Exam (elaborations)
CPA FAR FINAL EXAM QUESTIONS AND 100% CORRECT ANSWERS PASS GUARANTEED
- Course
- Institution
CPA FAR FINAL EXAM QUESTIONS AND 100% CORRECT ANSWERS PASS GUARANTEED...
[Show more]
Content preview
CPA FAR FINAL EXAM QUESTIONS AND 100% CORRECTANSWERS PASS GUARANTEED
A company announced a dividend that partially was liquidating. Which of the following is
the effect on each of the items below?
A. Additional Paid-in Capital Decrease Retained Earnings No effect
B. Additional Paid-in Capital Decrease Retained Earnings Decrease
C. Additional Paid-in Capital No effect Retained Earnings Decrease
D. Additional Paid-in Capital No effect Retained Earnings No effect ANSWER B
The board of directors of Lake Mining Co. declared a cash dividend of $400,000 to
common stockholders of record on January 18, Year 5, payable on February 10, Year 5.
The dividend is legal under the laws of Lake's state of incorporation. Selected data from
Lake's December 31, Year 4, balance sheet are as follows:
Accumulated depletion $100,000
Capital stock 500,000
Additional paid-in capital 150,000
Retained earnings 300,000
The $400,000 dividend includes a liquidating dividend of
A. $0
B. $100,000
C. $150,000
D. $300,000 - ANSWER B
Ole Corp. declared and paid a liquidating dividend of $100,000. This distribution
decreased Ole's
Paid-in Capital
,Retained Earnings
A. Paid-in Capital No Retained Earnings No
B. Paid-in Capital Yes Retained Earnings Yes
C. Paid-in Capital No Retained Earnings Yes
D. Paid-in Capital Yes Retained Earnings No - ANSWER D
On January 5, Year 2, Sardi Minerals Corp. declared a cash dividend of $600,000 to
shareholders of record on January 21, Year 2. It was payable on February 11, Year 2.
The dividend is permissible under the laws of Sardi's state of incorporation. The
following data pertain to Year 1:
Net income for year ended 12/31/Yr 1 $190,000
Additional paid-in capital, 12/31/Yr 1 675,000
Retained earnings, 1/1/Yr 2 425,000
The $600,000 dividend contains a liquidating dividend of
A. $0
B. $175,000
C. $410,000
D. $425,000 - ANSWER B
Chapter 13.1
A retained earnings appropriation may serve
A. To absorb a fire loss if the company is uninsured.
B. For accrual of a contingent loss that is probable and estimable.
C. For smoothing periodic income.
D. To limit earnings available for dividends. - ANSWER D
,At December 31, Year 3, Eagle Corp. had $1,750,000 of appropriated retained earnings
for the construction of a new office building that was completed in Year 4 at a total cost
of $1.5 million. During Year 4, Eagle appropriated $1,200,000 of retained earnings for
the construction of a new plant. Also, $2 million of cash was restricted for the retirement
of bonds due in Year 5. In its Year 4 balance sheet, Eagle should report what amount of
appropriated retained earnings?
A. $1,200,000
B. $1,450,000
C. $2,950,000
D. $3,200,000 - ANSWER A
The following information relates to Meg Corp.:
Dividends on its 1,000 shares of 6%, $10 par value cumulative preferred stock have not
been declared or paid for 3 years.
Treasury stock which cost $15,000 was reissued for $8,000.
How much should retained earnings be appropriated based upon those items?
A. $0
B. $1,800
C. $7,000
D. $8,800 - ANSWER A
An appropriation of retained earnings by the board of directors of a corporation for
bonded indebtedness will result in
A. The establishment of a sinking fund to retire bonds when they mature.
B. A reduction of cash on the balance sheet that is matched by an increase in the
investment and funds section of the balance sheet.
C. A reduction of the total retained earnings presented on the balance sheet.
D. The disclosure that management does not intend to distribute assets, in the form of
dividends, equal to the amount of the appropriation. - ANSWER D
Chapter 14.6
, GAAP comparative to consolidation of variable interest entities
A. A not-for-profit organization may not be treated as a variable interest entity.
A variable interest entity has equity investment of more than 10% of its total assets.
A variable interest entity is consolidated by its primary beneficiary when the beneficiary
becomes involved with the entity.
Corporations may not be organized as variable interest entities. - ANSWER C
Chapter 13.3
An entity issued rights to its existing shareholders without consideration. The rights
allowed the recipients to purchase unissued common stock for an amount in excess of
par value. When the rights are issued, which of the following accounts will be
increased?
A. Common Stock Yes Additional Paid-in Capital Yes
B. Common Stock Yes Additional Paid-in Capital No
C. Common Stock No Additional Paid-in Capital No
D. Common Stoc No Additional Paid-in Capital Yes - ANSWER C
A company issued rights to its existing shareholders. The rights were issued without
consideration. The rights allowed the recipients to purchase unissued common stock
for an amount in excess of par value. Common stock will be increased when the
A. Rights Are Issued Yes Rights Lapse Yes
B. Rights Are Issued Yes Rights Lapse No
C. Rights Are Issued No Rights Lapse No
D. Rights Are Issued No Rights Lapse Yes - ANSWER C
Tem Co. issued rights to its existing shareholders without consideration. A shareholder
received a right to buy one share for each 20 shares held. The exercise price was in
excess of par value, but less than the current market price. Retained earnings
decreases when
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Easton. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $17.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77858 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now