Questions from Financial Accounting

Q: China Inn and Midwest Chicken exchanged assets. Midwest Chicken received equipment

China Inn and Midwest Chicken exchanged assets. Midwest Chicken received equipment and gave a delivery truck. The fair value and book value of the delivery truck given were $31,000 and $32,600 (origin...

Q: An examination of the cash activities during the year shows the following

An examination of the cash activities during the year shows the following. Suzie has not reconciled the company’s cash balance with that of the bank since the company was started. Sh...

Q: The balance sheet of Cedar Crest Resort reports total assets of $

The balance sheet of Cedar Crest Resort reports total assets of $840,000 and $930,000 at the beginning and end of the year, respectively. The return on assets for the year is 20%. Calculate Cedar Cres...

Q: Vegetarian Delights has been experiencing declining market conditions for its specialty foods

Vegetarian Delights has been experiencing declining market conditions for its specialty foods division. Management decided to test the operational assets of the division for possible impairment. The t...

Q: Whole Grain Bakery purchases an industrial bread machine for $30,

Whole Grain Bakery purchases an industrial bread machine for $30,000. In addition to the purchase price, the company makes the following expenditures: freight, $2,000; installation, $4,000; testing, $...

Q: Refer to the situation described in BE7–19. Assume the

Refer to the situation described in BE7–19. Assume the sum of estimated future cash flows is $32 million instead of $38 million. What amount of impairment loss should Vegetarian Delights record?

Q: Finley Co. is looking for a new office location and sees

Finley Co. is looking for a new office location and sees a building with a fair value of $400,000. Finley also notices that much of the equipment in the existing building would be useful to its own op...

Q: Kosher Pickle Company acquires all the outstanding stock of Midwest Produce for

Kosher Pickle Company acquires all the outstanding stock of Midwest Produce for $19 million. The fair value of Midwest’s assets is $14.3 million. The fair value of Midwest’s liabilities is $2.5 millio...

Q: West Coast Growers incurs the following costs during the year related to

West Coast Growers incurs the following costs during the year related to the creation of a new disease-resistant tomato plant. What amount should West Coast Growers report as research and development...

Q: Hanoi Foods incurs the following expenditures during the current fiscal year:

Hanoi Foods incurs the following expenditures during the current fiscal year: (1) annual maintenance on its machinery, $8,900; (2) remodeling of offices, $42,000; (3) improvement of the shipping and r...