ACCT 551 Education Organization- tutorialrank.com

1. ACCT 551 Course Project (Notes to Financial Statement) (2 Project) For more course tutorials visit www.tutorialrank.com Tutorial Purchased: 3 Times, Rating: A+ ACCT 551 Course Project (Notes to Financial Statement) (2 Project) ============================================== ACCT 551 Final Exam Set 1 For more course tutorials visit www.tutorialrank.com Tutorial Purchased: 3 Times, Rating: A+

2. Question 1. (TCO C) Which characteristic is not possessed by intangible assets? Physical existence Short-lived Result in future benefits Expensed over current and/or future years Question 2. (TCO C) Which intangible assets are amortized? Limited Life Indefinite Life Question 3. (TCO C) Which of the following is often reported as an extraordinary item? Amortization expense Impairment losses for intangible assets other than goodwill Impairment losses on goodwill

3. mon stock dividend when the market value was $2 per share. Trent's net income for 2010 was $360,000. What is the balance in Agee’s investment account at the end of 2010? ============================================== ACCT 551 Final Exam Set 2 For more course tutorials visit www.tutorialrank.com Tutorial Purchased: 4 Times, Rating: A Question 1. 1. (TCO C) Which characteristic is not possessed by intangible assets? (Points : 5) Physical existence Short-lived Result in future benefits Expensed over current and/or future years

4. Question 2. 2. (TCO C) One factor that is not considered in determining the useful life of an intangible asset is (Points : 5) salvage value. provisions for renewal or extension. legal life. expected actions of competitors. Question 3. 3. (TCO C) Intangible assets are reported on the balance sheet ( ============================================== ACCT 551 Midterm Exam Set 1 For more course tutorials visit www.tutorialrank.com Tutorial Purchased: 4 Times, Rating: A

5. Question 1. (TCO C) The major problem of accounting for intangibles is determining fair market value. separability. salvage value. useful life. Question 2. (TCO C) Wriglee, Inc. went to court this year and successfully defended its patent from infringement by a competitor. The cost of this defense should be charged to patents, and amortized over the legal life of the patent. legal fees, and amortized over 5 years or less. expenses of the period. patents, and amortized over the remaining useful life of the patent. Question 3. (TCO C) Purchased goodwill should the gain or loss experienced by Hurst in reacquiring its 8% bonds? (Assume the firm used straight-line amortization.) Show calculations. ==============================================

6. ACCT 551 Midterm Exam Set 2 For more course tutorials visit www.tutorialrank.com Tutorial Purchased: 4 Times, Rating: A Question 1. (TCO C) The major problem of accounting for intangibles is determining Question 2. Question : (TCO C) Wriglee, Inc. went to court this year and successfully defended its patent from infringement by a competitor. The cost of this defense should be charged to

7. Question 3. Question : (TCO C) A loss on impairment of an intangible asset is the difference between the asset’s Question 4. Question : (TCO C) ELO Corporation purchased a patent for $90,000 on September 1, 2008. It had a useful life of 10 years. On January 1, 2010, ELO spent $22,000 to successfully defend the patent in a lawsuit. ELO feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense for 2010? Question 5. Question : (TCO C) General Products Company bought Special Products Division in 2010 and appropriately recorded $500,000 of goodwill related to the purchase. On December 31, 2011, the fair value of Special Products Division is $4,000,000 and it is carried on General Products’ books for a total of $3,400,000, including the goodwill. An analysis of Special Products Division’s assets indicates that goodwill of $400,000 exists on December 31, 2011. What goodwill impairment should be recognized by General Products in 2011? ==============================================

8. ACCT 551 Week 1 Discussion BE12-2, BE12-3, BE12-7, BE12-6, BE 12-12, Ex 12-15 For more course tutorials visit www.tutorialrank.com Tutorial Purchased: 4 Times, Rating: A BE12-2 makes us learn that if any legal cost is incurred to defend an intangible assets it should be added to the book value of intangible asset and depreciated over its remaining useful life. Book Value is determined by subtracting amortization till the date of incurring legal cost from the purchase price. BE12-3 provides us repeated practice to record amortization on intangible asset

 The take away from BE12-7 is how to test goodwill for impairment. We test goodwill for impairment by comparing the Fair Value (FV) with the Carrying Value(CV) of the reporting unit. If FV is less than CV then we proceed further to test goodwill for impairment. 

 BRIEF EXERCISE 12-7 the division exceeds the carrying amount of the assets, goodwill is not considered to be impaired. No entry is necessary.

9. BE12-6. This question helped us learn testing an intangible for impairment. This test involves two steps Recoverability test and Fair Value Test. In the Recoverability test we compare the Future Cash Flows and the Carrying Amount of the intangible. Here in this question the future cash flows of $210,000 are less than the carrying value therefore there is an impairment. Now we apply the second test to find the amount of impairment loss by comparing the fair value ($110,000) with the carrying value (300,000). The impairment loss here is $190,000 ( 300,000-110,000). Please note that the intangible is now reported only ============================================== ACCT 551 Week 1 Homework E12-5, E12-16 For more course tutorials visit www.tutorialrank.com Tutorial Purchased: 4 Times, Rating: A E12-5 (Correct Intangible Assets Account) As the recently appointed auditor for William J. Bryan Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2014, are prepared. The controller for William J. Bryan

10. Corporation mentions that only one account is kept for intangible assets. The account is shown below. E12-16 (Accounting for R&D Costs) Leontyne Price Company from time to time embarks on a research pro- gram when a special project seems to offer possibilities. In 2013, the company expends $325,000 on a research project, but by the end of 2013 it is impossible to determine whether any benefit will be derived from it. (a) What account should be charged for the $325,000, and how should it be shown in the financial statements? (b) The project is completed in 2014, and a successful patent is obtained. The R&D costs to complete the project are $110,000. (c) In 2015, the company successfully defends the patent in extended litigation at a cost of $47,200, thereby extending the patent life to December 31, 2022. (d) Additional engineering and consulting costs incurred in 2015 required to advance the design of a product to the manufacturing stage total $60,000. ==============================================

11. ACCT 551 Week 2 Homework E13-11, E13-12, P13-9 For more course tutorials visit www.tutorialrank.com Tutorial Purchased: 4 Times, Rating: A E13-11 (Warranties) Sheryl Crow Equipment Company sold 500 Rollomatics during 2014 at $6,000 each. During 2014, Crow spent $20,000 servicing the 2-year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. E13-12 (Premium Entries) No Doubt Company includes 1 coupon in each box of soap powder that it packs, and 10 coupons are redeemable for a premium (a kitchen utensil). In 2014, No Doubt Company purchased 8,800 premiums at 80 cents each and sold 110,000 boxes of soap powder at $3.30 per box; 44,000 coupons were presented for redemption in 2014. It is estimated that 60% of the coupons will eventually be presented for redemption. P13-9 (Premium Entries and Financial Statement Presentation) Sycamore Candy Company offers an MP3 download (seven-single medley) as a premium for every five candy bar wrappers presented by customers together with $2.50. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download

12. code to the company is $2.25. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2014 and 2015 are as follows. (All purchases and sales are for cash.) ============================================== ACCT 551 Week 3 Homework P14-5, P14-6, P14-7 For more course tutorials visit www.tutorialrank.com Tutorial Purchased: 4 Times, Rating: A P14-5 (Comprehensive Bond Problem) In each of the following independent cases the company closes its books on December 31. P14-6 (Issuance of Bonds between Interest Dates, Straight-Line, Redemption) Presented below are P14-7 (Entries for Life Cycle of Bonds) On April 1, 2014, Seminole Company sold 15,000 of its 11% 15-year, $1,000 face value bonds at 97.

13. ============================================== ACCT 551 Week 4 Homework E15-2, E15-5, E15-6 For more course tutorials visit www.tutorialrank.com Tutorial Purchased: 4 Times, Rating: A EXERCISE 15-2 Facts: Kathleen Battle Corporation was organized on January 1, 2014. It is authorized to issue 10,000 shares of 8%, $100 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $1 per share. The following transactions were completed during the first year. Prepare entries to record the transactions. E15-5 (Lump-Sum Sales of Stock with Preferred Stock) Dave Matthew Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $100,000. EXERCISE 15-6 (15th edition)

14. Facts: Lindsey Hunter Corporation is authorized to issue 50,000 shares of $5 par value C/S. During 2014, Lindsey Hunter took part in the following selected transactions. 1. Issued 5,000 shares of stock at $45 per share, less costs related to the issuance of the stock totaling $7,000. 2. Issued 1,000 shares of stock for land appraised at $50,000. The stock is actively traded on a national exchange at approximately $46 per share on the date of issuance. 2. Issued 1,000 shares of stock for land appraised at $50,000. The stock is actively traded on a national exchange at approximately $46 per share on the date of issuance. ============================================== ACCT 551 Week 5 Homework E15-15, E15-16 For more course tutorials visit www.tutorialrank.com

15. Tutorial Purchased: 4 Times, Rating: A E15-15 (Dividend Entries) The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2013. (a) A 5% stock dividend is declared and distributed at a time when the market price per share is $39. (b) The par value of the common stock is reduced to $2 with a 5-for-1 stock split. E15-16 (Computation of Retained Earnings) The following information has been taken from the ledger accounts of Isaac Stern Corporation. ============================================== ACCT 551 Week 6 Homework E16-6, E16-7, E16-12, E16-22 For more course tutorials visit www.tutorialrank.com

16. Tutorial Purchased: 4 Times, Rating: A E16-6 (Conversion of Bonds) On January 1, 2014, Gottlieb Corporation issued $4,000,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be converted into eight shares of Gottlieb Corporation $100 par value common stock after December 31, 2015. E16-7 (Issuance of Bonds with Warrants) Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of one warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $136,000, and the value of the warrants in the market is $24,000. The bonds sold in the market at issuance for $152,000. E16-12 (Issuance, Exercise, and Termination of Stock Options) On January 1, 2013, Nichols Corporation granted 10,000 options to key executives. Each option allows the executive to purchase one share of Nichols’ $5 par value common stock at a price of $20 per share. The options were exercisable within a 2-year period beginning January 1,

17. 2015, if the grantee is still employed by the company at the time of the exercise. On the grant date, Nichols’ stock was trading at $25 per share, and a fair value option-pricing model determines total compensation to be $400,000. E16-22(EPS with Convertible Bonds, Various Situations) In 2013, Chirac Enterprises issued, at par, 60 $1,000, 8% bonds, each convertible into 100 shares of common stock. Chirac had revenues of $17,500 and expenses other than interest and taxes of $8,400 for 2014. (Assume that the tax rate is 40%.) Throughout 2014, 2,000 shares of common stock were outstanding; none of the bonds was converted or redeemed. ============================================== ACCT 551 Week 7 Homework E17-7, E17-9, E17-15 For more course tutorials visit www.tutorialrank.com Tutorial Purchased: 4 Times, Rating: A

18. E17-7 (Trading Securities Entries) On December 21, 2013, Bucky Katt Company provided you with the following information regarding its trading securities. E17-9 (Available-for-Sale Securities Entries and Financial Statement Presentation) At December 31, 2013, the available-for-sale equity portfolio for Steffi Graf, Inc. is as follows. E17-15 (Equity Investments—Trading) Kenseth Company has the following securities in its trading port- folio of securities on December 31, 2013. ==============================================