Questions from Financial Reporting

Q: Some public service commission’s let utilities include construction in progress—construction

Some public service commission’s let utilities include construction in progress—construction dollars spent for projects not yet completed—in their rate-making asset bases. Other states allow only comp...

Q: Illinois Power & Heat just spent $5 million repairing one of

Illinois Power & Heat just spent $5 million repairing one of its electrical generating stations that was damaged by a tornado. The loss was uninsured. Management has asked the public service commissio...

Q: Why do regulators require banks and insurance companies to maintain minimum levels

Why do regulators require banks and insurance companies to maintain minimum levels of investor capital? What impact does this type of regulatory requirement have on the financial statements that banks...

Q: Wilson Corporation repairs rail cars for its clients, a process that

Wilson Corporation repairs rail cars for its clients, a process that often takes several months. As a result, the work on some contracts is done over two accounting periods. Wilson is determining whet...

Q: For the month of December 2017, Ranger Corporation’s records show the

For the month of December 2017, Ranger Corporation’s records show the following information: Cash received on accounts receivable……………………………. $35,000 Cash sales ………………….………………….………………….…………………. 30,00...

Q: Pogrund Vacation Properties sells real estate in Florida. Pogrund requires potential

Pogrund Vacation Properties sells real estate in Florida. Pogrund requires potential buyers who are interested in a property to remit a $10,000 deposit to show good faith before receiving detailed inf...

Q: Kendall Corporation designs and manufactures sports cars. During the course of

Kendall Corporation designs and manufactures sports cars. During the course of its business, Kendall generates substantial receivables from its customers. On July 1, 2017, to improve its cash flow, Ke...

Q: Blue, Inc., sells playground equipment to schools and municipalities.

Blue, Inc., sells playground equipment to schools and municipalities. It mails invoices at the end of each month for all goods shipped during that month; credit terms are net 30 days. Sales and accoun...

Q: On December 31, 2017, Fenton Company sold equipment to Denver

On December 31, 2017, Fenton Company sold equipment to Denver, Inc., accepting a $275,000 noninterest-bearing note receivable in full payment on December 31, 2017. Denver, Inc., normally pays 12% for...

Q: Binsford, Inc., sells $175,000 of its accounts

Binsford, Inc., sells $175,000 of its accounts receivable ($172,000 net of the allowance for doubtful accounts) to Upshaw Finance with recourse. Upshaw immediately remits cash equal to 90% of the gros...