Multiple Choice Questions 29.Which of the following statements is correct? A. Revenue is recognized at the time of shipment when goods are shipped FOB destination. B. Sales returns and allowances are reported as operating expenses on an income statement. C. A seller records revenue when title and risks of ownership transfer to the buyer. D. Sales discounts are reported as cost of sales on an income statement. 30.Which of the following would be included in Latimer Company's sales in 2016? A. Goods shipped from a supplier in 2016 with terms of FOB shipping point. Latimer received the goods in 2016. […]

127.On January 1, 2016, Gordon Company purchased a patent for $420,000 from an inventor who had developed a new manufacturing process. At the time of the purchase, the patent had a remaining useful life of 10 years. Required: A. Prepare the journal entry to record Gordon's purchase of the patent. B. Prepare the journal entry to record amortization of the patent on December 31, 2016. C. At the end of 2019, after amortization had been recorded through December 31, 2019, Gordon concluded that the estimated future cash flows from the patent to be $250,000. The patent's estimated fair value on […]

81) Mike, a dealer in securities and calendar-year taxpayer, purchased a security for inventory on November 18, 2012 for $15,000. The FMV on December 31, 2012 was $16,000. The security was sold on December 19, 2013 for $16,500. These transactions result in A) $0 ordinary income in 2012; $1,500 ordinary income in 2013. B) $0 ordinary income in 2012; $1,500 LTCG in 2013. C) $1,000 ordinary income in 2012; $500 LTCG in 2013. D) $1,000 ordinary income in 2012; $500 ordinary income in 2013. 82) Kate subdivides land held as an investment and Section 1237 is satisfied. The lots sell […]

Multiple Choice Questions 32.When a company prepares a bond indenture, certain provisions of the bonds are included. Which of the following is not specified in the indenture? A. Date of each interest payment. B. The coupon interest rate. C. The maturity date. D. The market rate of interest. 33.Which of the following is the title of a regulatory document with regard to a bond offering? A. Certificate B. Covenant C. Indenture D. Prospectus 34.Which of the following types of bonds has specific assets pledged to guarantee repayment? A. Debenture bond. B. Callable bond. C. Secured bond. D. Convertible bond. 35.Which […]

9) Pane Corporation owns 100% of Alder Corporation, 85% of Ball Corporation, 70% of Cake Corporation, 40% of Dash Corporation, and 10% of Eager Corporation. All of these corporations are domestic corporations. Pane, Alder and Ball belong to an affiliated group. Pane's marginal income tax rate is 35%. All investees have paid out all their net income in the form of dividends. During 2011, Pane Corporation received the following cash dividends: From Alder:$180,000 From Ball:$170,000 From Cake:$160,000 From Dash:$100,000 From Eager:$ 60,000 Required: 1. Compute the amount of the dividend income that would be excluded from taxation under the current […]