Questions from Intermediate Accounting

Q: Consider the following liabilities of Future Brands, Inc., at December

Consider the following liabilities of Future Brands, Inc., at December 31, 2018, the company’s fiscal year-end. Should they be reported as current liabilities or long-term liabilities? 1. $77 million...

Q: Carswell Electronics adopted the dollar-value LIFO method on January 1

Carswell Electronics adopted the dollar-value LIFO method on January 1, 2018, when the inventory value of its one inventory pool was $720,000. The company decided to use an external index, the Consume...

Q: Camden Biotechnology began operations in September 2018. The following selected transactions relate

Camden Biotechnology began operations in September 2018. The following selected transactions relate to liabilities of the company for September 2018 through March 2019. Camden’s fiscal year ends on De...

Q: Rockwell Corporation uses a periodic inventory system and has used the FIFO

Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1979. In 2018, the company decided to switch to the average cost method. Data...

Q: The balance sheet at December 31, 2018, for Nevada Harvester

The balance sheet at December 31, 2018, for Nevada Harvester Corporation includes the liabilities listed below: a. 11% bonds with a face amount of $40 million were issued for $40 million on October 31...

Q: Cates Computing Systems develops and markets commercial software for personal computers and

Cates Computing Systems develops and markets commercial software for personal computers and workstations. Three situations involving compensation for possible future absences of Cates’s employees are...

Q: In the March 2019 meeting of Valleck Corporation’s board of directors,

In the March 2019 meeting of Valleck Corporation’s board of directors, a question arose as to the way a possible obligation should be disclosed in the forthcoming financial statements for the year end...

Q: Late in 2018, you and two other officers of Curbo Fabrications

Late in 2018, you and two other officers of Curbo Fabrications Corporation just returned from a meeting with officials of the City of Jackson. The meeting was unexpectedly favorable even though it cul...

Q: Kevin Brantly is a new hire in the controller’s office of Fleming

Kevin Brantly is a new hire in the controller’s office of Fleming Home Products. Two events occurred in late 2018 that the company had not previously encountered. The events appear t...

Q: The Cloud Company employs a perpetual inventory system and the McKenzie Corporation

The Cloud Company employs a perpetual inventory system and the McKenzie Corporation uses a periodic system. Describe the differences between the two systems in accounting for the following events: (1)...