As assets but separately from other receivables. B. As offsets to capital. C. As trade notes and accounts receivable if they otherwise qualify as current assets. D. By means of footnotes only.
Judgement Case 9-1 – Inventory costs; lower of cost or market; retail inventory method Requirement 1 Theoretically, Hudson should account for the warehousing costs related to its wholesale inventories as a part of inventory. All of the necessary costs associated with preparing, and in this case storing, items for sale are to be included in inventory. The key here is that the warehousing cost is related to a particular set of items and for that reason it is important to account for the warehousing cost with the inventory in order to satisfy the matching principle. The matching principle “requires that revenues and any related expenses be recognized together in the same period” (The matching principle). By following the matching principle all of the costs associated with a particular product, not just its wholesale price, is expensed when the item is sold.
The present value of the minimum lease payments plus the present value of the unguaranteed residual value. 45. For a sales-type lease, a. the sales price includes the present value of the unguaranteed residual value. b. the present value of the guaranteed residual value is deducted to determine the cost of goods sold. c. the gross profit will be the same whether the residual value is guaranteed or unguaranteed.
First, according to the ASC 605-25-25-6, “a delivered item or items that do not qualify as a separate unit of accounting within the arrangement shall be determined for those combined deliverables as a single unit of accounting.” If the Power starterpack is not a separate deliverable, it shall be considered as a single unit of accounting, which is not a separate unit of accounting. Power starterpack is sold as a bundle, and only one stream of revenue. That means the activation card has to be sold as combination with service, and only recognize $200 as revenue. 2. The activation card is a separate deliverable and a separate unit of accounting.
The increase in the total liabilities was $ 15,427. This shows that the company increased its borrowing. For example, the accounts payable in the year 2008 were $4,185 while in 2009, they were $9,198. This shows that the hospital purchased more inventories on credit. The biggest portion of current liabilities in the year 2009 is long term debt’s current portion.
Cui xin yuan Case 11 -1 Polluter Corp Objectives: the appropriate classification in the statement of cash flows for the company’s purchase and sale of Emission allowances Accounting pronouncement: ASC 230 -10 statement of cash flow ASC 350 -30 -25 -3 General Intangibles Other than Goodwill Question 1: What is the appropriate classification in the statement of cash flows for the company’s purchase of Emission Allowances? The recognition of intangibles is defined under ASC 350 -30 -25 -3[Costs of internally developing, maintaining, or restoring intangible assets that are not specifically identifiable, that have indeterminate lives, or that are inherent in a continuing business or nonprofit activity and related to an entity as a whole, shall be recognized as an expense when incurred According to case, Upon receipt of the EAs, the Company recorded the EAs as intangible assets with a cost basis of zero, in accordance with The Federal Energy Regulatory Commission (“FERC”) accounting guidance for EAs. And To meet its need for additional EAs in fiscal years 2010–2014, on April 2, 2010, the Company spent $3 million to purchase EAs with a vintage year of 2012 from Clean Air Corp Acquiring of emission allowances means that Polluter Corp. had to buy allowances from another company. The emission allowances re regarded as tangible assets with zero cost basis. because the Emission and the cost of emission allowances have indetermination lives and inherent in a continuing business , the emission allowance is recognized as expense when incurred.
Stated that the lease is a capital lease, under ASC 840-30-30-1, “The lessee shall measure a capital lease asset and capital lease obligation initially at an amount equal to the present value at the beginning of the lease term of minimum lease payments during the lease term excluding that portion of the payments representing executory costs (such as insurance, maintenance, and taxes to be paid by the lessor) including any profit thereon.” This passage informs us that Lucas excludes executory cost. Also in support, ASC 840-10-25-5(b) states, For a lessee, minimum lease payments comprise the payments that the lessee is obligated to make or can be required to make in connection with the leased property, excluding both of the following: a) Contingent rentals b) Any guarantee by the lessee of the lessor's debt and the lessee's obligation to pay (apart from the rental payments) executory costs such as insurance, maintenance, and taxes in connection with the leased property. In conclusion, Lucas will not include the general repairs and maintenance cost towards minimum lease payments. Instead, the general repairs and maintenance
7-20 47. An NOL carryforward is used in determining the current year’s NOL. ANS: F An NOL carryforward is not used in determining the current year’s NOL. PTS: 1 REF: p. 7-21 48. The excess of nonbusiness capital losses over nonbusiness capital gains must be added to taxable income to compute the net operating loss of an individual.
Financial statements for each individual prior period presented shall be adjusted to reflect correction of the period-specific effects of the error. Zumiez’s ability to determine the materiality of the error also falls in line with the rules and regulations set forth. In FASB 250-10-45-27, determining materiality for the purpose of reporting the correction of an error, amounts shall be related to the estimated income for the full fiscal year and also to the effect on the trend of earnings. Changes that are material with respect to an interim period but not material with respect to the estimated income for the full fiscal year or to the trend of earnings shall be separately disclosed in the interim
Should impairment testing be completed on intangible assets, and if so, how often? 3. How should prior periods be corrected for financial reporting and taxes to correct incorrect treatment for intangible asset expenses? Conclusions: 1. ASC 350-30-35-1: Expenses related to intangible assets that have a finite useful life must be capitalized and amortized over the useful life of the intangible assets.