Questions from Intermediate Accounting

Q: Briefly explain the differences between U.S. GAAP and IFRS

Briefly explain the differences between U.S. GAAP and IFRS in the measurement of an impairment loss for goodwill.

Q: The Churchill Corporation uses a periodic inventory system and the LIFO inventory

The Churchill Corporation uses a periodic inventory system and the LIFO inventory cost method for its one product. Beginning inventory of 20,000 units consisted of the following, listed in chronologic...

Q: On June 28 Lexicon Corporation acquired 100% of the common stock

On June 28 Lexicon Corporation acquired 100% of the common stock of Gulf & Eastern. The purchase price allocation included the following items: $4 million, patent; $3 million, developed technology; $2...

Q: On November 21, 2018, a fire at Hodge Company’s warehouse

On November 21, 2018, a fire at Hodge Company’s warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $12,000. The follow...

Q: Colah Company purchased $1 million of Jackson, Inc. 5

Colah Company purchased $1 million of Jackson, Inc. 5% bonds at par on July 1, 2018, with interest paid semiannually. When the bonds were acquired Colah decided to elect the fair value option for acco...

Q: As a long-term investment at the beginning of the 2018

As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 30% of Nursery Supplies Inc.’s 8 million shares for $56 million. The fair value and book value of t...

Q: Edible Chemicals Corporation owns a $4 million whole life insurance policy

Edible Chemicals Corporation owns a $4 million whole life insurance policy on the life of its CEO, naming Edible Chemicals as beneficiary. The annual premiums are $70,000 and are payable at the beginn...

Q: Below are two unrelated situations relating to life insurance.

Below are two unrelated situations relating to life insurance. Required: Prepare the appropriate journal entry for each situation. 1. Ford Corporation owns a whole life insurance policy on the life o...

Q: John’s Specialty Store uses a perpetual inventory system. The following are

John’s Specialty Store uses a perpetual inventory system. The following are some inventory transactions for the month of May 2018: 1. John’s purchased merchandise on account for $5,000. Freight charge...

Q: Bloom Corporation purchased $1,000,000 of Taylor Company

Bloom Corporation purchased $1,000,000 of Taylor Company 5% bonds at par with the intent and ability to hold the bonds until they matured in 2025, so Bloom classifies their investment as HTM. Unfortun...