Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 13, Problem 13.17BE
To determine
Current and Long-Term Liabilities: Liabilities are referred to as the obligations of the business towards the creditors for operating the business. Liabilities may be short-term or long-term depending upon the time duration in which it is paid back to the creditors. Liabilities are classified in to current liabilities and long-term liabilities. Current liabilities are those liabilities which need to be paid within a year. Long-term liabilities are those liabilities that have longer maturity period.
GAAP:
Generally Accepted Accounting Principle (GAAP) is a common set of accounting principles, standards, and procedures that the companies must follow at the time of preparation of the financial statements.
IFRS:
International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring a standard global language in accounting, so that the other firms across the globe can understand the accounting term of all other businesses.
To determine: Whether liability is accrued under GAAP or IFRS.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
● LO16–3, LO16–4, LO16–7The date is January 10, 2023, and Maryton Hotels’ CFO George Smith is looking with dismay at his company’s financial performance during 2022. Already facing stiff competition from other hotel chains as well as Airbnb, Maryton had run an operating loss in 2020 and 2021 and had responded by engaging in a broad effort to refresh hotel décor and update wi-fi and other infrastructure. That effort concluded in late 2021 and seemed to be showing success in early 2022. However, a variant of the COVID-19 virus reached pandemic status in mid-2022, and business and leisure travel fell off considerably. Occupancy rates at Maryton properties plunged, producing a $10 million pre-tax net operating loss for 2022. Maryton’s CEO has asked that George “work some of his accounting magic” to “put a positive spin on things” and minimize Maryton’s net loss, hoping to calm concerns being voiced by investors and lenders.Required:Assume Maryton has a 25% tax rate. Prepare a journal entry…
M7 Q6
Minelli Enterprises uses large amounts of copper in the manufacture of ceiling fans. The firm has been very concerned about the detrimental impact of rising copper prices on its earnings and has decided to hedge the price risk associated with its next quarterly purchase of copper. The current market price of copper is $3.00 per pound and Minelli's management wants to lock in this price. How can Minelli ensure that it will pay no more than $3 per pound for copper using a forward contract?
Question content area bottom
Part 1
(Select the best choice below.)
A.
Minelli can take a short position in a forward contract for copper, with a delivery date in one month, and a delivery price of $3/lb. To complete this transaction, Minelli must find a counterpart to take the other side of the contract.
B.
Minelli can take a long position in a forward contract for copper, with a delivery date in one month, and a delivery price of $3/lb. The futures exchange…
GA
E
E
1
95
81F
Clear
Question 74
You have been asked to evaluate a pollution device. The device costs $500 to set up and $100 per year to operate. It must be
completely replaced every 4 years, and it has no salvage value. Assume the pollution control equipment is replaced as it wears out,
and the cost of capital is 12%.
What is the EAC of the wet scrub device?
A) $257.74
B) $264.62
$286.04
D) $296.93
E) $331.21
Last saved B:52:43 PM
Questions Filter (74)
#
Q Search
D
Chapter 13 Solutions
Intermediate Accounting, 10 Ed
Ch. 13 - What are the essential characteristics of...Ch. 13 - Prob. 13.2QCh. 13 - Bronson Distributors owes a supplier 100,000 on...Ch. 13 - Bank loans often are arranged under existing lines...Ch. 13 - Prob. 13.5QCh. 13 - Prob. 13.6QCh. 13 - Salaries of 5,000 have been earned by employees by...Ch. 13 - Prob. 13.8QCh. 13 - Prob. 13.9QCh. 13 - Prob. 13.10Q
Ch. 13 - Prob. 13.11QCh. 13 - Prob. 13.12QCh. 13 - Long-term obligations usually are reclassified and...Ch. 13 - How do IFRS and U.S. GAAP differ with respect to...Ch. 13 - Prob. 13.15QCh. 13 - Prob. 13.16QCh. 13 - Prob. 13.17QCh. 13 - Prob. 13.18QCh. 13 - Suppose the analysis of a loss contingency...Ch. 13 - Prob. 13.20QCh. 13 - Distinguish between the accounting treatment of a...Ch. 13 - At December 31, the end of the reporting period,...Ch. 13 - After the end of the reporting period, a...Ch. 13 - Prob. 13.24QCh. 13 - Prob. 13.25QCh. 13 - Prob. 13.26QCh. 13 - Prob. 13.27QCh. 13 - Prob. 13.28QCh. 13 - Bank loan; accrued interest LO132 On October 1,...Ch. 13 - Non-interest-bearing note; accrued interest LO132...Ch. 13 - Determining accrued interest LO132 On July1,...Ch. 13 - Commercial paper LO132 Branch Corporation issued...Ch. 13 - Non-interest-bearing note; effective interest rate...Ch. 13 - Sales tax LO133 DuringDecember, Rainey Equipment...Ch. 13 - Prob. 13.12BECh. 13 - Prob. 13.13BECh. 13 - Contingency LO135, LO136 Skill Hardware is the...Ch. 13 - Contingency LO135, LO136 Bell International can...Ch. 13 - Prob. 13.16BECh. 13 - Prob. 13.17BECh. 13 - FASB codification research LO133, LO134, LO135...Ch. 13 - Current noncurrent classification of debt; Sprint...Ch. 13 - Prob. 13.12ECh. 13 - Prob. 13.14ECh. 13 - Extended warranties LO135, LO136 Carnes...Ch. 13 - Disclosures of liabilities Indicate (by letter)...Ch. 13 - Prob. 13.11PCh. 13 - Prob. 13.2DMPCh. 13 - Prob. 13.3DMPCh. 13 - Prob. 13.4DMPCh. 13 - Prob. 13.18DMPCh. 13 - Real World Case 1319 Contingencies LO135 Real...Ch. 13 - Prob. 1CCTCCh. 13 - Prob. 2CCTC
Knowledge Booster
Similar questions
- EXERCISE 5–11 Missing Data; Basic CVP Concepts [LO5–1, LO5–9] Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.) a. Assume that only one product is being sold in each of the four following case situations: {picture11} b. Assume that more than one product is being sold in each of the four following case situations: {picture12}arrow_forwardP18–15 VOLUNTARY SETTLEMENTS: PAYMENTS Jacobi Supply Company recently ran into certain financial difficulties that have resulted in the initiation of voluntary settlement procedures. The firm currently has $150,000 in outstanding debts and approximately $75,000 in liquidatable short-term assets. Indicate, for each of the following plans, whether the plan is an extension, a composition, or a combination of the two. Also indicate the cash payments and timing of the payments required of the firm under each plan. Each creditor will be paid ¢50¢ on the dollar immediately, and the debts will be considered fully satisfied. Each creditor will be paid ¢80¢ on the dollar in two quarterly installments of ¢50¢ and ¢30¢. The first installment is to be paid in 90 days. Each creditor will be paid the full amount of its claims in three installments of ¢50¢, ¢25¢, and ¢25¢ on the dollar. The installments will be made in 60-day intervals, beginning in 60 days. A group of creditors with claims of $50,000…arrow_forwardBrief Exercise 11-13 (Algo) Amortization; Software development costs [LO11-4] On September 30, 2024, Athens Software began developing a software program to shield personal computers from malware and spyware. Technological feasibility was established on February 28, 2025, and the program was available for release on April 30, 2025. Development costs were incurred as follows: $ September 30 through December 31, 2024 January 1 through February 28, 2025 March 1 through April 30, 2025 Athens expects a useful life of four years for the software and total revenues of $7,600,000 during that time. During 2025, revenue of $1,520,000 was recognized. Required: 1. Prepare a journal entry to record the development costs in each year of 2024 and 2025. 2. Calculate the required amortization for 2025. Complete this question by entering your answers in the tabs below. Required Required 1 2 Prepare a journal entry to record the development costs in each year of 2024 and 2025. Note: If no entry is…arrow_forward
- 4G+ 12:16 PM O 0.1KB/s O 68 00:43:39 Remaining Multiple Choice Which of the following statements is false regarding RESEARCH and DEVELOPMENT (R&D) COSTS? RESEARCH activities are undertaken to discover new knowledge that will be useful in developing new product or in significantly improving an existing product. O DEVELOPMENT activities involve the application of research findings to develop a new product prior to the start of commercial production. No intangible asset arising from research shall be recognized; expenditure on research shall be recognized as an expense when it is incurred. If an entity cannot distinguish the research phase from the development phase, the entity treats the R&D expenditure as if it were incurred in the development phase only 11 of 25 レarrow_forward[LO 11-3] 11-26 Make versus Buy; Continuation of Exercise 9-22 (Chapter 9) Vista Company manufac- tures electronic equipment. In 2021, it purchased from an outside supplier the special switches used in each of its products. The supplier charged Vista $2 per switch. As an alternative, Vista's CEO considered purchasing either machine A or machine B so the company could manufacture its own switches. The CEO decided at the beginning of 2022 to purchase machine A, based on the following data: Annual fixed cost (depreciation) Variable cost per switch Machine A $135,000 0.65 Machine B $204,000 0.30 Required 1. Assume that machine A has not yet been purchased. What is the annual volume (rounded up to nearest whole number) that would make the company indifferent between the two decision alternatives (i.e., purchasing and then using machine A to make the switches versus purchasing the switches from the outside vendor)? 2. Assume that machine A has already been purchased. Is it preferable to use…arrow_forwardMake or Buy Analysis [LO 7–3]“In my opinion, we ought to stop making our own drums and accept that outside supplier’s offer,” said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. “At a price of $18 per drum, we would be paying $5 less than it costs us to manufacture the drums in our own plant. Since we use 60,000 drums a year, that would be an annual cost savings of $300,000.” Antilles Refining’s current cost to manufacture one drum is given below (based on 60,000 drums per year): Direct materials............................................$10.35 Direct labor ...............................................6.00 Variable overhead .........................................1.50 Fixed overhead ($2.80 general company overhead, $1.60 depreciation and, $0.75 supervision) ....... 5.15 Total cost per drum ........................................$23.00 A decision about whether to make or buy the drums is especially important at this time because the equipment being used to…arrow_forward
- Problem 13-6 (Static) Various contingencies [LO13-5, 13-6] Eastern Manufacturing is involved with several situations that possibly involve contingencies. Each is described below. Eastern's fiscal year ends December 31, and the 2021 financial statements are issued on March 15, 2022. a. Eastern is involved in a lawsuit resulting from a dispute with a supplier. On February 3, 2022, judgment was rendered against Eastern in the amount of $107 million plus interest, a total of $122 million. Eastern plans to appeal the judgment and is unable to predict its outcome though it is not expected to have a material adverse effect on the company. b. In November 2020, the State of Nevada filed suit against Eastern, seeking civil penalties and injunctive relief for violations of environmental laws regulating hazardous waste. On January 12, 2022, Eastern reached a settlement with state authorities. Based upon discussions with legal counsel, the Company feels it is probable that $140 million will be…arrow_forwardProblem 10-23 Comparing Mutually Exclusive Projects [LO1] Letang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System A costs $305,000, has a four-year life, and requires $105,000 in pretax annual operating costs. System B costs $385,000, has a six-year life, and requires $99,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Whichever project is chosen, it will not be replaced when it wears out. The tax rate is 23 percent and the discount rate is 11 percent. Calculate the NPV for both conveyor belt systems. (A negative answer should be İndicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) System A System B ces Which conveyor belt system should the firm choose? O system B System Aarrow_forwardProblem 27-06 MACRS Depreciation and Leasing [LO3] You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs $5,200,000. Because of radiation contamination, it actually will be completely valueless in four years. You can lease it for $1,550,000 per year for four years. Assume that the tax rate is 24 percent. You can borrow at 8 percent before taxes. Assume that the scanner will be depreciated as three-year property under MACRS. Use Table 10.7. a. What is the NAL of the lease? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Should you lease or buy? a. b. Answer is complete but not entirely correct. $ -10,374.62 X NAL Leasearrow_forward
- Q A Problem 12-25 (Algo) Net Present Value Analysis of a Lease or Buy Decision [LO12-2] The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer and then sold the cars after three years of use. The company's present fleet of cars is three years old and will be sold very shortly. To provide a replacement fleet, the company is considering two alternatives: Purchase alternative: The company can purchase the cars, as in the past, and sell the cars after three years of use. Ten cars will be needed, which can be purchased at a discounted price of $16,000 each. If this alternative is accepted, the following costs will be incurred on the fleet as a whole: Annual cost of servicing, taxes, and licensing Repairs, first year Repairs, second year Repairs, third year At the end of three years, the fleet could be sold for one-half of the original purchase price. Lease alternative: The company can lease the cars under a three-year…arrow_forwardProblem 27-06 MACRS Depreciation and Leasing [LO3] You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs $6,300,000. Because of radiation contamination, it actually will be completely valueless in four years. You can lease it for $1,795,000 per year for four years. Assume that the tax rate is 25 percent. You can borrow at 6 percent before taxes. Assume that the scanner will be depreciated as three-year property under MACRS. Use Table 10.7 a. What is the NAL of the lease? (A negative answer should be indicated by a minus. sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Should you lease or buy? a. b. NALarrow_forward4G 10:12 O O 6 01:58:17 Remaining Multiple Choice B, Inc. owns a residential property it acquired for P3,000,000. It transferred ownership thereto to its supervisory employee for P2,400,000 when its fair value was P4,500,000. What is the monetary value of the benefit? P600,000 P1,500,000 P2,100,000 P2,400,000 16 of 60 IIarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT