Question: Refer to the information given in P12-

> The following 20X2 consolidated statement of cash flows is presented for Printing Company and its subsidiary, Sons Delivery: Printing acquired 60 percent of the voting shares of Sons Delivery in 20X1 at underlying book value. At that date, the fair val

> Pagle Corporation holds 80 percent of Standard Company’s common shares. The companies report the following balance sheet data for December 31, 20X1: An 8 percent annual dividend is paid on the Pagle preferred stock and a 12 percent di

> Poppy Corporation owns 60 percent of Seed Company’s common shares. Balance sheet data for the companies on December 31, 20X2, are as follows: The bonds of Poppy Corporation and Seed Company pay annual interest of 8 percent and 10 perc

> Poison Corporation holds 70 percent of Snake Company’s voting common shares but none of its preferred shares. Summary balance sheets for the companies on December 31, 20X1, are as follows: Neither of the preferred issues is convertibl

> Polly Corporation owns 80 percent of Sonny Corporation’s stock and 90 percent of Daughter Company’s stock. The companies file a consolidated tax return each year and in 20X5 paid a total tax of $80,000. Each company is

> What is the basis of accounting in the proprietary funds? Why?

> Pond Corporation holds 75 percent of the voting shares of Spring Services Company. During 20X7, Pond sold inventory costing $60,000 to Spring Services for $90,000, and Spring Services resold one-third of the inventory in 20X7. The remaining inventory was

> Pro Corporation purchased 11,000 shares of Schroeder Corporation on January 1, 20X3, at book value. At that date, the fair value of the non controlling interest was equal to percent of Schroeder’s book value. On December 31, 20X8, Schr

> Plant Advertising Corporation acquired 60 percent of Seed Manufacturing Company’s shares on December 31, 20X1, at underlying book value of $180,000. At that date, the fair value of the non controlling interest was equal to 40 percent of

> Peel Corporation purchased 60 percent of Split Products Company’s shares on December 31, 20X7, for $210,000. At that date, the fair value of the non controlling interest was $140,000. On January 1, 20X9, Peel purchased an additional 20

> Pepper Home Builders Inc. acquired 80 percent of Salty Concrete Works stock on January 1, 20X3, for $360,000. At that date, the fair value of the non controlling interest was $90,000. Salty Concrete’s balance sheet contained the followi

> Stake Company reported the following summarized balance sheet data as of December 31, 20X2: Stake issues 4,000 additional shares of its $10 par value stock to its shareholders as a stock dividend on April 20, 20X3. The market price of Stakeâ&#128

> Pond Corporation holds 75 percent of the voting shares of Spring Services Company. Assume Pond accounts for this investment using the equity method. During 20X7, Pond sold inventory costing $60,000 to Spring Services for $90,000, and Spring Services reso

> Currently, you are an experienced senior working at a public accounting firm. For the upcoming busy season, you have a new client, a publicly traded corporation. You have not worked with the manager of this client assignment before. You hope to impress t

> Title III of SOX specifies requirements for the membership of the audit committee and its authority. All publicly traded firms must follow SOX. Required: a. Explain the role of the audit committee as SOX specifies, with regard to the annual audit conduc

> The following footnote was abstracted from a recent annual report of Johnson & Johnson Company: Footnote 7: Foreign Currency Translation For translation of its international currencies, the Company has determined that the local currencies of its inte

> Are all expenditures encumbered?

> The Statements of Governmental Accounting Standards are the final step in the GASB’s decision making process. Standard setting has a number of specific steps with open and thorough study of the issues and public participation and input encouraged through

> The Mattfield v. Kramer Brothers court case presents a number of the interesting legal issues that often arise from the dissolution of a partnership. The case was heard in the Supreme Court of the State of Montana in 2005 and decided on May 31, 2005, as

> Obtain a copy of the Uniform Partnership Act of 1997 [UPA of 1997] for answering this case question. The UPA of 1997 can be obtained from your university’s general library, law library, or the Internet. You are in a group that is considering forming a pa

> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations 1. General partner 2. Note payable to a partner 3. Recognition of neither bonus nor goodwill 4. Drawing account 5. L

> How are dividends that are paid to the parent’s preferred shareholders and to the subsidiary’s preferred shareholders treated in computing consolidated EPS?

> Following are descriptions of several independent situations. 1. Rockford Company has a subsidiary in Argentina. The subsidiary does not have much debt because of the high interest costs resulting from the average annual inflation rate exceeding 100 perc

> Why do VHWOs not report all pledges received in the period in the assets without donor restrictions section of the statement of activities? Identify what is not included.

> Explain how an expenditure may be classified by (1) function, (2) activity, and (3) object within a governmental unit’s financial statements.

> How are discontinued operations reported on an interim basis?

> A reconciliation schedules is a required disclosure in the government wide financial statements. What are the purpose and content of these reconciliation schedules?

> A forward exchange contract may be used (a) to manage an exposed foreign currency position, (b) to hedge an identifiable foreign currency commitment, (c) to hedge a forecasted foreign currency transaction, or (d) to speculate in foreign currency markets.

> Define the following terms: (a) local currency unit, (b) recording currency, and (c) reporting currency.

> Define the following features of a partnership: (a) separate business entity, (b) agency relationship, and (c) partner’s joint and several liability.

> Why is there interest in the adoption of a single set of high-quality accounting standards?

> Palace Corporation owns 80 percent of the common shares and 70 percent of the preferred shares of Surf Company, all purchased at underlying book value on January 1, 20X2. At that date, the fair value of the non controlling interest in Surfâ€&#

> On January 1, 20X1, Par Company purchased all the outstanding stock of South Bay Company, located in Canada, for $120,000. On January 1, 20X1, the direct exchange rate for the Canadian dollar (C$) was C$1 = $0.80. South Bay’s book value on January 1, 20X

> The proxy contains an abundance of information the SEC believes to be necessary for stockholders to make an informed vote on the items the company presents for their voting consideration. This case provides opportunities to analyze the proxy of a publicl

> The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information: 1. The partnership’s trial balance on June 30, 20X1, is 2. The partners share profits and losses

> C. Eastwood, A. North, and M. West are manufacturers’ representatives in the architecture business. Their capital accounts in the ENW partnership for 20X1 were as follows: Required: For each of the following independent income-sharing

> Following are four independent transactions or events that relate to a local government and a voluntary health and welfare organization: 1. Made a disbursement of $25,000 from the general fund assets without donor restrictions for the cash purchase of ne

> Give the term(s) that is (are) described in each of the following numbered statements. 1. This is the set of financial statements that presents the governmental unit’s infrastructure assets and long-term debt. 2. At the present time, this body has the au

> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations 1. Proprietary funds A. Trust and agency funds. 2. Modified accrual method B. Fiscal and accounting entities of a go

> A partnership involves an association between two or more persons to carry on a business as co-owners for profit. Items 1 through 10 relate to partnership agreements. The statement of facts for Parts A and B are followed by numbered sentences that state

> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations 1. Dissolution A. Sale of partnership assets, payment of its creditors, and distribution of any remaining assets to

> Select the correct answer for each of the following questions. 1. When property other than cash is invested in a partnership, at what amount should the noncash property be credited to the contributing partner’s capital account? a. Cont

> At the end of the second quarter of 20X1, Malta Corporation assembled the following information: 1. The first quarter resulted in a $90,000 loss before taxes. During the second quarter, sales were $1,200,000; purchases were $650,000; and operating expens

> Apple Corporation acquires 80 percent of Berry Corporation’s common shares on January 1, 20X2. On January 2, 20X2, Berry acquires 60 percent of Coco Corporation’s common stock. Information on company book values on the

> Solo Co. Ltd. located in Mexico City is a wholly owned subsidiary of Partner Inc., a U.S. company. At the beginning of the year, Solo’s condensed balance sheet was reported in Mexican pesos (MXP) as follows: During the year, the compa

> Refer to the information given in P12-23 and P12-27 for Palermo and its subsidiary, Salina Ranching. Assume that the U.S. dollar is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investment in Salina

> Refer to the information given in P12-23 and P12-26 for Palermo and its subsidiary, Salina Ranching. Assume that the U.S. dollar is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investment in Salina

> Refer to the information in P12-23. Assume the U.S. dollar is the functional currency. Required: a. Prepare a schedule re measuring the December 31, 20X3, trial balance of Salina Ranching from Australian dollars to U.S. dollars. b. Prepare a schedule pr

> Refer to the information given in P12-23 and P12-24 for Palermo and its subsidiary, Salina Ranching. Assume that the Australian dollar (A$) is the functional currency and that Palermo uses the fully adjusted equity method for accounting for its investmen

> Palermo Inc. purchased 80 percent of the outstanding stock of Salina Ranching Company, located in Australia, on January 1, 20X3. The purchase price in Australian dollars (A$) was A$200,000, and A$40,000 of the differential was allocated to plant and equi

> Refer to the information in P12-21. Assume that the dollar is the functional currency. Required: a. Prepare a schedule re measuring Silva Company’s December 31, 20X4, trial balance from reals to dollars. b. Prepare a schedule providing

> On January 1, 20X4, Plum Corporation acquired Silva Company, a Brazilian subsidiary, by purchasing all its common stock at book value. Silva’s trial balances on January 1, 20X4, and December 31, 20X4, expressed in Brazilian reals (BRL),

> Refer to the information given in P12-17 and your answer to part a of P12-18. Required: Prepare a schedule providing a proof of the re measurement gain or loss. For this part of the problem, assume that the Norwegian subsidiary had the following monetar

> Sink Corporation prepared the following summarized balance sheet on January 1, 20X1: Plumber Company acquires 80 percent of Sink Corporation’s common stock on January 1, 20X1, for $80,000. At that date, the fair value of the common sh

> Refer to the information presented in P12-17 and your answer to part a of P12-17. Required: Prepare a schedule providing a proof of the translation adjustment. Data from P12-17: On January 1, 20X5, Pirate Company acquired all of the outstanding stock

> Refer to the information in P12-17. Assume the U.S. dollar is the functional currency, not the krone. Required: a. Prepare a schedule re measuring the trial balance from Norwegian kroner into U.S. dollars. b. Assume that Pirate uses the fully adjusted e

> On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $151,200. Ship’s net assets on the date of acquisition were 700,000 kroner (NKr). On January 1, 20X5, the book and

> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations A. Hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm com

> On November 3, 20X2, PRD Corporation acquired 2 JRS Company bonds ($1,000 face value) at a cost of 105. PRD classifies them as available-for-sale securities. On this same date, PRD decides to hedge against a possible decline in the value of the securitie

> Mega Company believes the price of oil will increase in the coming months. Therefore, it decides to purchase call options on oil as a price risk-hedging device to hedge the expected increase in prices on an anticipated purchase of oil. On November 30, 20

> Select the correct answer for each of the following questions. 1. According to ASC 815, which of the following is not an underlying? a. A security price. b. A monthly average temperature. c. The price of a barrel of oil. d. The number of foreign currenc

> On December 1, 20X1, Micro World Inc. entered into a 120-day forward contract to sell 100,000 Australian dollars (A$). Micro World’s fiscal year ends on December 31. The direct exchange rates follow: Required: Prepare all journal entr

> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations A. Exchange rate for immediate delivery of currencies. B. Imports and exports whose prices are stated in a foreign c

> Maple Company had the following export and import transactions during 20X5: 1. On March 1, Maple sold goods to a Canadian company for C$30,000, receivable on May 30. The spot rates for Canadian dollars were C$1 = $0.65 on March 1 and C$1 = $0.68 on May 3

> Select the correct completion of each of the following items. 1. Which of the following steps in the acquisition of goods and services occurs first? a. Appropriation b. Encumbrance c. Budget d. Expenditure 2. What account is used to earmark the fund ba

> Globe Shipping, a U.S. company, is an importer and exporter. The following are some transactions with foreign companies. 1. Globe sold blue jeans to a South Korean importer on January 15 for $7,400, when the exchange rate was South Korean won (KRW)1 = $0

> Tex Hardware sells many of its products overseas. The following are some selected transactions. 1. Tex sold electronic subassemblies to a firm in Denmark for 120,000 Danish kroner (Dkr) on June 6, when the exchange rate was Dkr 1 = $0.1750. Collection wa

> Princeton Products Corporation acquired 90 percent ownership of Stanford Company on October 20, 20X2, through an exchange of voting shares. Princeton Products issued 8,000 shares of its $10 par stock to acquire 27,000 shares of Stanfordâ€&#153

> Stage Company operates on a calendar-year basis, reporting its results of operations quarterly. For the first quarter of 20X1, Stage reported sales of $240,000 and operating expenses of $180,000 and paid dividends of $10,000. On April 1, 20X1, Parachute

> Protecto Corporation purchased 60 percent of Strand Company’s outstanding shares on January 1, 20X1, for $24,000 more than book value. At that date, the fair value of the noncontrolling interest was $16,000 more than 40 percent of Stran

> Following are the consolidated balance sheet accounts of Primer Inc. and its subsidiary, Sore Corporation, as of December 31, 20X6 and 20X5. Additional Information: 1. On January 20, 20X6, Primer issued 10,000 shares of its common stock for land having

> Using the data presented in P10-20: a. Prepare a worksheet to develop a consolidated statement of cash flows for 20X4 using the direct method of computing cash flows from operations. b. Prepare a consolidated statement of cash flows for 20X4. Data from

> Point Company holds 80 percent ownership of Shoot Company. The consolidated balance sheets as of December 31, 20X3, and December 31, 20X4, are as follows: The 20X4 consolidated income statement contained the following amounts: Point acquired its inve

> Using the data presented in P10-18: a. Prepare a worksheet to develop a consolidated statement of cash flows for 20X3 using the direct method of computing cash flows from operations. b. Prepare a consolidated statement of cash flows for 20X3. Data from

> Pear Corporation acquired 75 percent ownership of Sugar Company on January 1, 20X1, at underlying book value. At that date, the fair value of the non controlling interest was equal to 25 percent of the book value of Sugar Company. Consolidated balance sh

> Select the correct response for each of the following. 1. Which of the following accounts could be included in an enterprise fund’s statement of net position? 2. Customers’ meter deposits that cannot be spent for no

> Putter Corporation owns 70 percent of the voting common stock of Sand Company. At December 31, 20X1, the companies reported the following: During 20X1, Sand sold inventory costing $70,000 to Putter for $100,000, and Putter resold 40 percent of the inve

> Plug Corporation holds 80 percent of Socket Company’s common stock. The following balance sheet data are presented for December 31, 20X7: Socket reported net income of $115,000 in 20X7 and paid dividends of $60,000. Its bonds have an

> Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail Stores. The companies’ balance sheets as of December 31, 20X4, were as follows: Short Retail’s 8 percent preferred stock is convert

> Poom Manufacturing used cash to acquire 75 percent of the voting stock of Satellite Industries on January 1, 20X3, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 25 percent of Satellite’s book value. Po

> Powder Corporation acquired 70 percent of Solid Company’s stock on December 31, 20X7, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 30 percent of Solid Company’s boo

> Peace Corporation acquired 100 percent of Soft Inc. in a nontaxable transaction on December 31, 20X1. The following balance sheet information is available immediately following the transaction: Additional Information: 1. The current and future effectiv

> First Boston Corporation acquired 80 percent of Gulf side Corporation common stock on January 1, 20X5. Gulf side holds 60 percent of the voting shares of Paddock Company, and Paddock owns 10 percent of the stock of First Boston. All acquisitions were mad

> Penny Manufacturing Company acquired 75 percent of Saul Corporation stock at underlying book value. At the date of acquisition, the fair value of the noncontrolling interest was equal to 25 percent of Saul’s book value. The balance shee

> Planet Corporation held 80 percent of Sun Corporation’s outstanding common shares on December 31, 20X2, which it had acquired at underlying book value. When the shares were acquired, the fair value of the non controlling interest was eq

> Power Corporation owns 75 percent of Surge Company’s stock; no intercompany purchases or sales were made in 20X4. For the year, Power and Surge reported sales of $300,000 and $200,000 and cost of goods sold of $160,000 and $95,000, respectively. Power’s

> The U.S. dollar strengthened against the European euro. Will imports from Europe into the United States be more expensive or less expensive in U.S. dollars? Explain.

> Reread the aggregate demand shock example (event #3) in Section 13.5. Suppose the parameters of the AS and AD curves take the following values:

> Reread the inflation shock example (event #1) in Section 13.5. Suppose the size of the shock is

> The Federal Reserve is obsessed with inflation, so much so that it ignores the fact that millions of American workers are unemployed. We need a Fed that fights for American jobs. We need a Fed that views any unemployment as too much unemployment, rather

> Consider the policy rule for the nominal interest rate in equation (13.5). Draw a graph with the inflation rate on the horizontal axis and the nominal interest rate on the vertical. (a) What is the slope of this line? Is it larger than 1 or less than 1?

> Consider a simplified version of the Taylor rule, where monetary policy depends only on short- run output: Rt −

> Our monetary policy rule responds only to shocks to the inflation rate. We saw in Section 13.5 that this means that aggregate demand shocks can cause the economy to undergo a “ boom- recession” cycle. Create your own monetary policy rule that would insul

> Consider the policy rule used in the chapter: Rt −

> Suppose a large number of new immigrants enter the labor market. Assume this increase in the supply of labor provides a drag on wage increases: wages rise by less than the prevailing rate of inflation over the next year. Use the short- run model to expla

> Suppose the economy is hit by an unexpected oil price shock that permanently raises oil prices by $50 per barrel. This is a temporary increase in

> The end of Section 12.4 contains a summary of the short- run model. Explain the economic reasoning that underlies each step in this summary.

> Suppose the rural part of a country is hit by a major earthquake that destroys 10 percent of the country’s housing stock. The government and private sector respond with a major construction effort to help rebuild houses. Discuss how this episode is likel

> With the goal of stabilizing output, explain how and why you would change the interest rate in response to the following shocks. Show the effects on the economy in the short run using the IS- MP diagram. (a) Consumers become pessimistic about the state

> Suppose you are appointed to chair the Federal Reserve. Your twin goals are to maintain low inflation and to stabilize economic activity—that is, to keep output at potential. Why are these appropriate goals for monetary policy?