Questions from Intermediate Accounting


Q: Refer to the situation described in BE 19–3. Suppose

Refer to the situation described in BE 19–3. Suppose that unexpected turnover during 2019 caused the forfeiture of 5% of the stock options. What is the effect on earnings in 2019? In 2020? In BE 19–3...

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Q: Ozark Distributing Company is primarily engaged in the wholesale distribution of consumer

Ozark Distributing Company is primarily engaged in the wholesale distribution of consumer products in the Ozark Mountain regions. The following disclosure note appeared in the company’s 2018 annual re...

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Q: Investing activities include the acquisition and disposition of assets. Provide three

Investing activities include the acquisition and disposition of assets. Provide three specific examples. Identify two exceptions.

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Q: On January 1, 2018, Hugh Morris Comedy Club (HMCC

On January 1, 2018, Hugh Morris Comedy Club (HMCC) granted 1 million stock options to key executives exercisable for 1 million shares of the company’s common stock at $20 per share. The stock options...

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Q: Walters Audio Visual Inc. offers an incentive stock option plan to

Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2018, options were granted for 40 million $1 par common shares. The exercise price is the market...

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Q: SSG Cycles manufactures and distributes motorcycle parts and supplies. Employees are

SSG Cycles manufactures and distributes motorcycle parts and supplies. Employees are offered a variety of share-based compensation plans. Under its nonqualified stock option plan, SSG granted options...

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Q: In order to encourage employee ownership of the company’s $1 par

In order to encourage employee ownership of the company’s $1 par common shares, Washington Distribution permits any of its employees to buy shares directly from the company through payroll deduction....

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Q: Most changes in accounting principles are recorded and reported retrospectively. In

Most changes in accounting principles are recorded and reported retrospectively. In a few situations, though, the changes should be reported prospectively. When is prospective application appropriate?...

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Q: Tesla Motor’s disclosure notes for the year ending December 31, 2015

Tesla Motor’s disclosure notes for the year ending December 31, 2015, included the following regarding its $0.001 par common stock: EMPLOYEE STOCK PURCHASE PLAN—Employees are eligible to purchase comm...

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Q: For the year ended December 31, 2018, Norstar Industries reported

For the year ended December 31, 2018, Norstar Industries reported net income of $655,000. At January 1, 2018, the company had 900,000 common shares outstanding. The following changes in the number of...

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