Exam 8: Operating Activities

Which of the following is a difficulty in determining current market values when determining the value of fixed assets?

You are trying to determine the functional currency of a foreign unit. For the following three factors determine what conditions would result in the foreign currency being the functional currency: a. Sales Prices b. Financing c. Relationships between the Parent and the Foreign Unit

Snowflake Corp. Penguin, Inc. acquires 100% of the outstanding shares of Snowflake Corp. for $2,250,000 and accounts for the transaction using the purchase method. Snowflake's balance sheet at the acquisition date is as follows: Based on the information concerning Snowflake Corp. what is the market value of the company's shareholders' equity at the acquisition date?

The functional currency of a foreign unit whose receivables and payables are denominated in foreign currency and not usually remitted to parent company is the ______________________________.

Which of the following would not be used to determine the cost of an asset?

Under the equity method the investor's share of investee income ____________________ the investment account and dividends ____________________ the investment account.

Under U.S. GAAP, when an asset's carrying amount is deemed _______________, the asset is considered impaired.

When a firm can exercise control or significantly influence the operations of a company it has only a minority interest in, it should account for the investment using the ______________________________.

Based on the information concerning Record Corp., what amount of goodwill should CD record at the acquisition date?

All of the following are consistent with the purpose of determining the useful life of a long-lived asset except :

Which one of the following is an example of the expected benefit approach for valuing long-lived assets?

A company would need to record an impairment loss for its equipment when:

United owns Estada, a European based subsidiary for which the Euro is the functional currency. Estada had a net asset position at January 1, 2012 of 1,200,000 Euros and reported income of 350,000 Euros for 2012, which was earned evenly throughout the year. In addition, Estada paid 100,000 Euros of dividends at December 31, 2012. The following were in effect during 2012: Determine the amount of the unrealized translation gain or loss United should record for 2012 with respect to Estada.

Currently, the FASB's Statements of Accounting Concepts (Nos. 5 and 6) define an asset as having all of the following characteristics except :

The term used to describe the amount of a company's annual interest cost that should be capitalized is known as:

U.S. GAAP requires firms to expense immediately all internal expenditures for R&D costs. Alternatively, U.S. GAAP could require firms to capitalize and subsequently amortize all internal expenditures on R&D that have future potential. Required : Why have standard setters chosen not to allow the capitalization alternative? How would analysts be better served if U.S. GAAP required capitalization of R&D costs?

U.S. GAAP stipulates that firms should ____________________ expenditures that increase the service potential of an asset beyond that originally anticipated

Firms recognize a(n) ______________________________ when the carrying amount of a fixed asset exceeds its fair value and is deemed not recoverable.

Firms that capitalize routine maintenance and repair charges will end up with the result of having the current period's income being ____________________.

When the purchase price of another entity exceeds the book value of the entity's net assets the purchaser allocates the excess to identifiable assets and liabilities in order to revalue them to market value and any additional excess is allocated to ____________________.