Exam 8: Operating Activities

The method used to account for oil and gas exploration costs that capitalizes the exploration costs of productive wells is the:

When an intangible asset has a finite life, it is reported on the balance sheet at original cost with no ____________ taken.

When a company has a minority passive investment it will recognize changes in the market value of the investment as ____________________ gains and losses.

Unrealized holding gains and losses from investments classified as available for sale are reported in _____________________________________________.

Record Corporation CD Inc. acquires 100% of the outstanding shares of Record Corp. for $1,200,000 and accounts for the transaction using the purchase method. Record Corp's balance sheet at the date of acquisition appears below: Based on the information concerning Record Corp., what is the market value of the company's shareholders' equity at the acquisition date?

Ownership of 50% or more of the voting stock of another company implies an ability to ____________________ the company and _________________ should be prepared

Assume that Morrison Company used cash to acquire machinery expected to contribute to the generation of revenues over a three-year period and the company erroneously expensed the cost to acquire the machine. Required: a. Describe the effects on ROA of the error over the three-year period. b. Explain how the error would affect the statement of cash flows.

A key characteristic of asset measurement is best described as:

Financial reporting requires firms to ____________________ immediately all R&D costs incurred internally.

When dividends from an investment are recognized as income, the investment must have been of which type?

Carlson Company began constructing a building for its own use in January 2012. During 2012, Carlson incurred interest of $75,000 on specific construction debt and $16,750 on other borrowings. Interest computed on the weighted-average amount of accumulated expenditures for the building during 2012 as $55,000 Required: What amount of interest should Carlson capitalize?

Which of the following is the least effective way for an analyst to understand whether existing long-lived assets must be replaced?

How should Focus Company record expenditures for research and development costs according to U.S. GAAP?

Unrealized gains and losses that appear in accumulated other comprehensive income are from securities classified as ___________________________________ securities.

When a foreign entity operates as a relatively self-contained and integrated unit within a foreign country, normally, its functional currency is the ____________________________________________________________.

Which of the following is not a classification for a minority, passive investment?

Assume that Hsu Company needs to acquire a large special-purpose materials handling facility. Given that no outside vendor exists for this type of facility and that the company has available engineering, management, and productive capacity, the Hsu borrows funds and builds the facility. Identify the costs that should be capitalized as part of this facility.

When a foreign entity operates as a direct and integral extension of the U.S. parent, normally, its functional currency is the _________________________.

Goodwill represents:

If Ashley Company accounts for the investment as a minority, passive and classifies the investment as an available-for-sale investment, then Ashley will recognize what amount of 2010 income from the investment?