All of the following are typically recognized as accounting liabilities except: A

1. All of the following are typically recognized as accounting liabilities except:
   A. Rental Fees Received inAdvance
   B. Bonds Payable
   C. Taxes Payable
   D. Loan Guarantees

D. Loan Guarntees

2. What is the date on which a company incurs a legal liability to distribute the dividend to owners of the stock?

Date of Decleration

3. On January 1, 2012, Porter Corporation signed a five-year noncancelable lease for certain machinery. The terms of the lease called for: 1)Porter to make annual payments of $60,000 at the end of each year (starting on Dec. 31, 2012) for five years. Porter must return the equipment to the lessor end of this period. 2)The machinery has an estimated useful life of 6 years and no expected salvage value. 3)Porter uses the straight-line method of depreciation for all of its fixed assets. 4)Porter's incremental borrowing rate is 8%. 5)The fair value of the asset at January 1, 2012 is $275,000. For the year ended December 31, 2012, Porter should record depreciation expense for the leased equipment equal to

$47,912

4. Operating Lease Commitments at the end of 2012 Year Reported Lease Commitments 2013 $148,239 2014 $252,800 2015 $278,327 2016 $279,210 2017 $285,452 Beyond 2017 $2,471,600 Using the information provided by Santa Corporation estimate the average life of the operating leases.

13.66 years

5. A company issues bonds on Jan. 1 with a face value of $75,000,000 and receives $74,587,500 net of floatation costs. The bonds have a 8% coupon and pay interest annually Dec. 31. The term of the bond is 5 years. What is the effective interest rate on these bonds, and what is the liability the company would show on its books at Dec. 31 after the first interest payment?

Effective interest rate = 8.1% Bonds liability year end #1 = $74,657,620

6. Why would a company consider financing with "classic" preferred stock rather than debt?

Classic preferred stock is considered equity by the ratings agencies, and companies with credit ratings at risk can finance without impacting their debt ratios

7. Graham Corporation accounts for its investment in the common stock of Luke Company under the equity method. Graham Corporation should ordinarily record a cash dividend received from Luke as what?

A reduction of the carrying value of the investment

8. FASB has set forth all of the following conditions for recognizing transfers of receivables as sales only if the following conditions of surrendering control of the receivables are met except what?
   A. A creditor of the selling firm can access the receivables in the event of the seller's bankruptcy.
   B. The buying firm obtains the right to pledge or exchange the transferred assets, and no condition both constrains the transferee from taking advantage of its right and provides more than a trivial benefit to the transferor.
   C. The assets transferred have been isolated from the selling firm.
   D. The selling firm does not maintain effective control over the assets transferred through (a) an agreement that both entitles and obligates it to repurchase the assets or (b) the ability to unilaterally ca

A. A creditor of the selling firm can access the receivables in the event of the seller's bankruptcy.

9. What is the date on which a company determines the owners of the stock that will receive a dividend?

Date of record

10. Regarding accounting for troubled debt, which of the following statements is true?
    A. Because IFRS uses the present value approach to determine the magnitude of the settlement for troubled debt, the magnitude of the new book value of the restructured debt will be lower and the gain recognition will be larger under IFRS.
    B. U.S. GAAP uses a "10 percent rule" to determine whether a gain is recognized by the debtor in a troubled debt situation.
    C. The settlement of troubled debt results in an economic loss to the debtor because the creditor accepts more than the book value of the debt to settle the debt.
    D. The treatment for troubled debt is the same under both U.S. GAAP and IFRS.

A. Because IFRS uses the present value approach to determine the magnitude of the settlement for troubled debt, the magnitude of the new book value of the restructured debt will be lower and the gain recognition will be larger under IFRS