cash 120000


Al ~Ix

I

2

3

4

5

6

I




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull





a $0 b $40000 c $50000 d $100000



benefits






a $114500 b $ 85000 c $ 77000 d $ 75000




a $0 b $80000 c $160000 d $240000





Cost = $85000






I


















a $ 30000 b $ 50000 c $ 90000 d $110000





At issuance



















a $ 1000 b $11000 c $36000 d $66000





I





a 147500 b 183750 c 295000 d 36750041















bull





a $446510 b $$$461456 c $520000 d $535340







a $18400 b $20000 c $37000 d $45000











I



a $ 9000 b $12000 c $21000 d $28000






a $0 b $1980000 c $2000000 d $2030000





I









Al J( fx

2

3

4

5

6

I



Al ~Ix

1

2

3

4

5

6


Cash 120000





Cash 120000


Al ~Ix

I

2

3

4

5

6

I




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull


















a $ 30000 b $ 50000 c $ 90000 d $110000





At issuance



















a $ 1000 b $11000 c $36000 d $66000





I





a 147500 b 183750 c 295000 d 36750041















bull





a $446510 b $$$461456 c $520000 d $535340







a $18400 b $20000 c $37000 d $45000











I



a $ 9000 b $12000 c $21000 d $28000






a $0 b $1980000 c $2000000 d $2030000





I









Al J( fx

2

3

4

5

6

I



Al ~Ix

1

2

3

4

5

6


Cash 120000





Cash 120000


Al ~Ix

I

2

3

4

5

6

I




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull














a $ 1000 b $11000 c $36000 d $66000





I





a 147500 b 183750 c 295000 d 36750041















bull





a $446510 b $$$461456 c $520000 d $535340







a $18400 b $20000 c $37000 d $45000











I



a $ 9000 b $12000 c $21000 d $28000






a $0 b $1980000 c $2000000 d $2030000





I









Al J( fx

2

3

4

5

6

I



Al ~Ix

1

2

3

4

5

6


Cash 120000





Cash 120000


Al ~Ix

I

2

3

4

5

6

I




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull





a 147500 b 183750 c 295000 d 36750041















bull





a $446510 b $$$461456 c $520000 d $535340







a $18400 b $20000 c $37000 d $45000











I



a $ 9000 b $12000 c $21000 d $28000






a $0 b $1980000 c $2000000 d $2030000





I









Al J( fx

2

3

4

5

6

I



Al ~Ix

1

2

3

4

5

6


Cash 120000





Cash 120000


Al ~Ix

I

2

3

4

5

6

I




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull





a $446510 b $$$461456 c $520000 d $535340







a $18400 b $20000 c $37000 d $45000











I



a $ 9000 b $12000 c $21000 d $28000






a $0 b $1980000 c $2000000 d $2030000





I









Al J( fx

2

3

4

5

6

I



Al ~Ix

1

2

3

4

5

6


Cash 120000





Cash 120000


Al ~Ix

I

2

3

4

5

6

I




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull



a $ 9000 b $12000 c $21000 d $28000






a $0 b $1980000 c $2000000 d $2030000





I









Al J( fx

2

3

4

5

6

I



Al ~Ix

1

2

3

4

5

6


Cash 120000





Cash 120000


Al ~Ix

I

2

3

4

5

6

I




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull









Al J( fx

2

3

4

5

6

I



Al ~Ix

1

2

3

4

5

6


Cash 120000





Cash 120000


Al ~Ix

I

2

3

4

5

6

I




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull



Al ~Ix

1

2

3

4

5

6


Cash 120000





Cash 120000


Al ~Ix

I

2

3

4

5

6

I




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull




Al x fx

1

2

3

4

5

6




E9 bull rjx




4 Legal fees 300000




costs


9 Total



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull



Bllefx


E9J( fx

2

3

4

5

6

7

8

9


date date

$4000000 $4200000


Legal fees 300000





Total

BlICfx

1




bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull



Researcb







Research


FASB ASC 835 I - 1 20 1 - 15 I - I 8



bull

appendix i): 2015 released aicpa questions for financial accounting and report…€¦ · and...

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