72. Which type of accounting change should always be accounted for in current and future periods?
A. Change in accounting estimate
B. Correction of an error
C. Change in accounting principle
D. Change in inventory costing methods
73. Which of the followin
A restriction of retained earnings is most likely to be required by the:
A. payment of last maturing series of a serial bond issue.
B. amortization of intangible assets.
C. purchase of treasury stock.
D. exhaustion of potential benefits of the invest
Discussion Section 09/18/2015
San Mateo Co. had the following account balances in Dec 31, 2011 before recording
bad debt expense for the year:
Which of the following changes would be accounted for prospectively?
A. Changing from declining-balance depreciation to straight-line depreciation
B. Change in the expected life of a depreciable asset
C. First time presentation of assumption financial
XYZ reported the following equity accounts on December 31 of this year:
(1) The Board of Directors declared a 10 percent stock dividend on all classes of shares on
April 1, and issued these shares on August 1.
(2) Income for th
A company had 50,000 common shares and the following 3 convertible securities outstanding
the entire year:
1. 6%, $100 par cumulative preferred shares, 200 shares outstanding, each convertible into 5
2. 200, 6% convertible bonds, face $
At December 31, 2014 and 2013, GHI had 90 common shares and 20 convertible preferred
shares outstanding, in addition to 9% convertible bonds payable in the face amount of $4,000.
During 2014, GHI paid dividends of $2.50 per share on the preferred sha
FED had 100 common shares issued and outstanding at December 31, 2013. On July 1,
2014, FED issued a 10 percent stock dividend. Unexercised stock options to purchase 20
common shares (adjusted for 2014 stock dividends) at $20 per share were outstandi
Learning Objective: 20-02 Calculate basic EPS adjusting for weighted average number of shares; contingently issuable and complex dividends.
On January 1, 2014, WXY had stock warrants outstanding to purchase 6,000 shares at an
A company with a simple capital structure would include which of the following in the
computation of earnings per share?
A. Convertible securities
B. Number of shares of nonconvertible cumulative preferred shares
C. Dividends on nonconvertible cumulat
JUNK BONDS Inc. began operations Jan. 1, 2014. The following events related to common
shares took place on the indicated dates during 2014.
Jan. 1 Issued 25,000 common shares
Apr. 1 Purchased 4,000 treasury shares
May 1 Split the common shares 4-for-1
147.A company reported the following capital structure on December 31, 2002, and the related
results of operations for the year then ended.
A 2 for 1 stock split was issued on December 31, 2002.
The tax rate for the year is 40%.
Show the earnings per shar
When a company has negative net income and potentially dilutive securities, the calculation of
EPS results in:
A. Diluted EPS i.e. all potentially dilutive securities are included in the calculation (whether
dilutive or anti-dilutive).
B. No EPS being
The annual dividend on nonconvertible cumulative preferred shares is $10,000. At the
beginning of the current year, there were 3 years of dividends in arrears. During the current
year, $38,000 of dividends on the preferred shares was declared, and $35
Beechy - Chapter 20 #15
Learning Objective: 20-03 Itemize the steps required in calculating diluted EPS and identify appropriate adjustments to be made for conversions.
In some cases, diluted earnings per share amoun
Learning Objective: 20-06 Describe the disclosure requirements related to EPS and the impact of restatements and changes in share capital.
ABC Inc. has 20,000 common shares outstanding throughout the year. It also had 20,000, 6
percent preferred share
Expiry date 10 years from date of issue
Exercised during year: none
Ordinary shares outstanding, Jan. 1, 2014: 3,300,000
Year-end Dec. 31, 2014:
Tax rate 40%
Pre-tax rate of return 18%
Average market price for the year $71 per share
Net income for 2014: $
Jamieson Corp. sponsors a defined benefit plan for its employee group.
The following data pertains to the plan's first 2 years in existence:
Jamieson's balance sheet as per IFRS for Year 2 would show a net:
A. defined pension asset of $26,576.
You calculate basic EPS to be $15.87 and diluted EPS to be $16.65. From a disclosure point,
what needs to be disclosed?
Both basic EPS and diluted EPS must be disclosed on the face of the Statement of
Beechy - Chapter 20 #131
A change from an accelerated depreciation method to the straight-line depreciation method
should be accounted for as a:
A. Change in accounting entity.
B. Change in accounting principle.
C. Change in accounting estimate.
D. Correction of accounting er
123.In 20x4, a firm discovered that $10,000 of equipment purchased on 1/1/x1 was expensed in full.
The equipment has a ten-year life, has no residual value, and should have been depreciated on
the straight-line basis. The error is corrected. As a result,
137.On January 1, 20x1, DB purchased equipment that cost $48,000. It was depreciated on the
straight-line basis for the years 20x1, 20x2 and 20x3 (estimated useful life 5 years and no
residual value). During early 20x4, DB changed the estimated total usef
149.AME did not account properly for the deferrals and accruals given below:
Items omitted at year-end:
(a) The correct income for 20x1 was $_.
(b) The correct income for 20x2 was $_.
150.The following errors were discovered during 20x3:
Therefore, the pr
Learning Objective: 21-02 Identify changes in accounting policies as either mandatory or voluntary and illustrate the retrospective application with full or
partial restatement and the related disclosures.
A change i
129.On January 1, 2014, Ryan Ltd. purchased equipment for $30,000 cash. Ryan Ltd's fiscal year
end is December 31. At the time of acquisition, the equipment was expected to last 8 years and
had an estimated salvage value of $1,200. Ryan Ltd. uses the stra
111.At the beginning of the current year, a capital expenditure of $24,000 for equipment with an
estimated useful life of six years (and no residual value) was debited erroneously to maintenance
expense. Straight-line depreciation is used. This error will
100.BVC began operations January 1, 20x1. Financial statements for the year ended December 31,
20x1, and 20x2, contained the following errors:
In addition, on December 26, 20x2, fully depreciated machinery was sold for $21,600 cash, but
the sale was not r
89. Which of the following is not an example of an accounting error, as distinguished from a change
in accounting principle or change in estimate?
A. Misstatement of an accounting value, such as inventory, deferred charge or credit, liabilities, or
l. 1. Important elements of an internal control system for cash disbursements include each of the following
A Only authorized personnel should sign checks.
B. All expenditmes should be authorized before a check' 15 prepared.
C. All disbursements, o
UNIVERSITY OF CALIFORNIA, BERKELEY
HAAS SCHOOL OF BUSINESS
Course: UGBA 120AB (Intermediate Accounting )
Instructor: Mr. Stanton
Class Hours: 8:00-9:30A.M.
Office Hrs. Mon. & Wed. 12:30-1:30p.m.
Class Days: Mon., Wed.