acct 450 ch2

vi) Goodwill- The beginning balance for Goodwill was determined by finding the difference between Total Assets and Total Liabilities at the beginning . Goodwill accounts for all the intangible assets that were transferred from the old company to the new company, including brand name, as well as a premium paid for the company. Goodwill was not amortized in this model.

2. What would be the impact on Blockbuster's 1988 earnings per share if 5 amortization were applied to this goodwill?

The fourth pair of columns on a 10-column work sheet prepared at the end of the period would be the

6. Note 8 states Harnischfeger’s allowance for doubtful accounts. Compute the ratio of the allowance to gross receivables (receivables before the allowance) in 1983 and 1984. What would the allowance have been if the company maintained the ratio at the 1983 level? How much did the pre-tax income increase as a result of the changed ratio in 1984?

6. Note 8 states Harnischfeger’s allowance for doubtful accounts.  Compute the ratio of the allowance to gross receivables (receivables before the allowance) in 1983 and 1984.  What would the allowance have been if the company maintained the ratio at the 1983 level?  How much did the pre-tax

10. Complete the following table to show how Six Flags’ 2008 balance sheet would change if it fully impaired its goodwill. Ignore income tax effects. Classify “Redeemable Minority Interest” and “Mandatorily Redeemable Preferred Stock” as liabilities.

Operating cash flow was not enough to cover capital investments (this firm does not to appear to pay dividends as it does not show in the prior 3 years). The firm is financing it operations from the issuance of common stock. $23,082 was raised during the period, which is covering its investments in capital expenditures.

1. A company’s ending accounts receivable balance and the period’s advertising expense would be found on which financial statements, respectively

2. For the most recent year, what is the amount of inventory in the balance sheet? What does this amount represent?

The ledger of Wainwright Company at the end of the current year shows Accounts Receivable $78,000; Credit Sales $810,000; and Sales Returns and Allowances $40,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

f) To evaluate the material misstatement in the accounts, I think both of the consolidated income statement and the three financial statements are useful. We need to use the information properly from all the financial statements. However the consolidated income statement is the most useful one. If there is a significant change in an account balance comparing with preceding two years, the auditor will examine whether there a material misstatement exists. For instance, the bad debt expense as a percent of net sales in 2011, 2010 and 2009 are 0.56%, 0.70% and 0.69%, respectively. There should

ii. What percentage of the total (gross) assets acquired in the NDS acquisition (excluding liabilities assumed) are comprised of goodwill and other intangibles?

Many states view collecting use tax on smaller purchases as burdensome, therefore states have customarily attempted to collect a use tax only on big-ticket items that require licenses—such as cars and boats. Many states over the last several years are increasing enforcement efforts of the use tax laws to get the state population to pay the taxes due in an attempt to combat internet ordering. The realities of limited resources as well as the complexities involved with tracking down minor purchases and demanding that a use tax be paid are limiting the collection efforts.

Compute Jack and Amy’s child tax credit for 2011 and indicate what portion is refundable.

- A firm has a market value equal to its book value. Currently, the firm has excess cash of $1,200 and other assets of $10,800. Equity is worth $12,000. The firm has 750 shares of stock outstanding and net income of $775. What will the new earnings per share be if the firm uses its excess cash to complete a stock repurchase?