Financial Accounting Ii
Question # 1
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Transaction costs that are directly attributable to the “issuance of new shares” should be: a. Expensed immediately b. Charged to retained earnings c. Deducted from equity d. Deducted from equity, net of related income tax benefit
ANSWER
D
Deducted from equity, net of related income tax benefit
Question # 2
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The following information pertains to Hopson Co.'s pension plan: Projected benefit obligation at 1/1/13 $72,000 Assumed discount rate 10% Service costs for 2013 $28,000 Pension benefits paid during 2013 $15,000 If no change in actuarial estimates occurred during 2013, Hopson's projected benefit obligation at December 31, 2013 was a. $74,200. b. $85,000. c. $90,200. d. $92,200.
Answer
D. $92,200
PBO, beginning Current service cost Interest cost (72,000 x 10%) Payment PBO, ending
$72,000 28,000 7,200 (15,000) $92,200
Question # 3
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What is the accounting for treasury shares? a. On repurchase of treasury shares, a gain or loss is recognized equal to the difference between the amount at which the shares were issued and the repurchase price for the shares. b. On
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Transaction costs that are directly attributable to the “issuance of new shares” should be: a. Expensed immediately b. Charged to retained earnings c. Deducted from equity d. Deducted from equity, net of related income tax benefit
ANSWER
D
Deducted from equity, net of related income tax benefit
Question # 2
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The following information pertains to Hopson Co.'s pension plan: Projected benefit obligation at 1/1/13 $72,000 Assumed discount rate 10% Service costs for 2013 $28,000 Pension benefits paid during 2013 $15,000 If no change in actuarial estimates occurred during 2013, Hopson's projected benefit obligation at December 31, 2013 was a. $74,200. b. $85,000. c. $90,200. d. $92,200.
Answer
D. $92,200
PBO, beginning Current service cost Interest cost (72,000 x 10%) Payment PBO, ending
$72,000 28,000 7,200 (15,000) $92,200
Question # 3
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What is the accounting for treasury shares? a. On repurchase of treasury shares, a gain or loss is recognized equal to the difference between the amount at which the shares were issued and the repurchase price for the shares. b. On