FINANCIAL ACCOUNTING AND
REPORTING Exam with Answers
100% Correct
1. Vance Company provided the following information on December 31, 2017:
Copyright 300,000
Deposit with advertising agency used to promote goodwill 270,000
Bond sinking fund 700,000
Excess of cost over fair value of identifiable net assets of acquired subsidiary 3,900,000
Trademark 900,000
On December 31, 2017, what amount should be reported as total intangible assets?
a. 4,800,000
b. 5,070,000
c. 5,100,000
d. 5,370,000
2. Logan Company reported the following information for the current year:
Sales 1,400,000
Cost of sales 500,000
Administrative expenses 250,000
Loss on sale of equipment 90,000
Commissions to salespersons 80,000
Interest revenue 50,000
, Freightout 30,000
Loss on disposition of wholesale division 120,000
Bad debt expense 30,000
The income tax rate is 30%. Finished goods inventory was P800,000 on January 1 and
P700,000 on December 31. What is the income from continuing operations before tax?
a. 640,000
b. 350,000
c. 470,000
d. 245,000
3. Ruth Company provided the following events for 2017. The tax rate is 30%.
Depreciation for 2015 was found to be understated 30,000
A litigation settlement resulted in a loss 25,000
The inventory on December 31, 2015 was overstated 40,000
The entity disposed of the recreational division at a loss 500,000
What would be the effect of these events on 2017 net income net of tax?
a. 17,500
b. 367,500
c. 388,500
d. 416,500
, 4. During 2017, Lopez Company disposed of Pine Division, a major component. The entity
realized a gain of P1,200,000 on the sale of Pine's assets. The operating loss was P1,400,000
in 2017. What amount should be reported in discontinued operation?
a. 1,200,000 gain
b. 1,400,000 loss
c. 200,000 loss
d. 0
5. Stine Company reported the following balances on December 31, 2017:
Accounts receivable 2,400,000
Trading securities 600,000
Accumulated depreciation on equipment and furniture 1,500,000
Cash 1,100,000
Inventory 3,000,000
Equipment 2,500,000
Patent 400,000
Prepaid expenses 200,000
Land held for future business site 1,800,000
What total amount should be reported as current assets on December 31, 2017?
a. 9,000,000
b. 8,200,000
c. 7,700,000
d. 7,300,000
REPORTING Exam with Answers
100% Correct
1. Vance Company provided the following information on December 31, 2017:
Copyright 300,000
Deposit with advertising agency used to promote goodwill 270,000
Bond sinking fund 700,000
Excess of cost over fair value of identifiable net assets of acquired subsidiary 3,900,000
Trademark 900,000
On December 31, 2017, what amount should be reported as total intangible assets?
a. 4,800,000
b. 5,070,000
c. 5,100,000
d. 5,370,000
2. Logan Company reported the following information for the current year:
Sales 1,400,000
Cost of sales 500,000
Administrative expenses 250,000
Loss on sale of equipment 90,000
Commissions to salespersons 80,000
Interest revenue 50,000
, Freightout 30,000
Loss on disposition of wholesale division 120,000
Bad debt expense 30,000
The income tax rate is 30%. Finished goods inventory was P800,000 on January 1 and
P700,000 on December 31. What is the income from continuing operations before tax?
a. 640,000
b. 350,000
c. 470,000
d. 245,000
3. Ruth Company provided the following events for 2017. The tax rate is 30%.
Depreciation for 2015 was found to be understated 30,000
A litigation settlement resulted in a loss 25,000
The inventory on December 31, 2015 was overstated 40,000
The entity disposed of the recreational division at a loss 500,000
What would be the effect of these events on 2017 net income net of tax?
a. 17,500
b. 367,500
c. 388,500
d. 416,500
, 4. During 2017, Lopez Company disposed of Pine Division, a major component. The entity
realized a gain of P1,200,000 on the sale of Pine's assets. The operating loss was P1,400,000
in 2017. What amount should be reported in discontinued operation?
a. 1,200,000 gain
b. 1,400,000 loss
c. 200,000 loss
d. 0
5. Stine Company reported the following balances on December 31, 2017:
Accounts receivable 2,400,000
Trading securities 600,000
Accumulated depreciation on equipment and furniture 1,500,000
Cash 1,100,000
Inventory 3,000,000
Equipment 2,500,000
Patent 400,000
Prepaid expenses 200,000
Land held for future business site 1,800,000
What total amount should be reported as current assets on December 31, 2017?
a. 9,000,000
b. 8,200,000
c. 7,700,000
d. 7,300,000
