Intermediate accounting solution of c15

Intermediate Accounting 第九版教学设计1. 简介该教学设计旨在帮助学生掌握Intermediate Accounting 第九版的内容。

Intermediate Accounting是美国会计学专业的一门核心课程，也是会计学专业的重要基础课程。

本教学设计将以教学大纲、课程安排、教学方法、考核方式以及教学资源等方面进行详细阐述。

2. 教学大纲Intermediate Accounting 第九版的教学大纲主要包括以下几个方面的内容：•第1章会计准则、财务报表和财务陈述•第2章资产计量、收入识别和利润表•第3章费用、费用核算和成本•第4章资产分类和资产账面价值•第5章现金、短期投资和应收账款•第6章存货和中长期投资•第7章有形固定资产和无形资产•第8章负债和所有者权益成分•第9章报表分析3. 课程安排Intermediate Accounting第九版共有36个课时，每个课时45分钟。

教学内容将按照如下课程安排进行：章节课时数第1章 2第2章 4第3章 4第4章 3第5章 3第6章 5第7章 5第8章 5第9章 54. 教学方法本课程采用讲授、互动讨论、案例分析等多种教学方法。

•讲授：教师将会根据每个章节的教学大纲进行讲授，并将会以PPT课件和教学笔记的形式进行辅助。

•互动讨论：教师将会提供几个问题，要求学生通过思考和交流来回答问题。

•案例分析：教师将将根据真实的企业案例，对学生进行财务分析和解读。

5. 考核方式本课程的考核方式包括期中考试、期末考试以及课堂表现。

•期中考试：占总成绩的40%。

•期末考试：占总成绩的50%。

•课堂表现：占总成绩的10%。

包括出勤率、课堂表现、小测试和作业等要素。

6. 教学资源学生在学习该课程时，可以通过以下渠道来获得教学资源：•Intermediate Accounting 第九版教材•附加学习材料：包括PPT、教学笔记、案例分析、习题解答和答案等。

Chapter 7 Cash and ReceivablesQUESTIONS FOR REVIEW OF KEY TOPICSAACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments, and faculty may approach assessment and its documentation differently, one approach is to provide specific questions on exams that become the basis for assessment. To aid faculty in this endeavor, we have labeled each question, exercise and problem in Intermediate Accounting, 6e with the following AACSB learning skills:Questions AACSB Tags Exercises (cont.)AACSB Tags 7-1Reflective thinking 7-11Analytic7-2 Reflective thinking 7-12Analytic7-3Reflective thinking 7-13Analytic7-4Reflective thinking, Communications 7-14Analytic7-5Diversity, Reflective thinking 7-15Analytic7-6Reflective thinking 7-16Analytic7-7Reflective thinking 7-17Analytic7-8Reflective thinking 7-18Diversity, Analytic7-9Reflective thinking, Communications 7-19Analytic7-10Reflective thinking 7-20 Reflective thinking7-11Diversity, Reflective thinking 7-21Analytic7-12Reflective thinking 7-22Analytic7-13Reflective thinking 7-23Analytic7-14Diversity, Reflective thinking 7-24 Analytic7-15Reflective thinking, Communications 7-25Analytic7-16 Reflective thinking7-26Analytic7-17 Reflective thinking7-27 Analytic7-18 Reflective thinking7-28 Analytic7-19 Reflective thinking, Communications7-29 Analytic7-20 Diversity, Reflective thinking7-30 Reflective thinking,CommunicationsBrief Exercises 7-31 Reflective thinking,Communications 7-1Reflective thinking CPA/CMA7-2Diversity, Reflective thinking 7-1Analytic7-3Reflective thinking 7-2Analytic7-4 Analytic 7-3Reflective thinking7-5Analytic 7-4 Analytic7-6Analytic 7-5Analytic7-7Diversity, Reflective thinking 7-6Analytic7-8Analytic 7-7Analytic7-9Analytic 7-1Reflective thinking7-10Analytic 7-2Analytic7-11Analytic 7-3Analytic7-12Analytic Problems7-13 Analytic 7-1Analytic7-14Reflective thinking 7-2Analytic7-15 Diversity, Reflective thinking 7-3Analytic7-16 Analytic 7-4 Analytic7-17 Analytic 7-5 AnalyticExercises7-6 Analytic 7-1Analytic7-7Analytic 7-2Analytic 7-8Analytic 7-3 Diversity, Analytic 7-9 Diversity, Analytic 7-4Analytic 7-10Analytic 7-5Analytic 7-11Analytic 7-6 Analytic 7-12Analytic 7-7 Analytic 7-13Analytic 7-8Analytic 7-14Analytic 7-9Analytic 7-15 Analytic 7-10AnalyticQUESTIONS FOR REVIEW OF KEY TOPICSQuestion 7-1Cash equivalents usually include negotiable instruments as well as highly liquid investments that have a maturity date no longer than three months from date of purchase.Question 7-2Internal control procedures involving accounting functions are intended to improve the accuracy and reliability of accounting information and to safeguard the company’s assets. The separation of duties means that employees involved in recordkeeping should not also have physical responsibility for assets.Question 7-3Management must document the company’s internal controls and assess their adequacy. The auditors must provide an opinion on management’s assessment. The Public Company Accounting Oversight Board’s Auditing Standard No. 5, which supersedes Auditing Standard No. 2, further requires the auditor to express its own opinion on whether the company has maintained effective internal control over financial reporting.Question 7-4A compensating balance is an amount of cash a depositor (debtor) must leave on deposit in an account at a bank (creditor) as security for a loan or a commitment to lend. The classification and disclosure of a compensating balance depends on the nature of the restriction and the classification of the related debt. If the restriction is legally binding, then the cash will be classified as either current or noncurrent (investments and funds or other assets) depending on the classification of the related debt. In either case, note disclosure is appropriate. If the compensating balance arrangement is informal and no contractual agreement restricts the use of cash, note disclosure of the arrangement including amounts involved is appropriate. The compensating balance can be included in the cash and cash equivalents category of current assets.Question 7-5Yes, IFRS and U.S. GAAP differ in how bank overdrafts are treated. Under IFRS, overdrafts can be offset against other cash accounts. Under U.S. GAAP overdrafts must be treated as liabilities.Answers to Questions (continued)Question 7-6Trade discounts are reductions below a list price and are used to establish a final price for a transaction. The reduced price is the starting point for initial valuation of the transaction. A cash discount is a reduction, not in the selling price of a good or service, but in the amount to be paid by a credit customer if the receivable is paid within a specified period of time.Question 7-7The gross method of accounting for cash discounts considers discounts not taken as part of sales revenue. The net method considers discounts not taken as interest revenue, because they are viewed as compensation to the seller for allowing the buyer to defer payment.Question 7-8When returns are material and a company can make reasonable estimates of future returns, an allowance for sales returns is established. At a financial reporting date, this provides an estimate of the amount of future returns for prior sales, and involves a debit to sales returns and a credit to allowance for sales returns for the estimated amount. Allowance for sales returns is a contra account to accounts receivable. When returns actually occur in the future reporting period, the allowance for sales returns is debited.Question 7-9Even when specific customer accounts haven’t been proven uncollectible by the end of the reporting period, bad debt expense properly should be matched with sales revenue on the income statement for that period. Likewise, since it’s not expected that all accounts receivable will be collected, the balance sheet should report only the expected net realizable value of that asset. So, to record the bad debt expense and the related reduction of accounts receivable when the amount hasn’t been determined, an estimate is needed. In an adjusting entry, we record bad debt expense and reduce accounts receivable for an estimate of the amount that eventually will prove uncollectible.If uncollectible accounts are immaterial or not anticipated, or it’s not possible to reliably estimate uncollectible accounts, an allowance for uncollectible accounts is not appropriate. In these few cases, any bad debts that do arise simply are written off as bad debt expense at the time they prove uncollectible.Answers to Questions (continued)Question 7-10The income statement approach to estimating bad debts determines bad debt expense directly by relating uncollectible amounts to credit sales. The balance sheet approach to estimating future bad debts indirectly determines bad debt expense by estimating the net realizable value for accounts receivable that exist at the end of the period. In other words, the allowance for uncollectible accounts at the end of the period is estimated and then bad debt expense is determined by adjusting the allowance account to reflect net realizable value.Question 7-11A company has to separately disclose trade receivables and receivables from related parties under U.S. GAAP, but not under IFRS.Question 7-12The assignment of all accounts receivable in general as collateral for debt requires no special accounting treatment other than note disclosure of the agreement. Question 7-13The accounting treatment of receivables factored with recourse depends on whether certain criteria are met. If the criteria are met, the factoring is accounted for as a sale. If they are not met, the factoring is accounted for as a loan. In addition, note disclosure may be required. Accounts receivable factored without recourse are accounted for as the sale of an asset. The difference between the book value and the fair value of proceeds received is recognized as a gain or a loss.Question 7-14U.S. GAAP focuses on whether control of assets has shifted from the transferor to the transferee. In contrast, IFRS focuses on whether the company has transferred “substantially all of the risks and rewards of ownership,” as well as whether the company has transferred control. Under IFRS:If the company transfers substantially all of the risks and rewards of ownership, the transfer is treated as a sale.If the company retains substantially all of the risks and rewards of ownership, the transfer is treated as a secured borrowing.If neither conditions 1 or 2 hold, the company accounts for the transaction as a sale if it has transferred control, and as a secured borrowing if it has retained control.Answers to Questions (continued)Question 7-15When a note is discounted, a financial institution, usually a bank, accepts the note and gives the seller cash equal to the maturity value of the note reduced by a discount. The discount is computed by applying a discount rate to the maturity value and represents the financing fee the bank charges for the transaction.The four-step process used to account for a discounted note receivable is as follows:1. Accrue any interest revenue earned since the last payment date (or date of thenote).2. Compute the maturity value.3. Subtract the discount the bank requires (discount rate times maturity valuetimes the remaining length of time from date of discounting to maturity date) from the maturity value to compute the proceeds to be received from the bank (maturity value less discount).pute the difference between the proceeds and the book value of the noteand related interest receivable. The treatment of the difference will depend on whether the discounting is accounted for as a sale or as a loan. If it’s a sale the difference is recorded as a loss or gain on the sale; if it’s a loan the difference is viewed as interest expense or interest revenue.Question 7-16A company’s investment in receivables is influenced by several related variables, to include the level of sales, the nature of the product or service, and credit and collection policies. The receivables turnover and average collection period ratios are designed to monitor receivables.Question 7-17The items necessary to adjust the bank balance might include deposits outstanding (including undeposited cash), outstanding checks, and any bank errors discovered during the reconciliation process. The items necessary to adjust the book balance mi ght include collections made by the bank on the company’s behalf, service and other charges made by the bank, NSF (nonsufficient funds) check charges, and any company errors discovered during the reconciliation process.Answers to Questions (concluded)Question 7-18A petty cash fund is established by transferring a specified amount of cash from the company’s general checking account to an employee designated as the petty cash custodian. The fund is replenished by writing a check to the petty cash custodian for the sum of the bills paid with petty cash. The appropriate expense accounts are recorded from petty cash vouchers at the time the fund is replenished.Question 7-19When a creditor’s investment in a receivable becomes impaired, due to a troubled debt restructuring or for any other reason, the receivable is re-measured based on the discounted present value of currently expected cash flows at the loan’s original effective rate (regardless of the extent to which expected cash receipts have been reduced). The extent of the impairment is the difference between the carrying amount of the receivable (the present value of the receivable’s cash flows prior to the restructuring) and the present value of the revised cash flows discounted at the loan’s original effective rate. This difference is recorded as a loss at the time the receivable is reduced.Question 7-20No. Under both U.S. GAAP and IFRS, a company can recognize in net income the recovery of impairment losses of accounts and notes receivable.BRIEF EXERCISESBrief Exercise 7-1The company could improve its internal control procedure for cash receipts by segregating the duties of recordkeeping and the handling of cash. Jim Seymour, responsible for recordkeeping, should not also be responsible for depositing customer checks.Brief Exercise 7-2Under IFRS the cash balance would be $245,000, because they could offset the two accounts. Under U.S. GAAP the balance would be $250,000, because they could not offset the two accounts.Brief Exercise 7-3All of these items would be included as cash and cash equivalents except the U.S. Treasury bills, which would be included in the current asset section of the balance sheet as short-term investments.Brief Exercise 7-4Income before tax in 2012 will be reduced by $2,500, the amount of the cash discounts.$25,000 x 10 = $250,000 x 1% = $2,500Brief Exercise 7-5Income before tax in 2011 will be reduced by $2,500, the anticipated amount of cash discounts.$25,000 x 10 = $250,000 x 1% = $2,500Brief Exercise 7-6Estimated returns = $10,600,000 x 8% = $848,000Less: Actual returns (720,000)Remaining estimated returns $128,000Brief Exercise 7-7Singletary cannot combine the two types of receivables under U.S. GAAP, as the director is a related party. Under IFRS a combined presentation would be allowed. Brief Exercise 7-8(1) Bad debt expense = $1,500,000 x 2% = $30,000(2) Allowance for uncollectible accounts:Beginning balance $25,000Add: Bad debt expense 30,000Deduct: Write-offs (16,000)Ending balance $39,000Brief Exercise 7-9(1) A llowance for uncollectible accounts:Beginning balance $ 25,000Deduct: Write-offs (16,000)Required allowance (33,400)*Bad debt expense $24,400(2) Required allowance = $334,000** x 10% = $33,400*Accounts receivable:Beginning balance $ 300,000Add: Credit sales 1,500,000Deduct: Cash collections (1,450,000)Write-offs (16,000)Ending balance $ 334,000** Brief Exercise 7-10Allowance for uncollectible accounts:Beginning balance $30,000Add: Bad debt expense 40,000Deduct: Required allowance (38,000)Write-offs $32,000Brief Exercise 7-11Credit sales $8,200,000Deduct: Cash collections (7,950,000)Write-offs (32,000)* Year-end balance in A/R (2,000,000)Beginning balance in A/R $1,782,000*Allowance for uncollectible accounts:Beginning balance $30,000Add: Bad debt expense 40,000Deduct: Required allowance (38,000)Write-offs $32,000 Brief Exercise 7-122011 interest revenue:$20,000 x 6% x 1/12 =$1002012 interest revenue:$20,000 x 6% x 2/12 =$200Brief Exercise 7-13Assets decrease by $7,000:Cash increases by $100,000 x 85% = $ 85,000Receivable from factor increases by($11,000 – $3,000 fee) 8,000Accounts receivable decrease (100,000)Net decrease in assets $ (7,000)Liabilities would not change as a result of this transaction.Income before income taxes decreases by $7,000(the loss on sales of receivables)The journal entry to record the transaction is as follows:Brief Exercise 7-14Logitech would account for the transfer as a secured borrowing. The receivables remain on the company’s books and a liability is recorded for the amount borrowed plus the bank’s fee.Brief Exercise 7-15Under IFRS, Huling would treat this transaction as a secured borrowing, because they retain substantially all of the risks and rewards of ownership. Under U.S. GAAP, Huling would treat this transaction as a sale, because they have transferred control. Note, however, that in practice we would typically expect for the entity that has the risks and rewards of ownership to also have control over the assets, so we would expect these criteria to usually lead to the same accounting.Brief Exercise 7-16Brief Exercise 7-17Receivables turnover = $320,000 = 5.33$60,000*($50,000 + 70,000) 2 = $60,000*Average collection = 365 = 68 daysperiod 5.33EXERCISESExercise 7-1Requirement 1Cash and cash equivalents includes:a. Balance in checking account $13,500Balance in savings account 22,100b. Undeposited customer checks 5,200c. Currency and coins on hand 580f. U.S. treasury bills with 2-month maturity 15,000Total $56,380Requirement 2d. The $400,000 savings account will be used for future plant expansion andtherefore should be classified as a noncurrent asset, either in other assets orinvestments.e. The $20,000 in the checking account is a compensating balance for a long-term loan and should be classified as a noncurrent asset, either in otherassets or investments.f. The $20,000 in 7-month treasury bills should be classified as a current assetalong with other temporary investments.Exercise 7-2Requirement 1Cash and cash equivalents includes:Cash in bank – checking account $22,500U.S. treasury bills 5,000Cash on hand 1,350Undeposited customer checks 1,840Total $30,690Requirement 2The $10,000 in 6-month treasury bills should be classified as a current asset along with other temporary investments.Exercise 7-3Requirement 1: U.S. GAAPCurrent Assets:Cash $175,000Current Liabilities:Bank Overdrafts $ 15,000 Requirement 2: IFRSCurrent Assets:Cash $160,000(No current liabilities with respect to overdrafts.)Exercise 7-4Requirement 1Sales price = 100 units x $600 = $60,000 x 70% = $42,000Requirement 2Exercise 7-4 (concluded)Requirement 3Requirement 1, using the net method:Requirement 2, using the net method:Exercise 7-5Requirement 1Sales price = 1,000 units x $50 = $50,000Requirement 2Exercise 7-6 Requirement 1Requirement 2Exercise 7-7Requirement 1Estimated returns = 4% x $11,500,000 = $460,000Less: Actual returns (450,000)Remaining estimated returns $10,000Note: another series of journal entries that produce the same end result would be:Exercise 7-7 (continued)Requirement 2Beginning balance in allowance account $300,000 Add: Year-end estimate 460,000 Less: Actual returns (450,000) Ending balance in allowance account $310,000Exercise 7-8Requirement 1Bad debt expense = $67,500 (1.5% x $4,500,000)Requirement 2Allowance for uncollectible accountsBalance, beginning of year $42,000 Add: Bad debt expense for 2011 (1.5% x $4,500,000) 67,500 Less: End-of-year balance (40,000) Accounts receivable written off $69,500 Requirement 3$69,500 — the amount of accounts receivable written off.Exercise 7-9Requirement 1To record the write-off of receivables.To reinstate an account previously written off and to record the collection.Allowance for uncollectible accounts:Balance, beginning of year $32,000Deduct: Receivables written off (21,000) Add: Collection of receivable previously written off 1,200Balance, before adjusting entry for 2011 bad debts 12,200Required allowance: 10% x $625,000 (62,500) Bad debt expense $50,300 To record bad debt expense for the year.Requirement 2Current assets:Accounts receivable, net of $62,500 allowancefor uncollectible accounts $562,500Exercise 7-10Using the direct write-off method, bad debt expense is equal to actual write-offs. Collections of previously written-off receivables are recorded as revenue.Allowance for uncollectible accounts:Balance, beginning of year $17,280Deduct: Receivables written off (17,100)Add: Collection of receivables previously written off 2,200Less: End of year balance (22,410)Bad debt expense for the year 2011 $20,030 Exercise 7-11($ in millions)Allowance for uncollectible accounts:Balance, beginning of year $16Add: Bad debt expense 14Less: End of year balance (18)Write-offs during the year $ 12*Accounts receivable analysis:Balance, beginning of year ($1,084 + 16)$ 1,100Add: Credit sales 4,271Less: Write-offs* (12)Less: Balance end of year ($953 + 18) (971)Cash collections $4,388Exercise 7-12Requirement 1Requirement 22011 income before income taxes would be understated by $900 2012 income before income taxes would be overstated by $900.Exercise 7-13Requirement 1Requirement 2$ 1,800 interest for 9 months÷ $28,200 sales price= 6.383% rate for 9 monthsx 12/9to annualize the rate_______= 8.511% effective interest rateExercise 7-14Requirement 1Book value of stock $16,000Plus gain on sale of stock 6,000= Note receivable $22,000Interest reported for the year $ 2,200= 10% rate Divided by value of note $ 22,000 Requirement 2To record sale of stock in exchange for note receivable.To accrue interest on note receivable for twelve months.Exercise 7-15Exercise 7-16Exercise 7-17Exercise 7-18Mountain High retains significant risks and rewards and therefore must treat the transfer as a secured borrowing. The accounts receivable stay on the balance sheet of Mountain High, and they must record a liability.Exercise 7-19Step 1: Accrue interest earned.Step 2: Add interest to maturity to calculate maturity value.Step 3: Deduct discount to calculate cash proceeds.Step 4: To record a loss for the difference between the cash proceeds and the note’s book value.Exercise 7-20List A List Bc 1. Internal control a. Restriction on cash.j 2. Trade discount b. Cash discount not taken is sales revenue.g 3. Cash equivalents c. Includes separation of duties.h 4. Allowance for uncollectibles d. Bad debt expense a % of credit sales.i 5. Cash discount e. Recognizes bad debts as they occur.l 6. Balance sheet approach f. Sale of receivables to a financial institution.d 7. Income statement approach g. Include highly liquid investments.k 8. Net method h. Estimate of bad debts.a 9. Compensating balance i. Reduction in amount paid by credit customer.m 10. Discounting j. Reduction below list price.b 11. Gross method k. Cash discount not taken is interest revenue.e 12. Direct write-off method l. Bad debt expense determined by estimating realizablevalue.f 13. Factoring m. Sale of note receivable to a financial institution.Exercise 7-21Requirement 1Step 1: To accrue interest earned for two months on note receivableStep 2: Add interest to maturity to calculate maturity value.Step 3: Deduct discount to calculate cash proceeds.Exercise 7-21 (continued)Step 4: To record a loss for the difference between the cash proceeds and the note’s book value.Exercise 7-21 (concluded)Requirement 2To accrue interest earned on note receivable.Exercise 7-22Second quarter:Receivables turnover = $16,629 = 1.62$10,244Average collection = 91 = 56 daysperiod 1.62Third quarter:Receivables turnover = $13,648 =1.36$10,068Average collection = 91 = 67 daysperiod 1.36Exercise 7-23Average collection period = 365 ÷ Accounts receivable turnover = 50 days Accounts receivable turnover = 365 ÷ 50 = 7.3Average accounts receivable = ($400,000 + 300,000) ÷ 2 = $350,000 Accounts receivable turnover = Net sales ÷ Average accounts receivable7.3 = Net sales ÷ $350,000Net sales = 7.3 x $350,000 =$2,555,000Exercise 7-24To establish the petty cash fund.To replenish the petty cash fund.Exercise 7-25Exercise 7-26Compute balance per bank statement:Balance per books $23,820 Deduct: Deposits outstanding (2,340) Add: Checks outstanding 1,890 Deduct: Bank service charges (38) Balance per bank $23,332Exercise 7-27Requirement 1Requirement 2To correct error in recording cash receipt from credit customer.To record credits to cash revealed by the bank reconciliation.Note: Each of the adjustments to the book balance required journal entries.None of the adjustments to the bank balance require entries.Exercise 7-28A NALYSISPrevious Value:Accrued 2010 interest (10% x $12,000,000)$ 1,200,000Principal 12,000,000Carrying amount of the receivable$13,200,000 New Value:Interest $1 million x 1.73554 * = $1,735,540Principal $11 million x 0.82645 ** = 9,090,950Present value of the receivable (10,826,490) Loss:$ 2,373,510* present value of an ordinary annuity of $1: n=2, i=10% (from Table 4)** present value of $1: n=2, i=10% (from Table 2)J OURNAL E NTRIESJanuary 1, 2011Loss on troubled debt restructuring (to balance) ......... 2,373,510Accrued interest receivable (account balance) ........ 1,200,000 Note receivable ($12,000,000 - 10,826,490) ........... 1,173,510 December 31, 2011Cash (required by new agreement) ................. ............ 1,000,000Note receivable (to balance) ....................... ….. ........ 82,649Interest revenue (10% x $10,826,490) ........ ............ 1,082,649December 31, 2012Cash (required by new agreement) ................. ............ 1,000,000Note receivable (to balance) ........................... ............ 90,861Interest revenue (10% x [$10,826,490 + 82,649]) ... 1,090,861*Cash (required by new agreement) ................. ............ 11,000,000Note receivable (balance) ........................... ............ 11,000,000 * rounded to amortize the note to $11,000,000 (per schedule below)Exercise 12-28 (concluded)Amortization Schedule – Not requiredCash Effective Increase in Outstanding Interest Interest Balance Balance by agreement 10% x Outstanding Balance Discount Reduction10,826,4901 1,000,000 .10 (10,826,490) = 1,082,649 82,649 10,909,1392 1,000,000 .10 (10,909,139) = 1,090,861* 90,861 11,000,0002,000,000 2,173,510 173,510* roundedExercise 7-29A NALYSISPrevious Value:Accrued 2010 interest (10% x $240,000)$ 24,000Principal 240,000Carrying amount of the receivable$264,000New Value:$11,555 + 11,555 + 11,555 + 240,000=$274,665$274,665 x 0.82645 * = (226,997) Loss:$37,003* present value of $1: n=2, i=10% (from Table 2)J OURNAL E NTRIESJanuary 1, 2011Loss on troubled debt restructuring (to balance) ......... 37,003Accrued interest receivable (10% x $240,000) ........ 24,000 Note receivable ($240,000 - 226,997) ........ ............ 13,003 December 31, 2011Note receivable (to balance) ........................... ............ 22,700Interest revenue (10% x $226,997) ............. ............ 22,700 December 31, 2012Note receivable (to balance) ........................... ............ 24,968Interest revenue (10% x [$226,997 + 22,700]) ........ 24,968* Cash (required by new agreement) ................. ............ 274,665Note receivable (balance) ........................... ............ 274,665 * rounded to amortize the note to $274,665 (per schedule below)Exercise 7-29 (concluded)Amortization Schedule – Not requiredCash Effective Increase in Outstanding Interest Interest Balance Balance by agreement 10% x Outstanding Balance Discount Reduction226,9971 0 .10 (226,997) = 22,700 22,700 249,6972 0 .10 (249,697) = 24,968* 24,968 274,66547,668 47,668* roundedExercise 7-30Requirement 1The specific citation that specifies these disclosure policies is FASB ACS 310–10–50–9: “Receivables—Overall—Disclosure—Accounting Policies for Credit Losses and Doubtful Accounts.”Requirement 2FASB ACS 310–10–50–9 reads as follows:“In addition to disclosures required by this Subsection and Subtopic 450-20, an entity shall disclose a description of the accounting policies and methodology the entity used to estimate its allowance for loan losses, allowance for doubtful accounts, and any liability for off-balance-sheet credit losses and related charges for loan, trade receivable or other credit losses in the notes to the financial statements. Such a description shall identify the factors that influenced management's judgment (for example, historical losses and existing economic conditions) and may also include discussion of risk elements relevant to particular categories of financial instruments.”。

COMPREHENSIVE EXAMINATION EPART 5(Chapters 18-21)Approximate Problem Topic Time E-I Long-Term Contracts. 15 min.E-II Installment Sales Method. 20 min.E-III Deferred Income Taxes. 25 min.E-IV Pensions. 15 min.E-V Leases. 25 min.100 min.Test Bank for Intermediate Accounting, Fifteenth EditionE - 2Problem E-I— Long-Term Contracts.Edwards Company contracted on 4/1/14 to construct a building for $2,400,000. The project was completed in 2016. Additional data follow:2014 2015 2016 Costs incurred to date $ 560,000 $1,350,000 $1,900,000Estimated cost to complete 1,040,000 450,000 —Billings to date 500,000 1,900,000 2,400,000Collections to date 400,000 1,300,000 2,200,000 Instructions(a) Calculate the income recognized by Edwards under the percentage-of-completion method ofaccounting in each of the years 2014, 2015, and 2016.(b) Prepare all necessary entries for the year 2015.(c) Present the balance sheet disclosures at December 31, 2015. Proper headings orsubheadings must be indicated.Problem E-II— Installment Sales Method.Garber, Inc. accounts for all sales of its merchandise on the installment basis. Following is the unadjusted trial balance at 12/31/16:Cash $ 64,200Installment Accounts Receivable—2014 170,000Installment Accounts Receivable—2015 400,000Installment Accounts Receivable—2016 750,000Inventory, 1/1/16 103,000Repossessed Merchandise 22,000Accounts Payable $ 136,000 Deferred Gross Profit—2014 84,000 Deferred Gross Profit—2015 175,000 Common Stock 600,000 Retained Earnings 406,200 Installment Sales 1,000,000 Purchases 738,000Loss on Repossession 4,000Operating Expenses 150,000$2,401,200 $2,401,200Additional Data: 2014 Gross Profit Rate = 32%; Inventory 12/31/16 = $159,000;Repossessed merchandise 12/31/16 = $14,000;Merchandise sold in 2015 was repossessed in 2016 and the followingentry was prepared (assume correctly):Deferred Gross Profit—2015 ................................ 14,000Repossessed Merchandise ................................... 22,000Loss on Repossession ......................................... 4,000Installment Accounts Receivable—2015 ... 40,000Comprehensive Examination E E - 3 Problem E-II (cont.)Instructions(a) Determine collections during 2016 on Installment A/R for each of the years 2014, 2015, and2016.(b) Without prejudice to your answer in Part (a), assume that total collections on InstallmentAccounts Receivable during 2016 were $1,060,000; $220,000 from 2014, $300,000 from 2015, and $540,000 from 2016. Prepare all necessary adjusting and closing entries at 12/31/16.Problem E-III— Deferred Income Taxes.In 2015, the initial year of its existence, Dexter Company's accountant, in preparing both the income statement and the tax return, developed the following list of items causing differences between accounting and taxable income:1. The company sells its merchandise on an installment contract basis. In 2015, Dexter elected,for tax purposes, to report the gross profit from these sales in the years the receivables are collected. However, for financial statement purposes, the company recognized all the gross profit in 2015. These procedures created a $500,000 difference between book and taxable incomes. The future collection of the installment contracts receivables are expected to result in taxable amounts of $250,000 in each of the next two years. (Note: the company treats installment contracts receivable as a current asset on its balance sheet.)2. The company has also chosen to depreciate all of its depreciable assets on an acceleratedbasis for tax purposes but on a straight-line basis for accounting purposes. These procedures resulted in $60,000 excess depreciation for tax purposes over accounting depreciation. The temporary difference due to excess tax depreciation will reverse equally over the three year period from 2016-2018.3. Dexter leased some of its property to Baker Company on July 1, 2015. The lease was toexpire on July 1, 2017 and the monthly rentals were to be $60,000. Baker, however, paid the first year's rent in advance and Dexter reported this entire amount on its tax return. These procedures resulted in a $360,000 difference between book and taxable incomes. (Note: this lease was an operating lease and Dexter classified the unearned rent as a current liability on its balance sheet.)4. Dexter owns $200,000 of bonds issued by the State of Oregon upon which 5% interest is paidannually. In 2015, Dexter showed $10,000 of income from the bonds on its income statement but did not show any of this amount on its tax return. (Note: these bonds are classified as long-term investments on Dexter's balance sheet.)5. In 2015, Dexter insured the lives of its chief executives. The premiums paid amounted to$12,000 and this amount was shown as an expense on the income statement. However, this amount was not deducted on the tax return. The company is the beneficiary.E - 4Test Bank for Intermediate Accounting, Fifteenth EditionProblem E-III (cont.)InstructionsAssuming that the income statement of Dexter Company showed "Income before income taxes" of $1,500,000; that the enacted tax rates are 30% for all years; and that no other differences between book and taxable incomes existed, except for those mentioned above:(a) Compute the income taxes payable.(b) Prepare a schedule of future taxable and (deductible) amounts at the end of 2015.(c) Prepare a schedule of deferred tax (asset) and liability at the end of 2015.(d) Compute the net deferred tax expense (benefit) for 2015.(e) Make the journal entry recording income tax expense, income taxes payable, and deferredincome taxes for 2015.(f) Indicate how income tax expense and any deferred income taxes should be disclosed onthe financial statements under generally accepted accounting principles. Show the amounts for these items and indicate specifically where they would be disclosed.Problem E-IV— Pensions.Presented below is information related to Stage Department Stores, Inc. pension plan for 2015.Service cost $550,000Funding contribution for 2015 530,000Settlement rate used in actuarial computation 10%Expected return on plan assets 9%Amortization of PSC (due to benefit increase) 90,000Amortization of unrecognized net gains 48,000Projected benefit obligation (at beginning of period) 540,000Fair value of plan assts (at beginning of period) 360,000 Instructions(a) Compute the amount of pension expense to be reported for 2015. (Show computations.)(b) Prepare the journal en try to record pension expense and the employer’s contribution for2015.Comprehensive Examination E E - 5 Problem E-V— Leases.On January 1, 2015, Foley Company (as lessor) entered into a noncancelable lease agreement with Pinkley Company for machinery which was carried on the accounting records of Foley at $6,795,000 and had a market value of $7,200,000. Minimum lease payments under the lease agreement which expires on December 31, 2024, total $10,650,000. Payments of $1,065,000 are due each January 1. The first payment was made on January 1, 2015 when the lease agreement was finalized. The interest rate of 10% which was stipulated in the lease agreement is the implicit rate set by the lessor. The effective interest method of amortization is being used. Pinkley expects the machine to have a ten-year life with no salvage value, and be depreciated on a straight-line basis. Collectibility of the rentals is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor.Instructions(a) From the lessee's viewpoint, what kind of lease is the above agreement? From the lessor'sviewpoint, what kind of lease is the above agreement?(b) What should be the income before income taxes derived by Foley from the lease for theyear ended December 31, 2015?(c) Ignoring income taxes, what should be the expenses incurred by Pinkley from this lease forthe year ended December 31, 2015?(d) What journal entries should be recorded by Pinkley Company on January 1, 2015?(e) What journal entries should be recorded by Foley Company on January 1, 2015?E - 6Test Bank for Intermediate Accounting, Fifteenth EditionSolutions — Comprehensive Examination EProblem E-I— Solution.(a) 2014 income = ($560,000 ÷ $1,600,000) × $800,000 = $280,0002015 income = ($1,350,000 ÷ $1,800,000) × $600,000 = $450,000 – $280,000 = $170,000 2016 income = $500,000 – $450,000 = $50,000(b) Construction in Process .............................................................. 790,000Accounts Payable, Cash, Inventory, etc. ......................... 790,000Accounts Receivable .................................................................. 1,400,000Billings on Construction in Process ................................. 1,400,000Cash ........................................................................................... 900,000Accounts Receivable ....................................................... 900,000 Construction Expenses ............................................................... 790,000Construction in Process .............................................................. 170,000Revenue from Long-Term Contracts ............................... 960,000(c) Current assets:Accounts receivable $600,000Current liabilities:Billings ($1,900,000) in excess of costs andrecognized profit ($1,800,000) $100,000Problem E-II— Solution.(a) Collections in 2016 on installment accounts receivable:2014 $84,000 ÷ ($170,000 + collections) = 32%Collections equal $92,5002015 $175,000 ÷ ($400,000 + collections) = 35% *Collections equal $100,0002016 Installment Sales – Installment Accounts Receivable = Collections$1,000,000 – $750,000 = $250,000*14,000 ÷ 40,000 = 35%Comprehensive Examination E E - 7 Problem E-II— Solution (cont.).(b) Inventory 12/31/16 ....................................................................... 159,000Repossessed Merchandise 12/31/16 ........................................... 14,000Cost of Goods Sold .................................................................... 690,000Purchases ....................................................................... 738,000Inventory 1/1/16 ............................................................... 103,000Repossessed Merchandise ............................................. 22,000 Installment Sales ......................................................................... 1,000,000Cost of Goods Sold ......................................................... 690,000Deferred Gross Profit—2016 (31%) ................................ 310,000 Deferred Gross Profit—2014 (32% × $220,000) ......................... 70,400Deferred Gross Profit—2015 (35% × $300,000) .......................... 105,000Deferred Gross Profit—2016 (31% × $540,000) ......................... 167,400Realized Gross Profit ...................................................... 342,800 Realized Gross Profit ................................................................. 342,800Loss on Repossession .................................................... 4,000Operating Expenses ....................................................... 150,000Income Summary ............................................................ 188,800 Income Summary ....................................................................... 188,800Retained Earnings .......................................................... 188,800Problem E-III — Solution.(a) The computation of income tax payable is as follows:Pretax financial income $1,500,000Permanent differences:State of Oregon bonds (10,000)Executive insurance premiums 12,000Temporary differences:Installment contracts (500,000)Excess tax depreciation (60,000)Lease rental 360,000Taxable income 1,302,000Tax rate 30%Income tax payable $390,600(b) 2016 2017 2018 TotalFuture taxable (deductible) amounts:Installment sales $250,000 $250,000 $500,000Depreciation 20,000 20,000 $20,000 60,000Unearned rent (360,000) (360,000)Test Bank for Intermediate Accounting, Fifteenth EditionE - 8Problem E-III — Solution (cont.).(c) Future Taxable(Deductible) Tax Deferred Tax Temporary Differences Amounts Rate (Asset) Liability Installment Sales $500,000 30% $150,000Depreciation 60,000 30 18,000Rent (360,000) 30 $(108,000)Totals $200,000 $(108,000) $168,000(d) Deferred tax asset at end of 2015 $(108,000)Deferred tax asset at beginning of 2015 -0-Deferred tax (benefit) $(108,000)Deferred tax liability at end of 2015 $168,000Deferred tax liability at beginning of 2015 -0-Deferred tax expense $168,000Deferred tax expense $168,000Deferred tax (benefit) (108,000)Net deferred tax expense for 2015 $ 60,000(e) Income Tax Expense ($390,600 + $60,000) ............................... 450,600Deferred Tax Asset ...................................................................... 608,000Deferred Tax Liability ...................................................... 168,000Income Tax Payable ....................................................... 390,600 (f) Income statementIncome before income taxes $1,500,000Income tax expense:Current $390,600Deferred 60,000 450,600 Net income $1,049,400Balance sheetCurrent liabilities:Deferred tax liability ($150,000 – $108,000) $42,000Long-term liabilities:Deferred tax liability $18,000Comprehensive Examination E E - 9 Problem E-IV— Solution.(a) Service cost $550,000Interest on projected benefit obligation ($540,000 ⨯ 10%) 54,000Expected return on plan assets ($360,000 ⨯ 9%) (32,400)Amortization of PSC 90,000Amortization of net gains (48,000)Pension expense—2015 $613,600(b) Pension Expense ....................................................... 613,600Other Comprehensive Income (G/L) ........................... 48,000Cash ................................................................ 530,000Other Comprehensive Income (PSC) ............... 90,000Pension Asset/Liability ..................................... 41,600E - 10Test Bank for Intermediate Accounting, Fifteenth EditionProblem E-V — Solution.(a) From the viewpoint of the lessee (Pinkley Company), the lease is a capital lease becausethe present value of the minimum lease payments ($7,200,000) exceeds 90% of the fair value of the leased property. The lease term also is in excess of 75% of the property's estimated economic life. For those same reasons and because of the predictable collectibility, absence of uncertainties surrounding costs yet to be incurred by the lessor, and presence of a dealer's profit, the lease is a sales-type lease to the lessor, Foley Company.(b) Profit on sale $ 705,000Interest on outstanding balance($7,200,000 – $1,065,000) × .10 613,500Income of lessor in 2014 $1,318,500(c) Interest on outstanding balance($7,200,000 – $1,065,000) × .10 $ 613,500Depreciation ($7,200,000 ÷ 10) 720,000Expenses incurred by lessee in 2014 $1,333,500(d) Leased Equipment .................................................................... 7,200,000Lease Liability ................................................................ 7,200,000Lease Liability ............................................................................ 1,065,000Cash .............................................................................. 1,065,000(e) Lease Receivable ..................................................................... 7,200,000Cost of Goods Sold ................................................................... 6,795,000Sales Revenue .............................................................. 7,200,000Inventory ....................................................................... 6,795,000Cash ......................................................................................... 1,065,000Lease Receivable........................................................... 1,065,000。

Intermediate Accounting 第2册课程设计1. 简介本文档是Intermediate Accounting第2册课程设计的说明。

Intermediate Accounting是会计专业的一门重要课程，通过引入更高级的会计概念和原则，深入学习各种财务报表及相关问题的处理方法，帮助学生提高其会计知识和能力。

本课程设计旨在帮助学生更好的理解Intermediate Accounting的相关知识，提高其学习成绩。

2. 课程设计内容课程设计内容包括以下几个方面：•理论学习：通过系统化的教学，讲解Intermediate Accounting的相关概念和原则，包括财务报表的研究、现金流量表的编制、会计估计、收入与成本的识别等。

•实践操作：通过实践课堂，学生将学到的理论知识运用到实践中，加深其对Intermediate Accounting的理解和掌握。

•个人或小组项目：学生将分别完成一个关于Intermediate Accounting的个人或小组项目，从而锻炼其团队协作能力和分析判断能力。

3. 课程教学方法课程将采用多种教学方法，包括但不限于以下几种：•讲授法：通过系统化的教学，讲解Intermediate Accounting的相关概念和原则。

•实践法：在课程教学过程中添加案例分析，让学生将学到的理论知识应用到实际问题中去解决。

•个人或小组项目：学生将分别完成一个关于Intermediate Accounting的个人或小组项目，从而锻炼其团队协作能力和分析判断能力。

4. 课程设计目标•通过Intermediate Accounting的学习和实践，提高学生的会计知识和能力。

•坚定学生的会计职业信心，为学生拓展职业领域提供基础。

•提高学生对Intermediate Accounting理论的理解和应用，为学生未来的工作奠定坚实的基础。

•锻炼学生的团队协作能力、独立思考能力和分析判断能力，为学生今后的职业生涯打好坚实的基础。

Intermediate A ccounting IChapter 14-2 HW SolutionsEXERCISE 14-12 (15–20 minutes)Reacquisition price ($1,000,000 X 101%) ................................................$1,010,000 Less: Net carrying amount of bonds redeemed:Par value .....................................................................................$1,000,000Unamortized discount .................................................................(15,000)Unamortized bond issue costs ................................................... (8,000) 977,000 Loss on redemption $ 33,000 Calculation of unamortized discount—Original amount of discount:$1,000,000 X 3% = $30,000$30,000/10 = $3,000 amortization per yearAmount of discount unamortized:$3,000 X 5 = $15,000Calculation of unamortized issue costs—Original amount of costs:$24,000 X $1,000,000/$1,500,000 = $16,000$16,000/10 = $1,600 amortization per yearAmount of costs unamortized:$1,600 X 5 = $8,000January 2, 2010Bonds Payable ........................................................................................1,000,000Loss on Redemption of Bonds ...............................................................33,000 Unamortized Bond Issue Costs ........................................... 8,000 Discount on Bonds Payable......................................................15,000 Cash ..........................................................................................1,010,000 Problem 14-2 (25-30 minutes)(a) Present value of the principal$2,000,000 X .38554 (PV10, 10%) ................................................. $ 771,080 Present value of the interest payments$210,000* X 6.14457 (PVOA10, 10%) ........................................... 1,290,360 Present value (selling price of the bonds) .................................... $2,061,440 *$2,000,000 X 10.5% = $210,000Cash ..................................................................................................2,011,440Unamortized Bond Issue Costs ........................................................50,000Bonds Payable ......................................................................2,000,000Premium Bonds Payable.......................................................61,440(b)DateCash Paid$2,000,000 x 10.5%Interest ExpenseCV x 10%PremiumAmortizationCarrying Amountof Bonds1/1/09 $2,061,440 1/1/10 $210,000 $206,144 $3,856 2,057,584 1/1/11 210,000 205,758 4,242 2,053,342 1/1/12 210,000 205,334 4,666 2,048,676 1/1/13 210,000 204,868 5,132 2,043,544(c) Carrying amount as of 1/1/12........................................................... $2,048,676Less: Amortization of bond premium (5,132 ÷ 2) ........................... 2,566 Carrying amount as of 7/1/12........................................................... $2,046,110 Reacquisition price ........................................................................... $1,065,000 Carrying amount as of 7/1/12 ($2,046,110 ÷ 2).............................. (1,023,055)41,945 Unamortized bond issue costs ($32,500 ÷ 2) .................................. 16,250 Loss .................................................................................................. $ 58,195 Entry for accrued interestInterest Expense ..............................................................................51,217Premium on Bonds Payable ($5,132 X 1/2 X 1/2)...........................1,283Cash ($210,000 X 1/2 X 1/2) ..............................................52,500 Entry for reacquisitionBonds Payable .................................................................................1,000,000Premium on Bonds Payable ............................................................23,055*Loss on Redemption of Bonds ........................................................58,195Unamortized Bond Issue Costs ...........................................16,250**Cash .....................................................................................1,065,000 *Premium as of 7/1/12 to be written off($2,046,110 – $2,000,000) X 1/2 = $23,055**($50,000 X 1/2) ÷ 10 = $2,500 per year$2,500 X 3.5 = $8,750Remaining Balance: $25,000 – $8,750 = $16,250 on 1/2 BondsThe loss is reported as an ordinary loss.Problem 14-9 (20-25 minutes)(a) 12/31/09 Machinery ..................................................................182,485.20Discount on Notes Payable .......................................27,514.80Cash ...............................................................50,000.00Notes Payable................................................160,000.00[To record machinery at thepresent value of the note plusthe immediate cash payment:PV of $40,000 annuity @ 8%for 4 years ($40,000 X3.31213) ....................................$132,485.20Down payment ............................. 50,000.00Capitalized value ofMachinery .................................$182,485.20(b) 12/31/10 Notes Payable............................................................40,000.00Cash ...............................................................40,000.00 Interest Expense ........................................................10,598.82Discount on Notes Payable ...........................10,598.82Schedule of Note Discount A mortizationDate Cash Paid InterestExpense AmortizationCarrying Amount ofNote12/31/09 $132,485.2012/31/10 $40,000.00 $10,598.82 $29,401.18 103,084.02*12/31/11 40,000.00 8,246.72 31,753.28 71,330.7412/31/12 40,000.00 5,706.46 34,293.54 37,037.2012/31/13 40,000.00 2,962.80** 37,037.20 —*$103,084.02 = $132,485.20 – $29,401.18.**$0.18 adjustment due to rounding.(c) 12/31/11 Notes Payable............................................................40,000.00Cash ...............................................................40,000.00Interest Expense ........................................................8,246.72Discount on Notes Payable ...........................8,246.72(d) 12/31/12 Notes Payable............................................................40,000.00Cash ...............................................................40,000.00 Interest Expense ........................................................5,706.46Discount on Notes Payable ...........................5,706.46 (e) 12/31/13 Notes Payable............................................................40,000.00Cash ...............................................................40,000.00 Interest Expense ........................................................2,962.80Discount on Notes Payable ...........................2,962.80。

Intermediate Accounting IChapter 11-2 HW SolutionsQuestion 31.Mandive makes the following journal entries in year 1, assuming straight-line depreciation.Depreciation Expense ................................................................................ 100,000Accumulated Depreciation—Plant Assets ....................................... 100,000 To record depreciation expense in year 1Accumulated Depreciation—Plant Assets .................................................. 100,000Plant Assets .................................................................................... 40,000Revaluation Surplus ........................................................................ 60,000 To adjust the plant assets to fair value and record revaluation surplusThus, there is a 2-step process. First, record depreciation based on the cost of $400,000. As a result, depreciation expense of $100,000 is reported on the income statement. Secondly, the revaluation of $60,000 which is the difference between the fair value of $360,000 and the book value of $300,000 is recorded.Recall that the revaluation surplus is reported in stockholders’ equity as a component of other comprehensive income. Mandive now reports the following information at the end of year 1 for its plant assets:Plant Assets ($400,000 -$40,000) .............................................................. $360,000Accumulated depreciation—Plant assets 0Book value ................................................................................................. $360,000Revaluation surplus ................................................................................... $ 60,000As indicated, $360,000 is the new basis of the asset. Depreciation expense of $100,000 is reported in the income statement and $60,000 is reported in other comprehensive income. The $60,000 of other comprehensive income then is also reported as revaluation surplus in the balance sheet. Assuming no change in the useful life, depreciation in year 2 will be $120,000 ($360,000 ÷ 3).EXERCISE 11-11 (10–15 minutes)(a) No correcting entry is necessary because changes in estimate are handled in the current andprospective periods.(b) Revised annual chargeBook value as of 1/1/2011 [$52,000 – ($6,000 X 5)] = $22,000Remaining useful life, 5 years (10 years – 5 years)Revised salvage value, $4,500($22,000 – $4,500) ÷ 5 = $3,500Depreciation Expense—Equipment ......................................................3,500Accumulated Depreciation—Equipment ....................................3,500(a) December 31, 2010Loss on Impairment .........................................................................220,000Accumulated Depreciation—Equipment ...............................220,000 Note: The asset fails the recoverability test ($300,000 < $500,000)Cost ................................................................ $900,000Accumulated depreciation ............................... 400,000Carrying amount ............................................. 500,000Fair value ........................................................ 280,000Loss on impairment ........................................ $220,000(b)It may be reported in the other expenses and losses section or it may be highlighted as an unusual itemin a separate section. It is not reported as an extraordinary item.(c)No entry necessary. Restoration of any impairment loss is not permitted.NOT REQUIRED:(d)Management first had to determine whether there was an impairment. To evaluate this step,management does a recoverability test. The recoverability test estimates the future cash flows expected from use of that asset and its eventual disposition. If the sum of the expected future net cash flows (undiscounted) is less than the carrying amount of the asset, an impairment results. If the recoverability test indicates that an impairment has occurred, a loss is computed. The impairment loss is the amount by which the carrying amount of the asset exceeds its fair value.EXERCISE 11-22 (15–20 minutes)Depletion base: $1,250,000 + $90,000 – $100,000 + $200,000 = $1,440,000Depletion rate: $1,440,000 ÷ 60,000 = $24/ton(a) Per unit mineral cost: $24/ton(b) 12/31/10 inventory: $24 X 6,000 tons = $144,000(c) Cost of goods sold 2010: $24 X 24,000 tons = $576,000(a)Asset turnover ratio:2007 2006Kodak is using their assets more efficiently in 2007 to produce sales.(b) Rate of return on assets:Kodak is more profitably using their assets in 2007.(c) Profit margin on sales:Kodak is performing better in 2007 and is more able to control costs.(d) The asset turnover ratio times the profit margin on sales provides the rate of return on assets computedfor Eastman Kodak as follows:Profit margin on sales X Asset Turnover Return on Assets6.56% X .736 = 4.83%Note the answer 4.83% is the same as the rate of return on assets computed in (b)above.$10,301= .736 times$10,568 = .715 times$13,659 + $14,320 $14,320 + $15,2362 2$676= 4.83%$(601) = (4.07%)$13,659 + $14,320 $14,320 + $15,2362 2$676= 6.56%$(601) = (5.69%)$10,301 $10,568。

IntermediateAccounting教科书上习题答案（byJDavidSpiceland）Chapter 7 Cash and ReceivablesQUESTIONS FOR REVIEW OF KEY TOPICSAACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments, and faculty may approach assessment and its documentation differently, one approach is to provide specific questions on exams that become the basis for assessment. To aid faculty in this endeavor, we have labeled each question, exercise and problem in Intermediate Accounting, 6e with the following AACSB learning skills:Questions AACSB Tags Exercises (cont.)AACSB Tags 7-1Reflective thinking 7-11Analytic7-2 Reflective thinking 7-12Analytic7-3Reflective thinking 7-13Analytic7-4Reflective thinking, Communications 7-14Analytic7-5Diversity, Reflective thinking 7-15Analytic7-6Reflective thinking 7-16Analytic7-7Reflective thinking 7-17Analytic7-8Reflective thinking 7-18Diversity, Analytic7-9Reflective thinking, Communications 7-19Analytic7-10Reflective thinking 7-20 Reflective thinking7-11Diversity, Reflective thinking 7-21Analytic7-12Reflective thinking 7-22Analytic7-13Reflective thinking 7-23Analytic7-14Diversity, Reflective thinking 7-24 Analytic7-15Reflective thinking, Communications 7-25Analytic7-16 Reflective thinking7-26Analytic7-17 Reflective thinking7-27 Analytic7-18 Reflective thinking7-28 Analytic7-19 Reflective thinking, Communications7-29 Analytic7-20 Diversity, Reflective thinking7-30 Reflective thinking,CommunicationsBrief Exercises 7-31 Reflective thinking,Communications 7-1Reflective thinking CPA/CMA7-2Diversity, Reflective thinking 7-1Analytic7-3Reflective thinking 7-2Analytic7-4 Analytic 7-3Reflective thinking7-5Analytic 7-4 Analytic7-6Analytic 7-5Analytic7-7Diversity, Reflective thinking 7-6Analytic7-8Analytic 7-7Analytic7-9Analytic 7-1Reflective thinking7-10Analytic 7-2Analytic7-11Analytic 7-3Analytic7-12Analytic Problems7-13 Analytic 7-1Analytic7-14Reflective thinking 7-2Analytic7-15 Diversity, Reflective thinking 7-3Analytic7-16 Analytic 7-4 Analytic7-17 Analytic 7-5 AnalyticExercises7-6 Analytic 7-1Analytic7-7Analytic 7-2Analytic 7-8Analytic 7-3 Diversity, Analytic 7-9 Diversity, Analytic 7-4Analytic 7-10Analytic 7-5Analytic 7-11Analytic 7-6 Analytic 7-12Analytic 7-7 Analytic 7-13Analytic 7-8Analytic 7-14Analytic 7-9Analytic 7-15 Analytic 7-10AnalyticQUESTIONS FOR REVIEW OF KEY TOPICSQuestion 7-1Cash equivalents usually include negotiable instruments as well as highly liquid investments that have a maturity date no longer than three months from date of purchase.Question 7-2Internal control procedures involving accounting functions are intended to improve the accuracy and reliability of accounting information and to safeguard the company’s assets. The separation of duties means that employees involved in recordkeeping should not also have physical responsibility for assets.Question 7-3Management must document the company’s internal controls and assess their adequacy. The auditors must provide an opinion on management’s assessment. The Public Company Accounting Oversight Board’s Auditing Standard No. 5, which supersedes Auditing Standard No. 2, further requires the auditor to express its own opinion on whether the company has maintained effective internal control over financial reporting.Question 7-4A compensating balance is an amount of cash a depositor (debtor) must leave on deposit in an account at a bank (creditor) as security for a loan or a commitment to lend. The classification and disclosure of a compensating balance depends on the nature of the restriction and the classification of the related debt. If the restriction is legally binding, then the cash will be classified as either current or noncurrent (investments and funds or other assets) depending on the classification of the related debt. In either case, note disclosure is appropriate. If the compensating balance arrangement is informal and no contractual agreement restricts the use of cash, note disclosure of the arrangement including amounts involved is appropriate. The compensating balance can be included in the cash and cash equivalents category of current assets. Question 7-5Yes, IFRS and U.S. GAAP differ in how bank overdrafts are treated. Under IFRS, overdrafts can be offset against other cash accounts. Under U.S. GAAP overdrafts must be treated as liabilities.Answers to Questions (continued)Question 7-6Trade discounts are reductions below a list price and are used to establish a final price for a transaction. The reduced price is the starting point for initial valuation of the transaction. A cash discount is a reduction, not in the selling price of a good or service, but in the amount to be paid by a credit customer if the receivable is paid within a specified period of time.The gross method of accounting for cash discounts considers discounts not taken as part of sales revenue. The net method considers discounts not taken as interest revenue, because they are viewed as compensation to the seller for allowing the buyer to defer payment.Question 7-8When returns are material and a company can make reasonable estimates of future returns, an allowance for sales returns is established. At a financial reporting date, this provides an estimate of the amount of future returns for prior sales, and involves a debit to sales returns and a credit to allowance for sales returns for the estimated amount. Allowance for sales returns is a contra account to accounts receivable. When returns actually occur in the future reporting period, the allowance for sales returns is debited.Question 7-9Even when specific customer accounts haven’t been proven uncollectible by the end of the reporting period, bad debt expense properly should be matched with sales revenue on the income statement for that period. Likewise, since it’s not expected that all accounts receivable will be collected, the balance sheet should report only the expected net realizable value of that asset. So, to record the bad debt expense and the related reduction of accounts receivable when the amount hasn’t been determined, an estimate is needed. In an adjusting entry, we record bad debt expense and reduce accounts receivable for an estimate of the amount that eventually will prove uncollectible.If uncollectible accounts are immaterial or not anticipated, or it’s not possible to reliably estimate uncollectible accounts, an allowance for uncollectible accounts is not appropriate. In these few cases, any bad debts that do arise simply are written off as bad debt expense at the time they prove uncollectible.Answers to Questions (continued)Question 7-10The income statement approach to estimating bad debts determines bad debt expense directly by relating uncollectible amounts to credit sales. The balance sheet approach to estimating future bad debts indirectly determines bad debt expense by estimating the net realizable value for accounts receivable that exist at the end of the period. In other words, the allowance for uncollectible accounts at the end of the period is estimated and then bad debt expense is determined by adjusting the allowance account to reflect net realizable value.Question 7-11A company has to separately disclose trade receivables and receivables from related parties under U.S. GAAP, but not under IFRS.Question 7-12The assignment of all accounts receivable in general as collateral for debt requires no special accounting treatment other than note disclosure of the agreement. Question 7-13The accounting treatment of receivables factored with recourse depends on whether certain criteria are met. If the criteria are met, the factoring is accounted for as a sale. If they are not met, the factoring is accounted for as a loan. In addition, note disclosure may be required. Accounts receivable factored without recourse are accounted for as the sale of an asset. The difference between the book value and the fair value of proceeds received is recognized as a gain or a loss.Question 7-14U.S. GAAP focuses on whether control of assets has shifted from the transferor to the transferee. In contrast, IFRS focuses on whether the company has transferred “substantially all of the risks and rewards of ownership,” as well as whether the company has transferred control. Under IFRS:If the company transfers substantially all of the risks and rewards of ownership, the transfer is treated as a sale.If the company retains substantially all of the risks and rewards of ownership, the transfer is treated as a secured borrowing. If neither conditions 1 or 2 hold, the company accounts for the transaction as a sale if it has transferred control, and as a secured borrowing if it has retained control.Answers to Questions (continued)When a note is discounted, a financial institution, usually a bank, accepts the note and gives the seller cash equal to the maturity value of the note reduced by a discount. The discount is computed by applying a discount rate to the maturity value and represents the financing fee the bank charges for the transaction.The four-step process used to account for a discounted note receivable is as follows:1. Accrue any interest revenue earned since the last payment date (or date of thenote).2. Compute the maturity value.3. Subtract the discount the bank requires (discount rate times maturity valuetimes the remaining length of time from date of discounting to maturity date) from the maturity value to compute the proceeds to be received from the bank (maturity value less discount)./doc/2db73084591b6bd97f192279168884868762b8ba.html pute the difference between the proceeds and the book value of the noteand related interest receivable. The treatment of the difference will depend on whether the discounting is accounted for as a sale or as a loan. If it’s a sale the difference is recorded as a loss or gain on the sale; if it’s a loan the difference is viewed as interest expense or interest revenue.Question 7-16A company’s investment in receivables is influenced by several related variables, to include the level of sales, the nature of the product or service, and credit and collection policies. The receivables turnover and average collection period ratios are designed to monitor receivables.Question 7-17The items necessary to adjust the bank balance might include deposits outstanding (including undeposited cash), outstanding checks, and any bank errors discovered during the reconciliation process. The items necessary to adjust the book balance mi ght include collections made by the bank on the company’s behalf, service and other charges made by the bank, NSF (nonsufficient funds) check charges, and any company errors discovered during the reconciliation process.Answers to Questions (concluded)Question 7-18A petty cash fund is established by transferring a specified amount of cash from the company’s general checking account to an employee designated as the petty cash custodian. The fund is replenished by writing a check to the petty cash custodian for the sum of the bills paid with petty cash. The appropriate expense accounts are recorded from petty cash vouchers at the time the fund is replenished.Question 7-19When a creditor’s investment in a receivable becomes impaired, due to a troubled debt restructuring or for any other reason, the receivable is re-measured based on the discounted present value of currently expected cash flows at the loan’s original effective rate (regardless of the extent to which expected cash receipts have been reduced). The extent of the impairment is the difference between the carrying amount of the receivable (the present value of the receivable’s cash flows prior to the restructuring) and the present value of the revised cash flows discounted at the loan’s original effective rate. This difference is recorded as a loss at the time the receivable is reduced.Question 7-20No. Under both U.S. GAAP and IFRS, a company can recognize in net income the recovery of impairment losses of accounts and notes receivable.BRIEF EXERCISESBrief Exercise 7-1The company could improve its internal control procedure for cash receipts by segregating the duties of recordkeeping andthe handling of cash. Jim Seymour, responsible for recordkeeping, should not also be responsible for depositing customer checks.Brief Exercise 7-2Under IFRS the cash balance would be $245,000, because they could offset the two accounts. Under U.S. GAAP the balance would be $250,000, because they could not offset the two accounts.Brief Exercise 7-3All of these items would be included as cash and cash equivalents except the U.S. Treasury bills, which would be included in the current asset section of the balance sheet as short-term investments.Brief Exercise 7-4Income before tax in 2012 will be reduced by $2,500, the amount of the cash discounts.$25,000 x 10 = $250,000 x 1% = $2,500Brief Exercise 7-5Income before tax in 2011 will be reduced by $2,500, the anticipated amount of cash discounts.$25,000 x 10 = $250,000 x 1% = $2,500Brief Exercise 7-6Estimated returns = $10,600,000 x 8% = $848,000Less: Actual returns (720,000)Remaining estimated returns $128,000Brief Exercise 7-7Singletary cannot combine the two types of receivables under U.S. GAAP, as the director is a related party. Under IFRS a combined presentation would be allowed. Brief Exercise 7-8(1) Bad debt expense = $1,500,000 x 2% = $30,000(2) Allowance for uncollectible accounts:Beginning balance $25,000Add: Bad debt expense 30,000Deduct: Write-offs (16,000)Ending balance $39,000Brief Exercise 7-9(1) A llowance for uncollectible accounts:Beginning balance $ 25,000Deduct: Write-offs (16,000)Required allowance (33,400)*Bad debt expense $24,400(2) Required allowance = $334,000** x 10% = $33,400* Accounts receivable:Beginning balance $ 300,000Add: Credit sales 1,500,000Deduct: Cash collections (1,450,000)Write-offs (16,000)Ending balance $ 334,000** Brief Exercise 7-10 Allowance for uncollectible accounts:Beginning balance $30,000Add: Bad debt expense 40,000Deduct: Required allowance (38,000)Write-offs $32,000Brief Exercise 7-11Credit sales $8,200,000Deduct: Cash collections (7,950,000)Write-offs (32,000)* Year-end balance in A/R (2,000,000) Beginning balance in A/R $1,782,000*Allowance for uncollectible accounts:Beginning balance $30,000Add: Bad debt expense 40,000Deduct: Required allowance (38,000)Write-offs $32,000 Brief Exercise 7-122011 interest revenue:$20,000 x 6% x 1/12 =$1002012 interest revenue:$20,000 x 6% x 2/12 =$200Brief Exercise 7-13Assets decrease by $7,000:Cash increases by $100,000 x 85% = $ 85,000 Receivable from factor increases by($11,000 – $3,000 fee) 8,000Accounts receivable decrease (100,000)Net decrease in assets $ (7,000)Liabilities would not change as a result of this transaction.Income before income taxes decreases by $7,000(the loss on sales of receivables)The journal entry to record the transaction is as follows:Brief Exercise 7-14Logitech would account for the transfer as a secured borrowing. The receivables remain on the company’s books and a liability is recorded for the amount borrowed plus the bank’s fee.Brief Exercise 7-15Under IFRS, Huling would treat this transaction as a secured borrowing, because they retain substantially all of the risks and rewards of ownership. Under U.S. GAAP, Huling would treat this transaction as a sale, because they have transferred control. Note, however, that in practice we would typically expect for the entity that has the risks and rewards of ownership to also have control over the assets, so we would expect these criteria to usually lead to the same accounting.Brief Exercise 7-16Brief Exercise 7-17Receivables turnover = $320,000 = 5.33$60,000*($50,000 + 70,000) 2 = $60,000*Average collection = 365 = 68 daysperiod 5.33EXERCISESExercise 7-1Requirement 1Cash and cash equivalents includes:a. Balance in checking account $13,500Balance in savings account 22,100b. Undeposited customer checks 5,200c. Currency and coins on hand 580f. U.S. treasury bills with 2-month maturity 15,000Total $56,380Requirement 2d. The $400,000 savings account will be used for future plant expansion andtherefore should be classified as a noncurrent asset, either in other assets orinvestments.e. The $20,000 in the checking account is a compensating balance for a long-term loan and should be classified as a noncurrent asset, either in otherassets or investments.f. The $20,000 in 7-month treasury bills should be classified as a current assetalong with other temporary investments.Exercise 7-2Requirement 1Cash and cash equivalents includes:Cash in bank – checking account $22,500U.S. treasury bills 5,000Cash on hand 1,350Undeposited customer checks 1,840Total $30,690Requirement 2The $10,000 in 6-month treasury bills should be classified as a current asset along with other temporary investments. Exercise 7-3Requirement 1: U.S. GAAPCurrent Assets:Cash $175,000Current Liabilities:Bank Overdrafts $ 15,000 Requirement 2: IFRSCurrent Assets:Cash $160,000(No current liabilities with respect to overdrafts.)Exercise 7-4Requirement 1Sales price = 100 units x $600 = $60,000 x 70% = $42,000Requirement 2Exercise 7-4 (concluded) Requirement 3Requirement 1, using the net method:Requirement 2, using the net method:Exercise 7-5Requirement 1Sales price = 1,000 units x $50 = $50,000Requirement 2。

Chapter 1 Environment and Theoretical Structure of Financial AccountingQUESTIONS FOR REVIEW OF KEY TOPICSQuestion 1-5The primary objective of financial accounting is to provide investors and creditors with information that will help them make investment and credit decisions.Question 1-7GAAP (generally accepted accounting principles) are a dynamic set of both broad and specific guidelines that a company should follow in measuring and reporting the information in their financial statements and related notes. It is important that all companies follow GAAP so that investors can compare financial information across companies to make their resource allocation decisions.Question 1-9Auditors are independent, professional accountants who examine financial statements to express an opinion. The opinion reflects the auditors’ assessment of the statements' fairness, which is determined by the extent to which they are prepared in compliance with GAAP. The auditor adds credibility to the financial statements, which increases the confidence of capital market participants relying on that information. Question 1-11New accounting standards, or changes in standards, can have significant differential effects on companies, investors and creditors, and other interest groups by causing redistribution of wealth. There also is the possibility that standards could harm the economy as a whole by causing companies to change their behavior.Question 1-13The purpose of the conceptual framework is to guide the Board in developing accounting standards by providing an underlying foundation and basic reasoning on which to consider merits of alternatives. The framework does not prescribe GAAP.Question 1-14Relevance and faithful representation are the primary qualitative characteristics that make information decision-useful. Relevant information will possess predictive and/or confirmatory value. Faithful representation is the extent to which there is agreement between a measure or description and the phenomenon it purports to represent.The benefit from providing accounting information is increased decision usefulness. If the information is relevant and possesses faithful representation, it will improve the decisions made by investors and creditors. However, there are costs to providing information that include costs to gather, process, and disseminate that information. There also are costs to users in interpreting the information as well as possible adverse economic consequences that could result from disclosing information. Information should not be provided unless the benefits exceed the costs.Question 1-17Information is material if it is deemed to have an effect on a decision made by a user. The threshold for materiality will depend principally on the relative dollar amount of the transaction being considered. One consequence of materiality is that GAAP need not be followed in measuring and reporting a transaction if that transaction is not material. The threshold for materiality has been left to subjective judgment. Question 1-19The four basic assumptions underlying GAAP are (1) the economic entity assumption, (2) the going concern assumption, (3) the periodicity assumption, and (4) the monetary unit assumption.Question 1-22The four key broad accounting principles that guide accounting practice are (1) the historical cost or original transaction value principle, (2) the realization or revenue recognition principle, (3) the matching principle, and (4) the full disclosure principle.Question 1-23Two important reasons to base valuation on historical cost are (1) historical cost provides important cash flow information since it represents the cash or cash equivalent paid for an asset or received in exchange for the assumption of a liability, and (2) historical cost valuation is the result of an exchange transaction between two independent parties and the agreed upon exchange value is, therefore, objective and possesses a high degree of verifiability.Question 1-25The four different approaches to implementing the matching principle are:1. Recognizing an expense based on an exact cause-and-effect relationship between a revenue andexpense event. Cost of goods sold is an example of an expense recognized by this approach.2. Recognizing an expense by identifying the expense with the revenues recognized in a specific timeperiod. Office salaries is an example of an expense recognized by this approach.3. Recognizing an expense by a systematic and rational allocation to specific time periods.Depreciation is an example of an expense recognized by this approach.4. Recognizing expenses in the period incurred, without regard to related revenues. Advertising is anexample of an expense recognized by this approach.GAAP prioritizes the inputs companies should use when determining fair value. The highest and most desirable inputs, Level 1, are quoted market prices in active markets for identical assets or liabilities. Level 2 inputs are other than quoted prices that are observable including quoted prices for similar assets or liabilities in active or inactive markets and inputs that are derived principally from observable related market data. Level 3 inputs, the least desirable, are inputs that reflect the entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.EXERCISESExercise 1-2Requirement 1Requirement 2Amount owed at the end of year one $ 5,000Advertising costs incurred in year two 25,00030,000Amount paid in year two (15,000)Liability at the end of year two 15,000Less cash paid in year three (35,000)Advertising expense in year three $20,000*Exercise 1-7List A List Bo 1. Predictive value a. Decreases in equity resulting from transfers toowners.h 2. Relevance b. Requires consideration of the costs and value ofinformation.g 3. Timeliness c. Important for making interfirm comparisons.a 4. Distribution to owners d. Applying the same accounting practices over time.j 5. Confirmatory value e. Users understand the information in the context of thedecision being made.e 6. Understandability f. Agreement between a measure and the phenomenonit purports to represent.n 7. Gain g. Information is available prior to the decision.f 8. Faithful representation h. Pertinent to the decision at hand.k 9. Comprehensive income i. Implies consensus among different measurers.p 10. Materiality j. Information confirms expectations.c 11. Comparability k. The change in equity from nonowner transactions.m 12. Neutrality l. The process of admitting information into financial statements.l 13. Recognition m. The absence of bias.d 14. Consistency n. Results if an asset is sold for more than its bookvalue.b 15. Cost effectiveness o. Information is useful in predicting the future.i 16. Verifiability p. Concerns the relative size of an item and its effect ondecisions.Exercise 1-121. Disagree —Monetary unit assumption2. Disagree —Full disclosure principle3. Agree —The matching principle4. Disagree —Historical cost (original transaction value) principle5. Agree —Realization (revenue recognition) principle6. Agree —Materiality7. Disagree —Periodicity assumption。

Chapter 19Share-Based Compensation and Earnings Per Share ExercisesExercise 19-1Requirement 1$5 fair value per sharex 16 million shares granted= $80 million fair value of awardRequirement 2December 31, 2011 ($ in millions)Compensation expense ($80 million ÷ 2 years) (40)Paid-in capital – restricted stock (40)December 31, 2012Compensation expense ($80 million ÷ 2 years) (40)Paid-in capital – restricted stock (40)Paid-in capital – restricted stock (80)Common stock (16 million shares x $1 par) (16)Paid-in capital – excess of par (remainder) (64)Requirement 1$2.50 fair value per sharex 12 million shares granted= $30 million fair value of award Requirement 2no entry Requirement 3($ in millions) Compensation expense ($30 million ÷ 3 years) (10)Paid-in capital – restricted stock (10)Requirement 4Compensation expense ($30 million ÷ 3 years) (10)Paid-in capital – restricted stock (10)Requirement 5Compensation expense ($30 million ÷ 3 years) (10)Paid-in capital – restricted stock (10)Requirement 6Paid-in capital – restricted stock (30)Common stock (12 million shares x $1 par) (12)Paid-in capital – excess of par (remainder) (18)Requirement 1$3,000,000 111,540 shares = $26.90Requirement 2The $3,000,000 total compensation is expensed over the three-year vesting period, $1,000,000 each year. During the first year, the expense is the appropriate portion of $1,000,000, depending on the date the shares were issued. For instance, if the shares were issued three months before the end of the year, the expense would be 3/12 x $1,000,000 = $250,000. The expense is the full $1,000,000 in the year following the year in which the stock was issued.Requirement 1$22.50 fair value per sharex 4 million shares granted= $90 million fair value of awardRequirement 2no entry Requirement 3($ in millions) Compensation expense ($90 million ÷ 3 years) (30)Paid-in capital – restricted stock (30)Requirement 4$22.50 fair value per sharex 4 million shares grantedx 90% 100% – 10% forfeiture rate= $81 million fair value of awardRequirement 1$3 fair value per optionx 4 million options granted= $12 million total compensation Requirement 2no entryRequirement 3($ in millions) Compensation expense ($12 million ÷ 2 years) (6)Paid-in capital – stock options (6)Requirement 4Compensation expense ($12 million ÷ 2 years) (6)Paid-in capital – stock options (6)Requirement 1At January 1, 2011, the estimated value of the award is:$3 estimated fair value per optionx 25 million options granted= $75 million total compensationRequirement 2($ in millions) Compensation expense ($75 million ÷ 3 years) ............................ 25.0Paid-in capital – stock options ............................................ 25.0 Requirement 3Adams-Meneke should adjust the cumulative amount of compensation expense recorded to date in the year the estimate changes.2012Compensation expense ([$75 x 94% x 2/3] – $25) (22)Paid-in capital –stock options (22)2013Compensation expense ([$75 x 94% x 3/3] – $25 – $22) ....... 23.5Paid-in capital –stock options ............................................. 23.5Note that this approach is contrary to the usual way companies account forchanges in estimates. For instance, assume a company acquires a 3-yeardepreciable asset having no estimated residual value. The $75 milliondepreciable cost would be depreciated straight-line at $25 million over thethree-year useful life. If the estimated residual value changes after one year to 6% of cost, the new estimated depreciable cost of $70.5 would be reduced by the $25 million depreciation recorded the first year, and the remaining $45.5 millionwould be depreciated equally, $22.75 million per year, over the remaining two years.Requirement 1At January 1, 2011, the estimated value of the award is:$1 estimated fair value per optionx 40 million options granted= $40 million fair value of awardRequirement 2($ in millions) Compensation expense ($40 million ÷ 2 years) (20)Paid-in capital – stock options (20)Requirement 3Compensation expense ($40 million ÷ 2 years) (20)Paid-in capital – stock options (20)Requirement 4Cash ($8 exercise price x 30 million shares) (240)Paid-in capital - stock options(3/4 account balance of $40 million) (30)Common stock (30 million shares at $1 par per share) (30)Paid-in capital – excess of par (remainder) (240)Note: The market price at exercise is irrelevant.Requirement 5Paid-in capital – stock options ($40 -30 million) (10)Paid-in capital – expiration of stock options (10)Requirement 1At January 1, 2011, the total compensation is measured as: $ 3 fair value per optionx 12 million options granted= $36 million fair value of awardRequirement 2December 31, 2011, 2012, 2013($ in millions) Compensation expense ($36 million ÷ 3 years) (12)Paid-in capital – stock options (12)Requirement 3Cash ($11 exercise price x 12 million shares) (132)Paid-in capital - stock options ($12 million x 3 years) (36)Common stock(12 million shares at $1 par per share) (12)Paid-in capital – excess of par (to balance) (156)Note: The market price at exercise is irrelevant.Cash ($12 x 50,000 x 85%)510,000 Compensation expense ($12 x 50,000 x 15%)90,000Common stock ($1 x 50,000)50,000Paid-in capital - in excess of par ($11 x 50,000)550,000Exercise 19-10(amounts in thousands, except per share amount)net Earningsincome Per Share$655 $655 ———————————————————————— = ——= $.64 900(1.05) + 60 (8/12) (1.05)+ 72 (7/12) 1,029shares new newat Jan. 1 shares shares↑___ stock dividend ___↑adjustment1. EPS in 2011(amounts in thousands, except per share amount)net Earnings income Per Share $400 $400——————————————————————————–––– = $2.00 202 - 6 (10/12) + 6 (2/12) + 24 (1/12) 200shares treasury treasury shares newat Jan. 1 shares sold shares2. EPS in 2012(amounts in thousands, except per share amount)net Earnings income Per Share $400 $400——————————————————————————–––– = $.88 (202 - 6 + 6 + 24) x (2.00) 452shares stock dividendat Jan. 1 adjustment3. 2011 EPS in the 2012 comparative financial statements(amounts in thousands, except per share amount)net Earningsincome Per Share$400 $400——————————————————————————–––– = $1.00 200 x (2.00) 400 weighted-average shares stock dividendas previously calculated adjustmentExercise 19-12(amounts in thousands, except per share amount)net preferred Earningsincome dividends Per Share$2,000 – $50 $1,950 ————————————————— = ————= $1.95 800 (1.25) 1,000shares stock dividendat Jan. 1 adjustmentExercise 19-13(amounts in thousands, except per share amount)net preferred Net Lossloss dividends Per Share– $114 – $761– $190 —————————————————————— = ——= ($.50) 373 + 12 (7/12) 380shares newat Jan. 1 shares19.5% x $800* = $76*8,000 shares x $100 par = $800,000(amounts in millions, except per share amount)net preferred Earnings income dividends Per Share $150 – $271$123 —————————————————————— = ——— = $.65 200 (1.05) – 24 (10/12) (1.05)+ 4 (3/12) 190shares treasury newat Jan. 1 shares shares↑___ stock dividend ___↑adjustment19% x $300 = $27(amounts in millions, except per share amount)Basic EPSnet preferredincome dividends$150 – $27 $123 ——————————————————————————= —— = $.65 200 (1.05) – 24 (10/12) (1.05)+ 4 (3/12) 190shares treasury newat Jan. 1 shares shares↑___ stock dividend ___↑adjustmentDiluted EPSnet preferredincome dividends$150 – $27 $123 ——————————————————————————= —— = $.63 200 (1.05) – 24 (10/12) (1.05)+ 4 (3/12) + (30 – 24*) 196shares treasury new assumed exerciseat Jan. 1 shares shares of options↑___ stock dividend ___↑adjustment*Purchase of treasury stock30 million sharesx $56 (exercise price)$1,680 million÷ $70 (average market price)24 million shares(amounts in millions, except per share amount)Basic EPSnet preferredincome dividends$150 – $27 $123——————————————————————————= —— = $.62 200 (1.05) – 24 (10/12) (1.05)+ 4 (3/12) + 30(4/12) 200shares treasury new actual exerciseat Jan. 1 shares shares of options↑___ stock dividend ___↑adjustmentDiluted EPSnet preferredincome dividends$150 – $27 $123————————————————————————————= —— = $.60 200 (1.05) – 24(10/12) (1.05) + 4(3/12) + (30 – 24*)(8/12) + 30(4/12) 204 shares treasury new assumed exercise actual exerciseat Jan. 1 shares shares of options of options↑___ stock dividend ___↑adjustment*Purchase of treasury stock30 million sharesx $56 (exercise price)$1,680 million÷ $70 (average market price)24 million shares(amounts in millions, except per share amount)Basic EPSnet preferredincome dividends$150 – $27*$123 ———————————————————————————— = — = $.65 200 (1.05) – 24 (10/12) (1.05)+ 4 (3/12) 190 shares treasury newat Jan. 1 shares shares↑___ stock dividend ___↑adjustment*9% x $100 x 3 million shares = $27 million preferred dividendsDiluted EPSnet preferred after-taxincome dividends interest savings$150 – $27 + $5* – 40% ($5**) $126 ————————————————————————————= — = $.62 200 (1.05) – 24 (10/12) (1.05)+ 4 (3/12) + (30 – 24**) + 6 202 shares treasury new exercise conversionat Jan. 1 shares shares of options of bonds↑___ stock dividend ___↑adjustment**8% x $62.5 million = $5 million interest**Purchase of treasury stock30 million sharesx $56 (exercise price)$1,680 million÷ $70 (average market price)24 million shares(amounts in thousands, except per share amount)Basic EPSnetincome$720 $720 ———————————————————— = ——= $8.4780 + 15 (4/12) 85shares newat Jan. 1 sharesDiluted EPSnetincome$720 $720 —————————————————————— = ——= $8.0980 + 15 (4/12) + (24 – 20)*89shares new exerciseat Jan. 1 shares of options*Purchase of treasury shares24,000 sharesx $37.50 (exercise price)$900,000÷ $45 (average market price)20,000 shares(amounts in thousands, except per share amounts)Basic EPSnet preferredincome dividends$500 – 60*$440 ——————————————————————— = ——— = $4.40 100 100sharesat Jan. 1Diluted EPSnet preferred preferred after-taxincome dividends dividends interest savings$500 – 60*+60* + $100**– 40% ($100) $560 ——————————————————————————— = —— = $3.46 100 +32 + 30 162shares conversion conversionat Jan. 1 of preferred of bondsstock*12,000 shares x $5** $1,000,000 x 10%Order of Entry:Note that we included in our calculation, the convertible security with the lowest―incremental effect‖ ($60/32 = $1.87) before the one with the higher effect ($60/30 = $2.00).After including the conversion of the preferred stock only, EPS is $500 / 132 = $3.79. The $2.00 incremental effect of the conversion of the bonds is less than that amount, so in this instance the order of entry was unimportant. But there are situations in which the incremental effect of the second convertible security is higher than the calculation prior to its inclusion. In those situations, including the second security is antidilutive. That’s why we should include securities in the calculation in reverse order, beginning with the lowest incremental effect (most dilutive).(amounts in thousands, except per share amounts)Basic EPSnet Earningsincome Per Share$120$120——————————= ——— = $.15800800sharesat Jan. 1Diluted EPSnet Earningsincome Per Share$120$120——————————= ——— = $.14800+ (54 – 18*) 836shares sharesat Jan. 1 assumed vestedProceeds:$270,000 ($5 market price per share x 54,000 shares)÷ 3 years vesting period$90,000 compensation expense per yearx 2$180,000 expensed in 2010 and 2011$90,000 unexpensed compensation at Dec. 31, 2011*Assumed purchase of treasury shares$90,000 proceeds÷ $5(average market price)18,000 sharesNote: The proceeds also must be increased (or decreased) by any tax benefits that would be added to (or deducted from) paid-in capital when the eventual tax deduction differs from the amount expensed, the ―excess tax benefit.‖ Since that occurs when the stock price at vesting differs from the stock price at the grant date, the fact that the market price remained at $5 avoided that issue.Requirement 1$5 fair value per sharex 18 million shares granted= $90 million fair value of awardThe $90 million total compensation is expensed equally over the three-year vestingperiod, reducing earnings by $30 million each year.2010Compensation expense (30)Paid-in capital–restricted stock (30)2011Compensation expense (30)Paid-in capital–restricted stock (30)Requirement 2The total compensation for the award is $90 million ($5 market price per share x 18 million shares). Because the stock award vests over three years, it is expensed as $30 million each year for three years. At the end of 2011, the second year, $60 million has been expensed and $30 million remains unexpensed, so $30 million would be the assumed proceeds in an EPS calculation. If the market price averages $5, the $30 million will buy back 6 million shares and we would add to the denominator of diluted EPS 12 million common shares:No adjustment to the numerator18 million – 6* million = 12 million*Assumed purchase of treasury shares$30 million÷ $5 (average market price)6 million sharesNote: The proceeds also must be increased (or decreased) by any tax benefits that would be added to (or deducted from) paid-in capital when the eventual tax deduction differs from the amount expensed, the ―excess tax benefit.‖ Since that occurs when the stock price at vesting differs from the stock price at the grant date, the fact that the market price remained at $5 avoided that issue.(amounts in millions, except per share amounts)Basic EPSnetincome$148 $148 —————————————————————————— = ——— = $3.8935 + 4 (9/12) 38shares newat Jan. 1 sharesDiluted EPSnetincome$148 $148 —————————————————————————— = ——— = $3.7935 + 4 (9/12) + 1 39shares new additionalat Jan. 1 shares sharesBecause the conditions are met for issuing 1 million shares, those shares are assumed issued for diluted EPS. Conditions for the other 1 million shares are not yet met, so as they are ignored.(amounts in thousands, except per share amounts)Basic EPSnetincome$2,000 $2,000—————————————————————————— = ——— = $2.96 600 + 100 (9/12) 675shares newat Jan. 1 sharesDiluted EPSnetincome$2,000 $2,000—————————————————————————— = ——— = $2.74 600 + 100 (9/12) + 4 x 10 + 15 730shares new contingent contingentat Jan. 1 shares shares* shares***Because the conditions currently are met (i.e., market price exceeds $48) for issuing 10,000 shares in each of the next 4 years, those shares are assumed issued for diluted EPS.** The condition for the other 15,000 shares also is met (the controller is employed), so those shares are assumed issued for diluted EPS.List A List B__e_ 1. Subtract preferred dividends. a. Options exercised.__m_ 2. Time-weighted by 5/12. b. Simple capital structure.__a_ 3. Time-weighted shares assumed issued c. Basic EPS.plus time-weighted-actual shares. d. Convertible preferred stock.__i_ 4. Midyear event treated as if e. Earnings available to common it occurred at the beginning of the shareholders.reporting period. f. Antidilutive.__l_ 5. Preferred dividends do not reduce g. Increased marketability.earnings. h. Extraordinary items.__b_ 6. Single EPS presentation. i. Stock dividend.__g_ 7. Stock split. j. Add after-tax interest tonumerator.__d_ 8. Potential common shares. k. Diluted EPS.__f_ 9. Exercise price exceeds market price. l. Noncumulative, undeclared__c_10. No dilution assumed. preferred dividends.__j_ 11. Convertible bonds. m. Common shares retired inAugust._n_ 12. Contingently issuable shares. n. Include in diluted EPS when _k_ 13. Maximum potential dilution. conditions for issuance are met. _h_ 14. Shown between per share amountsfor net income and for income fromcontinuing operations.Requirement 1The FASB Accounting Standards Codification represents the single source of authoritative U.S. generally accepted accounting principles.The appropriate accounting treatment for the situation is specified in FASB ASC 718–10–50: ―Compensation–Stock Compensation–Overall–Disclosure.‖Requirement 2Section 718–10–50–2c states that companies must disclose:For the most recent year for which an income statement is provided, both of the following:1.The number and weighted-average exercise prices (or conversion ratios) for eachof the following groups of share options:1.Those outstanding at the beginning of the year2.Those outstanding at the end of the year3.Those exercisable or convertible at the end of the year4.Those that during the year were:1.Granted2.Exercised or converted3.Forfeited4.ExpiredThe FASB Accounting Standards Codification represents the single source of authoritative U.S. generally accepted accounting principles. The specific citation for each of the following items is:1. Stock options:FASB ASC 718–10–30: ―Compensation-Stock Compensation–Overall–InitialMeasurement.‖2. The measurement date for share-based payments classified as liabilities:FASB ASC 718–30–30–1: ―Compensation–Awards Classified as Liabilities–Initial Measurement–Public Entity.‖3. The formula to calculate diluted earnings per share.FASB ASC 260–10–45–16: ―Earnings per Share–Overall–Other PresentationMatters–Computation of Diluted EPS.‖4. The way stock dividends or stock splits in the current year affect thepresentation of EPS on the income statement.FASB ASC 260–10–55–12: ―Earnings per Share–Overall–ImplementationGuidelines–Stock Dividends or Stock Splits.‖Requirement 1The SARs are considered to be equity because IE will settle in shares of IE stock at exerciseJanuary 1, 2011No entryCalculate total compensation expense:$ 3 estimated fair value per SARx 24 million SARs granted= $72 million total compensationThe total compensation is allocated to expense over the 4-year service (vesting) period: 2011 – 2014$72 million ÷ 4 years = $18 million per yearRequirement 2December 31, 2011, 2012, 2013, 2014 ($ in millions)Compensation expense ($72 million ÷ 4 years)18Paid-in capital – SAR plan 18Requirement 3The total compensation is measured once – at the grant date – and is not re-measured subsequently.Requirement 4June 6, 2016Paid-in capital – SAR plan (account balance)72Common stock ($1 par per share x [$96 million*\ $50]) 1.92Paid-in capital – in excess of par (to balance)70.08*$50 – 46 = $4 appreciation per share times 24 million units = $96 millionRequirement 1The SARs are considered to be a liability because employees can elect to receive cash at exercise.January 1, 2011No entryRequirement 2December 31, 2011($ in millions) Compensation expense($4 x 24 million x 1/4)24 Liability – SAR plan 24 December 31, 2012Compensation expense ([$3 x 24 million x 2/4] - 24)12 Liability – SAR plan 12 December 31, 2013Compensation expense ([$4 x 24 million x 3/4] – 24 – 12)36 Liability – SAR plan 36 December 31, 2014Liability – SAR plan 12 Compensation expense ([$2.50 x 24 million x 4/4] –24 –12 –36)12 Requirement 3December 31, 2015Compensation expense ([$3 x 24 million x all] –24 –12 –36 +12)12 Liability – SAR plan 12 Requirement 4June 6, 2016Compensation expense ([($50-46) x 24 million x all] –24–12–36+12–12)24 Liability – SAR plan 24 Liability – SAR plan (account balance)96 Cash 96CPA REVIEW QUESTIONS CPA Exam Questions1. c.2. b.3. b.4. b.5. b.。

intermediate accounting pdf 链接标题：Intermediate Accounting PDF 链接引言概述：Intermediate accounting是会计学中的一个重要领域，它涉及到复杂的会计准则和规定。

对于学习和实践会计的人来说，拥有一本高质量的Intermediate Accounting PDF是非常重要的。

本文将介绍Intermediate Accounting PDF的重要性，并提供一些优质的链接资源。

正文内容：1. Intermediate Accounting PDF的重要性1.1 提供深入的会计知识：Intermediate Accounting PDF提供了深入的会计知识，覆盖了会计学中的各个方面，包括财务报表、资产负债表、利润表等。

这些知识对于学生和从业人员来说都是至关重要的，可以帮助他们理解和应用复杂的会计准则。

1.2 提供实践经验：Intermediate Accounting PDF不仅仅是理论知识的集合，还包含了大量的实践案例和解决方案。

通过学习这些实践经验，读者可以更好地应用会计知识，解决实际的会计问题。

2. Intermediate Accounting PDF的链接资源2.1 专业出版社网站：许多专业出版社都提供Intermediate Accounting PDF的链接资源，例如Wiley、Pearson等。

这些出版社出版的教材通常具有权威性和可靠性，可以提供高质量的会计知识。

2.2 学术机构网站：一些知名的学术机构网站，如哈佛大学、斯坦福大学等，也提供Intermediate Accounting PDF的链接资源。

这些资源通常由知名学者编写，具有较高的学术水平。

2.3 会计协会网站：会计协会网站，如美国会计师协会（AICPA）、国际会计师协会（IFAC）等，也提供Intermediate Accounting PDF的链接资源。

Intermediate Accounting第十六版课程设计一、课程信息1.1 课程名称Intermediate Accounting1.2 课程代码ACCT 3211.3 学分3学分1.4 先修课程Principles of Accounting1.5 任课教师XXX1.6 授课语言英语二、课程介绍Intermediate Accounting是会计专业的必修课程之一，本课程旨在探究企业财务报表的编制、分析和解释。

课程内容包括：1.资产负债表编制2.现金流量表编制3.利润表和综合收益表编制4.投资与减值5.长期负债6.股权7.所得税除了以上课程内容，学生还将深入研究以下相关课题：1.财务报表分析2.会计和金融之间的区别3.财务和税务报告通过本课程的学习，学生将获得编制和分析企业财务报表的技能，同时也将更深入地了解企业财务管理和财务报告的重要性。

三、课程目标本课程的目标是帮助学生：1.熟悉会计的基本原则和技能2.理解企业财务报表的编制、分析和解释3.掌握财务报表分析的技巧4.能够分析财务和税务报表5.理解会计和金融之间的区别6.了解企业财务管理和财务报告的重要性四、教学方法本课程采用混合式教学方法，包括：1.实践演练2.互动讨论3.学生报告与分享4.个人或小组项目展示五、教学大纲章节内容课时第一章会计和财务报告环节 2 第二章企业财务报表的编制 6 第三章资产负债表编制 6 第四章现金流量表编制8 第五章利润表和综合收益表编制 6 第六章投资与减值8 第七章长期负债8 第八章股权8 第九章所得税 6 第十章财务报表分析 6 第十一章会计和金融之间的区别 6 第十二章财务和税务报告 6六、学习评估评估方式分为以下三项：1.日常表现（40%）：包括参与讨论、作业完成情况、课堂互动2.小项目（30%）：学生可个人或小组完成一个涉及课程内容的项目，并进行展示3.终结性考试（30%）：在学期末进行，测试学生对课程内容的掌握程度七、参考书目1.Kieso, D. E., Weygandt, J. J., & Warfield, T. D.(2016). Intermediate Accounting (16th ed.). Wiley.2.Spiceland, J. D., Sepe, J. F., & Nelson, M. W.(2019). Intermediate Accounting (10th ed.). McGraw-Hill Education.3.Stice, J. D., & Stice, E. K. (2016). IntermediateAccounting: Reporting and Analysis (3rd ed.). Cengage Learning.。

Intermediate Accounting第2册课程设计1. 简介Intermediate Accounting第2册是财务会计的一门核心课程，主要包括长期负债、股权和收益、现金流量表、会计核算和分析等内容。

通过学习本课程，学生将掌握财务会计的核心概念和技能，包括财务报表分析、会计估计和应用、会计核算和准则等。

2. 目标本课程的主要目标是帮助学生：•理解长期负债的概念和性质，并能评估企业的债务风险；•掌握股权和收益的基本概念和会计处理方法，能够识别不同类型的股权和收益；•了解现金流量表的基本结构，能够分析企业的现金流量情况；•熟悉会计核算和分析的基本原理和方法，能够准确揭示企业的财务状况。

3. 教材本课程的教材为《Intermediate Accounting，第2册，第16版》，作者为Donald E. Kieso、Jerry J. Weygandt、andTerry D. Warfield。

该教材具备如下特点：•经典权威：该教材是财务会计领域的一本经典教材，自1975年以来已经历了16个版本的更新和完善，具备充分的经验和权威性；•实用性强：该教材注重将理论与实践相结合，具备实用性和可操作性；•知识丰富：该教材内容丰富、全面，涵盖了财务会计领域的核心概念和技能。

4. 教学内容本课程的教学内容安排如下：1. 长期负债•长期负债的概念和性质；•长期债券的发行、偿还和赎回；•带权债务和担保债务；•其他长期负债（租赁、退休金等）。

2. 股权和收益•股权的概念和性质；•发行股票和股票回购；•不同类型的股本和股东权益；•收益的概念和性质；•会计处理方法（实现和认可）；•不同类型的收益（销售、利息、出租等）。

3. 现金流量表•现金流量表的结构和内容；•直接法和间接法的编制方法；•现金流量表分析。

4. 会计核算和分析•会计核算的基本原理和方法；•会计估计和应用；•财务比率分析；•财务报表分析。

5. 教学方法本课程的教学采用“理论 + 实践”相结合的方法，除了讲授基本概念和理论外，还将通过案例分析、实例讲解、小组讨论等方式，引导学生思考和探究实际财务会计问题。

COMPREHENSIVE EXAMINATION DPART 4(Chapters 15-17)Approximate Problem Topic Time D-I Treasury Stock. 20 min.D-II *Cash Dividends. 10 min.D-III Stock Dividends and Stock Splits. 10 min.D-IV Earnings Per Share Concepts. 10 min.D-V Earnings Per Share Computations. 10 min.D-VI Basic and Diluted Earnings Per Share. 20 min.D-VII Available-for-Sale Equity Securities. 15 min.D-VIII Trading Securities. 30 min.125 min.*Part of this topic is dealt with in an Appendix to the chapter.D - 2Test Bank for Intermediate Accounting, Fifteenth EditionProblem D-I— Treasury StockThe stockholders' equity section of Carey Co.'s balance sheet at December 31, 2014, was as follows:Common stock--$10 par (authorized 1,000,000 shares,issued and outstanding 600,000 shares) $ 6,000,000 Paid-in capital in excess of par 1,500,000Retained earnings 3,250,000$10,750,000InstructionsPrepare journal entries (1, 2, and 4) and show proper disclosure (3) to reflect the following treasury stock transactions showing how each is accounted for under the cost method. (Show computations.)1. On January 4, 2015, having idle cash, Carey Co. repurchased 25,000 shares of its out-standing stock for $500,000.2. On March 4, Carey sold 5,000 of these reacquired shares at $24 per share.3. Show the proper disclosures in the stockholders' equity section of the balance sheet issued atthe end of the first quarter, March 31, 2015. Assume net income of $100,000 during the first quarter.4. On June 30, 2015 the firm sold 10,000 of the reacquired shares for $17 per share.*Problem D-II— Cash DividendsBell Company has stock outstanding as follows: Common, $10 par value per share, 140,000 shares; Preferred, 4%; $100 par value per share, 8,000 shares. The Preferred is cumulative and participating up to an additional 3% of par; two years are in arrears (not including the current year); and the total amount of cash dividends declared for both classes of stock is $192,000. InstructionsPrepare the entry for the dividend declaration, separating the dividend into the common and preferred portions.Comprehensive Examination D D - 3 Problem D-III— Stock Dividends and Stock SplitsStock dividends and stock splits are common forms of corporate stock distribution to stockholders. Consider each of the numbered statements. You are to decide whether it:A. Applies to both stock dividends and stock splits.B. Applies to neither.C. Applies to stock splits only.D. Applies to stock dividends only.E. Applies to stock splits effected in the form of a dividend only.F. Applies to both stock splits effected in the form of a dividend and a stock dividend.(In each instance, the issuing company has only one class of stock.)InstructionsPrint next to the number of each statement below, the single capital letter of the description which applies to the statement.Statements____ 1. The distribution is a multiple as contrasted to a fraction of the number of shares previously outstanding.____ 2. The total number of shares outstanding is increased.____ 3. The individual stockholder's share of net assets is increased.____ 4. There is no transfer between retained earnings and capital stock accounts, other than to the extent occasioned by legal requirements.____ 5. There is no change in the total stockholders' equity of the issuing corporation.____ 6. The retained earnings available for dividends are increased.____ 7. Retained earnings in the amount of the distribution are transferred to capital stock, in some instances in an amount in excess of that required by the laws of the state ofincorporation.____ 8. Subsequent per-share earnings, if any, are decreased.____ 9. The par (or stated value) of the stock is unchanged.D - 4Test Bank for Intermediate Accounting, Fifteenth EditionProblem D-IV— Earnings Per Share ConceptsIndicate which of the following securities would be included in the computation of "basic earnings per share," and which would be included in the computation of "diluted earnings per share." Place a "B" before those which affect only basic EPS, a "D" before those which affect only diluted EPS, a "BD" before those which affect both basic and diluted EPS, and an "N" before those securities which do not affect EPS computations. Assume that, where applicable, the appropriate securities are dilutive.____ 1. Warrants to purchase additional common shares.____ 2. Common stock.____ 3. Nonconvertible debenture bonds.____ 4. Convertible, noncumulative preferred stock.____ 5. Cumulative, nonconvertible preferred stock.____ 6. Convertible bonds.____ 7. Executive stock options.____ 8. Notes payable.Problem D-V— Earnings Per Share ComputationsJones, Inc. has net income (30% tax rate) of $1,400,000 for 2015, and an average number of shares outstanding during the year of 500,000 shares. The corporation issued $2,000,000 par value of 10-year, 9% convertible bonds on January 1, 2013 at a $180,000 discount. The convertible bonds are convertible into 70,000 shares of common stock. Assume the company uses the straight-line method for amortizing bond discount.InstructionsCompute the earnings per share data, excluding any notes if required.Comprehensive Examination D D - 5 Problem D-VI— Basic and Diluted Earnings Per ShareAssume that the following data relate to Rosen, Inc. for the year 2015:Net income (30% tax rate) $3,500,000Average common shares outstanding 2015 1,000,000 shares10% cumulative convertible preferred stock:Convertible into 80,000 shares of common $1,600,0008% convertible bonds; convertible into 75,000shares of common $2,500,000Stock options:Exercisable at the option price of $25 per share;average market price in 2015, $30 84,000 shares InstructionsCompute (a) basic earnings per share, and (b) diluted earnings per share.Problem D-VII—Available-for-Sale Equity InvestmentsOn January 2, 2014, Norwin Company purchased 2,000 shares of Oslo Company common stock for $60,000. The stock has a par value of $10 and is part of the total stock outstanding of 20,000 shares of Oslo Company. Norwin Company intends the stock to be available for sale. Total stockholders' equity of Oslo Company on January 2, 2014 was $600,000.InstructionsPrepare necessary journal entries on the books of Norwin Company for the following transactions. If no entry is required, write "none" in the space provided. (Round all calculations to the nearest cent.)(a) January 2, 2014: Norwin purchases the shares described above.(b) December 31, 2014: Norwin receives a $.75 per share dividend from Oslo, and Osloannounces a net income for 2014 of $250,000.(c) December 31, 2014: According to The Wall Street Journal, Oslo common is selling for $27per share. Norwin's management views this decline as being only temporary in nature.Oslo's common is Norwin's only available-for-sale security.(d) February 15, 2015: Norwin sells 1,000 of the shares purchased on January 2, 2014 at $32per share.D - 6Test Bank for Intermediate Accounting, Fifteenth EditionProblem D-VIII— Trading SecuritiesThe information below relates to Milton Company's trading securities in 2014 and 2015.(a) Prepare the journal entries for the following transactions.January 1, 2014 Purchased $400,000 par value of GLF Company bonds at 97 plus accrued interest. The bonds pay interest annually at 9% each December 31.Broker's commission was $4,000.September 1, 2014 Sold $200,000 par value of GLF Company bonds at 94 plus accrued interest. Broker's commission, taxes, and fees were $2,000.September 5, 2014 Purchased 5,000 shares of Hayes, Inc. common stock for $30 per share.The broker's commission on the purchase amounted to $2,000.December 31, 2014 Make the appropriate entry for the GLF Company bonds.December 31, 2014 The market prices of the trading securities at December 31 were: Hayes, Inc. common stock, $31 per share; and GLF Company bonds, 99. Makethe appropriate entry.July 1, 2015 Milton sold 1/2 of the Hayes, Inc. common stock at $33 per share. Broker's commissions, taxes, and fees were $1,000.December 1, 2015 Milton purchased 600 shares of Ramirez, Inc. common stock at $45 per share. Broker's commission was $500.December 31, 2015 Make the appropriate entry for the GLF Company bonds.December 31, 2015 The market prices of the trading securities at December 31 were: Hayes, Inc. common stock, $34 per share; GLF Company bonds, 98; and Ramirez,Inc. common stock, $47 per share. Make the appropriate entry.(b) Present the financial statement disclosure (balance sheet and income statement) of MiltonCompany's transactions in trading securities for each of the years 2014 and 2015.Appropriate financial statement subheadings must be disclosed.Comprehensive Examination D D - 7 Solutions — Comprehensive Examination DProblem D-I— Solution.1. Treasury Stock .............................................................................. 500,000Cash .................................................................................. 500,000 2. Cash ............................................................................................. 120,000Treasury Stock .................................................................. 100,000Paid-in Capital from Treasury Stock ................................... 20,000 3. Stockholders' equity:Common stock, $10 par, 1,000,000 shares authorized,600,000 shares issued, 580,000 shares outstanding $ 6,000,000 Paid-in capital in excess of par value 1,500,000Paid-in capital from treasury stock 20,000Retained earnings 3,350,00010,870,000 Less: Cost of 20,000 shares held in treasury (400,000)Total stockholders' equity $10,470,0004. Cash ............................................................................................. 170,000Paid-in Capital from Treasury Stock .............................................. 20,000Retained Earnings ......................................................................... 10,000Treasury Stock .................................................................. 200,000*Problem D-II— Solution.Retained Earnings .............................................................................. 192,000 Dividends Payable, Preferred .................................................. 112,000Dividends Payable, Common .................................................. 80,000 Computations:Preferred Common Total Arrears—$800,000 × 4% × 2 $64,000 $ 64,000Preference—$800,000 × 4% 32,000 32,000Common—$1,400,000 × 4% $ 56,000 56,000Participating 2%* 16,000 24,000 40,000$112,000 $ 80,000 $192,000 * [($192,000 – $152,000) ÷ ($600,000 + $1,400,000)]Test Bank for Intermediate Accounting, Fifteenth EditionD - 8Problem D-III— Solution.1. C 4. E 7. F2. A 5. A 8. A3. B 6. B 9. FProblem D-IV— Solution.1. D 5. BD2. BD 6. D3. N 7. D4. D 8. NProblem D-V — Solution.Basic earnings per share($1,400,000 ÷ 500,000 shares) $2.80 Diluted earnings per share$1,400,000 + .7($180,000 + $18,000)—————————————————$2.70 500,000 + 70,000Problem D-VI — Solution.$3,500,000 – $160,000(a) Basic EPS = ——————————— = $2.231,500,000(b) Shares EarningsStart 1,500,000 $3,340,000Convertible preferred 80,000 160,000Convertible bonds 75,000 140,000*Options 14,000** 01,669,000 $3,640,000*($2,500,000 × .08) × (1 – .30)**[($30 – $25) ÷ $30] × 84,000$3,640,000 ÷ 1,669,000 = $2.18 DEPSComprehensive Examination D D - 9 Problem D-VII— Solution.(a) Equity Investments ..................................................................... 60,000Cash ............................................................................... 60,000 (b) Cash .......................................................................................... 1,500Dividend Revenue .......................................................... 1,500 No entry to accrue investee profits because fair value, not equity, method is being used. (c) Unrealized Holding Gain or Loss—Equity ................................... 6,000Fair Value Adjustment (Available-for-Sale) ..................... 6,000 (d) Cash (1,000 × $32) ..................................................................... 32,000Gain on Sale of Securities ............................................... 2,000Equity Investments (1,000 × $30) .................................... 30,000Problem D-VIII— Solution.January 1, 2014*Debt Investments ($400,000 ×.97) + $4,000 ....................................... 392,000 Cash ........................................................................................ 392,000September 1, 2014Cash ($188,000 + $12,000 – $2,000) .................................................. 198,000Loss on Sale of Investments ............................................................... 10,000 Debt Investments .................................................................... 196,000Interest Revenue ..................................................................... 12,000September 5, 2014Equity Investments .............................................................................. 152,000 Cash ........................................................................................ 152,000December 31, 2014*Cash ($150,000 × .09) ......................................................................... 13,500 Interest Revenue ..................................................................... 13,500December 31, 2014Fair Value Adjustment (Trading) .......................................................... 5,000 Unrealized Holding Gain or Loss—Income ($348,000 – $353,000) 5,000D - 10Test Bank for Intermediate Accounting, Fifteenth EditionJuly 1, 2015Cash ($82,500 – $1,000) ..................................................................... 81,500 Gain on Sale of Investments .................................................... 5,500 Equity Investments .................................................................. 76,000December 1, 2015Equity Investments .............................................................................. 27,500 Cash ........................................................................................ 27,500December 31, 2015Cash .................................................................................................... 13,500 Interest Revenue ..................................................................... 13,500December 31, 2015Fair Value Adjustment (Trading) ........................................................... 14,200 Unrealized Holding Gain or Loss—Income ............................. 14,200 ($375,500 – $394,200) - $5,000December 31,Balance Sheet 2014 2015 Current assets:Equity Investments, at fair value $353,000 $394,200Income StatementOther revenue and gains:Interest Revenue $13,500 $13,500 Unrealized holding gain on trading securities 5,000 14,200 Gain on sale of securities 5,500 Other expenses and losses:Loss on sale of securities 10,000。

COMPREHENSIVE EXAMINATION APART 1(Chapters 1-6)Problem A-I —Multiple Choice.Choose the best answer for each of the following questions and enter the identifying letter in the space provided.___ 1. How does failure to record accrued revenue distort the financial reports?a. It understates revenue, net income, and current assets.b. It understates net income, stockholders ' equity, and current liabilities.c. It overstates revenue, stockholders ' equity, and current liabilities.d. It understates cur rent assets and overstates stockholders ' equity.___ 2. A contingent liability which is normally accrued isa. notes receivable discounted.b. accommodation endorsements on customer notes.c. additional compensation that may be payable on a dispute now being arbitrated.d. estimated claims under a service warranty on new products sold.___ 3. Which of the following items is a current liability?a. Bonds due in three months (for which there is an adequate sinking fund classified as along-term investment).b. Bonds due in three years.c. Bonds (for which there is an adequate appropriation of retained earnings) due in elevenmonths.d. Bonds to be refunded when due in eight months, there being no doubt about themarketability of the refunding issue.___ 4. On June 15, 2014 Stine Corporation accepted delivery of merchandise whichit purchased on account. As of June 30 Stine had not recorded the transaction or included themerchandise in its inventory. The effect of this error on its balance sheet for June 30, 2014would bea. assets and stockholders ' equity were overstated but liabilities were notaffected.b. stockholders ' equity was the only item affected by the omission.c. assets and liabilities were understated but stockholders ' equity was notaffected.d. assets and stockholders ' equity were understated but liabilities were not affected.___ 5. Reversing entries are most commonly used in relation to year-end adjustingentries thata. allocate the expired portion of a depreciable asset to expense.b. amortize intangible assets.c. provide for bad debt expense.d. accrue interest revenue on notes receivable.___ 6. Of the following adjusting entries, which one would cause an increase in assets at the end of theA-2 Comprehe nsive Exam Aperiod?a. The entry to record the earned portion of rent received in advance.b. The entry to accrue unrecorded interest expense.c. The entry to accrue unrecorded interest revenue.d. The entry to record expiration of prepaid insurance.___ 7. Why is it necessary to make adjusting entries?a. The accountant has made errors in recording external transactions.b. Certain facts about the affairs of the business are not included in the ledger as built upfrom external transactions.c. The accountant wants to show the largest possible net income for the period.d. The accountant wants to show the net cash flow for the year.___ 8. Notes to financial statements should not be used toa. describe the nature and effect of a change in accounting principles.b. identify substantial differences between book and tax income.c. correct an improper financial statement presentation.d. indicate basis for asset valuation.___ 9. Consistency is best demonstrated whena. expenses are reported as charges against the period in which incurred.b. the effect of changes in accounting methods is properly disclosed.c. extraordinary gains and losses are not reported on the income statement.d. accounting procedures are adopted which give a consistent rate of net income.___ 10. The current assets section of a balance sheet should never includea. a receivable from a customer not collectible for over one year.b. the premium paid on short-term bond investment.c. goodwill arising from the purchase of a going business.d. customers' accounts with credit balances.Comprehe nsive Exam AA-3Problem A-ll — Adjusti ng and Revers ing En tries.$ 500 The follow ing list of acco unts and their bala nces represe nts the un adjusted trial bala nee of Alt Company at December 31,2014:Additio nal Data: Problem A-II — (cont.)1. The bala nce in the In sura nce Expe nse acco unt contains the premium costs of threepolicies:Policy 1, remaining cost of $2,550, 1-yr. term, taken out on May 1,2013; Policy 2, original cost of $9,000, 3-yr. term, taken out on Oct. 1,2014; Policy 3, original cost of $1,300, 1-yr. term, taken out on Jan. 1,2014.2. On September 30, 2014, Alt received $21,600 rent from its lessee for an eighteen month leasebegi nning on that date. 3. The regular rate of depreciation is 10% per year. Acquisitions and retirements during a yearare depreciated at half this rate. There were no purchases during the year. On December 31,2013, the balance of the Plant and Equipment account was $220,000. 4. On December 28, 2014, the bookkeeper in correctly credited Sales Reve nue for a receipt onacco unt in the amount of $20,000. 5. At December 31,2014, salaries and wages accrued but unpaid were $4,200. 6. Alt estimates that 1% of sales will become uncollectible.Cash Equity In vestme nts (tradi ng) Acco unts Receivable Allowa nee for Doubtful Acco unts Inven tory Prepaid Rent Pla nt Assets Accumulated Depreciati on-Pla nt Assets Acco unts Payable Bonds Payable Common Stock Reta ined EarningsSales Reve nueCost of Goods Sold Freight-Out Salaries and Wages Expe nse In terest Expe nse Rent Reve nueMiscella neous Expe nse In sura nee Expe nse $ 27,290 60,000 69,000 54,720 36,000 160,000 154,400 11,000 32,000 2,040890 12,850$620,19014,740 11,370 90,000 170,00097,180 214,800 21,600 $620,190A-4 Comprehe nsive Exam A7. On August 1,2014, Alt purchased, as a short-term investment, 60 $1,000, 6% bonds of Alle nCorp. at par. The bonds mature on August 1,2015. In terest payme nt dates are July 31 and January 31.8. On April 30, 2014, Alt rented a warehouse for $3,000 per month, paying $36,000 in advance. Instructions(a) Record the necessary correcting and adjusting entries.(b) Indicate which of the adjusting entries may be reversed at the beginning of the next accountingperiod.Comprehe nsive Exam AA-5Problem A-III — Key Conceptual Terms.Various accounting assumptions, principles, constraints, and characteristics are listed below. Select those which best justify the following accounting procedures and indicate___ 1. Chose the solution that will be least likely to overstate assets or income. ___ 2. Describing the depreciation methods used in the financial statements. ___ 3. Applying the same accounting treatment to similar accounting events.___ 4. The quality which helps users make predictions about present, past, and future events. ___ 5. Recording a transaction when goods or services are exchanged for cash or claims to cash. ___ 6. Preparing consolidated statements.___ 7. Information must make a difference or a company need not disclose it. ___ 8. Provides the figure at which to record a liability.___ 9. The preparation of timely reports on continuing operations. ___ 10. Accrual accounting (do not use "going concern").___ 11. Reporting those items which are significant enough to affect decisions. Select two. ___ 12. Additivity of financial statement figures relating to different time periods. ___ 13. Ignoring the phenomenon of price-level changes (do not use "historical cost"). ___ 14. Not reporting assets at liquidation prices (do not use "historical cost"). ___ 15. Characterized by completeness, neutrality, and being free from error. ___ 16. Establishment of an allowance for doubtful accounts.___ 17. Use of estimating procedures for amortization policies. Select two (do not use "periodicity") (17and 18). ___ 18. See item 17 above.the corresponding letter(s) in once or not at all.a. Historical costb. Relevancec. Monetary unitd. Going concerne.Consistencythe space(s) provided. A letter f. Economic entity g. Cost constraint h. Conservatism i. Periodicityj.Expense recognitionmay be used more than k. Revenue recognition l. Full disclosure m. FaithfulrepresentationA-6Comprehe nsive Exam AProblem A-IV — Bala nee Sheet Form.List the eorreetions needed to present in good form the balanee sheet below. Errors in elude miselassifieati ons, lack of adequate disclosure, and poor term ino logy. Do not concern yourself with the arithmetie. If an item can be elassified in more than one eategory, select the category most favored by the authors of your textbook.Tanner Corporati on Bala nee SheetFor the year ended December 31,2014AssetsDeferred Charges:Disco unt on bonds payable Other Assets:Cash surre nder value of life in sura neeLiabilities and CapitalCash$ 18,000 Equity in vestme nts -tradi ng (fair value, $32,000) 27,000 Aeeo unts receivable 75,000 Inven tory60,000 Supplies inven tory3,000 In vestme nt in subsidiary eompa ny 60,000In vestme nts:Treasury stockTan gible Fixed Assets:Buildi ngs and land213,000 Less: Reserve for depreeiati on 60,000$243,00078,000153,0003,000 54,000 $531.000Current Liabilities:Aeeo unts payableReserve for in come taxesCustomer's aeeo unts with credit bala ncesLon g-Term Liabilities:Bonds payable Total Liabilities Capital Stock:Capital stock Ear ned surplusCash divide nds declared$ 45,00042,000 ______ 3_$ 87,003120,000 225,000 74,997 24,000323,997 $531,000Curre nt Assets:Comprehe nsive Exam A A-7Problem A-V ——Bala nee Sheet and In come Stateme nt Classificati ons.Specify, to the left of each account, the letter of the financial statement classification the acco unt would appear in. Use only the classificati ons show n.Acco unt bala nces take n from the ledger of Morin Compa ny on December 31,2014 follow:1. Com mon Stock, $10 par 16. Inven tory2. Loss on Disposal of Equipme nt 17. Salaries and Wages Expe nse3. Buildi ngs 18. Mercha ndise on order with supplier4. Office Expe nse19. In terest Reve nue 5. Allowa nee for Doubtful Acco unts 20. Selli ng Expe nses 6. Notes Payable (Short Term) 21. In terest Expe nse 7. Accum. Depreciati on — Buildi ngs 22. In come Taxes Payable 8. Mortgage Payable due 2016 23. In sura nee Expe nse 9. Depleti on Expe nse 24. Advertis ing Expe nse 10. Freight-Out 25. Equity In vestme nts 11. Sales Reve nue 26. Acco unts Receivable 12. Divide nds 27. Land13.Reta ined Ear nings Dec. 31, 201328. 29. Acco unts PayableError made in computing 201214. Cashdepreciati on expe nse 15. Sales Disco unts30.Gain on Redempti on of Debta. Curre nt Assets j. Sales Reve nueb. In vestme ntsk. Cost of Goods Sold c. Property, Pla nt, and Equipme nt l. Operat ing Expe nses d. Intan gible Assets m. Other Reve nues and Gainse. Other Assetsn.Other Expe nses and Losses f. Curre nt Liabilities o. Extraordi nary Itemg. Lon g-term Debt p. Reta ined Ear nings Sectio n h. i.Capital StockReta ined Earningsq. Not on the Stateme ntsBala nee Sheet Stateme nt In come and Reta ined Ear ningsA-8Comprehe nsive Exam AProblem A-VI — Future Value and Prese nt Value.In computing your answers to the cases below, you can round your answer to the n earest dollar. Prese nt value tables are provided on the n ext page.Use the followi ng in formati on in an sweri ng Cases 1 and 2 below:On Jan uary 1,2008, Gray Compa ny sold $900,000 of 10% bon ds, due Jan uary 1,2018.Interest on these bonds is paid on July 1 and January 1 each year. According to the terms of the bond con tract, Gray must establish a sinking fund for the retireme nt of the bond principal starting no later than January 1, 2016. Since Gray was in a tight cash position during the years 2008 through 2013, the first contribution into the fund was made on Jan uary 1,2014.Case ' 1: Assume that, starting with the January 1, 2014 contribution, Gray desires to make a totalof four equal annual contributions into this fund. Compute the amount of each of these contributions assuming the interest rate is 8% compo un ded annu ally.Compute the amount of each of these contributions assuming the annual in terest rate is 12%, compo un ded semia nnu ally.Case 3: On Jan uary 2, 2014, Nelson Compa ny loa ned $100,000 to Holt Compa ny. The terms of thisloan agreement stipulate that Holt is to make 5 equal annual payme nts to Nels on at 10% in terest compo un ded annu ally. Assume the payme nts are to begi n on December 31,2014. Compute the amount of each of these payme nts.Case 4: Jim Marsh, a lawyer contemplating retirement on his 65th birthday, decides to create a fund onan 8% basis which will en able him to withdraw $60,000 per year begi nning June 30, 2017, and ending June 30, 2021. To provide this fund, he intends to make equal con tributi ons on June 30 of each of the years 2012 through 2016.(a) How much must the bala nee of the fund equal after the last con tributi on on June 30,2016 in order for him to satisfy his objective? (b) What are each of his contributions to the fund?Case 2: Assume, in stead, that start ing with the January desires to make a total of five equal semiannual1, 2016 contribution, Graycontributions into this fund.Comprehe nsive Exam A A-9Table 1Future Value of 1Periods 6% 8% 9% 10% 12%1 1.06000 1.08000 1.09000 1.10000 1.12002 1.12360 1.16640 1.18810 1.21000 1.25443 1.19102 1.25971 1.29503 1.33100 1.40494 1.26248 1.36049 1.41158 1.46410 1.57355 1.33823 1.46933 1.53862 1.61051 1.7623Table 2Prese nt Value of 1Periods 6% 8% 9% 10% 12%1 0.94340 0.92593 0.91743 0.90909 0.89282 0.89000 0.85734 0.84168 0.82645 0.79713 0.83962 0.79383 0.77218 0.75132 0.71174 0.79209 0.73503 0.70843 0.68301 0.63555 0.74726 0.68058 0.64993 0.62092 0.5674Table 3Future Value of an Ordi nary Ann uity of 1Periods 6% 8% 9% 10% 12%1 1.00000 1.00000 1.00000 1.00000 1.00002 2.06000 2.08000 2.09000 2.10000 2.12003 3.18360 3.24640 3.27810 3.31000 3.37444 4.37462 4.50611 4.57313 4.64100 4.77935 5.63709 5.86660 5.98471 6.10510 6.3528Table 4Prese nt Value of an Ordi nary Ann uity of 1Periods 6% 8% 9% 10% 12%1 0.94340 0.92593 0.91743 0.90909 0.89282 1.83339 1.78326 1.75911 1.73554 1.69003 2.67301 2.57710 2.53130 2.48685 2.40184 3.46511 3.31213 3.23972 3.16986 3.03735 4.21236 3.99271 3.88965 3.79079 3.6047Table 5PeriodsPrese nt Value of an Ann uitv Due of 16% 8% 9% 10% 12%1 1.00000 1.00000 1.00000 1.00000 1.00002 1.94340 1.92593 1.91743 1.90909 1.89283 2.83339 2.78326 2.75911 2.73554 2.69004 3.67301 3.57710 3.53130 3.48685 3.40185 4.46511 4.31213 4.23972 4.16986 4.0373A-10 Comprehe nsive Exam A Solutio ns ——Comprehe nsive Exam in ati on A Problem A-I —Solution.1. a 4. c 7. b 10. c2. d 5. d 8. c3. c 6. c 9. bProblem A-II —Solutio n.(a) 1. Prepaid In sura nee ....................................................................In sura nee Expe nse ......................................................(Both Policies 1 and 3 have expired and their costs bel ongin In sura nee Expe nse. The mon thly premium on Policy 2is $9,000 36 - $250. At 12/31/14, 33 mos.of in sura nee, or $8,250, remains un expired) 8,2508,2502. Rent Reve nue .............................................................................. 18,000Un ear ned Rent ............................................................... 18,000 (Mon thly rent is $21,600 18 -$1,200. At 12/31/14,15 mos. of rent, or $18,000, remai ns un ear ned)3. Depreciati on Expe nse .................................................................. 19,000Accumulated Depreciati on .............................................[(Equipme nt retired duri ng 2014 =$220,000 -$160,000 = $60,000)10% of $160,000 = $16,0005% of $60,000 = 3,00019,000 Total depreciation = $19,000]4. Sales Reve nue ..........................................................................Acco unts Receivable ......................................................... 20,00020,000(To correct the entry made in error)5. Salaries and Wages Expe nse .......................................................... 4,200Salaries and Wages Payable ......................................... 4,200 6. Bad Debt Expe nse ....................................................................... 1,948Allowance for Doubtful Accounts .................................... 1,948 (Corrected Sales Reve nue bala nee is $214,800 - $20,000=$194,800. 1% of $194,800 is $1,948.)7. In terest Receivable ...................................................................... 1,500In terest Reve nue ............................................................. 1,500 (Mon thly in terest is $60,000 .06 x>t/12 = $300.5 mon ths' accrued in terest is $1,500)8. Rent Expe nse ..........................................................................Prepaid Rent ..................................................................(To record 8 mon ths' of rent expired at $3,000 per mon th)24,00024,000(b) 1, 2, 5, and 7. Items No. 1 and No. 2 represent prepaid items that were initially recorded in nominalacco un ts. Items No. 5 and No. 7 represe nt accrued items.Comprehe nsive Exam AA-11 Problem A-III — Solution.Problem A-IV — Solution.1."For the year ended" in the title should be deleted. 2.Equity investments should be reported at their fair value. 3. The amount of Allowance for Doubtful Accounts should be disclosed and deducted fromAccounts Receivable.4. The inventory costing method (cost, lower of cost or market) and the basis for pricing the inventory (LIFO, FIFO, etc.) should be disclosed.5. Investment in Subsidiary should be classified as an investment.6. Treasury Stock is misclassified under Investments. It should appear as a deduction from the Stockholders' Equity section.7. Buildings and Land should be separated.8. "Reserve for" Depreciation should be "Accumulated" Depreciation.9. Discount on Bonds Payable should be classified with and deducted from Bonds Payable. 10. Cash Surrender Value of Life Insurance should be classified among Investments.11. "Reserve" for Income Taxes should be titled Income Taxes Payable.12. The small balance of $3 for customer's accounts with credit balances, while noterroneously classified, might be offset against and buried in the Accounts Receivable account because it is so small in amount.13. The maturity date and the interest rate should be disclosed for the Bonds Payable.14."Capital Stock" listed as a title should be "Stockholders' Equity;" "Capital stock" listed as an account should be “ Common stock. ”lccd 1234 11k r o fgai 6789 eb 1234 67A-12 Comprehe nsive Exam A15. More information relative to the capital stock, such as par value and the number of sharesauthorized, issued, and outsta nding should be disclosed.16. "Earned surplus" should not be used; Retained Earnings is the preferred title.17. Cash divide nds declared is actually Divide nds Payable and should be classified as acurre nt liability.Problem A-V ——Solutio n.Problem A-VI — Solutio n. Case 1. $900,000 is the amount of an 8% annuity due for 4 periods. Use the table factor for thefuture value of an 8% ordinary annuity for 4 periods, and multiply by (1.08):4.50611 X(1.08) = 4.86660.Periodic payme nts = $900,000 4.86660 = $184,934Case 2. Since interest is compounded semiannually, divide the 12% annual interestrate by 2, and use the table factor for the future value of a 6% ordinary ann uity for 5 periods.Periodic payme nts = $900,000 5.63709 = $159,657Case 3. $100,000 is the prese nt value of a 10% ordinary ann uity for 5 periods.Periodic payme nts = $100,000 3.79079 = $26,380Case 4. (a) At June 30, 2016, the balanee in the fund is the present value of an 8%ordinary annu ity of $60,000 for 5 periods.Bala nee in the fund = $60,000 3.99271 = $239,563(b) At June 30, 2016, $239,563 is the future value of an 8% ordinary annuity for fiveperiods.Periodic payme nts = $239,563 5.666 = $40,835 hn cl a f cgk —jp od9 02pa ・J a I q ^1 ml nf— I9 02 3 4 bacfp m。

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