Many companies make annual reports available on their corporate website, often under an Investors tab. Annual reports also can be accessed through the SEC’s EDGAR system at www.sec.gov (under Filings, click Company Filings Search, type in Company Name, and under Filing Type, search for 10-K). Access the most recent annual report for a U.S.-based multinational company with which you are familiar to complete the following requirements. Required a. Identify the location(s) in the annual report that provides disclosures related to the translation of foreign currency financial statements and foreign currency hedging. b. Determine whether the company’s foreign operations have a predominant functional currency. c. Determine the amount of remeasurement gain or loss, if any, reported in net income in each of the three most recent years. d. Determine the amount of translation adjustment, if any, reported in other comprehensive income in each of the three most recent years. Explain the sign (positive or negative) of the translation adjustment in each of the three most recent years. e. Determine whether the company hedges net investments in foreign operations. If so, determine the type(s) of hedging instrument used.
> What is the purpose of the laws of distribution? a. To guide the distribution of personal property when an individual dies without a will. b. To verify the legality of a will, especially an oral will. c. To guide the distribution of real property when an
> Which of the following is not exempt from registration with the SEC under the Securities Act of 1933? a. Securities issued by a nonprofit religious organization. b. Securities issued by a government unit. c. A public offering of $40 million to unaccredit
> Why might real estate be omitted from an inventory of estate property? a. Real estate is subject to a separate inheritance tax. b. State laws prohibit real property from being conveyed by an estate. c. State laws require a separate listing of all real es
> Which of the following countries uses IFRS? a. Canada. b. Mexico. c. Brazil. d. All of these answer choices are correct.
> What financial statements must be reported when the liquidation basis of accounting is being applied? a. Statement of activities and a statement of financial position. b. Income statement and balance sheet. c. Statement of liquidating cash flows and stat
> Nestlé S.A. is a very large company headquartered in a very small country (Switzerland). It has operations in more than 50 different countries around the world. Much of the company’s international expansion has been through the acquisition of local (i.e.
> Which of the following is not a true statement? a. Testate refers to a person having a valid will. b. The laws of descent convey personal property if an individual dies without a valid will. c. Intestate refers to a person having no valid will. d. A spec
> Place Company owns a majority voting interest in Sassano, Inc. On January 1, 2016, Place issued $1,000,000 of 11 percent 10-year bonds at $943,497.77 to yield 12 percent. On January 1, 2018, Sassano purchased all of these bonds in the open market at a pr
> Henry O’Donnell created an inter vivos trust fund. He owns a large department store in Higgins, Utah. He also owns a tract of land adjacent to the store used as an extra parking lot when the store is having a sale and during the Christmas season. O’Donne
> James Albemarle created a trust fund at the beginning of 2016. The income from this fund will go to his son Edward. When Edward reaches the age of 25, the principal of the fund will be conveyed to United Charities of Cleveland. Mr. Albemarle specified th
> After the death of Lennie Pope, his will was read. It contained the following provisions: ∙ $110,000 in cash goes to decedent’s brother, Ned Pope. ∙ Residence and other personal property go to his sister, Sue Pope. ∙ Proceeds from the sale of Ford stock
> Jerry Tasch’s will has the following provisions: ∙ $150,000 in cash goes to Thomas Thorne. ∙ All shares of Coca-Cola go to Cindy Phillips. ∙ Residence goes to Kevin Simmons. ∙ All other estate assets are to be liquidated with the resulting cash going to
> The executor of Gina Purcell’s estate has recorded the following information: Assets discovered at death (at fair value): Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $600,000 Life insurance receivabl
> The executor of Rose Shield’s estate listed the following properties (at fair value): Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $300,000 Life insurance receivable . . . . . . . . . . . . . . . . . . . . . . . 200,
> What is a prospectus? a. A document attached to a Form 8–K. b. A potential stockholder as defined by Regulation S–K. c. A document a company files with the SEC prior to filing a registration statement. d. The first part of a registration statement that a
> During 2016, an estate generated income of $20,000: Rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,000 Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000 Dividend income . . . . . . . . . .
> When does the liquidation basis of accounting first have to be applied to financial statements of a liquidating entity to be viewed as in conformity with U.S. GAAP? a. When an involuntary bankruptcy petition is approved by the court. b. When liquidation
> Donna Stober’s estate has the following assets (all figures approximate fair value): Investments in stocks and bonds . . . . . . . . . . . . . . . . . . . . $1,400,000 House . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
> According to the IASB, IFRS comprise interpretations issued by the SIC and IFRIC, and a. International financial reporting standards issued by the IASB only. b. International accounting standards issued by the IASC only. c. International financial report
> Zac Peterson’s estate reports the following information: Value of estate assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,300,000 Conveyed to spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 Conveyed t
> Marie Hardy’s will has the following provisions: “I leave the cash balance deposited in the First National Bank (up to a total of $50,000) to Jack Abrams. I leave $18,000 cash to Suzanne Benton. I leave 1,000 shares of Coca-Cola Company stock to Cindy Ch
> On January 1, Coldwater Company has a net book value of $2,174,000 as follows: 2,000 shares of preferred stock; par value $100 per share; cumulative, nonparticipating, nonvoting; call value $108 per share . . . . . . . . . . . . . . . . . . . . . . . . .
> At what value are the assets within an estate reported?
> What are the responsibilities of the executor of an estate?
> What are the objectives of probate laws?
> What are probate laws?
> What is a letter of comments? a. A letter the SEC sends to a company indicating needed changes or clarifications in a registration statement. b. A questionnaire supplied to the SEC by a company suggesting changes in Regulation S–X. c. A letter included i
> On a balance sheet prepared for a company during reorganization, how are liabilities reported? a. As current and long term. b. As monetary and nonmonetary. c. As subject to compromise and not subject to compromise. d. As equity related and debt related.
> If a person dies without leaving a valid will, how is the distribution of property regulated?
> Distinguish between testate and intestate.
> Why is the distinction between principal and income so important in accounting for most trusts?
> Which of the following is not a reason for establishing international accounting standards? a. Some countries do not have the resources to develop accounting standards on their own. b. Comparability of financial reporting is needed between companies oper
> What are QTIP trusts, GRATs, and charitable remainder trusts?
> What is a testamentary trust?
> What is an inter vivos trust?
> On January 1, Tesco Company spent a total of $4,384,000 to acquire control over Blondel Company. This price was based on paying $424,000 for 20 percent of Blondel’s preferred stock and $3,960,000 for 90 percent of its outstanding common stock. At the acq
> Why have trust funds become especially popular in recent years?
> What is a trust fund?
> When should a company begin gathering information about differences between IFRS and its existing GAAP to assist in its first time adoption of IFRS?
> What does the term incorporation by reference mean? a. The legal incorporation of a company in more than one state. b. Filing information with the SEC by indicating that the information is already available in another document. c. A reference guide indic
> What is the purpose of the charge and discharge statement that the executor of an estate issues?
> In the initial accounting for an estate, why does the executor record only the assets?
> What is the alternate date for valuing the assets of an estate? When should this alternate date be used?
> What transactions are normally viewed as changes in the principal of an estate? What transactions are normally viewed as changes in the income of an estate?
> Which of the following is not a potential problem caused by differences in financial reporting practices across countries? a. Consolidation of financial statements by firms with foreign operations is more difficult. b. Firms incur additional costs when a
> In accounting for an estate or trust, how is the distinction between principal and income determined?
> Other than financial considerations, why should individuals consider preparing a valid will?
> What deductions are allowed in computing estate income taxes?
> Why is the establishment of a credit shelter trust fund considered a good estate planning technique?
> Pesto Company possesses 80 percent of Salerno Company’s outstanding voting stock. Pesto uses the initial value method to account for this investment. On January 1, 2014, Pesto sold 9 percent bonds payable with a $10 million face value (maturing in 20 yea
> Which of the following must be provided to every potential buyer of a new security? a. A letter of comments. b. A deficiency letter. c. A prospectus. d. A Form S–16.
> What is a taxable gift?
> What was the impact of the American Taxpayer Relief Act of 2012 on the conveyance of property?
> How is the federal estate tax computed?
> What is the purpose of the process of abatement? How does the executor of an estate utilize this process?
> Describe the four types of legacies, and give examples of each.
> Which of the following historical reasons for accounting diversity could explain why accounting standards would be more detailed in some countries than in others? a. Different rates of inflation across countries. b. Different legal systems across countri
> What are the differences between a devise, a legacy, and a bequest?
> What are homestead and family allowances?
> What is a cram down? a. An agreement about the total amount of money to be reserved to pay creditors who have priority. b. The bankruptcy court’s confirmation of a reorganization even though a class of creditors or stockholders did not accept it. c. The
> What claims against an estate have priority?
> How does an executor discover the claims against an estate?
> In what ways does the IASB differ from the IASC?
> If an asset of an estate has no readily ascertainable fair value, how should it be presented/valued on the charge/discharge statement?
> Redfield Company reports current earnings of $420,000 while declaring $52,000 in cash dividends. Snedeker Company earns $147,000 in net income and declares $13,000 in dividends. Redfield has held a 70 percent interest in Snedeker for several years, an in
> A local citizen gives a not-for-profit entity a cash donation that is restricted for research activities. The money should be recorded in a. Unrestricted Net Assets. b. Temporarily Restricted Net Assets. c. Permanently Restricted Net Assets. d. Deferred
> A private not-for-profit health care entity provides its patients with services that would normally be charged at $1 million. However, it estimates a $200,000 reduction because of contractual adjustments. It expects another $100,000 reduction because of
> What is a contractual adjustment? a. An increase in a patient’s charges caused by revisions in the billing process utilized by a health care entity. b. A year-end journal entry to recognize all of a health care entity’s remaining receivables. c. A reduct
> Mercy for America, a private not-for-profit health care facility located in Durham, North Carolina, charged a patient $8,600 for services. It actually billed this amount to the patient’s third-party payor. The third-party payor submitted a check for $7,9
> Even if all companies in the world were to use IFRS, what are two obstacles to the worldwide comparability of financial statements?
> Which of the following statements is true? a. The Securities Exchange Act of 1934 regulates intrastate stock offerings made by a company. b. The Securities Act of 1933 regulates the subsequent public trading of securities through brokers and markets. c.
> Many companies make annual reports available on their corporate website, often under an Investors tab. Annual reports also can be accessed through the SEC’s EDGAR system at www.sec.gov (under Filings, click Company Filings Search, type in Company Name, a
> In the accounting for health care providers, what are third-party payors? a. Doctors who reduce fees for indigent patients. b. Charities that supply medicines to hospitals and other health care providers. c. Friends and relatives who pay the medical cost
> Southwest is a private not-for-profit entity. It acquires Northeast, another private not-for-profit. The acquisition value is $980,000. Northeast has two assets (and no liabilities): equipment with a net book value of $120,000 but a fair value of $150,00
> What was the significance of the controversy in 1977 over the appropriate accounting principles to be used by oil- and gas-producing companies? a. Several major lawsuits resulted. b. Companies refused to follow the SEC’s dictates. c. Partners of a major
> BC and OP are both private not-for-profit entities. They are combined to create MN, a private not-for-profit with an entirely new board of directors. BC has land with a book value of $300,000 and a fair value of $400,000. OP has land with a book value of
> AB is a private not-for-profit entity. It acquires YZ, another private not-for-profit entity. The acquisition value is $1 million. YZ has net assets with a book value of $600,000 but a fair value of $700,000. Officials for AB expect that YZ will be predo
> A private not-for-profit entity receives two gifts. One is $80,000 and is restricted for paying salaries of teachers who help children learn to read. The other is $110,000, which is restricted for purchasing playground equipment. Both amounts are properl
> Pel Museum is a private not-for-profit entity. If it receives a contribution of historical artifacts, it need not recognize the contribution if the artifacts are to be sold and it will use the proceeds to a. Support general museum activities. b. Acquire
> Aaron Company’s books show current earnings of $430,000 and $46,000 in cash dividends. Zeese Company earns $164,000 in net income and declares $11,500 in dividends. Aaron has held a 70 percent interest in Zeese for several years, an investment with an ac
> In many cases, EPS is computed based on the parent’s portion of consolidated net income and parent company shares and convertibles. However, a different process must be used for some business combinations. When is this alternative approach required?
> What is an inherent limitation of the statement of financial affairs? a. Many of the amounts reported are only estimates that might prove to be inaccurate. b. The statement is applicable only to a Chapter 11 bankruptcy. c. The statement covers only a sho
> The Jones family lost its home in a fire. On December 25, 2017, a philanthropist sent money to the Amer Benevolent Society, a private not-for-profit entity, specifically to purchase furniture for the Jones family. During January 2018, Amer purchased furn
> A not-for-profit medical center performs services in the current year at a charge of $1 million. Of this amount, $200,000 is viewed as charity services because no collection was expected at the time of the work. The direct costs of that work were $80,000
> What are two differences between IFRS and U.S. GAAP with respect to the classification of financial statement items?
> A not-for-profit medical center performs services in the current year at a charge of $1 million. Officials expect bad debts to be $94,000. Another $200,000 is viewed as charity care services because no collection was expected at the time of the work. Wha
> Which of the following is a registration statement used by large companies that already have a significant following in the stock market? a. Form 8–K b. Form 10–K c. Form S–1 d. Form S–3
> Charity A and Charity B are affiliated entities. An accountant for Charity B is paid $10,000 per month, which is equal to the fair value of the services rendered. Charity A loses its accountant and the accountant from Charity B is sent to work with Chari
> On December 25, 2017, Mr. Jones gives Charity A 1,000 shares of stock that he bought originally for $9,000. No restrictions were placed on this donation. The governing board does not want to speculate on investments. Thus, it has a policy to sell all don
> On December 30, 2017, Leigh Museum, a not-for-profit entity, received a $7,000,000 donation of Day Co. common stock shares with donor-stipulated requirements as follows: The museum is to sell shares valued at $5,000,000 and use the proceeds to erect a pu
> The financial reporting for private not-for-profit entities primarily focuses on a. Basic information for the organization as a whole. b. Standardization of fund information reported. c. Inherent differences of various not-for-profit entities that impact
> To send a mailing, a private not-for-profit charity spends $100,000. The mailing solicits donations and provides educational and other information about the charity. Which of the following is true? a. No part of the $100,000 can be reported as a program
> Which of the following is not an expected function of a bankruptcy trustee? a. Filing a plan of reorganization. b. Recovering all property belonging to a company. c. Liquidating noncash assets. d. Distributing assets to the proper claimants.
> A private not-for-profit entity has the following activities performed by volunteers who work at no charge. In which case should no contribution be reported? a. A carpenter builds a porch on the back of one building so that patients can sit outside. b. A
> A private not-for-profit university charges its students tuition of $1 million. However, financial aid grants total $220,000. In addition, the school receives a $100,000 grant restricted for faculty salaries. Of this amount, $30,000 is spent appropriatel
> Mattoon, Inc., owns 80 percent of Effingham Company. For the current year, this combined entity reported consolidated net income of $500,000. Of this amount $465,000 was attributable to Mattoon’s controlling interest while the remaining $35,000 was attri
> A donor gives Charity 1 $50,000 in cash that it must convey to Charity 2. However, the donor can reconsider and revoke the gift at any time prior to its conveyance to Charity 2. Which of the following statements is true? a. Charity 1 should report a cont
> What are three difference between IFRS and U.S. GAAP with respect to the measurement of financial statement items?
> What is a registration statement? a. A statement that must be filed with the SEC before a company can begin an initial offering of securities to the public. b. A required filing with the SEC before a large amount of stock can be obtained by an inside par
> Under what circumstances is a company exempt from filing a registration statement with the SEC prior to the issuance of securities?
