Questions from Financial Accounting

Q: The following three independent sets of facts relate to (1)

The following three independent sets of facts relate to (1) the possible accrual or (2) the possible disclosure by other means of a loss contingency. Situation 1 A company offers a one‐way warranty fo...

Q: On January 1, 2016, Plywood Homes, Inc., issued

On January 1, 2016, Plywood Homes, Inc., issued 20‐year, 4 percent bonds having a face value of $1 million. The interest on the bonds is payable semiannually on June 30 and December 31. The proceeds t...

Q: SFAS No. 159 (see FASB 825) allows companies to

SFAS No. 159 (see FASB 825) allows companies to value financial liabilities at fair value. If not elected, financial liabilities will continue to be accounted for under the historical cost model. Team...

Q: Should we separate the debt and equity features of convertible debt?

Should we separate the debt and equity features of convertible debt? Team Debate: Team 1: Pro separation: Present arguments in favor of separating the debt and equity features of convertible debt. Tea...

Q: In the discussion memorandum “Distinguishing between Liability and Equity Instruments and

In the discussion memorandum “Distinguishing between Liability and Equity Instruments and Accounting for Instruments with Characteristics of Both,” the FASB addressed the issue of whether redeemable p...

Q: The FASB has carefully avoided the issue of discounting deferred taxes.

The FASB has carefully avoided the issue of discounting deferred taxes. SFAS No.109, “Accounting for Income Taxes,” stated, a deferred tax liability or asset should be recognized for the deferred tax...

Q: Income tax allocation is an integral part of U.S.

Income tax allocation is an integral part of U.S. GAAP. The applications of intraperiod income tax allocation (within a period) and interperiod tax allocation (among periods) are both required. Requir...

Q: SFAS No. 109, “Accounting for Income Taxes,” requires

SFAS No. 109, “Accounting for Income Taxes,” requires interperiod income tax allocation for temporary differences. Required: a. Define the term temporary difference. b. List the examples of temporary...

Q: SFAS No. 109, “Accounting for Income Taxes” (

SFAS No. 109, “Accounting for Income Taxes” (FASB ASC 740), requires companies to use the asset–liability method of interperiod income tax allocation. Required: a. Discuss the criteria for recognizing...

Q: There are three general views regarding interperiod income tax allocation: no

There are three general views regarding interperiod income tax allocation: no allocation, partial allocation, and comprehensive allocation. Required: a. Defend the position of no allocation of income...