ACCT 310 Exam

Part 1 (a) True. (b) False General-purpose financial reports helps users who lack the ability to demand all the financial information they need from an entity and therefore must rely, at least partly, on the information in financial reports. (c) False Standard-setting that is based on personal conceptual frameworks will lead to different conclusions about identical or similar issues. Another, and past decisions may not be indicative of future ones. (d) False Information that is decision-useful to capital providers may also be useful to users of financial reporting who are not capital providers. (e) False An implicit assumption is that users need reasonable knowledge of business and financial accounting matters to understand the information contained in the financial statements. (f) True.  Part 2 (a) False The fundamental qualitative characteristics that make accounting information useful are relevance and faithful representation. (b) False Relevant information must also be material. (c) False Information that is relevant is characterized as having predictive or confirmatory value. (d) False Comparability also refers to comparisons of a firm over time (consistency). (e) False Enhancing characteristics relate to both relevance and faithful representation. (f) True.  Part 3 Years 1-5 30,000900039,000 39, 000(3.60478)(140,586.42) Years 6-10 60,000-30,000-12,00018,000 18, 000(5.65022-3.60478) 36,817.92 Years 11-30 110,000-30,000-12,00068,000 68,000(8.24378-8.05518)12,824.80 (-140,586.42)36,817.92139,089.9212,824.80 Minimum amount she should accept is 48,146.22  Part 4 N3 I9 Present Value Future Value X PVF of single sum PV 240,000 X 0.77218 185,323 Cost of Building 250,000 Less Accum. Depr (100,000) Book Value 150,000 Present Value of Note 185,323 Book Value (150,000) Gain on sale 35,323 b) Interest received on bonds for 10 years 300,000 X 9 27,000 i. n 10 interest 11 Present Value of Ordinary Annuity Rents X PVF OA PV 27,000 X 5.88923