Acct 450, Fall 2010
Final quiz, Chpts 13,9 & 10 qz chpt 13 9 10 Key 1. Sparkman Co. file a !ankruptcy petition an liquiate its noncash assets. Sparkman "as payin# forty cents on the ollar for unsecure claims. $ailey Co. hel a mort#a#e of %10,000 on lan that "as sol for %110,000. 'he total amount of payment that $ailey shoul ha(e recei(e is calculate to !e ). %110,000. ). %110,000. $. %**,000. $. %**,000. C. %1+,000. -. %10,000. -. %10,000. . %0,000. . %0,000. Sale of lan %110,000 / *0 of remainin# %*0,000 o"e %1+,000 2uincy Corp., a!out to !e ! e liquiate, has the follo"in# amounts for its assets an lia!ilities
'he mort#a#e is secure !y the lan an !uilin#, an the note paya!le is secure !y the equipment. 2uincy +. 4o" much shoul 2uincy e5pect to pay on the accounts paya!le6 ). %+*0,000. ). %+*0,000. $. %1+7,000. $. %1+7,000. C. %1+0,000. C. %1+0,000. D. %9,000. . %1*,000. . %1*,000. )ssets )ssets a(aila!le for priority claims an unsecure creitors %++0,00 0 8 priority claims %100,000 %1+0,000 %1+0,000%300,000 unsecure payment of *0 on unsecure ollars. *0 5 %+*0,000 ): %9,000
3. 4o" much shoul the mort#a#e holer e5pect to collect from the liquiation6 A. %*;*,000 $. %10,000 $. %10,000 C. %*0,000 C. %*0,000 -. %*70,000 -. %*70,000 . %*;7,000 . %*;7,000
=anich Co. ha the follo"in# amounts for its assets, lia!ilities, an stockholers> equity accounts ?ust !efore filin# a !ankruptcy petition an requestin# liquiation
@f the salaries paya!le, %30,000 "as o"e to an officer of the company. 'he remainin# amount "as o"e to salarie employees "ho ha not !een pai "ithin the pre(ious 70 ays Aohn Be!! "as o"e %10,00, Samantha Aones "as o"e %1,000, Sanra Aohnson "as o"e %11,900, an -ennis o!erts "as o"e %+,00. 'he ma5imum o"e for any one employee>s claims for contri!utions to !enefit plans "as %700. stimate e5pense for aministerin# the liquiation amounte to %*0,000. *. Bhat "as the total amount of unsecure lia!ilities "ith priority6 ). %130,000. $. %1,000. C. %1,000. -. %1;0,000. . %+00,000. :ension %10,000 / Salaries %3,000 D %10,00 / %10,90 / %10,90 / %+,00E / 'a5es %70,000 /
. :i#skin Co., a .S. corporation, sol in(entory on creit to a $ritish company on )pril 7, +011. :i#skin recei(e payment of 3,000 $ritish pouns on =ay 7, +011. 'he e5chan#e rate "as G1 %1.* on )pril 7 an G1 1.*3 on =ay 7. Bhat amount of foreign exchange gain or loss shoul !e reco#nize6 Dround to the nearest dollar E ). %10,00 loss $. %10,00 #ain C. %1,;0 loss D. %3,70 loss . Ho #ain or loss shoul !e reco#nize. Horton Co., a .S. corporation, sol in(entory on -ecem!er 1, +011, "ith payment of 10,000 $ritish pouns to !e recei(e in si5ty ays. 'he pertinent e5chan#e rates "ere as follo"s
;. For "hat amount shoul Sales !e creite on -ecem!er 16 ). %,00. $. %1,9*9. C. %17,17+. D. %1;,+*1. . %1,;. 7. =ills Inc. ha a recei(a!le from a forei#n customer that is ue in the local currency of the customer DsticklesE. @n -ecem!er 31, +010, this recei(a!le for J+00,000 "as correctly inclue in =ills> !alance sheet at %13+,000. Bhen the recei(a!le "as collecte on Fe!ruary 1, +011, the .S. ollar equi(alent "as %1**,000. In =ills> +011 consoliate income statement, ho" much shoul ha(e !een reporte as a forei#n e5chan#e #ain6 ). %0. $. %3,000. C. %*7,000. -. %10,000. E. %1+,000.
@n )pril 1, +010, Shannon Company, a .S. company, !orro"e 100,000 euros from a forei#n !ank ! y si#nin# an interest8!earin# note ue )pril 1, +011. 'he ollar (alue of the loan "as as follo"s
9. 4o" much forei#n e5chan#e #ain or loss shoul !e inclue in Shannon>s +010 income statement6 ). %3,000 #ain. $. %3,000 loss. C. %,000 #ain. D. %,000 loss. . %;,000 #ain.
10. 4o" much forei#n e5chan#e #ain or loss shoul !e inclue in Shannon>s +011 income statement6 ). %1,000 #ain. $. %1,000 loss. C. %+,000 #ain. D. %+,000 loss. . %7,000 loss. 11. unther Co. esta!lishe a su!siiary in =e5ico on Aanuary 1, +011. 'he su!siiary en#a#e in the follo"in# transactions urin# +011
Bhat amount of forei#n e5chan#e #ain or loss "oul ha(e !een reco#nize in unther>s consoliate income statement for +0116 ). %700,000 #ain. $. %;0,000 #ain. C. %3+0,000 loss. D. %+70,000 loss. . %**0,000 loss.
1+. Sinkal Co. "as forme on Aanuary 1, +011 as a "holly o"ne forei#n su!siiary of a .S. corporation. Sinkal>s functional currency "as the stickle DJE. 'he follo"in# transactions an e(ents occurre urin# +011
Bhat "as the amount of the translation a?ustment for +0116 ). %+,000 ecrease in relati(e (alue of net assets. B. %0,700 ecrease in relati(e (alue of net assets. C. %1,+00 ecrease in relati(e (alue of net assets. -. %*,*00 increase in relati(e (alue of net assets. . %+,000 increase in relati(e (alue of net assets. Certain !alance sheet accounts of a forei#n su!siiary of the 'ulip Co. ha !een state in .S. ollars as follo"s
13. If the su!siiary>s local currency is its functional currency, "hat total amount shoul !e inclue in 'ulip>s !alance sheet in .S. ollars6 ). %09,000. $. %7,000. C. %0+,000. -. %30,000. . %1,000. 1*. If the .S. ollar is the functional currency of this su!siiary, "hat total amount shoul !e inclue in 'ulip>s !alance sheet in .S. ollars6 ). %09,000. $. %7,000. C. %0+,000. -. %30,000. E. %1,000.
) su!siiary of :orter Inc., a .S. company, "as locate in a forei#n country. 'he functional currency of this su!siiary "as the stickle DJE, the local currency "here the su!siiary is locate. 'he su!siiary acquire in(entory on creit on Ho(em!er 1, +010, for J1+0,000 that "as sol on Aanuary 1;, +011 for J1,000. 'he su!siiary pai for the in(entory on Aanuary 31, +011. Currency e5chan#e rates !et"een the ollar an the stickle "ere as follo"s
1. Bhat amount "oul ha(e !een reporte for cost of goods sold on :orter>s consolidated income statement at -ecem!er 31, +0116 ). %+*,000. $. %+,*00. C. %++,700. -. %+;,00. E. %+7,700.
