Questions from Intermediate Accounting


Q: On July 1, 2020, Lucas Ltd., a publicly listed

On July 1, 2020, Lucas Ltd., a publicly listed company, acquired assets from Jared Ltd. On the transaction date, a reliable, independent valuator assessed the fair values of these assets as follows:...

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Q: On October 1, 2020, Ocean Airways Ltd. purchased a

On October 1, 2020, Ocean Airways Ltd. purchased a new commercial aircraft for a total cost of $100 million. Included in the total cost are the aircraft's two engines, at a cost of $10 million each, a...

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Q: Cameo Manufacturers Inc., a publicly listed company, has two machines

Cameo Manufacturers Inc., a publicly listed company, has two machines that are accounted for under the revaluation model. Technology in Cameo's industry is fast-changing, causing the fair value of eac...

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Q: Fusters Inc. provides audited financial statements to its creditors and is

Fusters Inc. provides audited financial statements to its creditors and is required to maintain certain covenants based on its debt to equity ratio and return on assets. In addition, management of Fus...

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Q: You are hired to review the accounting records of Sheridan Inc.

You are hired to review the accounting records of Sheridan Inc. (a public corporation) before it closes its revenue and expense accounts as at December 31, 2020, the end of its current fiscal year. Th...

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Q: James Halabi is a financial executive with McDowell Enterprises. Although James

James Halabi is a financial executive with McDowell Enterprises. Although James has not had any formal training in finance or accounting, he has a "good sense" for numbers and has helped the company g...

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Q: Langevin Ltd., which has a calendar year end, entered into

Langevin Ltd., which has a calendar year end, entered into an equipment lease on June 1, 2020, with GH Financing Limited. The lease term is two years and requires payments of $3,000 at the end of each...

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Q: The following are the facts for the second question asked of prospective

The following are the facts for the second question asked of prospective employees. Last year the company exchanged a piece of land for a non-interest-bearing note. The note is to be paid at the rate...

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Q: Castlegar Ltd. had the following investment portfolio at January l,

Castlegar Ltd. had the following investment portfolio at January l, 2020: During 2020, the following transactions took place: 1. On March 1, Josie Corp. paid a $2 per share dividend. 2. On April 30, C...

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Q: On December 31 , 2019, Nodd Corp. acquired an investment

On December 31 , 2019, Nodd Corp. acquired an investment in GT Ltd. bonds with a nominal interest rate of 10% (received each December 31), and the controller produced the following bond amortization s...

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