Questions from Financial Accounting

Q: Canning Corporation has an uncertain tax position with a deferred tax benefit

Canning Corporation has an uncertain tax position with a deferred tax benefit of $100,000. The likelihood of realization of this uncertain tax position is illustrated in the following probability dist...

Q: Part 1: Capital leases and operating leases are the two classifications

Part 1: Capital leases and operating leases are the two classifications of leases described in FASB pronouncements from the standpoint of the lessee. Required: a. Describe how a capital lease would be...

Q: Milton Corporation entered into a lease arrangement with James Leasing Corporation for

Milton Corporation entered into a lease arrangement with James Leasing Corporation for a certain machine, and neither company has early adopted the new lease standard. James’s primary business is leas...

Q: On January 1, 2017, Von Company entered into two noncancelable

On January 1, 2017, Von Company entered into two noncancelable leases for new machines to be used in its manufacturing operations. The first lease does not contain a bargain purchase option; the lease...

Q: There are a variety of reasons that companies may use derivative financial

There are a variety of reasons that companies may use derivative financial instruments. Some use derivatives so that the risk of financial operations can be controlled, whereas others attempt to manag...

Q: On January 1, 2017, Weiss Company issued for $1

On January 1, 2017, Weiss Company issued for $1,085,800 its 20-year, 11% bonds that have a maturity value of $1,000,000 and pay interest semiannually on January 1 and July 1. Bond issue costs were not...

Q: Under what conditions of bond issuance does a discount on bonds payable

Under what conditions of bond issuance does a discount on bonds payable arise? Under what conditions of bond issuance does a premium on bonds payable arise?

Q: On March 1, 2017, Morgan Company sold its 5-

On March 1, 2017, Morgan Company sold its 5-year, $1,000 face value, 9% bonds dated March 1, 2017, at an effective annual interest rate (yield) of 11%. Interest is payable semiannually, and the first...

Q: Part I. The appropriate method of amortizing a premium

Part I. The appropriate method of amortizing a premium or discount on issuance of bonds is the effective–interest method. Required: a. What is the effective-interest method of amortization and how...

Q: Smyle Kaufman Company recently issued bonds with associated bond issue costs of

Smyle Kaufman Company recently issued bonds with associated bond issue costs of $4.5 million. Required: How should these bond issue costs be accounted for and classified in Kaufman’s financial statem...