ASSESSMENT CASE PAPER ANALYSIS / TUTORIALOUTLET DOT COM ASSESSMENT CASE PAPER ANALYSIS / TUTORIALOUTLET DO | Page 17

2018?
A. $0 for 2017; $100,000 for 2018
B. $100,000 for 2017 and $0 for 2018
C. $100,000 for 2017 and $100,000 for 2018
D. $200,000 for 2017 and $0 for 2018
9. A company, upon initial recognition of an asset retirement
obligation, should not take
which of the following actions?
A. Allocate asset retirement cost to expense over the useful life of the
related asset.
B. Measure the asset retirement cost at fair value.
C. Capitalize the asset retirement cost by increasing the carrying
amount of the
related asset.
D. Capitalize the asset retirement cost at its undiscounted cash flow
value 3 10. On January 1, 2016, Olson Inc. issued stock options for
200,000 shares to a division
manager. The options have an estimated fair value of $6 each. To
provide additional
incentive for managerial achievement, the options are not exercisable
unless divisional
revenue increases by 6% in three years. Olson initially estimates that
it is probable the
goal will be achieved. Ignoring taxes, what is reduction in earnings in
2016?
A. $0
B. $200,000
C. $400,000
D. $1,200,000
11. On December 31, 2015, the Meisenhelder Company had 250,000
shares of common
stock issued and outstanding. On March 31, 2016, the company sold
50,000 additional
shares for cash. Meisenhelder’s net income for the year ended
December 31, 2016 was
$700,000. During 2016, Meisenhelder declared and paid $80,000 in
cash dividends on