Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
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…
h2
Chapter 13 Solutions
Intermediate Accounting
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 - Prob. 13.6BECh. 13 - Advance collection LO133 In Lizzie Shoes...Ch. 13 - Sales tax LO133 DuringDecember, Rainey Equipment...Ch. 13 - Classifying debt LO134 Consider the following...Ch. 13 - Prob. 13.10BECh. 13 - Prob. 13.11BECh. 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 - Unasserted assessment LO135, LO136 At March 13,...Ch. 13 - Bank loan; accrued interest LO132 On November 1,...Ch. 13 - Determining accrued interest in various situations...Ch. 13 - Short-term notes LO132 The following selected...Ch. 13 - Paid future absences LO133 JWS Transport Companys...Ch. 13 - Paid future absences LO133 On January 1, 2018,...Ch. 13 - Prob. 13.6ECh. 13 - Customer deposits LO133 Diversified...Ch. 13 - Prob. 13.8ECh. 13 - Prob. 13.9ECh. 13 - FASB codification research LO133, LO134, LO135...Ch. 13 - Current noncurrent classification of debt; Sprint...Ch. 13 - Prob. 13.12ECh. 13 - Current noncurrent classification of debt LO131,...Ch. 13 - Prob. 13.14ECh. 13 - Warranties LO135, LO136 Cupola Awning Corporation...Ch. 13 - Extended warranties LO135, LO136 Carnes...Ch. 13 - Prob. 13.17ECh. 13 - Impairment of accounts receivable LO135, LO136...Ch. 13 - Prob. 13.19ECh. 13 - Various transactions involving contingencies ...Ch. 13 - Prob. 13.21ECh. 13 - Prob. 13.22ECh. 13 - Disclosures of liabilities Indicate (by letter)...Ch. 13 - Warranty expense; change in estimate LO135, LO136...Ch. 13 - Change in accounting estimate LO133 The...Ch. 13 - Contingency; Dow Chemical Company disclosure ...Ch. 13 - Payroll-related liabilities Appendix Lee...Ch. 13 - Prob. 13.1PCh. 13 - Prob. 13.2PCh. 13 - Current noncurrent classification of debt LO131,...Ch. 13 - Various liabilities LO131 through LO134 The...Ch. 13 - Bonus compensation; algebra LO133 Sometimes...Ch. 13 - Various contingencies LO135, LO136 Eastern...Ch. 13 - Prob. 13.7PCh. 13 - Expected cash flow approach; product recall LO136...Ch. 13 - Subsequent events LO136 Lincoln Chemicals became...Ch. 13 - Subsequent events; classification of debt; loss...Ch. 13 - Prob. 13.11PCh. 13 - Various liabilities; balance sheet classification;...Ch. 13 - Payroll-related liabilities Appendix Alamar...Ch. 13 - Prob. 13.1BYPCh. 13 - Prob. 13.3BYPCh. 13 - Prob. 13.4BYPCh. 13 - Prob. 13.5BYPCh. 13 - Prob. 13.7BYPCh. 13 - Prob. 13.8BYPCh. 13 - Judgment Case 139 Loss contingency and full...Ch. 13 - Prob. 13.10BYPCh. 13 - Prob. 13.12BYPCh. 13 - Prob. 13.13BYPCh. 13 - Prob. 13.14BYPCh. 13 - Prob. 13.15BYPCh. 13 - Prob. 13.16BYPCh. 13 - Prob. 13.18BYPCh. 13 - Real World Case 1319 Contingencies LO135 Real...Ch. 13 - Real World Case 1320 Contingencies and Subsequent...Ch. 13 - Prob. 1CCTCCh. 13 - Prob. 1CCIFRS
Knowledge Booster
Similar questions
- Brief 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_forwardNonearrow_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_forward
- Make 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 ........................................$23.00 A decision about whether to make or buy the drums is especially important at this time because the equipment being used to…arrow_forwardProblem 9-19 MIRR [LO6] Duo Corporation is evaluating a project with the following cash flows: Year Cash Flow 0 -$ 29,100 12345 11,300 14,000 15,900 13,000 -9,500 The company uses an interest rate of 8 percent on all of its projects. a. Calculate the MIRR of the project using the discounting approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the MIRR of the project using the reinvestment approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. Calculate the MIRR of the project using the combination approach. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. a. Discounting approach MIRR 11.19 % b. Reinvestment approach MIRR 11.19 % c. Combination approach MIRR 13.02 %arrow_forwardHel point 8 01:41:39 eflook Print Transportation Company has offered to purchase it for $60,000 on the replacement date. The old machine would have no salvage value in 20x5. If the replacement occurs, a new machine would be acquired from Hillcrest Industries on December 31, 20x1. The purchase price of $1,000,000 for the new machine would be paid in cash at the time of replacement. Due to the increased efficiency of the new machine, estimated annual cash savings of $300,000 would be generated through 20x5, the end of its expected useful life. The new machine is not expected to have any salvage value at the end of 20x5. Tri-County's management requires all investments to earn a 12 percent after-tax return. The company's tax rate is 30 percent. The new machine would be classified as three-year property for MACRS purposes Use Appendix A and Exhibit 16-9, for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Compute the net present value of the machine…arrow_forward
- Problem 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_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_forward
- 28arrow_forwardSee attachedarrow_forwardQ 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_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
