Q&A Hero

Q: The PQ partnership has the following plan for the distribution of partnership net income (loss): Required:Calculate the distribution of partnership net income (loss) for each independent situation below (for each situation, assume the average capital balance of P is $140,000 and of Q is $240,000).1. Partnership net income is $360,000.2. Partnership net income is $240,000.3. Partnership net loss is $40,000.

Q: The following data applies to Questions 53 – 61:In the JK partnership, Jacob’s capital is $140,000, and Katy’s is $40,000. They share income in a 3:2 ratio, respectively. They decide to admit Erin to the partnership. Each of the following questions is independent of the others.Refer to the information provided above. What amount will Erin have to invest to give her a one-fourth interest in the capital of the partnership if no goodwill or bonus is recorded?A. $45,000B. $50,000C. $60,000D. $66,000

Q: The following data applies to Questions 41 – 43:In the LMN partnership, Lynn’s capital is $60,000, Marty’s is $80,000, and Nancy’s is $70,000. They share income in a 4:3:3 ratio, respectively. Nancy is retiring from the partnership. Each of the following questions is independent of the others.Refer to the above information. Nancy is paid $84,000, and no goodwill is recorded. What is Lynn’s capital balance after Nancy withdraws from the partnership?A. $68,000B. $54,000C. $53,000D. $52,000

Q: The following data applies to Questions 41 – 43:In the LMN partnership, Lynn’s capital is $60,000, Marty’s is $80,000, and Nancy’s is $70,000. They share income in a 4:3:3 ratio, respectively. Nancy is retiring from the partnership. Each of the following questions is independent of the others.Refer to the information above. Nancy is paid $84,000, and no goodwill is recorded. In the journal entry to record Nancy’s withdrawalA. Lynn, Capital will be debited for $7,000B. Marty, Capital will be debited for $6,000C. Nancy, Capital will be credited for $70,000D. Cash will be debited for $84,000

Q: The following data applies to Questions 11 – 13:Sun Corporation owns 60 percent of Moon Company’s voting shares. On January 1, 20X4, Moon sold bonds with a par value of $400,000 when the market rate was 6 percent. Sun purchased one-third of the bonds; the remainder was sold to nonaffiliates. The bonds mature in 15 years and pay an annual interest rate of 5 percent. Interest is paid semiannually on June 30 and December 31.Based on the information given above, what amount of interest expense will be eliminated in the preparation of the 20X5 consolidated financial statements?A. $7,224B. $7,259C. $14,516D. $21,775

Q: The following data applies to Questions 11 – 13:Sun Corporation owns 60 percent of Moon Company’s voting shares. On January 1, 20X4, Moon sold bonds with a par value of $400,000 when the market rate was 6 percent. Sun purchased one-third of the bonds; the remainder was sold to nonaffiliates. The bonds mature in 15 years and pay an annual interest rate of 5 percent. Interest is paid semiannually on June 30 and December 31.Based on the information given above, what amount of interest income will Sun Corporation recognize on December 31, 20X5 relative to the interest received on that day, in its separate financial statements?A. $3,625B. $3,633C. $7,224D. $7,258

Q: When one company purchases the debt of an affiliate from an unrelated party, a gain or loss on the constructive retirement of debt is recognized by which of the following?

Q: The following options apply to Questions 37 45Each of the following questions names an item. Select the correct description of the item from this list. Indicate your selection by entering the letter of the description.Descriptionsa. Provides preliminary information to investors about an upcoming issue.b. Informs investors of an upcoming offering.c. Required annual filing to the SEC.d. Discloses unscheduled material events.e. Includes amendments to the Securities Act, additional disclosure requirements, and other current issues regarding accounting and auditing principles and standards.f. Results in a thorough examination by the SEC of a registration statement.g. Issued by the staff of the SEC and contains differences that must be corrected in a registration statement before the securities may be offered or sale.h. Quarterly report to SEC.i. Includes new or revised administrative practices and interpretations used in reviewing financial statements.j. Includes the results of actions taken against accountants or other participants because false or misleading statements were filed.k. Includes Regulations S-X and S-K.Form 8-K

Q: The following options apply to Questions 37 45Each of the following questions names an item. Select the correct description of the item from this list. Indicate your selection by entering the letter of the description.Descriptionsa. Provides preliminary information to investors about an upcoming issue.b. Informs investors of an upcoming offering.c. Required annual filing to the SEC.d. Discloses unscheduled material events.e. Includes amendments to the Securities Act, additional disclosure requirements, and other current issues regarding accounting and auditing principles and standards.f. Results in a thorough examination by the SEC of a registration statement.g. Issued by the staff of the SEC and contains differences that must be corrected in a registration statement before the securities may be offered or sale.h. Quarterly report to SEC.i. Includes new or revised administrative practices and interpretations used in reviewing financial statements.j. Includes the results of actions taken against accountants or other participants because false or misleading statements were filed.k. Includes Regulations S-X and S-K."Red Herring" Prospectus

Q: Which of the following is true about the Foreign Corrupt Practices Act of 1977 (FCPA)? I. Publicly held companies should maintain an adequate system of internal control. II. Individuals associated with U.S. companies are prohibited from bribing foreign officials for the purpose of securing a contract. III. Compensating or agents' fees are disallowed under all circumstances. A. I and II B. II and II C. I and III D. I, II, and III

Q: Proxy statements are: A. filed by an entity that acquires a beneficial ownership of more than 5 percent in a company. B. interim financial statements need not be audited. C. materials submitted to shareholders for votes on corporate matters. D. used to disclose unscheduled material events.

Q: Regulation D of the SEC presents important exemptions from full registration requirements for: A. private placements. B. issuances of securities by savings and loan associations. C. issuances of securities by common carriers regulated by the Interstate Commerce Commission. D. foreign companies.

Q: Which of the following types of securities or securities transactions are exempt from the need to be registered under the Securities Act of 1933? I. Commercial paper with a maturity of nine months or less. II. Intrastate issues in which the securities are offered and sold only within one state. III. Securities exchanged by an issuer exclusively with its existing shareholders with no commission charged. A. I and II B. II C. I, II, and III D. III