Question: Iptat International Ltd. provided the following

> Garden Grove Corporation made a sale to a foreign customer on September 15, Year 1, for 100,000 foreign currency units (FCU). Payment was received on October 15, Year 1. The following exchange rates apply: Date……………………………………U.S. Dollar per FCU September

> The process of professionalization of accounting in China has been unique. Required: Discuss the unique features of professionalization of accounting in China.

> Zorba Company, a U.S.-based importer of specialty olive oil, placed an order with a foreign supplier for 500 cases of olive oil at a price of 100 crowns per case. The total purchase price is 50,000 crowns. Relevant exchange rates are as follows: Zorba

> “In 2012, there were major reforms affecting accounting and financial reporting in the United Kingdom.” Do you agree? Explain.

> This chapter describes the mechanisms in place to regulate accounting and financial reporting in five countries. Required: Compare and contrast these mechanisms in the United Kingdom and China.

> Refer to Exhibits 6.3, 6.5, 6.7, 6.8, and 6.12. Required: Identify a. An issue in respect of which the practices of several countries discussed in this chapter are at variance with IFRS. b. The most important financial accounting practice for each of th

> Refer to the IASB Web site (www.iasb.org.uk). Required: a. Determine the manner in which IFRS are used in each of the five countries included in this chapter. b. Determine which of these countries has a resident who is a member of the IASB.

> Chapter 1 identified and described six major reasons for accounting diversity: legal system, taxation, providers of financing, inflation, political and economic ties, and culture. Required: a. Which factor or factors appear to have exerted the greatest

> How does a foreign currency option differ from a foreign currency forward contract?

> The number of professional accountants in a country indicates the status of the accounting profession in that country. Required: Determine the number of accountants per 100,000 of population in the United Kingdom and Japan. Explain why the numbers are s

> The NAFTA agreement has had a major impact on accounting and financial reporting by Mexican companies. Required: Discuss the nature of the impact referred to in the preceding statement.

> The JICPA has taken a number of positive steps toward convergence between Japanese GAAP and IFRS. Required: Explain the steps taken by the JICPA in this regard.

> Refer to Exhibits 6.3, 6.7, and 6.9. Required: Explain the main areas you would focus on in comparing financial statements prepared by companies in China, Japan, and Mexico with those prepared by companies using IFRS. Exhibits 6.3: Exhibits 6.7:

> The financial reporting issues facing Mexico are different in some respects from those of other countries covered in this chapter. Required: Provide two main reasons to support the above statement.

> China Petroleum and Chemical Corporation (CPCC) is one of a growing number of Chinese companies that has cross-listed its stock on foreign stock exchanges. To provide information that might be useful for a wide audience of readers outside of China, CPCC

> The Act of 2010 to modernize German accounting reflects a willingness to change as well as retain traditional German accounting practices. Required: Do you agree with the preceding statement? Explain.

> This chapter describes the major changes that have been introduced recently in Germany and Japan in the area of accounting regulation. Required: Describe any similarities between those changes in Germany and Japan.

> Indicate whether each of the following describes an accounting treatment that is acceptable under IFRS, U.S. GAAP, both, or neither by checking the appropriate box. Acceptable Under U.S. GAAP Both Neither IFRS • Bank overdrafts are netted against c

> This problem consists of two parts. Part A. On January 1, Year 1, Stone Company issued 100 stock options with an exercise price of $38 each to 10 employees (1,000 options in total). The employees can choose to settle the options either (a) in shares of

> Under what conditions can hedge accounting be used to account for a foreign currency option used to hedge a forecasted foreign currency transaction?

> The Campolino Company has a defined benefit post-retirement health-care plan for its employees. To fund the plan, Campolino makes an annual cash contribution to a health-care benefit fund on December 31 of each year. At the beginning of Year 5, Campolino

> n December 1, Year 1, Traylor Company sells $100,000 of short-term trade receivables to Main Street Bank for $98,000 in cash by guaranteeing to buy back the first $15,000 of defaulted receivables. Traylor’s historic rate of non collection on receivables

> On November 1, Year 1, Farley Corporation sells receivables due in six months with a carrying amount of $100,000 to Town Square Bank for a cash payment of $95,000, subject to full recourse. Under the right of recourse, Farley Corporation is obligated to

> Five years ago, Macro Arco Corporation (MAC) borrowed $12 million from Friendly Neighbor Bank (FNB) to finance the purchase of a new factory to be able to meet an expected increase in demand for its products. The expected increase in demand never materia

> On January 1, Year 1, Tempe extinguishes $10 million of 10 percent bonds payable due December 31, Year 2, that were originally issued at a discount by calling them at par value. The current carrying amount of the bonds payable is $9,950,000. To finance t

> The Bockster Company issues $20 million of preferred shares on January 1, Year 1, at par value. The preferred shares have a 5 percent fixed annual cash dividend. Part A. The preferred shareholders have the option to redeem the preferred shares for cash e

> A. Harrington Company is a U.S.-based company that prepares its consolidated financial statements in accordance with U.S. GAAP. The company reported income in 2015 of $5,000,000 and stockholders’ equity at December 31, 2015, of $40,000,000. T he CFO of S

> On January 1, Year 1, Spectrum Fabricators Inc. issues $20 million of convertible bonds at par value. The bonds have a stated annual interest rate of 6 percent, pay interest annually, and come due December 31, Year 5. The bonds are convertible at any tim

> Saffron Enterprises Inc., a U.S.-based company, purchases a 4 percent bond denominated in euros for $1,500 on January 1, Year 1, when the exchange rate is $1.50 per euro. (In other words, the purchase price was 1,000 euros.) The bond was purchased at par

> Phil’s Sandwich Company sells sandwiches at several locations in the northeastern part of the country. Phil’s customers receive a card on their first visit that allows them to receive one free sandwich for every eight sandwiches purchased in a three-mont

> What is hedge accounting?

> Cypress Company enters into a fixed-fee contract to provide architectural services to the Gervais Group for $240,000. The Gervais Group, which will make monthly payments of $40,000, is a new client for Cypress Company. Cypress has agreed to provide Gerva

> he Miller-Porter Company sells powder coating equipment at a sales price of $50,000 per unit. The sales price includes delivery, installation, and initial testing of the equipment, as well as a monthly service call for one year in which a technician chec

> Ultima Company offers its customers discounts to purchase goods and take title before they actually need the goods. The company offers to hold the goods for the customers until they request delivery. This relieves the customers from making room in their

> Mishima Technologies Company introduced Product X to the market on December 1. The new product carries a one-year warranty. In its first month on the market, Mishima sold 1,000 units of the new product for a total of $1,000,000. Customers have an uncondi

> Gotti Manufacturing Inc., a U.S.-based company, operates in three countries in addition to the United States. The following table reports the company’s pretax income and the applicable tax rate in these countries for the year ended Dece

> Updike and Patterson Investments Inc. (UPI) holds equity investments with a cost basis of $250,000. UPI accounts for these investments as available-for sale securities. As such, the investments are carried on the balance sheet at fair value, with unreali

> SC Masterpiece Inc. granted 1,000 stock options to certain sales employees on January 1, Year 1. The options vest at the end of three years (cliff vesting) but are conditional upon selling 20,000 cases of barbecue sauce over the three-year service period

> Bessrawl Corporation is a U.S.-based company that prepares its consolidated financial statements in accordance with U.S. GAAP. The company reported income in 2014 of $1,000,000 and stockholders’ equity at December 31, 2014, of $8,000,000. The CFO of Bess

> On January 2, Year 1, Argy Company’s board of directors granted 12,000 stock options to a select group of senior employees. The requisite service period is three years, with one-third of the options vesting at the end of each calendar year (graded vestin

> White River Company has a defined benefit pension plan in which the fair value of plan assets (FVPA) exceeds the present value of defined benefit obligations (PVDBO). The following information is available at December 31, Year 1 (amounts in millions):

> In what way has the development of accounting and auditing in China differed from that in other countries?

> T he Baton Rouge Company compiled the following information for the current year related to its defined benefit pension plan: Present value of defined benefit obligation, beginning of year……………………..$1,000,000 Fair value of plan assets, beginning of year…

> In January 1, Year 1, the Hoverman Corporation made amendments to its defined benefit pension plan, resulting in $150,000 of past service costs. The plan has 100 active employees with an average expected remaining working life of 10 years. There currentl

> The Kissel Trucking Company Inc. has a defined benefit pension plan for its employees. At December 31, Year 1, the following information is available regarding Kissel’s plan: Fair value of plan assets……………………………………………………$30,000,000 Present value of defi

> T he board of directors of Chestnut Inc. approved a restructuring plan on November 1, Year 1. On December 1, Year 1, Chestnut publicly announced its plan to close a manufacturing division in New Jersey and move it to China, and the company’s New Jersey e

> On June 1, Year 1, Charley Horse Company entered into a contract with Good Feed Company to purchase 1,000 bales of organic hay on January 30, Year 2, at a price of $30 per bale. The hay will be grown especially for Charley Horse and is needed to feed the

> In Year 1, Better Sleep Company began to receive complaints from physicians that patients were experiencing unexpected side effects from the company’s sleep apnea drug. The company took the drug off the market near the end of Year 1. During Year 2, the c

> On January 1, Year 1, an entity acquires a new machine with an estimated useful life of 20 years for $100,000. The machine has an electrical motor that must be replaced every fi ve years at an estimated cost of $20,000. Continued operation of the machine

> With its broad portfolio of market-leading businesses, the Jardine Matheson Group is an Asian-based conglomerate with extensive experience in the region. Its business interests include Jardine Pacific, Jardine Motors Group, Hongkong Land, Dairy Farm, Man

> Madison Company acquired a depreciable asset at the beginning of Year 1 at a cost of $12 million. At December 31, Year 1, Madison gathered the following information related to this asset: Carrying amount (net of accumulated depreciation) ……………………………$10

> Briefly describe the current requirement for companies in Mexico to account for the effect of inflation in their annual financial statements.

> Jefferson Company acquired equipment on January 2, Year 1, at a cost of $10 million. The equipment has a five-year life, no residual value, and is depreciated on a straight-line basis. On January 2, Year 3, Jefferson Company determines the fair value of

> Godfrey Company constructed a new, highly automated chemical plant in Year 1, which began production on January 1, Year 2. The cost to construct the plant was $5,000,000: $1,500,000 for the building and $3,500,000 for machinery and equipment. The useful

> Quick Company acquired a piece of equipment in Year 1 at a cost of $100,000. The equipment has a 10-year estimated life, zero salvage value, and is depreciated on a straight-line basis. Technological innovations take place in the industry in which the co

> Stevenson Corporation acquires a one-year-old building at a cost of $500,000 at the beginning of Year 2. The building has an estimated useful life of 50 years. However, based on reliable historical data, the company believes the carpeting will need to be

> In what way does the fair value model for investment property differ from the revaluation model for property, plant, and equipment?

> How are the Anglo and less developed Latin cultural areas expected to differ with respect to the accounting values of conservatism and secrecy?

> How is depreciation determined for an item of property, plant, and equipment that is comprised of significant parts, such as an airplane?

> In accounting for post-employment benefits, when are past service costs and actuarial gains and losses recognized in income?

> Steffen-Zweig Company exchanges two used printing presses with a total net book value of $24,000 ($40,000 cost less accumulated depreciation of $16,000) for a new printing press with a fair value of $24,000 and $3,000 in cash. The fair value of the two u

> What is the arm’s-length range of transfer pricing, and how does it affect the selection of a transfer pricing method?

> What is the significance of Bulletin A-8 of the Mexican Institute of Public Accountants?

> Why is there often a conflict between the performance evaluation and cost minimization objectives of transfer pricing?

> What are possible cost-minimization objectives that a multinational company might wish to achieve through transfer pricing?

> What are the various types of intercompany transactions for which a transfer price must be determined?

> What is a constructive obligation

> Were the EU directives effective in generating comparability of financial statements across companies located in member nations? Why or why not?

> To determine the amount at which inventory should be reported on the December 31, Year 1, balance sheet, Monroe Company compiles the following information for its inventory of Product Z on hand at that date: • Historical cost……………………………………………………………..$2

> How are convertible bonds measured initially on the balance sheet?

> What are the four classes of financial assets?

> How is an exchange of goods that are similar in nature and value accounted for?

> What is the accounting treatment for debt extinguishment costs? Debt modification costs?

> How are foreign branch income and foreign subsidiary income taxed differently by a company’s home country?

> How are costs associated with the issuance of bonds payable accounted for?

> What happens if a significant amount of held-to-maturity investments is reclassified as available- for-sale?

> How are deferred taxes classified on the balance sheet?

> What is the cutoff date for the occurrence of events after the reporting period requiring adjustment to the financial statements?

> What are the rules related to the recognition of a deferred tax asset?

> What is a gain on bargain purchase?

> As a result of a downturn in the economy, Optiplex Corporation has excess productive capacity. On January 1, Year 3, Optiplex signed a special order contract to manufacture custom-design generators for a new customer. The customer requests that the gener

> SKD Limited is a biotechnology company that prepares financial statements using internally developed accounting rules (referred to as SKD GAAP). To be able to compare SKD’s financial statements with those of companies in their home coun

> What are the types of differences that exist between IFRS and U.S. GAAP?

> How is goodwill measured in a business combination with a non-controlling interest?

> How does an individual taxpayer qualify for the foreign earned income exclusion?

> Which intangible assets are subject to annual impairment testing?

> What is the current treatment with respect to borrowing costs?

> As expressed in IAS 1, what is the overriding principle that should be followed in preparing IFRS-based financial statements?

> To what extent have IFRS been adopted by countries around the world?

> Under what conditions should a firm claim to prepare financial statements in accordance with IFRS?

> What are the alternative methods used internationally to present fixed assets on the balance sheet subsequent to acquisition?

> What is a provision, and when must a provision be recognized?

> When a previously recognized impairment loss is subsequently reversed, what is the maximum amount at which the affected asset may be carried on the balance sheet?

> Indicate whether each of the following describes an accounting treatment that is acceptable under IFRS, U.S. GAAP, both, or neither, by checking the appropriate box. Acceptable Under IFRS U.S. GAAP Both Neither • A company takes out a loan to finan

> What are the different ways in which financial statements differ across countries?

> What is the benefit provided to an individual taxpayer through the foreign earned income exclusion?

> What are the two most common methods used internationally for the order in which assets are listed on the balance sheet? Which of these two methods is most common in North America? In Europe?

> Why might a company want its stock listed on a stock exchange outside of its home country?

> What financial reporting issues arise as a result of making a foreign direct investment?

> What accounting issues arise for a company as a result of engaging in international trade (imports and exports)?