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On April 1, 2023, Shannon Company, a U.S. company, borrowed 100,000 euros from a foreign bank by signing an interest-bearing note due April 1, 2024. The dollar value of the loan was as follows: Date Amount April 1, 2023 $ 97,000 December 31, 2023 103,000 April 1, 2024 105,000 Angela, Incorporated, a U.S. company, had a euro receivable from exports to Spain and a British pound payable resulting from imports from England. Angela recorded foreign exchange gain related to both its euro receivable and pound payable. Did the foreign currencies increase or decrease in dollar value from the date of the transaction to the settlement date?   Euro Pound A) Increase Increase B) Increase Decrease C) Decrease Decrease D) Decrease Increase E) No change Decrease  

The Allen, Bevell, and Carter partnership began the process of liquidation with the following balance sheet: Cash $ 25,000 Liabilities $ 175,000 Noncash assets 500,000 Allen, capital 90,000     Bevell, capital 100,000     Carter, capital 160,000 Total $ 525,000 Total $ 525,000 Allen, Bevell, and Carter share profits and losses in a ratio of 3:2:5. Liquidation expenses are expected to be $14,000.Assuming that the noncash assets were sold for $150,000, which partner(s) would have been required to contribute assets to the partnership to cover a deficit in his or her capital account, prior to considering the liquidation expenses incurred?    

Reeder Corporation acquired one hundred percent of O’Neill Incorporated on January 1, 2022, at a price in excess of the subsidiary’s fair value. On that date, Reeder’s equipment (ten-year life) had a book value of $380,000 but a fair value of $460,000. O’Neill had equipment (ten-year life) with a book value of $240,000 and a fair value of $370,000. Reeder used the partial equity method to record its investment in O’Neill. On December 31, 2024, Reeder had equipment with a book value of $270,000 and a fair value of $400,000. O’Neill had equipment with a book value of $180,000 and a fair value of $300,000. What is the consolidated balance for the Equipment account as of December 31, 2024?

Clark Stone purchases raw material from its foreign supplier, Rinne Clay, on May 8. Payment of 1,500,000 foreign currency units (FC) is due in 30 days. May 31 is Clark’s fiscal year-end. The pertinent exchange rates were as follows: Date Spot Rate May 8 $ 1.16 May 31 $ 1.18 June 7 $ 1.12 For what amount should Clark’s Accounts Payable be credited on May 8? $1,740,000 $1,850,000 $1,500,000 $1,680,000 $1,770,000

On January 1, 2024, the Moody Company entered into a transaction for 100% of the outstanding common stock of Osorio Company. To acquire these shares, Moody issued $400 in long-term liabilities and also issued 40 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Moody paid $20 to lawyers, accountants, and brokers for assistance in bringing about this acquisition. Another $15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows:   Moody Osorio Cash $ 180 $ 40 Receivables 810 180 Inventories 1,080 280 Land 600 360 Buildings (net) 1,260 440 Equipment (net) 480 100 Accounts payable (450) (80) Long-term liabilities (1,290) (400) Common stock ($1 par) (330)   Common stock ($20 par)   (240) Additional paid-in capital (1,080) (340) Retained earnings (1,260) (340) Note: Parentheses indicate a credit balance.In Moody’s appraisal of Osorio, three assets were deemed to be undervalued on the subsidiary’s books: Inventory by $10, Land by $40, and Buildings by $60.If Osorio retains a separate corporate existence, what amount was recorded as the investment in Osorio? $400 $440 $800 $820 $1,030

On January 4, 2024, Mason Company purchased 40,000 shares (40%) of the common stock of Hefly Corporation, paying $560,000. At that time, the book value and fair value of Hefly’s net assets was $1,400,000. The investment gave Mason the ability to exercise significant influence over the operations of Hefly. During 2024, Hefly reported income of $150,000 and paid dividends of $40,000. On January 2, 2025, Mason sold 10,000 shares for $150,000.What is the appropriate journal entry to record the sale of the 10,000 shares? Event Account Title Debit Credit A) Cash 150,000     Investment in Hefly   150,000 B) Cash 150,000     Investment in Hefly   130,000   Gain on sale of investment   20,000 C) Cash 150,000     Loss on sale of investment 1,000     Investment in Hefly   151,000 D) Cash 150,000     Investment in Hefly   149,000   Gain on sale of investment   1,000 E) Cash 150,000     Loss on sale of investment 10,000     Investment in Hefly   160,000

Anderson, Incorporated acquires all of the voting stock of Kenneth, Incorporated on January 4, 2023, at an amount in excess of Kenneth’s fair value. On that date, Kenneth has equipment with a book value of $90,000 and a fair value of $120,000 (10-year remaining life). Anderson has equipment with a book value of $800,000 and a fair value of $1,200,000 (10-year remaining life). On December 31, 2024, Anderson has equipment with a book value of $975,000 but a fair value of $1,350,000 and Kenneth has equipment with a book value of $105,000 but a fair value of $125,000.If Anderson applies the equity method in accounting for Kenneth, what is the consolidated balance for the Equipment account as of December 31, 2024?

The partnership contract for Hanes and Jones LLP provides that Hanes is to receive a bonus of 20% of net income (after the bonus) and that the remaining net income is to be divided equally. If the partnership income before the bonus for the year is $57,600, Hanes’ share of this pre-bonus income is

Levinson Company established a subsidiary in Mexico on January 1, 2024. The subsidiary engaged in the following transactions during 2024: January 1 Sold common stock to Levinson for 7,500,000 pesos.   Purchased inventory throughout the year, 10,000,000 pesos. (¼ of the inventory remained at year end.)   Sales for the year totaled 14,000,000 pesos. December 31 Purchased equipment for 1,500,000 pesos. Levinson concluded that the subsidiary’s  functional currency was the dollar. Exchange rates for 2024 were: January 1 1 peso = $ 0.23 January 31 1 peso = $ 0.21 December 31 1 peso = $ 0.17 Weighted average rate for the year 1 peso = $ 0.20 What amount of foreign exchange gain or loss would have been recognized in Levinson’s consolidated income statement for 2024? $825,000 gain $685,000 gain $270,000 loss $570,000 loss $315,000 loss

McCoy has the following account balances as of December 31, 2023, before an acquisition transaction takes place. Inventory $ 125,000 Land 450,000 Buildings 575,000 Liabilities (590,000) Common stock ($10 par) (75,000) Additional Paid-In Capital (200,000) Retained earnings (12/31/23) (285,000) The fair value of McCoy’s Land and Buildings are $650,000 and $600,000, respectively. On December 31, 2023, Ferguson Company issues 30,000 shares of its $10 par value ($30 fair value) common stock in exchange for all of the shares of McCoy’s common stock. Ferguson paid $12,000 for costs to issue the new shares of stock. Before the acquisition, Ferguson has $800,000 in its common stock account and $350,000 in its additional paid-in capital account.On December 31, 2023, assuming that McCoy will retain its separate corporate existence, what value is assigned to Ferguson’s investment account? $150,000 $300,000 $600,000 $900,000 $912,000