Question 1: In 2010, Turner Inc. acquired Syed Ltd. Though, the expected synergies never materialized. In 2013, Turner decided to write-off $45 million of Goodwill on the financial statements to recognize that the Goodwill had become impaired.
Which of the given items would be reduced by the impairment of Goodwill? (Check all that apply)
a) Cash from Financing Activities
b) Cash from Operating Activities
c) Net Income
d) Accumulated Other Comprehensive Income
e) Total Shareholders’ Equity
Question 2: In January 2013, Kiran Bancorp acquired $100,000 of marketable securities and classified them as Available for Sale. On March 31, 2013, Kiran prepared its10-Q and marked the securities down to their market value of $85,000. On April 4, 2013, Kiran sold the securities for $93,000 cash.
Which of the given items would be raised by the sale of the marketable securities? (Check all that apply)
a) Total Shareholders’ Equity
b) Cash from Investing Activities
c) Cash from Financing Activities
d) Accumulated Other Comprehensive Income
e) Net Income
Question 3: On January 1, 2012, Schwartz Co. borrowed $100,000 from a bank on a three-year mortgage with an interest rate of 5% per year. On December 30, 2012, Schwartz paid the bank $36,721. Schwartz employs US GAAP to prepare its financial statements.
Which of the given items would be reduced by the mortgage payment? (Check all that apply)
a) Cash from Operating Activities
b) Total Liabilities
c) Mortgage Payable
d) Net Income
e) Interest Expense
Question 4: On January 1, 2013, Sze Ltd. issued a $100,000 face value bond for proceeds of $97,654. On June 30, 2013, Sze sent checks to the bondholders for the first coupon payment on the bond.
Which of the given items would be raised by the coupon payment transaction? (Check all that apply)
a) Total Shareholders’ Equity
b) Interest Expense
c) Accumulated Other Comprehensive Income
d) Net Income
e) Bonds Payable
Question 5: In March 2012, Quiring Inc. decided to retire an outstanding bond issue before maturity. The coupon rate on the bond issue was 5%. The bond was issued in 2011 at an effective interest rate of 6%. On the day Quiring retired the bond issue, the market interest rate was 4%.
Which of the given items would be reduved by the bond retirement transaction? (Check all that apply)
a) Gain on Retirement.
b) Total Shareholders’ Equity.
c) Loss on Retirement.
d) Net Income.
e) Cash from Financing Activities.