1.(TCO D) The
basis for classifying assets as current or noncurrent is conversion

to cash
within (Points : 5)

Question 2.

2. (TCO A) Why are some of the major differences between
iGAAP and U.S. GAAP? Explain in detail.

(Points : 25)

Question 3.

3.(TCO C)
Perry Corp. reports operating expenses in two categories: (1) selling and (2)
general and administrative. The adjusted trial balance at December 31, 2010,
included the following expense accounts.

Accounting
and legal fees

$140,000

Advertising

$120,000

Freight-out

$75,000

Interest

$60,000

Loss on
sale of long-term investments

$30,000

Officers’
salaries

$180,000

Rent for
office space

$180,000

Sales
salaries and commissions

$110,000

One half of
the rented premises are occupied by the sales department.

How much of
the expenses listed above should be included in Perry’s selling expenses for
2010? (Points : 15)395

Question 4.

4. (TCO C) For the year ended December 31, 2010, Transformers Inc.
reported the following.

Net income $60,000

Preferred dividends declared $10,000

Common dividend declared$2,000

Unrealized holding loss, net of tax $1,000

Retained earnings, beginning balance
$80,000

Common stock $40,000

Accumulated Other Comprehensive Income, Beginning Balance $5,000

What would Transformers report as the ending balance of retained
earnings? (Points : 20)

5.(TCO C) For the year ended
December 31, 2010, Transformers Inc. reported the following.

Net income

$60,000

Preferred dividends declared,

$10,000

Common dividend declared,

$2,000

Unrealized holding loss, net of tax; – Available-For-Sale-Securities

$1,000

Retained earnings

$80,000

Common stock,

$40,000

Accumulated Other Comprehensive Income, Beginning Balance

5,000

What would Transformers
report as its ending balance of accumulated other comprehensive
income? (Points : 20)

Question 6.

6. (TCO B) Prepaid rent at 1/1/10 was $30,000. During 2010, rent
payments of $120,000 were made and charged to “rent expense.” The
2010 income statement shows as a general expense the item “rent
expense” in the amount of $125,000. You are to prepare the missing
adjusting entry that must have been made, assuming reversing entries are not
made. Please indicate DR (debit) or CR (credit) to the left of the account
title, and place a comma between the account title and the amount of the
adjustment (Points : 10)

Question 7.

7. (TCO B) Retained earnings at 1/1/10 was $170,000 and at 12/31/10 it
was $200,000. During 2010, cash dividends of $50,000 were paid and a stock
dividend of $40,000 was issued. Both dividends were properly charged to
retained earnings. You are to provide the missing closing entry. Please
indicate DR (debit) or CR (credit) to the left of the account title, and place
a comma between the account title and the amount of the adjustment. (Points :
10)

Question 8.

8. (TCO B) Retained earnings at 1/1/10 was $150,000 and at 12/31/10 it
was $200,000. During 2010, cash dividends of $50,000 were paid and a stock
dividend of $40,000 was issued. Both dividends were properly charged to
retained earnings. You are to provide the missing closing entry. Please
indicate DR (debit) or CR (credit) to the left of the account title, and place
a comma between the account title and the amount of the adjustment. (Points :
10)

Question 9.

9. (TCO B) Allowance for doubtful accounts on 1/1/10 was $60,000. The
balance in the allowance account on 12/31/10 after making the annual adjusting
entry was $55,000, and during 2010, bad debts written off amounted to $40,000.
You are to provide the missing adjusting entry. Please indicate DR (debit) or
CR (credit) to the left of the account title, and place a comma between the
account title and the amount of the adjustment. (Points : 10)