Examination card № 26

on the discipline “Financial Accounting II”

for the 3rd year students

1. Recognizing and measuring impairment losses. Explain two step process of goodwill impairment.

2. On December 31, 2011, the separate-company financial statements for Pan Corporation and its 70 percent-owned subsidiary, Sad Corporation, had the following account balances related to dividends (in thousands)

	Pan	Sad
Dividends for 2011	1200	800
Dividends payable at December 31,2011	600	200

Required:

1. At what amount will dividends be shown in the consolidated retained earnings statement?

2. At what amount should dividends payable be shown in the consolidated balance sheet?

3. Information from the financial statements of Ames Fabricators, Inc., included the following:

	December 31	December 31
	2013	2012
Common shares	100,000	100,000
Convertible preferred shares( convertible into 32,000 shares of common)	12,000	12,000
10% convertible bonds ( convertible into 30,000 shares of common)	1,000,000	1,000,000

Ames’s net income for the year ended December 31, 2013, is $500,000. The income tax

rate is 40%. Ames paid dividends of $5 per share on its preferred stock during 2013.

Required:

Compute basic and diluted earnings per share for the year ended December 31, 2013.

Lecturer A. Kaldarova ______________________

Confirmed at the meeting of the department of "Socio-Economic Disciplines"

Minute №____ from ____ of 2015.

The dean of the faculty "International Educational Programs"

Ronald Voogdt _____________

^{name signature}

Examination card № 27

on the discipline “Financial Accounting II”

for the 3rd year students

1. When does goodwill result from a business combination?

2. Listed below are several terms and phrases associated with current liabilities. Pair each item from List A (by letter) with the item from List B that is most appropriately associated with it.

List A.

1. Face amount ×Interest rate ×Time. a. Informal agreement

2. Payable with current assets.

3. Short-term debt to be refinanced with common stock.

4. Present value of interest plus present value of principal.

5. Noninterest-bearing.

6. Noncommitted line of credit.

7. Pledged accounts receivable.

8. Reclassification of debt.

9. Purchased by other corporations.

10. Expenses not yet paid.

11. Liability until refunded.

12. Applied against purchase price.

List B.

1. Secured loan

2. Refinancing prior to the issuance of the financial statements

3. Accounts payable

4. Accrued liabilities

5. Commercial paper

6. Current liabilities

7. Long-term liability

8. Usual valuation of liabilities

9. Interest on debt

10. Customer advances

11. Customer deposits

3. Pin Corporation paid $1,800,000 for a 90 percent interest in San Corporation on January 1, 2011; San’s total book value was $1,800,000. The excess was allocated as follows: $60,000 to undervalued equipment with a three-year remaining useful life and $140,000 to goodwill. The income statements of Pin and San for 2011 are summarized as follows (in thousands):

	Pin	San
Sales	4000	1600
Income from San	180
Cost of sale	(2000)	(800)
Depreciation expense	(400)	(240)
Other expense	(800)	(360)
Net income	980	200

Required:

1. Calculate the goodwill that should appear in the consolidated balance sheet of Pin and Subsidiary at December 31, 2011.

2. Calculate consolidated net income for 2011.

Lecturer A. Kaldarova ______________________