Questions from Intermediate Accounting

Q: Ed’s Market Company (EMC) grows and sells fresh fruits and

Ed’s Market Company (EMC) grows and sells fresh fruits and vegetables. EMC is an IFRS reporter. EMC experienced three different unfortunate events in the current year. 1. In February, the government...

Q: Companies sometimes develop software for either external use (for example,

Companies sometimes develop software for either external use (for example, to sell to customers) or for internal use. Should a company expense or capitalize software for internal use? U.S. GAAP provid...

Q: Assume the same information for Case 4. IFRS does not provide

Assume the same information for Case 4. IFRS does not provide specific rules for software; the accounting for software development costs falls under the general guidance for intangible assets. Does IF...

Q: On January 2, 2018, JCR Jets, a calendar-

On January 2, 2018, JCR Jets, a calendar-year company, accepts a contract with a major airline to build four jets. JCR accepts a fixed fee of $300 million and must complete the project within three ye...

Q: ABC Lending signed a loan agreement with AMRO, Inc. on

ABC Lending signed a loan agreement with AMRO, Inc. on January 2, 2017. AMRO is borrowing $500,000 for 10 years with a stated interest rate of 7%. AMRO will make a payment of $71,188.75 at the end of...

Q: Companies sometimes use accounts receivable as collateral in a secured borrowing or

Companies sometimes use accounts receivable as collateral in a secured borrowing or sell them to a factor. The accounting method for these types of transactions is governed by ASC 860—Transfers and Se...

Q: More Toys, Inc., a toy retailer that has a calendar

More Toys, Inc., a toy retailer that has a calendar year-end and prepares interim financial statements quarterly. As of March 31, 20X4, More Toys has 10,000 Gabriella dolls in stock. The Gabriella dol...

Q: Tarheel Farm, Inc. (TFI) is a North Carolina

Tarheel Farm, Inc. (TFI) is a North Carolina corporation involved in agricultural production and has an October 31 fiscal year-end. It is not publicly traded, but it is required to prepare annual fina...

Q: Smart Cookie Learning Centers enters into a contract to customize and sell

Smart Cookie Learning Centers enters into a contract to customize and sell its LaLa tutoring software to the Westbro United School District. The contract price is $6,000,000 and must be paid to Smart...

Q: Sycamore enters into a contract with a customer to sell three products

Sycamore enters into a contract with a customer to sell three products for a total transaction price of $15,000. Each product is appropriately classified as a separate performance obligation. Sycamore...