Questions from Intermediate Accounting

Q: Geiberger Corporation manufactures replicators. On January 1, 2017, it

Geiberger Corporation manufactures replicators. On January 1, 2017, it leased to Althaus Company a replicator that had cost $110,000 to manufacture. The lease agreement covers the 5-year useful life o...

Q: Oliver Corporation has owned stock of Conrad Corporation since 2014. At

Oliver Corporation has owned stock of Conrad Corporation since 2014. At December 31, 2017, its balances related to this investment were: Equity Investments……………………………………………….$185,000 Fair Value Adjust...

Q: The management of Utrillo Instrument Company had concluded, with the concurrence

The management of Utrillo Instrument Company had concluded, with the concurrence of its independent auditors, that results of operations would be more fairly presented if Utrillo changed its method of...

Q: Simmons Corporation owns stock of Armstrong, Inc. Prior to 2017

Simmons Corporation owns stock of Armstrong, Inc. Prior to 2017, the investment was accounted for using the equity method. In early 2017, Simmons sold part of its investment in Armstrong, and began us...

Q: Shannon, Inc., changed from the LIFO cost flow assumption to

Shannon, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2017. The increase in the prior year’s income before taxes is $1,200,000. The tax rate is 40%. Prepare Sha...

Q: Sesame Company purchased a computer system for $74,000 on

Sesame Company purchased a computer system for $74,000 on January 1, 2016. It was depreciated based on a 7-year life and an $18,000 salvage value. On January 1, 2018, Sesame revised these estimates to...

Q: In 2017, Bailey Corporation discovered that equipment purchased on January 1

In 2017, Bailey Corporation discovered that equipment purchased on January 1, 2015, for $50,000 was expensed at that time. The equipment should have been depreciated over 5 years, with no salvage valu...

Q: Indicate the effect—Understate, Overstate, No Effect—that

Indicate the effect—Understate, Overstate, No Effect—that each of the following errors has on 2017 net income and 2018 net income.

Q: Novak Corporation is preparing its 2017 statement of cash flows, using

Novak Corporation is preparing its 2017 statement of cash flows, using the indirect method. Presented below is a list of items that may affect the statement. Using the code below, indicate how each it...

Q: Hendrickson Corporation reported net income of $50,000 in 2017

Hendrickson Corporation reported net income of $50,000 in 2017. Depreciation expense was $17,000. The following working capital accounts changed. Accounts receivable…………………………….$11,000 increase Avail...