Questions from Intermediate Accounting

Q: Facebook Inc. included the following disclosure note in an annual report

Facebook Inc. included the following disclosure note in an annual report: Share-Based Compensation (in part) . . . . Compensation expense related to these grants is based on the grant date fair value...

Q: Sometimes a business entity will change its method of accounting for certain

Sometimes a business entity will change its method of accounting for certain items. The change may be classified as a change in accounting principle, a change in accounting estimate, or a change in re...

Q: Some inventory errors are said to be “self-correcting,”

Some inventory errors are said to be “self-correcting,” in that the error has the opposite financial statement effect in the period following the error, thereby “correcting,” the original account bala...

Q: Danville Bottlers is a wholesale beverage company. Danville uses the FIFO

Danville Bottlers is a wholesale beverage company. Danville uses the FIFO inventory method to determine the cost of its ending inventory. Ending inventory quantities are determined by a physical count...

Q: Webster Products, Inc., adopted the dollar-value LIFO method

Webster Products, Inc., adopted the dollar-value LIFO method of determining inventory costs for financial and income tax reporting on January 1, 2018. Webster continues to use the FIFO method for inte...

Q: Mayfair Department Stores operates over 30 retail stores in the Pacific Northwest

Mayfair Department Stores operates over 30 retail stores in the Pacific Northwest. Prior to 2018, the company used the FIFO method to value its inventory. In 2018, Mayfair decided to switch to the dol...

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: Air France–KLM (AF), a Franco-Dutch company

Air France–KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year end...

Q: Target Corporation prepares its financial statements according to U.S.

Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended January 30, 2016, are available in Connect. This mate...

Q: Agee Technology, Inc., issued 9% bonds, dated January

Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $400 million on July 1, 2018, at a price of $380 million. For bonds of similar risk and maturity, the market yield is 10%...