Questions from Financial Accounting

Q: The Thomas Company is in the process of developing a revolutionary new

The Thomas Company is in the process of developing a revolutionary new product. A new division of the company was formed to develop, manufacture, and market this product. As of year‐end (December 31,...

Q: Newsom Corporation is preparing the interim financial data which it will issue

Newsom Corporation is preparing the interim financial data which it will issue to its stockholders and the Securities and Exchange Commission (SEC) in its 10-Q quarterly report at the end of the first...

Q: The entity theory of equity implies that there should be no need

The entity theory of equity implies that there should be no need for financial statements to distinguish between debt and equity. Alternatively, proprietary theory implies that such a distinction is n...

Q: The FASB issued SFAS No. 115 to describe the accounting treatment

The FASB issued SFAS No. 115 to describe the accounting treatment that should be afforded to equity securities that have readily determinable market values that are not accounted for under the equity...

Q: Presented following are four unrelated situations involving equity securities that have readily

Presented following are four unrelated situations involving equity securities that have readily determinable fair values. Situation 1 A noncurrent portfolio with an aggregate market value in excess of...

Q: Watson Company has several investments in the securities of other companies.

Watson Company has several investments in the securities of other companies. The following information regarding these investments is available at December 31, 2016. 1. Watson holds bonds issued by Fo...

Q: Kallus Corp. is an industry leader in the manufacture of toys

Kallus Corp. is an industry leader in the manufacture of toys. Each year, its design staff comes up with new ideas that are a great success. As a result, Kallus’s sales and profits consistently exceed...

Q: Qtip Corp. owns stock in Maxey Corp. The investment represents

Qtip Corp. owns stock in Maxey Corp. The investment represents a 10 percent interest, and Qtip is unable to exercise significant influence over Maxey. The Maxey stock was purchased by Qtip on January...

Q: On January 2, 2017, two identical companies, Daggar Corp

On January 2, 2017, two identical companies, Daggar Corp. and Bayshore Company, lease similar assets with the following characteristics: 1. The economic life is eight years. 2. The term of the lease i...

Q: On January 1, 2016, Dahlgren Corporation entered into a noncancelable

On January 1, 2016, Dahlgren Corporation entered into a noncancelable lease for a machine to be used in its manufacturing operations. The lease transfers ownership of the machine to Dahlgren at the en...