D. The seller's price to the buyer is fixed or determinable. Original AACSB: Analytic AICPA BB: Legal AICPA FN: Research Bloom's: Knowledge Difficulty: Medium 7-27 Chapter 07 - The Revenue and Collection Cycle 3. "Bill and Hold" refers to an arrangement where A. Sales are recorded but are not shipped. B.
It includes options and warrants as well as debt and stock. "(2) Participation rights – contractual rights of security holders to receive dividends or returns from the security issuer’s profits, cash flows, or returns on investments. " "(3) Preferred Stock – a security that has preferential rights compare to capital stock. " (C) What information about securities must companies disclose? Discuss how Hincapie should report the proposed preferred stock issue.
2. Participation Rights Contractual rights of security holders to receive dividends or returns from the security issuer’s profits, cash flows, or returns on investments. 3. Preferred Stock A security that has preferential rights compared to common stock. C. What information about securities must companies disclose?
ACC 548 Final Exam Answers 1. Under GASB rules for the financial reporting entity a. component units are included if the primary government is financially accountable for their operations B. counties are component units of the state government C. blended and discretely presented component units are to be reported in government-wide financial statements but not in fund financial statements D. component units must be reported in columns (discrete presentation) separate from the funds of a primary government 2. According to GASB Statement No. 44, all of the following is a recommendation category for the CAFR’s statistical section EXCEPT A. financial trends information B. debt capacity information C. comparative information D. operating
b. all noncurrent liabilities. c. current portions in current liabilities and the remainder in noncurrent liabilities. d. deferred credits. 48. To avoid leased asset capitalization, companies can devise lease agreements that fail to satisfy any of the four leasing criteria.
As assets but separately from other receivables. B. As offsets to capital. C. As trade notes and accounts receivable if they otherwise qualify as current assets. D. By means of footnotes only.
Since debt and equity levels are closely related there is an analysis called the “DuPont model” that systematically breaks ROE into components so that each can be evaluated. ROE = NI x EBT x EBIT x Sales x Total assets EBT EBIT Sales Total assets Common equity EBT = earnings before taxes. The first ratio measures the proportion of earnings before tax that is kept by the company. EBIT = earnings before interest and taxes. The second ratio measures the effect of interest; it indicates the proportion of earnings before interest and tax that is retained after paying interest.
Purchases of assets are characterized by the acquisition by the buyer of specified assets from an entity, which may or may not represent all or substantially all of its assets, and the assumption by the buyer of specified liabilities of the seller, which typically do not represent all of the liabilities of the seller. When the parties choose to structure an acquisition as an asset purchase, there are unique drafting and negotiating issues regarding the specification of which assets and liabilities are transferred to the buyer, as well as the representations, closing conditions, indemnification and other provisions essential to memorializing the bargain reached by the parties. There are also statutory (e.g., bulk sales and fraudulent transfer statutes) and common law issues (e.g., de facto merger and other successor liability theories) unique to asset purchase transactions that could result in an asset purchaser being held liable for liabilities of the seller which it did not agree to assume. These drafting and legal issues are dealt with from a United States (“U.S.”) law perspective in (1) the Model Asset Purchase Agreement with Commentary, which was published by the Mergers & Acquisitions Committee (formerly named the Negotiated Acquisitions Committee) (the “M&A Committee”) of the American Bar Association (“ABA”) in 2001 (the “Model Asset Purchase Agreement” or the “Model Agreement”); (2) the Revised Model Stock Purchase Agreement with Commentary, which was published by the M&A Committee in 2010 (the “Model Stock Purchase Agreement” or the “RMSPA”); and (3) the Model Public Company Merger Agreement with Commentary which was published by the M&A Committee in 2011 (the “Model Public Company Merger Agreement”). In recognition of how mergers and acquisitions (“M&A”) have
Running head: FAIR VALUE MEASUREMENTS Customer Inserts His/her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name Date Part 1 a) The three alternative accounting treatments for the classification of financial assets and for the recognition of gains and losses arising from changes in fair value permitted by FAS 115 Under FAS 115, fair value is defines as the price that can be received upon disposal or paid to transfer liability through a transaction between buyer and seller at the measurement date. The three alternative accounting treatments for classification of financial assets and for recognition of gains losses arising from changes in value and permitted FAS 115 are: i) Assets held to maturity All
Big Bear’s lease contract states that if Big Bear’s financial condition suffers a material adverse change, they would be in default. This is objectively determinable. The third condition is that predefined requirements that pertain solely to the lessee have been established which will determine if default has occurred. In Big Bear’s case the “material adverse change” is not predefined. Therefore the third condition has not been met and the penalty payment would be included in the minimum lease payment.