Questions from Intermediate Accounting

Q: Monat Company has grown rapidly since its founding in 2004. To

Monat Company has grown rapidly since its founding in 2004. To instill loyalty in its employees, Monat is contemplating establishment of a defined benefit plan. Monat knows that lenders and potential...

Q: Hamilton Construction Company uses the percentage-of-completion method of

Hamilton Construction Company uses the percentage-of-completion method of accounting. In 2017, Hamilton began work under contract #E2-D2, which provided for a contract price of $2,200,000. Other detai...

Q: Yanmei Construction Company began operations on January 1, 2017. During

Yanmei Construction Company began operations on January 1, 2017. During the year, Yanmei Construction entered into a contract with Lundquist Corp. to construct a manufacturing facility. At that time,...

Q: Pacific Crossburgers Inc. charges an initial franchise fee of $70

Pacific Crossburgers Inc. charges an initial franchise fee of $70,000. Upon the signing of the agreement (which covers 3 years), a payment of $28,000 is due. Thereafter, three annual payments of $14,0...

Q: On January 1, 2017, Lesley Benjamin signed an agreement,

On January 1, 2017, Lesley Benjamin signed an agreement, covering 5 years, to operate as a franchisee of Campbell Inc. for an initial franchise fee of $50,000. The amount of $10,000 was paid when the...

Q: Jupiter Company sells goods to Danone Inc. by accepting a note

Jupiter Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2017. The goods have a sales price of $610,000 (cost of $500,000). The terms are net 30. If Danone pays within 5...

Q: Jeff Heun, president of Concrete Always, agrees to construct a

Jeff Heun, president of Concrete Always, agrees to construct a concrete cart path at Dakota Golf Club. Concrete Always enters into a contract with Dakota to construct the path for $200,000. In additio...

Q: Bill Amends, owner of Real Estate Inc., buys and sells

Bill Amends, owner of Real Estate Inc., buys and sells commercial properties. Recently, he sold land for $3,000,000 to the Blackhawk Group, a developer that plans to build a new shopping mall. In addi...

Q: Blair Biotech enters into a licensing agreement with Pang Pharmaceutical for a

Blair Biotech enters into a licensing agreement with Pang Pharmaceutical for a drug under development. Blair will receive a payment of $10,000,000 if the drug receives regulatory approval. Based on pr...

Q: Aaron’s Agency sells an insurance policy offered by Capital Insurance Company for

Aaron’s Agency sells an insurance policy offered by Capital Insurance Company for a commission of $100 on January 2, 2017. In addition, Aaron will receive an additional commission of $10 each year for...