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!RSM220-Winter 2013 - Final Exam - Marking Key.doc

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University of Toronto St. George
Rotman Commerce
Xin Baohua

University of TorontoFaculty of Arts and ScienceandRotman School of ManagementRSM 220 H1FFinancial AccountingFinal Examinations April 2013Duration 3 hoursAids allowed Handheld batteryoperated calculatorPlease answer all questions on this exam paper or in booklets etc8 questionsyou must answer ALL questionsThe exam consist of x pagesFIRST NAME LAST NAME StudentQuestionGrade122231 310 4 7511623 711 865Total 180RSM220H1S Final Exam Winter 2013Page 1 of 17QUESTION 1Multiple Choice 22 marksREQUIRED Please answer the following questions 2 marks each by choosing the best answer 1Which of the following statements best describes the accounting for intangible assets after acquisition under IFRSaThey may be accounted for under the cost model or the revaluation modelbThey should be accounted for under the cost modelcThey should be accounted for under the revaluation model if an active market exists for the assetdNone of the above2Which of the following facts concerning depreciable assets should be included in the summary of significant accounting policiesAmortization MethodComposition of Assetsa NoYesb YesNoc YesYesd NoNo3Zenox Corps comparative balance sheets as at December 31 2012 and December 31 2011 reported accumulated depreciation balances of 800000 and 600000 respectively Property with a cost of 50000 and a carrying amount of 40000 was the only property sold in 2012Depreciation expense for 2012 wasa210000 b200000c190000d220000eNone of the above4Hopper Company acquired machinery on January 1 2005 which it amortized under the straightline method with an estimated life of fifteen years and no residual value On January 1 2010 Hopper estimated that the remaining life of this machinery was six years with no residual value How should this change be accounted for by HopperaAs a prior period adjustmentbAs a cumulative effect of a change in accounting policy in 2010cBy setting future annual depreciation equal to onesixth of the book value on January 1 2010dBy continuing to amortize the machinery over the original fifteen year life5Parry Co purchased land as a factory site for 500000 Parry paid 20000 to tear down two buildings on the land Salvage was sold for 2700 Legal fees of 1740 were paid for title investigation and making the purchase Architects fees were 20600 Title insurance cost 1200 and liability insurance during construction cost 1300 Excavation cost 5220 The contractor was paid 1200000 An assessment made by the city for pavement was 3200 Interest costs during construction were 85000The cost of the land that should be recorded by Parry Co isa520240b523440c524940d5281406For sale of physical goods the followingcondition has to be satisfied for a sellerto recognize sales revenueaThe legal title of the goods has to be transferred from the seller to the buyerbThe risks and rewards associated with the goods have to be transferred from the seller to the buyercThe physical possession of the goods has to be transferred from the seller to the buyerdPartial payment has been made from the buyer to the sellerRSM220H1S Final Exam Winter 2013Page 2 of 17
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