2019 AICPA Newly Released Questions—Financial

FINANCIAL
2019 AICPA Newly
Released MCQs
and Sims

A
IF
Please note that the AICPA only provides MCQs and simulations
without answer explanations. At the time of this release, the
Becker-provided MCQ and Simulation answer explanations are
still in development. The full answer explanations will be
available in an upcoming course software update.
A

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 2019 AICPA Newly Released Questions—Financial

2019 AICPA Financial Newly Released MCQs—Medium (Moderate) Rating

1.
The objectives of financial reporting stem from which of the following sources?
A. The need for conservatism.
B. The needs of the external users of the information.
C. Reporting on management's consistency.
D. Reporting on management's stewardship.

The Item ID is used by the AICPA

Item ID: 47153
to track its questions.

Key: B The Key indicates the correct

answer for each question.

FAR.CSO.20190101:

A
FAR.001.001.001
This line indicates the Content Group, Topic and Subtopic
in the January 2019 (20190101) FAR Blueprint that is the
basis for each question. For example, FAR.001.001.001
means that the question comes from FAR Blueprint Area I
(001), Topic A. Conceptual framework and standard-
setting for business and nonbusiness entities (.001),
IF
Subtopic 1. Conceptual framework (.001).

This line indicates the Skill Level of

FAR.SSO.20190101: Remembering and Understanding:1 the question based on the January
2019 (20190101) FAR Blueprint.

2.
A company's year-end comparative statement of financial position reflects the following changes from the
prior year: cash increased by $40,000, total liabilities increased by $32,000, and all other assets
A
decreased by $65,000. Which of the following statements is correct regarding the current-year change in
the company's stockholders' equity?
A. It increased by $25,000.
B. It increased by $105,000.
C. It decreased by $32,000.
D. It decreased by $57,000.

Item ID: 50099

Key: D
FAR.CSO.20190101: FAR.001.002.001
FAR.SSO.20190101: Application:2

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 2019 AICPA Newly Released Questions—Financial

3.
Andro Co. has a $10 million note payable that is due three months after year end. The note payable was
refinanced when long-term bonds were issued one month after year end for $11 million. The December
31 financial statements were issued two months after year end.
How should Andro classify and disclose the note?
Classification of liability Note disclosure required
A. Current No
B. Current Yes
C. Noncurrent No
D. Noncurrent Yes

Item ID: 45431

Key: D
FAR.CSO.20190101: FAR.001.002.001
FAR.SSO.20190101: Application:2

4.

A
During the year, Granite Co. sold a building for $100,000 resulting in a gain of $20,000. The building has
a net book value of $80,000 at the time of the sale. Granite uses the indirect method when preparing its
statement of cash flows. What is the amount that would be included in Granite's financing activities
section because of the building sale?
A. $0
IF
B. $20,000
C. $80,000
D. $100,000

Item ID: 52467

Key: A
FAR.CSO.20190101: FAR.001.002.005
A
FAR.SSO.20190101: Application:2

5.
Which of the following conditions or events would least likely raise substantial doubt about an entity's
ability to continue as a going concern?
A. Default on a loan agreement.
B. Flood damage to an insured warehouse.
C. Loss of a significant customer or supplier.
D. Negative cash flows from operating activities.

Item ID: 86901

Key: B
FAR.CSO.20190101: FAR.001.002.009
FAR.SSO.20190101: Remembering and Understanding:1

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 2019 AICPA Newly Released Questions—Financial

6.
On January 1 of the current year, a corporation had 10,000 shares of common stock outstanding. On
March 30, the corporation issued 4,000 more shares of stock. There were no other changes in the
number of shares outstanding. What is the weighted average number of shares that should be used to
calculate basic earnings per share?
A. 10,000
B. 12,000
C. 13,000
D. 14,000

Item ID: 44227

Key: C
FAR.CSO.20190101: FAR.001.004.000
FAR.SSO.20190101: Application:2

A
7.
Star Corp. had the following accounts and balances in its general ledger as of December 31:

Petty cash $ 500

XYZ Bank - checking account 20,000
Marketable equity security 10,000
Marketable debt security 7,500
IF
ABC Bank - depository account 5,000

What amount should Star report as cash and cash equivalents in the balance sheet as of December 31?
A. $25,000
B. $25,500
C. $35,000
D. $42,500
A
Item ID: 52673
Key: B
FAR.CSO.20190101: FAR.002.001.000
FAR.SSO.20190101: Application:2

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 2019 AICPA Newly Released Questions—Financial

8.
Carver Co., a retailer, uses the perpetual inventory method. Carver uses the moving average method to
determine the value of its inventory. The following information relates to inventory transactions that took
place during the month of March:

3/1 Beginning inventory 30,000 units at $10

3/5 Purchase 10,000 units at $12
3/10 Sales at $20 per unit 20,000 units
3/20 Purchase 20,000 units at $13

What amount should Carver report as cost of goods sold on its income statement at the end of March?
A. $200,000
B. $210,000
C. $240,000
D. $260,000

Item ID:
Key:
FAR.CSO.20190101:
FAR.SSO.20190101:

9.
A42817
B
FAR.002.003.000
Application:2
IF
For an available-for-sale security transferred into the trading category, the portion of the unrealized
holding gain or loss at the date of the transfer that has not been previously recognized in earnings shall
be:
A. Recognized in earnings immediately.
B. Amortized over the period to date of sale.
C. Transferred to other comprehensive earnings.
D. Deferred and recognized when the security is sold.
A
Item ID: 52731
Key: A
FAR.CSO.20190101: FAR.002.005.001
FAR.SSO.20190101: Remembering and Understanding:1

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 2019 AICPA Newly Released Questions—Financial

10.
At what value should a nongovernmental not-for-profit organization record shares of stock when
received?
A. Donor's basis.
B. Average of donor's basis and fair value on date of donation.
C. Fair value at end-of-year.
D. Fair value on the date of donation.

Item ID: 43329

Key: D
FAR.CSO.20190101: FAR.002.005.001
FAR.SSO.20190101: Remembering and Understanding:1

11.
A company issued bonds with detachable common stock warrants. The issue price exceeded the sum of

A
the warrants' fair value and face value of the bonds. The fair value of the bonds cannot be determined.
What value, if any, should be assigned to the warrants?
A. The excess of the proceeds over the face value of the bonds.
B. The proportion of the proceeds that the warrants' fair value bears to the face value of the bonds.
C. The fair value of the warrants.
D. No amount, because the total proceeds should be assigned to the bonds.
IF
Item ID: 47159
Key: C
FAR.CSO.20190101: FAR.002.008.001
FAR.SSO.20190101: Remembering and Understanding:1

12.
A company provides a defined benefit pension plan for all of its employees. The fair value of the plan
A
assets at year-end is $45,000,000. The values of the accumulated benefit obligation and projected benefit
obligation at year end are $46,000,000 and $60,000,000, respectively. The company expects to make
benefit payments totaling $2,000,000 next year. What amount should the company report in the year-end
financial statements as a liability in connection with the defined benefit pension plan?
A. $17,000,000
B. $15,000,000
C. $3,000,000
D. $1,000,000

Item ID: 47709

Key: B
FAR.CSO.20190101: FAR.002.011.002
FAR.SSO.20190101: Application:2

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 2019 AICPA Newly Released Questions—Financial

13.
In Year 1, a company purchased equipment that cost $70,000. The equipment has a useful life of seven
years and no salvage value. The company used the straight-line method to depreciate the equipment and
reported $10,000 of depreciation expense in Years 1 and 2. At the beginning of Year 3, the company
determines that the equipment will last for only three more years (five years total) and changes the
depreciable life of the asset accordingly. What amount of depreciation expense should the company
report in Year 3?
A. $10,000
B. $14,000
C. $16,667
D. $22,000

Item ID: 46941

Key: C
FAR.CSO.20190101: FAR.003.001.000
FAR.SSO.20190101: Application:2

14.

A
Grey Co. purchased stock in Cherry Co. Grey purchased a put option on the stock. The strike price is the
current market price. What is the most likely reason Grey purchased the put option?
A. Cherry stock has remained flat, and Grey believes the stock is going to remain at its original
purchase price.
IF
B. Cherry stock has increased in price, and Grey believes the stock is going to continue to increase in
price.
C. Cherry stock has decreased in price, but Grey believes the stock is going to increase in price.
D. Cherry stock has increased in price, but Grey is concerned that the price might decrease.

Item ID: 46169

Key: D
FAR.CSO.20190101: FAR.003.004.000
A
FAR.SSO.20190101: Remembering and Understanding:1

15.
On December 15, a U.S. company bought inventory from a European supplier. Payment is required in
euros in 30 days. What exchange rate should be used to value the payable for this transaction at year
end?
A. Exchange rate at settlement date.
B. Exchange rate at purchase date.
C. Exchange rate at year end.
D. Weighted-average exchange rate for the year.

Item ID: 45829

Key: C
FAR.CSO.20190101: FAR.003.005.000
FAR.SSO.20190101: Remembering and Understanding:1

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 2019 AICPA Newly Released Questions—Financial

16.
A company has an equity investment with a historical cost of $500,000 that is traded in an active market.
At December 31, Year 1, the quoted price for an identical investment was $400,000 and the quoted price
for a similar investment was $430,000. Using the company's internal present value of cash flows model,
the company arrived at a value of $410,000. What amount is the value of the investment on December
31, Year 1?
A. $400,000
B. $410,000
C. $430,000
D. $500,000

Item ID: 48751

Key: A
FAR.CSO.20190101: FAR.003.011.000
FAR.SSO.20190101: Application:2

A
17.
A company is working on a direct response advertising campaign that will likely provide the company
future benefits in the form of increased sales over the next two years. The company identified the
following costs associated with the advertising campaign:

Catalogs on hand to be mailed to potential customers $100,000

IF
Coupons printed to be mailed to existing customers 50,000
Employee salaries for call center support 45,000
Postage to be paid to mail the catalogs and coupons 25,000

What cost, if any, should be capitalized under IFRS?

A. $220,000
B. $150,000
C. $100,000
A
D. $0

Item ID: 54499

Key: D
FAR.CSO.20190101: FAR.003.012.000
FAR.SSO.20190101: Application:2

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 2019 AICPA Newly Released Questions—Financial

18.
Which of the following funds of a governmental unit uses the same basis of accounting as the special
revenue fund?
A. Internal service.
B. Capital projects.
C. Nonexpendable trust.
D. Enterprise.

Item ID: 41759

Key: B
FAR.CSO.20190101: FAR.004.001.002
FAR.SSO.20190101: Remembering and Understanding:1

19.
A city had to make significant repairs to a building damaged by flooding of a nearby river. Damage due to

A
flooding is not unusual, but has been infrequent in the last few years. How should the city's general fund
report the cost of the repairs in its fund financial statements?
A. As an expenditure.
B. As an other financing use.
C. As a special item.
D. As an extraordinary item.
IF
Item ID: 43759
Key: A
FAR.CSO.20190101: FAR.004.002.002
FAR.SSO.20190101: Application:2
A

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 2019 AICPA Newly Released Questions—Financial

2019 AICPA Financial Newly Released MCQs—Difficult (Hard) Rating

20.
A company that uses the accrual method of accounting started the fiscal year with assets of $600,000
and liabilities of $400,000. During the fiscal year the company recorded credit sales of $250,000, of which
$8,000 remained to be collected at year end, and incurred expenses of $90,000, of which $72,000 was
paid in cash. A stock dividend valued at $10,000 was declared and issued to stockholders during the
year. What is the year-end balance of total equity?
A. $350,000
B. $360,000
C. $370,000
D. $380,000

Item ID: 75086

Key: B

A
FAR.CSO.20190101: FAR.001.002.004
FAR.SSO.20190101: Application:2

21.
Which of the following costs should a nongovernmental not-for-profit organization report as a supporting
service expense?
IF
A. Salary paid to a program director.
B. Cost for the annual fund-raising dinner.
C. Printing cost incurred to create educational fliers on the prevention of illness.
D. Cost incurred to advertise the programs of the organization.

Item ID: 43561

Key: B
FAR.CSO.20190101: FAR.001.003.002
A
FAR.SSO.20190101: Remembering and Understanding:1

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 2019 AICPA Newly Released Questions—Financial

22.
ABC Co. is a public company that is required to file financial reports with the United States Securities and
Exchange Commission (SEC). ABC acquired a significant related business, Bauer Co., through the
registration and issuance of additional shares of common stock to the former stockholders of Bauer.
Which of the following forms should ABC file with the SEC as a result of the acquisition of Bauer?
A. Form 8-K.
B. Form 10-K.
C. Form 10-Q.
D. Form S-1.

Item ID: 49705

Key: A
FAR.CSO.20190101: FAR.001.004.000
FAR.SSO.20190101: Remembering and Understanding:1

A
23.
A U.S. publicly traded company's second fiscal quarter ends on March 31. If the company is an
accelerated filer, what is the latest date that the 10-Q should be filed with the U.S. SEC?
A. May 10.
B. May 15.
C. May 30.
IF
D. June 29.

Item ID: 82002

Key: A
FAR.CSO.20190101: FAR.001.004.000
FAR.SSO.20190101: Remembering and Understanding:1

24.
A
What are the two required financial statements of a defined contribution retirement plan?
A. A statement of financial position and a statement of activities.
B. A statement of fiduciary net assets and a statement of changes in fiduciary net assets.
C. A statement of net assets available for benefits of the plan and a statement of changes in fiduciary
net assets.
D. A statement of net assets available for benefits of the plan and a statement of changes in net
assets available for benefits.

Item ID: 77650

Key: D
FAR.CSO.20190101: FAR.001.005.000
FAR.SSO.20190101: Remembering and Understanding:1

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 2019 AICPA Newly Released Questions—Financial

25.
A defined benefit pension plan had the following activity during the fiscal year:

Dividends and interest received $ 92,000

Contributions received from employers and employees 340,000

Administrative expenses 45,400

Investments purchased 155,000

Increase in fair value of investments at year end 36,750

What should be reported as the total additions in the pension plan's statement of changes in net assets
available for benefits?
A. $313,750
B. $423,350

A
C. $432,000
D. $468,750

Item ID: 89078

Key: D
FAR.CSO.20190101: FAR.001.005.000
IF
FAR.SSO.20190101: Application:2
A

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 2019 AICPA Newly Released Questions—Financial

26.
On December 31, a company has the following bank accounts and corresponding cash balances:

California Bank
Operating – Summit Ridge ($400,000)
Operating – Bakersville 300,000
Operating – Smithville 50,000
Savings 500,000

Sedona Bank
Checking ($375,000)

How should the company report the above bank account balances in the balance sheet at December 31?
A. Cash of $75,000.
B. Cash of $450,000 and a liability of $375,000.

A
C. Cash of $850,000 and a liability of $775,000.
D. Cash of $800,000 and a liability of $725,000.

Item ID: 48031

Key: B
FAR.CSO.20190101: FAR.002.001.000
FAR.SSO.20190101: Application:2
IF
27.
A company manufactured 1,000 units of product during the year and sold 800 units. Costs incurred during
the current year are as follows:

Direct materials and direct labor $7,000

Indirect materials and indirect labor 2,000

A
Insurance on manufacturing equipment 3,000

Advertising 1,000

What amount should be reported as inventory in the company's year-end balance sheet?
A. $1,400
B. $1,800
C. $2,600
D. $2,400

Item ID: 79178

Key: D
FAR.CSO.20190101: FAR.002.003.000
FAR.SSO.20190101: Application:2

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 2019 AICPA Newly Released Questions—Financial

28.
Fountain Co. is constructing an office building for its own use. Fountain started the two-year construction
project on April 1, Year 1, at which point the interest capitalization period began. Fountain made the
following payments in Year 1 related to the construction of the building:

April 1 Payment to architect for building plans $ 30,000

July 1 Progress payment to contractor 60,000
October 1 Progress payment to contractor 150,000

For the purpose of capitalizing interest, what is Fountain's weighted average accumulated expenditures
for the year ended December 31, Year 1?
A. $80,000
B. $105,000
C. $120,000
D. $240,000

A
Item ID: 49535
Key: C
FAR.CSO.20190101: FAR.002.004.000
FAR.SSO.20190101: Application:2

29.
IF
A corporation recently issued $4 million of 10-year, 3% bonds at 101. There were 200,000 detachable
stock warrants included as part of the sale. Each warrant allows the bondholder to purchase one share of
no par common stock for $12 per share. On the date of issuance, the stock warrants had a fair value of
$1 per warrant. By what amount did the corporation's long-term debt increase as a result of this
issuance?
A. $3,840,000
B. $4,000,000
C. $4,040,000
A
D. $4,200,000

Item ID: 52201

Key: A
FAR.CSO.20190101: FAR.002.008.001
FAR.SSO.20190101: Application:2

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 2019 AICPA Newly Released Questions—Financial

30.
On January 1, Year 1, a company grants 5,000 nonqualified stock options to an employee with a strike
price of $3 per option and fair value of $8 per option. All of the options vest at the end of five years from
the grant date. At the end of Year 1, the company's stock price was $10 per share. What amount of
annual stock compensation cost should the company report for Year 1?
A. $0
B. $3,000
C. $5,000
D. $8,000

Item ID: 48277

Key: D
FAR.CSO.20190101: FAR.002.011.003
FAR.SSO.20190101: Application:2

A
31.
On December 31, Year 1, a publicly traded entity identified a tax position that will result in a $100,000 tax
benefit that qualifies for measurement and should be recognized. The entity has considered the amounts
and possible outcomes of the position being sustained upon examination as follows:

Possible Individual Cumulative

estimated probability of probability of
outcome occurring occurring
IF
$100,000 20% 20%
30,000 35% 55%
10,000 45% 100%
100%

What amount should be recognized as the tax benefit as of December 31, Year 1?
A. $0
B. $10,000
A
C. $30,000
D. $100,000

Item ID: 88259

Key: C
FAR.CSO.20190101: FAR.002.012.000
FAR.SSO.20190101: Application:2

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 2019 AICPA Newly Released Questions—Financial

32.
Paxton Co. signed contracts for the purchase of raw materials to be executed the following year at a firm
price of $5 million. The market price of the materials dropped to $3 million on December 31. What amount
should Paxton record as an estimated liability on purchase commitments as of December 31?
A. $5,000,000
B. $3,000,000
C. $2,000,000
D. $0

Item ID: 45717

Key: C
FAR.CSO.20190101: FAR.003.003.000
FAR.SSO.20190101: Application:2

33.

A
Which of the following costs should not be included in research and development?
A. Facility costs.
B. Personnel costs.
C. Administrative costs.
D. Indirect costs.
IF
Item ID: 44021
Key: C
FAR.CSO.20190101: FAR.003.008.000
FAR.SSO.20190101: Remembering and Understanding:1

34.
A company performing its long-lived asset impairment testing is reviewing the fair value of equipment.
Each of the following valuation techniques may be appropriate for measuring the fair value of the
A
equipment, except the:
A. Market approach.
B. Income approach.
C. Cost approach.
D. Net realizable value approach.

Item ID: 47617

Key: D
FAR.CSO.20190101: FAR.003.011.000
FAR.SSO.20190101: Remembering and Understanding:1

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 2019 AICPA Newly Released Questions—Financial

35.
A company owns a financial asset that has no principal market. The financial asset is actively traded in
four markets and the company has the ability to transact in all four of these markets. The following are the
quoted prices for the financial asset in each of the four markets:

Market Quoted Price

A $20,000
B 25,000
C 30,000
D 35,000

What is the fair value of the financial asset?

A. $20,000
B. $25,000
C. $27,500

A
D. $35,000

Item ID: 49455

Key: D
FAR.CSO.20190101: FAR.003.011.000
FAR.SSO.20190101: Application:2
IF
36.
A company owns land and a building that houses its manufacturing operations. When the company
purchased the manufacturing facility 10 years ago, the purchase price allocated to the land account was
$120,000. The manufacturing facility is located in an area that was once the site of many factories. The
owners of many of the neighboring factories have recently sold their facilities to residential real estate
developers. The company's land is also suitable for residential development. The estimated current value
of the land as part of the manufacturing facility is $150,000. The estimated current value of the land as an
undeveloped investment is $130,000, and the current value of the land as part of a residential
development would be $180,000. What is the fair value of the land?
A
A. $120,000
B. $130,000
C. $150,000
D. $180,000

Item ID: 47725

Key: D
FAR.CSO.20190101: FAR.003.011.000
FAR.SSO.20190101: Application:2

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 2019 AICPA Newly Released Questions—Financial

37.
A city government levies a tax on its citizens for improvements to roads. How should the city report the
tax in its statement of activities?
A. By type of tax in general revenues.
B. By type of tax in program revenues.
C. As program-specific contributions in program revenues.
D. In special items reported separately from general revenue.

Item ID: 79466

Key: A
FAR.CSO.20190101: FAR.004.002.001
FAR.SSO.20190101: Remembering and Understanding:1

38.
Which of the following is a minimum required report for the basic financial statements of a government

A
entity?
A. Fund financial statements.
B. Management's discussion and analysis.
C. Required supplementary information.
D. Budgetary comparison schedules.
IF
Item ID: 52383
Key: A
FAR.CSO.20190101: FAR.004.002.001
FAR.SSO.20190101: Remembering and Understanding:1
A

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Item: 500366

Scroll down to complete all parts of this task.

A wholesale company, Birch Corp., is preparing financial statements as of and for the year ended December 31, year 5. You have been asked
to review the unadjusted inventory subledger and determine the necessary adjustments, if any, to properly report the inventory balance as of
December 31, year 5, using the information in the exhibits above. The company's purchase and sales terms are f.o.b. destination.

To arrive at the adjusted inventory balance:

• Click in the cells in column A and select the appropriate description of the required adjustment. A description may be used once or not at
all.
• In the cell in column B, enter the corresponding amount of the adjustment.
• Enter additions to the inventory balance as positive whole values, and deductions from the inventory balance as negative whole values.
• Not all rows might be required to determine the adjusted inventory balance.

A B

A
1 Amount

2 Unadjusted balance per inventory subledger – 12/31/year 5 $140,800

Inventory returned to a vendor but not removed from the

3 ($2,500)
subledger

4 Inventory recorded in the subledger but not received from ($300)

a vendor
IF
5 Inventory shipped on consignment $10,000

6 Customer returns received but not recorded in the subledger $15,000

7 Damaged inventory ($2,000)

Customer f.o.b. destination shipment removed from the

8 $40,000
subledger before delivery

10 Adjusted balance per inventory subledger – 12/31/year 5 $201,000

A
-- Option List Details --
• Customer f.o.b. destination shipment removed from the subledger before delivery
• Customer f.o.b. shipping point shipment included in the subledger after delivery
• Customer returns received but not recorded in the subledger
• Customer returns recorded in the subledger but not received
• Damaged inventory
• Inventory received from a vendor but not recorded in the subledger
List
• Inventory received on consignment
• Inventory recorded in the subledger but not received from a vendor
• Inventory removed from the subledger but not returned to a vendor
• Inventory returned to a vendor but not removed from the subledger
• Inventory shipped on consignment

END OF CONTENT - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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Exhibits Information

Exhibits included in this item 1. Inventory subledger detail (unadjusted)

2. Email regarding keyboard returns
3. Email regarding consignment shipment
4. Packing slip from Computer Co.
5. Receiving report detail
6. Email regarding motherboard cycle count
7. Email regarding delivery of 250 tablets

A
IF
A

Registered to Andy Lee (#376536)

Exhibit for Item: 500366
Exhibit 1: Inventory subledger detail (unadjusted)

Birch Corp.
Inventory Subledger Detail (Unadjusted)
for the period December 1, year 5, to January 3, year 6

Transaction Item Item Extended

date number description Unit cost Quantity Transaction type cost

11/30/year 5
balance 133,000

computer
12/1/year 5 002344 wires 25.00 1,000 Purchase 25,000

17-inch
12/3/year 5 002350 monitors 300.00 50 Sale - order #1106 (15,000)

12/5/year 5 002225 keyboards 25.00 100 Purchase 2,500

A
12/10/year 5 002345 cords 15.00 100 Purchase 1,500

12/16/year 5 002108 laptop cases 25.00 250 Purchase 6,250

computer
12/20/year 5 002368 chargers 30.00 100 Purchase 3,000

12/21/year 5 002100 mouse pads 10.00 45 Sale - order #1107 (450)

IF
12/22/year 5 002111 printer parts 87.50 400 Purchase 35,000

12/26/year 5 002458 tablets 160.00 250 Sale - order #1108 (40,000)

12/28/year 5 002122 laptops 1,000.00 10 Sale - order #1109 (10,000)

12/31/year 5
balance 140,800

computer
1/3/year 6 002368 chargers 10.00 30 Purchase 300
A
1/3/year 6 balance 141,100

Registered to Andy Lee (#376536)

Exhibit for Item: 500366
Exhibit 2: Email regarding keyboard returns

From: [email protected]
To: [email protected]
Date: December 12, year 5
Subject: FW: Keyboards

Accounts Payable:

We received a credit memo today from Hall Co. for the keyboards that we returned last week. Please process this credit.

Thanks,

Purchasing Manager
Birch Corp.
P: 413.567.5211
[email protected]

From: [email protected]
To: [email protected]

A
Cc: [email protected]
Date: December 5, year 5
Subject: Keyboards

Purchasing Manager:

Today we received a shipment of 100 keyboards (item #002225) from Hall Co. Upon inspection, we determined that they were not
the correct keyboards, and we plan to return them tomorrow.
IF
Thanks,

Warehouse Manager
Birch Corp.
P: 413.567.6525
[email protected]
A

Registered to Andy Lee (#376536)

Exhibit for Item: 500366
Exhibit 3: Email regarding consignment shipment

From: [email protected]
To: [email protected]
Date: December 28, year 5
Subject: FW: Consignment shipment

Controller,

Based on the message below regarding the shipment of consigned goods with an inventory cost of $10,000 to Triangle Computer, I
have recognized $13,000 of revenue for this shipment for the year ended December 31, year 5 (order #1109).

Thanks,

Senior Accountant
Birch Corp.
P: 413.567.2020
[email protected]

From: [email protected]

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To: [email protected]
Cc: [email protected]
Date: December 28, year 5
Subject: Consignment shipment

Store Manager:

Today we shipped 10 laptops (item #002122) for you to sell on consignment at a price of $1,300 per laptop. According to the terms
IF
of our consignment agreement, you are entitled to a 10% commission on the laptops that you sell through February 28, year 6.

The shipment is scheduled to arrive on December 31, year 5.

Thanks,

Sales Manager
Birch Corp.
P: 413.567.2461
[email protected]
A

Registered to Andy Lee (#376536)

Exhibit for Item: 500366
Exhibit 4: Packing slip from Computer Co.

Computer Co. Packing Slip

123 Main Street DATE December 7, year 5

New York, NY 12345
Phone: 212-456-7890 CUSTOMER ID 1234578

Received
Received date: 12/10/year 5
Received by: Receiving dept. manager

Bill To Ship To

Birch Corp. Birch Corp.

45 Yard Street 45 Yard Street

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Springfield, MA 56789 Springfield, MA 56789

Order Date Purchase Order # Customer

Contact

11/30/year 5 121212 Purchasing Dept.

Item # Description Order Qty Ship Qty

IF
002345 Cords 100 80

Total: 100 80

Comments:

The remaining 20 cords are on backorder. We expect to ship the cords on December
29, year 5. We expect the common carrier to deliver them to your warehouse on or
A
about January 15, year 6.

Thank You for Your Business!

Registered to Andy Lee (#376536)

Exhibit for Item: 500366
Exhibit 5: Receiving report detail

Birch Corp.
Receiving Report Detail
for the period December 1, year 5, to January 3, year 6

Received Item Item Transaction

Receipt date from number description Quantity type

12/1/year 5 Lap Corp. 002344 computer wires 1,000 Purchase

12/5/year 5 Hall Co. 002225 keyboards 100 Purchase

12/10/year 5 Computer Co. 002345 cords 80 Purchase

12/16/year 5 Oak Co. 002108 laptop cases 250 Purchase

Gray computer
12/20/year 5 Computers 002368 chargers 100 Purchase

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12/22/year 5 Print Co. 002111 printer parts 400 Purchase

Customer return
12/29/year 5 Square Corp. 002350 17-inch monitors 50 (order # 1106)

Circle computer
1/3/year 6 Computers 002368 chargers 30 Purchase
IF
A

Registered to Andy Lee (#376536)

Exhibit for Item: 500366
Exhibit 6: Email regarding motherboard cycle count

From: [email protected]
To: [email protected]; [email protected]
Date: December 15, year 5
Subject: Motherboard Cycle Count

Controller and Senior Accountant:

During our December, year 5, cycle count, 10 motherboards (item #002045) from Jones Computers were identified as having
sustained significant water damage due to a leak in the roof of our warehouse. These items were purchased in November, year 5,
at a cost of $200 each. We discarded the inventory immediately following the cycle count.

Thanks,

Warehouse Manager
Birch Corp.
P: 413.567.6525
[email protected]

A
IF
A

Registered to Andy Lee (#376536)

Exhibit for Item: 500366
Exhibit 7: Email regarding delivery of 250 tablets

From: [email protected]
To: [email protected]
Date: January 5, year 6
Subject: Delivery of 250 tablets (Item #002458)

Controller:

I’ve just heard from Bench Computers that order #1108 was shipped f.o.b. destination on December 26, year 5, but was not
received until today.

Will this $60,000 sale of 250 tablets be counted toward my year 5 sales quota? I hope that future shipments will be more timely to
ensure the retention of important customers such as Bench Computers.

Thanks,

Sales Manager
Birch Corp.
P: 413.567.2461

A
[email protected]
IF
A

Registered to Andy Lee (#376536)

Blueprint Information

CSO: FAR.002.003.000

Skill: Analysis

Representative Task: Reconcile and investigate differences between the subledger

and general ledger for inventory to determine whether an adjustment is necessary

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IF
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Registered to Andy Lee (#376536)

 Item: 500627

Super Insurance Co. sells whole-life insurance contracts to policyholders. The contracts are long-
duration life insurance contracts. The company normally maintains its original assumptions concerning
the contracts; however, recent experience indicates that the contract liabilities and future premiums
might not be sufficient to cover future benefits to policyholders. Which section of the authoritative
guidance best outlines how the company will recognize any premium deficiency?

Enter your response in the answer fields below. Unless specifically requested, your response should
not cite implementation guidance. Guidance on correctly structuring your response appears above
and below the answer fields.

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Exhibits Information

There are no exhibits for this item.

Registered to Andy Lee (#376536)

Blueprint Information

CSO: FAR.002.007.000

Skill: Application

Note: There are no specific representative tasks associated with research prompts.

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Registered to Andy Lee (#376536)

Item: 503853

Scroll down to complete all parts of this task.

For each of the following independent situations, enter the requested amounts in the associated cells.
Record costs and gains as positive values and losses as negative values.

Situation 1:

On December 31, year 1, JM Co. exchanged a used machine for a new machine from DP, Inc. The
used machine had a book value of $100,000 ($120,000 cost minus $20,000 accumulated depreciation)
and a fair value of $90,000. The new machine had a list price of $150,000, and DP gave JM a trade-in
allowance of $105,000, with the difference paid in cash. The exchange has commercial substance.

A A

Question

2 How much should JM record as the cost of the new machine in year 1?
B

Amount

135,000
IF
3 How much should JM record as a gain (loss), if any, in year 1? (10,000)

Situation 2:

On December 1, year 1, AB Inc. exchanged a used truck for a new truck from LL Co. The used truck
had a book value of $57,500 ($75,000 cost minus $17,500 accumulated depreciation) and a fair value
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of $60,000. In addition to the exchange of the used truck, AB paid LL $8,000. The exchange has
commercial substance.

A B

1 Question Amount

2 How much should AB record as the cost of the new truck in year 1? 68,000

3 How much should AB record as a gain (loss), if any, in year 1? 2,500

Registered to Andy Lee (#376536)

Situation 3:

On July 1, year 1, DDC Co. exchanged a used crane for a new crane with ZN Corp. The used crane
had a book value of $120,000 ($225,000 cost minus $105,000 accumulated depreciation) and a fair
value of $125,000. The fair value of the new crane is $110,000. In addition to the exchange of the used
crane, ZN paid DDC $15,000. The exchange lacks commercial substance.

A B

1 Question Amount

2 How much should DDC record as the cost of the new crane in year 1? 105,600

3 How much should DDC record as a gain (loss), if any, in year 1? 600

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Exhibits Information
There are no exhibits for this item.

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IF
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Registered to Andy Lee (#376536)

Blueprint Information

CSO: FAR.002.004.000

Skill: Application

Representative Task: Calculate the amounts necessary to prepare journal entries to

record a nonmonetary exchange

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IF
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Registered to Andy Lee (#376536)

Task 500230_Stem and Table 01- HD

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Registered to Andy Lee (#376536)

Task 500230_Table 02 – 03 HD

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Registered to Andy Lee (#376536)

Task 500230_Table 04 - 05 HD

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Registered to Andy Lee (#376536)

Task 500230

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Registered to Andy Lee (#376536)

Exhibits Information

Exhibits included in this item 1. Foreign Currency Exchange Rates

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IF
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Registered to Andy Lee (#376536)

Exhibit for Item: 500230

Exhibit 1: Foreign Currency Exchange Rates

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IF
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Registered to Andy Lee (#376536)

Blueprint Information

CSO: FAR.003.005.000

Skill: Application

Representative Task: Calculate transaction gains or losses recognized from monetary

transactions denominated in a foreign currency

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IF
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Registered to Andy Lee (#376536)