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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.$. %**,000.C. %1+,000.-. %10,000.. %0,000.

Sale of lan %110,000 / *0 of remainin# %*0,000 o"e %1+,000

 2uincy Corp., a!out to !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.$. %1+7,000.C. %1+0,000.D. %9,000.. %1*,000.

 )ssets a(aila!le for priority claims an unsecure creitors %++0,000 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$. %10,000C. %*0,000-. %*70,000. %*;7,000

<an an !uilin# sol for %*0,000 lea(es %0,000 unsecure still o"in#.*0 5 %0,000 %+*,000=ort#a#e holer e5pects %*0,000 / %+*,000 %*;*,000

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  =anich Co. ha the follo"in# amounts for its assets, lia!ilities, an stockholers> equity accounts ?ust !eforefilin# 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 tosalarie 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. stimatee5pense 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 / <iq.e5penses %*0,000 %1,000.

. Bhat amount "oul the company ha(e e5pecte to pay for e(ery ollar of unsecure lia!ility "ithout priority6). %.30.

$. %.*0.C. %.0.-. %.0.. %.;.

)ssets a(aila!le for priority claims an unsecure creitors %*9,000 8 :riority claims %1,000 )ssetsa(aila!le for nonpriority unsecure creitors %330,000.%330,000%0,000 unsecure lia!. %.0.

 

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. :i#skin Co., a .S. corporation, sol in(entory on creit to a $ritish company on )pril 7, +011. :i#skinrecei(e payment of 3,000 $ritish pouns on =ay 7, +011. 'he e5chan#e rate "as G1 %1.* on )pril 7 anG1 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 #ainC. %1,;0 lossD. %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 customerDsticklesE. @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.

 

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@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 incomestatement for +0116). %700,000 #ain.$. %;0,000 #ain.C. %3+0,000 loss.D. %+70,000 loss.. %**0,000 loss.

 

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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 asfollo"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. 

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 ) su!siiary of :orter Inc., a .S. company, "as locate in a forei#n country. 'he functional currency of thissu!siiary "as the stickle DJE, the local currency "here the su!siiary is locate. 'he su!siiary acquirein(entory on creit on Ho(em!er 1, +010, for J1+0,000 that "as sol on Aanuary 1;, +011 for J1,000. 'hesu!siiary pai for the in(entory on Aanuary 31, +011. Currency e5chan#e rates !et"een the ollar an thestickle "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.