Questions from Intermediate Accounting

Q: Presented below is information from Perez Computers Incorporated. July 1 Sold

Presented below is information from Perez Computers Incorporated. July 1 Sold $20,000 of computers to Robertson Company with terms 3/15, n/60. Perez uses the gross method to record cash discounts....

Q: Indicate how well the percentage-of-sales method and the

Indicate how well the percentage-of-sales method and the aging method accomplish the objectives of the allowance method of accounting for bad debts.  

Q: Of what merit is the contention that the allowance method lacks the

Of what merit is the contention that the allowance method lacks the objectivity of the direct write-off method? Discuss in terms of accounting’s measurement function.  

Q: What is “imputed interest”? In what situations is it necessary

What is “imputed interest”? In what situations is it necessary to impute an interest rate for notes receivable? What are the considerations in imputing an appropriate interest rate? &nb...

Q: What is the fair value option? Where do companies that elect

What is the fair value option? Where do companies that elect the fair value option report unrealized holding gains and losses?  

Q: Wilton, Inc. had net sales in 2014 of $1

Wilton, Inc. had net sales in 2014 of $1,400,000. At December 31, 2014, before adjusting entries, the balances in selected accounts were: Accounts Receivable $250,000 debit, and Allowance for Doubtf...

Q: Indicate three reasons why a company might sell its receivables to another

Indicate three reasons why a company might sell its receivables to another company.  

Q: When is the financial components approach to recording the transfers of receivables

When is the financial components approach to recording the transfers of receivables used? When should a transfer of receivables be recorded as a sale?  

Q: Moon Hardware is planning to factor some of its receivables.

Moon Hardware is planning to factor some of its receivables. The cash received will be used to pay for inventory purchases. The factor has indicated that it will require “recourse” on t...

Q: Because of calamitous earthquake losses, Bernstein Company, one of your

Because of calamitous earthquake losses, Bernstein Company, one of your client’s oldest and largest customers, suddenly and unexpectedly became bankrupt. Approximately 30% of your client&rsqu...