Questions from Accounting Principles

Q: Talkington Electronics issues a $400,000, 8%, 15

Talkington Electronics issues a $400,000, 8%, 15-year mortgage note on December 31, 2019. The proceeds from the note are to be used in financing a new research laboratory. The terms of the note provid...

Q: Bargain Wholesale Supply owns stock in Cyrus Corporation, which it intends

Bargain Wholesale Supply owns stock in Cyrus Corporation, which it intends to hold indefinitely because of some negative tax consequences if sold. Should the investment in Cyrus be classified as a sho...

Q: (a) What are long-term liabilities? Give three

(a) What are long-term liabilities? Give three examples. (b) What is a bond?

Q: In general, what are the requirements for the financial statement presentation

In general, what are the requirements for the financial statement presentation of long-term liabilities?

Q: Alex Ramirez is confused about losses and gains on the sale of

Alex Ramirez is confused about losses and gains on the sale of debt investments. Explain to Alex (a) how the gain or loss is computed, and (b) the statement presentation of the gains and losses.

Q: Seibel Company sells Mayo’s bonds costing $40,000 for $

Seibel Company sells Mayo’s bonds costing $40,000 for $45,000, including $500 of accrued interest. Seibel records a $5,000 gain on this sale. Is this correct? Explain.

Q: To acquire Peoples Corporation stock, J. Rich pays $62

To acquire Peoples Corporation stock, J. Rich pays $62,000 in cash. What entry should be made for this investment?

Q: What constitutes “significant influence” when an investor’s financial interest is

What constitutes “significant influence” when an investor’s financial interest is below the 50% level?

Q: Why is it necessary to convert accrual-basis net income to

Why is it necessary to convert accrual-basis net income to cash-basis income when preparing a statement of cash flows?

Q: The president of Merando Company is puzzled. During the last year

The president of Merando Company is puzzled. During the last year, the company experienced a net loss of $800,000, yet its cash increased $300,000 during the same period of time. Explain to the presid...