Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 9, Problem 3ATC
a.
To determine
Compute the ratios for 2011 and 2014 using end-of-year amounts for total assets and total equity instead of averages.
b.
To determine
Based on the analysis, comment on the apparent effects of Incorporation DE’s acquisition of Company PE.
c.
To determine
Based on the analysis, explain whether the effects of the merger were good or bad for Incorporation DE.
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Problem 12-12 (IAA)
Bicol Company uses approximately 200,000 units of raw
material in its manufacturing operations.
On December 1, 2021, the entity purchased a call option
to buy 200,000 units of the raw material on July 1, 2022 at
a strike price of P25 per unit.
The entity paid P20,000 for the call option. The entity
designated the call option as a cash flow hedge against
price fluctuation for its July purchase,
The market price of the raw material is P28 on December
31, 2021 and P21 on July 1, 2022.
1. What amount should be reported as derivative asset on
December 31, 2021?
a. 600,000
b. 580,000
C.
20,000
d.
0
2. What amount should be recognized as loss on call option
in 2022?
a. 300,000
b. 500,000
c. 200,000
d. 20,000
3. What amount should be reported as derivative liability
on July 1, 2022?
a. 800,000
b. 400,000
c. 780,000
d.
0
4. What amount should be reported as cost of purchases on
July 1, 2022?
a. 5,000,000
b. 4,980,000
c.
4,200,000
d. 4,220,000
345
Brief Exercise 9-13
Blue Spruce Ltd. has a single investment that it accounts for using FV-OCI. The carrying value of the investment at the last reporting period was $65,900. To date, $2,970 of unrealized gains on fair value adjustments have been recorded to other comprehensive income. The
original cost of the investment is therefore $62,930. On June 15, when the market value of the investment is $66,340, Blue Spruce sold the investment. Using the three-step approach, record the sale and reclassification (recycling) entry at June 15, assuming the investment is
an equity investment and the company reclassifies gains or losses to Retained Earnings on disposition of the investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No
Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
(To adjust to fair value at date of disposal)
(To record disposal)
(To…
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The cost of equipment purchased by Swifty, Inc., on June 1, 2025, is $100,800. It is estimated that the machine will have a
$8,400 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 46,200,
and its total production is estimated at 660,000 units. During 2025, the machine was operated 6,240 hours and
produced 57,200 units. During 2026, the machine was operated 5,720 hours and produced 49,900 units.
Compute depreciation expense on the machine for the year ending December 31, 2025, and the year ending December 31, 2026,
using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e.g. 45,892.)
b.
d.
Straight-line
Units-of-output
Working hours
Sum-of-the-years'-digits
e. Double-declining-balance
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Chapter 9 Solutions
Survey Of Accounting
Ch. 9 - 1. Why are ratios and trends used in financial...Ch. 9 - Prob. 2QCh. 9 - Prob. 3QCh. 9 - 4. What is the significance of inventory turnover,...Ch. 9 - 5. What is the difference between the current...Ch. 9 - Prob. 6QCh. 9 - Prob. 7QCh. 9 - Prob. 8QCh. 9 - 9. What are some limitations of the earnings per...Ch. 9 - Prob. 10Q
Ch. 9 - Prob. 11QCh. 9 - Prob. 12QCh. 9 - Prob. 13QCh. 9 - Prob. 14QCh. 9 - Exercise 9-1 Horizontal analysis Winthrop...Ch. 9 - Prob. 2ECh. 9 - Prob. 3ECh. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Comprehensive analysis The December 31, 2019,...Ch. 9 - Prob. 10ECh. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Ratio analysis Compute the specified ratios using...Ch. 9 - Prob. 14ECh. 9 - LO 13-2, 13-3, 13-4, 13-5 Exercise 13-15A...Ch. 9 - Prob. 16PCh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Problem 9-21 Ratio analysis Selected data for...Ch. 9 - Prob. 22PCh. 9 - Problem 9-23 Ratio analysis The following...Ch. 9 - Prob. 24PCh. 9 - Prob. 1ATCCh. 9 - Prob. 3ATCCh. 9 - ATC 9-5 Ethical Dilemma Making the ratios look...
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