INTERMEDIATE ACCOUNTING
8th Edition
ISBN: 9780078096488
Author: SPICELAND
Publisher: MCG
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Chapter 1, Problem 1.12BYP
To determine
Revenue Recognition Principle:
Revenue Recognition Principle emphasizes, that the revenue and incurrence of related service must pertain to same period; hence it requires the recognition of revenue, in the same period as the service is provided.
The revenue received in advance, should not be included under the revenues in income statement, as the service is yet to be provided, and the revenue, though received has not been actually earned.
To Decide: Whether to agree or disagree with the position of Company W.
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Students have asked these similar questions
Problem 6-21 Calculating Number of Periods [LO3]
One of your customers is delinquent on his accounts payable balance. You've mutually agreed to a
repayment schedule of $500 per month. You will charge 1.95 percent per month interest on the overdue
balance.
If the current balance is $18,500, how long will it take for the account to be paid off? (Do not round
Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Months for account to be paid off
58.98
3-16A • LO 5
See Example 3-6 on page 3-20, Example 3-8 on page 3-32,
Example 3-9 on page 3-32
Vulcan Company is a monthly depositor whose tax liability for March 20-- is $2,505.
1. What is the due date for the deposit of these taxes?
2. Assume that no deposit was made until April 29 (14 days late). Compute the following penalties:
a. Penalty for failure to make timely deposit.
b. Penalty for failure to fully pay tax.
c. Interest on taxes due and unpaid (assume a 6% interest rate).
d. Total penalty imposed.
$
$
2$
ACTIVITY 59
EVALUATING ACCOUNTS RECEIVABLE
Purpose:
• Analyze trends in Accounts Receivable and the Allowance for Bad Debt accounts.
Assume you work in the corporate loan office of Lanford Bank. Chris Ives, owner of CI Manufacturing, Inc.
has come to you seeking a loan of $350,000 for new manufacturing equipment to expand his operations.
He proposes to use his accounts receivable as collateral for the loan and has provided you with the
following financial statements.
02
Q3
(5 in thousands)
Income Statement
Sales revenue
Cost of goods sold
Gross profit
Q4
Operating expenses
Operating income
Balance Sheet
Q1
Accounts receivable
Allowance for bad debts.
Ratio Analysis
Accounts receivable turnover ratio
Allowance as a percentage of sales revenue
b.
C.
d.
e.
f.
Year 7
$1,475
876
599
518
$.81
$ 458
23
Specific Accounts
3.22
1.56%
Year 6
$1,589
947
642
487
$ 155
$387
31
Examine the trend in each of the following accounts.
Sales revenue:
In Year 6 it (increased / decreased), and then in Year 7…
Chapter 1 Solutions
INTERMEDIATE ACCOUNTING
Ch. 1 - Prob. 1.1QCh. 1 - What is meant by the phrase efficient allocation...Ch. 1 - Identify two important variables to be considered...Ch. 1 - What must a company do in the long run to be able...Ch. 1 - Prob. 1.5QCh. 1 - Prob. 1.6QCh. 1 - Prob. 1.7QCh. 1 - Prob. 1.8QCh. 1 - Prob. 1.9QCh. 1 - Prob. 1.10Q
Ch. 1 - Prob. 1.11QCh. 1 - Prob. 1.12QCh. 1 - Prob. 1.13QCh. 1 - Prob. 1.14QCh. 1 - Prob. 1.15QCh. 1 - Explain what is meant by: The benefits of...Ch. 1 - Prob. 1.17QCh. 1 - Briefly define the financial accounting elements:...Ch. 1 - Prob. 1.19QCh. 1 - What is the going concern assumption?Ch. 1 - Prob. 1.21QCh. 1 - Prob. 1.22QCh. 1 - What are two advantages to basing the valuation of...Ch. 1 - Describe how revenue recognition relates to...Ch. 1 - What are the four different approaches to...Ch. 1 - In addition to the financial statement elements...Ch. 1 - Briefly describe the inputs that companies should...Ch. 1 - Prob. 1.28QCh. 1 - Prob. 1.29QCh. 1 - Prob. 1.30QCh. 1 - Prob. 1.31QCh. 1 - Prob. 1.32QCh. 1 - Accrual accounting LO12 Cash flows during the...Ch. 1 - Financial statement elements LO17 For each of the...Ch. 1 - Prob. 1.3BECh. 1 - Basic assumptions and principles LO17 through...Ch. 1 - Prob. 1.5BECh. 1 - Prob. 1.6BECh. 1 - Accrual accounting LO12 Listed below are several...Ch. 1 - Accrual accounting LO12 Listed below are several...Ch. 1 - Prob. 1.3ECh. 1 - Prob. 1.4ECh. 1 - Prob. 1.5ECh. 1 - Financial statement elements LO17 For each of the...Ch. 1 - Concepts; terminology; conceptual framework LO17...Ch. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10ECh. 1 - Basic assumptions and principles LO18, LO19...Ch. 1 - Prob. 1.12ECh. 1 - Prob. 1.13ECh. 1 - Prob. 1.14ECh. 1 - Prob. 1.15ECh. 1 - Prob. 1CPACh. 1 - Prob. 2CPACh. 1 - Prob. 3CPACh. 1 - Prob. 4CPACh. 1 - Prob. 5CPACh. 1 - Prob. 6CPACh. 1 - Prob. 7CPACh. 1 - Prob. 8CPACh. 1 - Prob. 9CPACh. 1 - Prob. 10CPACh. 1 - Prob. 1CMACh. 1 - Prob. 2CMACh. 1 - Prob. 3CMACh. 1 - Prob. 1.1BYPCh. 1 - Research Case 12 Accessing SEC information through...Ch. 1 - Prob. 1.3BYPCh. 1 - Prob. 1.4BYPCh. 1 - Ethics Case 18 The auditors responsibility LO14...Ch. 1 - Prob. 1.9BYPCh. 1 - Judgment Case 110 GAAP, comparability, and the...Ch. 1 - Prob. 1.11BYPCh. 1 - Prob. 1.12BYPCh. 1 - Analysis Case 113 Expense recognition LO19...Ch. 1 - Prob. 1.14BYPCh. 1 - Prob. 1.15BYPCh. 1 - Prob. 1.16BYP
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