Questions from Intermediate Accounting

Q: Identify and define the three characteristics of an asset that must be

Identify and define the three characteristics of an asset that must be established to determine periodic depreciation, depletion, or amortization.

Q: Western Die-Casting Company holds an investment in unsecured bonds of

Western Die-Casting Company holds an investment in unsecured bonds of LGB Heating Equipment, Inc. When the investment was acquired, management’s intention was to hold the bonds for resale. Now managem...

Q: For several years Fister Links Products has held Microsoft bonds, considered

For several years Fister Links Products has held Microsoft bonds, considered by the company to be securities available-for-sale. The bonds were acquired at a cost of $500,000. At the end of 2018, thei...

Q: Fowler Inc. purchased $75,000 of bonds on January

Fowler Inc. purchased $75,000 of bonds on January 1, 2018. The bonds pay interest semiannually and mature in 20 years, at which time the $75,000 principal will be paid. The bonds do not pay any amount...

Q: On July 15, 2018, the Nixon Car Company purchased 1

On July 15, 2018, the Nixon Car Company purchased 1,000 tires from the Harwell Company for $50 each. The terms of the sale were 2/10, n/30. Nixon uses a periodic inventory system and the gross method...

Q: At the beginning of 2016, the Healthy Life Food Company purchased

At the beginning of 2016, the Healthy Life Food Company purchased equipment for $42 million to be used in the manufacture of a new line of gourmet frozen foods. The equipment was estimated to have a 1...

Q: Assume the same facts as in BE 12–8, but

Assume the same facts as in BE 12–8, but that Fowler intends to hold the bonds until maturity. How much unrealized gain or loss would Fowler include in 2018 net income with respect to the bonds? In B...

Q: Adams Industries holds 40,000 shares of FedEx common stock,

Adams Industries holds 40,000 shares of FedEx common stock, which is not a large enough ownership interest to allow Adams to exercise significant influence over FedEx. On December 31, 2018, and Decemb...

Q: Turner Company owns 10% of the outstanding stock of ICA Company

Turner Company owns 10% of the outstanding stock of ICA Company. During the current year, ICA paid a $5 million cash dividend on its common shares. What effect did this dividend have on Turner’s 2018...

Q: Turner Company owns 40% of the outstanding stock of ICA Company

Turner Company owns 40% of the outstanding stock of ICA Company. During the current year, ICA paid a $5 million cash dividend on its common shares. What effect did this dividend have on Turner’s 2018...