1.Which statement is true about nuclear fission or bombs?
A moderator slows down neutrons to make fission less likely.
The nuclear bomb dropped on Hiroshima in WWII was called Fat Man.  
A moderator slows down neutrons to make fission more likely.
The nuclear bomb in WWII that used ²³⁵U and a gun-type design was called Fat Man.
The maximum amount of fissile material that will sustain a chain reaction is called the critical mass.

The correct ranking of countries from highest to lowest for either their total nuclear power generation or for their percentage of electrical power from nuclear is:
Total nuclear power generation: France, U.S., China, South Korea
Percentage of electrical power from nuclear : South Korea, U.S., France, China
Total nuclear power generation: France, South Korea, U.S., China
Percentage of electrical power from nuclear : U.S., South Korea, France, China
Total nuclear power generation: U.S., France, China, South Korea

Which statement is true about a nuclear reactor?
Adding the moderator to the reactor slows down fission.
A sudden loss of primary coolant water in a pressurized water reactor slows down fission.  
Removing the control rods from the reactor slows down fission.
Removing the moderator from the reactor speeds up fission.
A sudden loss of primary coolant water in a pressurized water reactor speeds up fission.

Accounting

Read the case ‘April Company’ and answer the questions below:

April Company (‘April’) is a well-known diversified corporation with many different businesses in Hong Kong.

In order to meet the long term growth and diversification strategy under the direction of the new Chairman; the company has purchased assets and constructed a new building as its new head office in Hong Kong as follows:

i 1 Jan 2017: truck and equipment: These assets were purchased as a lump sum for $150,000 cash. The following information was gathered.

ii 1 Feb 2017: A new piece of machinery was acquired by trading in a used piece of machinery. (The exchange was with commercial substance.) Facts concerning the trade-in are as follows.

iii 1 Jan 2017: A building was constructed as the new head office of the company. Construction began on 1 January 2017 and would be completed in 15 months. The payments to the contractor in the first year (2017) were as follows.

On 1 January 2017, April Company secured a specific construction loan ($400,000) with an 8% interest rate to finance the construction of the new building. The building expenditures are qualifying assets of the construction in capitalization of interest costs and the capitalized interest costs should be included in the building. April drew down on the construction loan and other outstanding debt (if required) to meet the payment schedule shown above.

The other outstanding debt in the company during 2017:

* $1,000,000 bonds (due in year 2025), with 6% effective annual interest rate

* $500,000 long term note (due in 2030), with 7.5% interest rate per annum.

The company, according to the accounting standards in Hong Kong, will capitalize the maximum allowable interest costs for this construction.

The CFO of April estimated that the truck and the new machinery would be used for ten years, with an estimated residual value of $20,000 and $40,000 respectively. He also estimated that the equipment would have a useful life of five years and a residual value of $5,000. April’s depreciation policy specifies the 200% double-declining balance method for equipment and the straight-line method for the truck and machinery. (The building was not yet ready for use in 2017.)

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Required:

a     For each of the above assets purchased, traded or constructed, determine the amount of each of them clearly and record the transactions by journal entries in the books of April Company for the year ended 31 December 2017. Interest expense for the year has been recorded.

b     For each of the assets above (except the building), calculate April Company’s 2017 depreciation expense, for book purposes. Assume monthly depreciation had not been provided before the end of the year.

c     Discuss the arguments for and against the capitalization of interest costs.

1. Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to the ending inventory using FIFO. Date Activities Units Acquired at Cost Units Sold at Retail May 1 Beginning Inventory 160 units @ $11 5 Purchase 225 units @ $13 10 Sales 145 units @ $21 15 Purchase 105 units @ $14 24 Sales 95 units @ $22 Multiple Choice $3,215 $3,355 $6,155 $2,940 $2,800

2.

Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to cost of goods sold using FIFO.

• $5,460

• $6,025

• $5,940

• $5,825

• $5,260

3.

A company has beginning inventory of 30 units at a cost of $13.00 each on October 1. On October 5, it purchases 21 units at $14.00 per unit. On October 12 it purchases 31 units at $15.00 per unit. On October 15, it sells 63 units. Using the FIFO periodic inventory method, what is the value of the inventory at October 15 after the sale?

• $532.00

• $247.00

• $285.00

• $315.00

• $600.00

4.

On December 31 of the current year, Plunkett Company reported an ending inventory balance of $211,500. The following additional information is also available:

• Plunkett sold and shipped goods costing $37,300 to Savannah Enterprises on December 28 with shipping terms of FOB shipping point. The goods were not included in the ending inventory amount of $211,500.
• Plunkett purchased goods costing $43,300 on December 29. The goods were shipped FOB destination and were received by Plunkett on January 2 of the following year. The shipment was a rush order that was supposed to arrive by December 31. These goods were included in the ending inventory balance of $211,500.
• Plunkett's ending inventory balance of $211,500 included $14,300 of goods being held on consignment from Carole Company. (Plunkett Company is the consignee.)
• Plunkett's ending inventory balance of $211,500 did not include goods costing $94,300 that were shipped to Plunkett on December 27 with shipping terms of FOB destination and were still in transit at year-end.

Based on the above information, the amount that Plunkett should report in ending inventory on December 31 is:

• $205,500

• $168,200

• $191,200

• $153,900

• $197,200

5.

A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts:

All sales are made on credit. Based on past experience, the company estimates that 0.5% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

• $1,378

• $4,700

• $3,890

• $2,018

• $5,170

For each problem, follow these steps.

1. State the hypotheses and identify the claim.

2. Find the critical values(s).

3. Compute the test value.

4. Make the decision.

5. Summarize the results.

1. The reasons that workers in the 25-54 year old category were displaced are listed below.

Plant closed/moved 44.8%

Insufficient work 25.2%

Position eliminated 30.0%

A random sample of 180 displaced workers (in this age category) found that 40 lost their jobs due to their position being eliminated, 53 due to insufficient work, and the rest due to the company being closed or moving. At the 0.01 level of significance, are these proportions different from those from the U.S. Department of Labor?  

ABC corporation has just sold equipment to a French company exports worth FF 80 million with payment due in three months. The spot rate is FF 7.4/$ and the 3 month forward rate is FF 7.5/$. Also assume: 3 month French interest rate 9.00% p.a. 3 month U.S. interest rate 4.00% p.a. 3 month call option on Francs at FF 7.5/$ (strike price) 3.0% premium 3 month put option on Francs at FF 7.5/$ (strike price) 2.4% premium a) How can ABC hedge this risk? b) Which alternative would you choose and why?

International Accounting:

Answer based on IFRS unless otherwise indicated.

What is a provision, and when must a provision be recognized?

What is a contingent liability? What is the financial reporting treatment for contingent liabilities?

What is a constructive obligation?

What is an onerous contract? How are onerous contracts accounted for?

How does a company measure the net pension benefit liability (asset) to report on the balance sheet under IFRS and U.S. GAAP?

page 198In accounting for post-employment benefits, when are past service costs and actuarial gains and losses recognized in income?

What is the basis for determining compensation cost in an equity-settled share-based payment transaction with nonemployees? With employees?

On April 1, 2017, Mendoza Company borrowed 680,000 euros for one year at an interest rate of 5 percent per annum. Mendoza must make its first interest payment on the loan on October 1, 2017 and will make a second interest payment on March 31, 2018 when the loan is repaid. Mendoza prepares U.S.-dollar financial statements and has a December 31 year-end. Prepare all journal entries related to this foreign currency borrowing assuming the following exchange rates for 1 euro:

April 1, 2017 $ 1.12

October 1, 2017 1.22

December 31, 2017 1.26

March 31, 2018 1.30

Reliable Non-Authoritative Sources

In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162” (“SFAS 168”). SFAS 168 established the FASB Standards Accounting Codification (“Codification”) as the source of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied to nongovernmental entities and rules and interpretive releases of the SEC as authoritative GAAP for SEC registrants.

For discussion: What are some non-authoritative sources of information and how could management of a company utilize information obtained from non-authoritative sources in preparing GAAP financial statements?

1. Define the accounts receivable turnover and the days sales outstanding ratios. What do these ratios tell us about a company’s accounts receivable?

2. What effect, if any, does a strengthening of the dollar have on reported sales and net income for companies operating outside the United States, when those foreign operations are translated to U.S. dollars for consolidation purposes?

3. How do companies test assets for impairment? If an asset is impaired, how do companies write them down?

4. What determines the effective cost of debt?

5. Define bond default. What are some potential ramifications if a company defaults on its debt?

Lakonishok Equipment has an investment opportunity in Europe. The project costs €12 million and is expected to produce cash flows of €2.7 million in year 1, €3.1 million in year 2, and €2.8 million in year 3. The current spot exchange rate is $1.3/€. The current risk-free rate in the United States is 5 percent, compared to that in Europe of 3.5 percent. The appropriate discount rate for the project is estimated to be 18 percent, the U.S. cost of capital for the company. In addition, the subsidiary can be sold at the end of three years for an estimated €6.5 million. What is the NPV of the project?