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 8, Problem 8.11BYP
1.
To determine
FASB Accounting Standards Codification: It simplifies user access to all the authoritative US GAAP by providing all the information related to a particular topic under one roof.
To state: the specific citation that provides guidance for determining whether an arrangement involving the sale of inventory is “in substance” a financing arrangement.
2.
To determine
To state: the specific citation that addresses the recognition of a product financing arrangement.
3.
To determine
the appropriate treatment of product financing arrangements like the one proposed by Mr. E.
4.
To determine
To Prepare: the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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…
3 Supply Chain Management Ch 11
11.3
Din 12 ed
11.4
in 11 ed
5 Uriel
3
9
D
2
Kamal Fatehl, production manager of Kennesaw Manufacturing, finds his profit at $15,000--Inadeguate for expanding his business.
The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment.
Kamal would like to improve the profit line to $25,000 so he can obtain the bank's approval for the loan.
a) What percentage improvement is needed in a supply chain strategy for profit to improve to $25,000?
b) What percentage improvement is meeded in a sales strategu for profit to improve to $25,000?
What must sales be to improve to $25,000?
Sales
Cost of Supply Chain Purcha
Other Production Costs
Fixed Costs
Profit
Sssss
$
$
$
$
$
250,000
175,000
30,000
30,000
15,000
% of Sales
100%
70%
12%
12%
6%
Question 26 of 40
View Policies
Show Attempt History
Current Attempt in Progress
Your answer is incorrect.
0/0.3 E
You wrote a piece of software that does a better job of allowing computers to network than any other program designed for this
purpose. A large networking company wants to incorporate your software into its systems and is offering to pay you $486,000 today,
plus $486,000 at the end of each of the following six years, for permission to do this. If the appropriate interest rate is 6 percent, what
is the present value of the cash flow stream that the company is offering you? (Round factor values to 4 decimal places, e.g. 1.5215 and
final answer to 2 decimal places, e.g. 15.25.)
Present value
$
2,389 613.89
eTextbook and Media
Save for Later
Using multiple attempts will impact your score.
20% score reduction after attempt 2
Search
Attempts: 1 of 3 used
Submit Answer
Chapter 8 Solutions
Intermediate Accounting
Ch. 8 - Describe the three types of inventory of a...Ch. 8 - What is the main difference between a perpetual...Ch. 8 - The Cloud Company employs a perpetual inventory...Ch. 8 - The Bockner Company shipped merchandise to Laetner...Ch. 8 - What is a consignment arrangement? Explain the...Ch. 8 - Prob. 8.6QCh. 8 - The Esquire Company employs a periodic inventory...Ch. 8 - Prob. 8.8QCh. 8 - Its common in the electronics industry for unit...Ch. 8 - Explain why proponents of LIFO argue that it...
Ch. 8 - Prob. 8.11QCh. 8 - Describe the ratios used by financial analysts to...Ch. 8 - Prob. 8.13QCh. 8 - Prob. 8.14QCh. 8 - The Austin Company uses the dollar-value LIFO...Ch. 8 - Identify any differences between U.S. GAAP and...Ch. 8 - Determining ending inventory; periodic system ...Ch. 8 - Prob. 8.2BECh. 8 - Prob. 8.3BECh. 8 - Purchas e discounts; gross method LO83 On...Ch. 8 - Prob. 8.5BECh. 8 - Prob. 8.6BECh. 8 - Inventor y cost flow methods; perpetual system ...Ch. 8 - LIFO method LO84 Esquire Inc. uses the LIFO...Ch. 8 - LIFO method LO84 AAA Hardware uses the LIFO...Ch. 8 - LIFO liquidation LO86 Refer to the situation...Ch. 8 - Prob. 8.11BECh. 8 - Ratio analysis LO87 Selected financial statement...Ch. 8 - Dollar-value LIFO LO88 At the beginning of 2018,...Ch. 8 - Perpetual inventory system; journal entries LO81...Ch. 8 - Prob. 8.2ECh. 8 - Determining cost of goods sold; periodic inventory...Ch. 8 - Perpetual and periodic inventory systems compared ...Ch. 8 - Prob. 8.6ECh. 8 - Goods in transit; consignment LO82 The December...Ch. 8 - Physical quantities and costs included in...Ch. 8 - Prob. 8.9ECh. 8 - Prob. 8.10ECh. 8 - Prob. 8.11ECh. 8 - FASB codification research LO82, LO83 Access the...Ch. 8 - Inventory cost flow methods; periodic system ...Ch. 8 - Inventory cost flow methods; perpetual system ...Ch. 8 - Comparison of FIFO and LIFO; periodic system ...Ch. 8 - Average cost method; periodic and perpetual...Ch. 8 - FIFO, LIFO, and average cost methods LO81, LO84...Ch. 8 - Supplemental LIFO disclosures; LIFO reserve; AEP...Ch. 8 - LIFO liquidation LO81, LO84, LO86 The Reuschel...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018, the...Ch. 8 - Dollar-value LIFO LO88 Mercury Company has only...Ch. 8 - Dollar-value LIFO LO88 Carswell Electronics...Ch. 8 - Concepts; terminology LO81 through LO85 Listed...Ch. 8 - Various inventory transactions; journal entries ...Ch. 8 - Prob. 8.2PCh. 8 - Prob. 8.4PCh. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Supple mental LIFO disclosures; Caterpillar LO84,...Ch. 8 - LIFO liquidation LO84, LO86 Taylor Corporation...Ch. 8 - LIFO liquidation LO84, LO86 Cansela Corporation...Ch. 8 - Prob. 8.11PCh. 8 - Integrating problem; inventories and accounts...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018, the...Ch. 8 - Dollar-value LIFO LO88 Kingston Company uses the...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018,...Ch. 8 - Prob. 8.1BYPCh. 8 - Real World Case 82 Physical quantities and costs...Ch. 8 - Judgment Case 83 The specific identification...Ch. 8 - Prob. 8.4BYPCh. 8 - Prob. 8.5BYPCh. 8 - Judgment Case 86 Goods in transit LO82 At the end...Ch. 8 - Ethics Case 87 Profit manipulation LO84 In 2017...Ch. 8 - Real World Case 88 Effects of inventory valuation...Ch. 8 - Real World Case 89 Effects of inventory valuation...Ch. 8 - Communication Case 810 Dollar-value LIFO method ...Ch. 8 - Prob. 8.11BYPCh. 8 - Prob. 8.CCTCCh. 8 - Prob. CCIFRS
Knowledge Booster
Similar questions
- Businessarrow_forwardV - MN * 00 因 今4 3. 01 n Chapters 8-10 Saved Help Save & Exit Subm Banc Corp. Trust is considering either a bankwide overhead rate or department overhead rates to allocate $420,000 of indirect costs. The bankwide rate could be based on either direct labor hours (DLH) or the number of loans processed. The departmental rates would be based on direct labor hours for Consumer Loans and a dual rate based on direct labor hours and the number of loans processed for Commercial Loans. The following information was gathered for the upcoming period: Department DLH Loans Processed Direct Costs Consumer 000'0 $280,000 12,000 850 Commercial 0000 000 If Banc Corp. Trust uses a bankwide rate based on the number of loans processed, what would be the total costs for the Commercial Department? Multiple Choice 000'0 Graw < Prev 13 of 25 10:19 PM Type here to search (Gpツ 4/15/2021 近 同回 F10 PrtSc +D -E3 Delete F7 F8 F11 F12 Ins 反 6- & 23 3. Backspac 7. 6 5. [C A G H. B N Alt Ctrl Alt Homearrow_forward182 CHAPTER 6 - REVENUE MANAGEMENT CASE STUDY 60 2 Suggest revenue management strategies to use under the following circumstances at The Times Hotel: Situation 1: The Train Collectors will be in town November 12, 13, and 14 only November 13, 14, and 15 only November 13 and 14 only I November 14 and 15 only I November 15 only from November 10 through November 15 and will draw 50,000 people. Every room in town is expected to be taken for that period. What policy should the hotel develop for guests who want to reserve a room for the following periods? Situation 2: The last two weeks of December are November 10 only November 10 and 11 only November 10, 11, and 12 only I November 11, 12, and 13 only usually a slow period for room sales, but a local Snow and Ice Festival will attract visitors who may request reservations for single overnight accommo- dations. What policy should the hotel develop for accepting room reservation?arrow_forward
- * 00 B T # M ロ 5 QuikCard processes credit card receipts for local banks. QuikCard processed 1,150,000 receipts in October. All receipts are processed the same day they are received. October costs were labor of $18,000 and overhead of $28,000. What is the cost to process 1,900 receipts? Multiple Choice $29.74. $76.00. .... .... ation 1:36 earch Windows 自己(p v 3/26 GUA PRIVATE ACCENT HIGHLIGHTER IGHL IOHTEa FORAY™ AP ACA HB N CLASSIC Esc F1 F2 F3 F4 F5 %24 4 & 4. 9. 2. 5. ement: 7. Tab M ned view Caps Lock Shift WN Ctrl Altarrow_forwardAnswer question 7arrow_forwardEthics Case 13-17 Profits guaranteed LO13-5 This was Joel Craig's first visit to the controller's corner office since being recruited for the senior accountant position in May. Because he'd been directed to bring with him his preliminary report on year-end adjustments, Craig presumed he'd done something wrong in preparing the report. That he had not was Craig's first surprise. His second surprise was his boss's request to reconsider one of the estimated expenses. S & G Fasteners was a new company, specializing in plastic industrial fasteners. All products carry a generous long-term warranty against manufacturer's defects. "Don't you think 4% of sales is a little high for our warranty expense estimate?" his boss wondered. "After all, we're new at this. We have little experience with product intro- ductions. I just got off the phone with Blanchard (the company president). He thinks we'll have trouble renewing our credit line with the profits we're projecting. The pressure's on."…arrow_forward
- PROBLEM 14-18 Common-Size Statements and Financial Ratios for a Loan Application LO14–1, LO14-2, LO14-3, LO14-4 Paul Sabin organized Sabin Electronics 10 years ago to produce and sell several electronic devices on which he had secured patents. Although the company has been fairly profitable, it is now experiencing a severe cash shortage. For this reason, it is requesting a $500,000 long-term loan from Gulfport State Bank, $100,000 of which will be used to bolster the Cash account and $400,000 of which will be used to modern- ize equipment. The company's financial statements for the two most recent years follow: Sabin Electronics Comparative Balance Sheet This Year Last Year Assets Current assets: Cash .... $ 70,000 $ 150,000 Marketable securities 18,000 Accounts receivable, net 480,000 300,000 Inventory 950,000 600,000 Prepaid expenses 20,000 22,000 Total current assets 1,520,000 1,090,000 Plant and equipment, net. 1,480,000 $3,000,000 $2,460,000 1,370,000 Total assets .......…arrow_forwardProblem 8-7B Record contingencies (LO8-5) Compact Electronics is a leading manufacturer of digital camera equipment. Assume the following transactions occur during the year ended December 31, 2021. 1. Accounts receivable were $27.9 million (all credit) at the end of 2021. Although no specific customer accounts have been shown to be uncollectible, the company estimates that 1% of accounts receivable will eventually prove uncollectible. 2. Compact Electronics is the plaintiff in a $3.9 million lawsuit filed against a supplier. The suit is in final appeal, and attorneys advise it is virtually certain that Compact Electronics will win and be awarded $2.4 million. 3. In November 2021, Compact Electronics became aware of a design flaw in one of its digital camera models. A product recall appears probable and would likely cost the company $490,000. 4. Compact Electronics is the defendant in a patent infringement lawsuit brought by a competitor. It appears reasonably likely Compact Electronics…arrow_forwardEthics Case 19-12 International Network Solutions LO19-6 International Network Solutions provides products and services related to remote access networking. The com- pany has grown rapidly during its first 10 years of operations. As its segment of the industry has begun to mature, though, the fast growth of previous years has begun to slow. In fact, this year revenues and profits are roughly the same as last year. One morning, nine weeks before the close of the fiscal year, Rob Mashburn, CFO, and Jessica Lane, controller, were sharing coffee and ideas in Lane's office. Y Lane: Mashburn: Lane: Mashburn: About the Board meeting Thursday. You may be right. This may be the time to suggest a share buyback program. To begin this year, you mean? Right! I know Barber will be lobbying to use the funds for our European expansion. She's probably right about the best use of our funds, but we can always issue more notes next 。 year. Right now, we need a quick fix for our EPS numbers. Our…arrow_forward
- Answer question 8, is it a b c or darrow_forward2 Problem 11-25A (Algo) Effects of operating leverage on profitability LO 11-1, 11-2 [The following information applies to the questions displayed below.] Franklin Training Services (FTS) provides instruction on the use of computer software for the employees of its corporate clients. It offers courses in the clients' offices on the clients' equipment. The only major expense FTS incurs is instructor salaries; it pays instructors $5,300 per course taught. FTS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $470 per student. Novak estimated that 20 students would attend the course. Base your answers on the preceding information. Problem 11-25A (Algo) Part 2 The instructor has offered to teach the course for a percentage of tuition fees. Specifically, she wants $250 per person attending the class. Assume that the tuition fee remains at $470 per student. f. Is the cost of instruction a fixed or a variable cost? g. Determine the profit,…arrow_forwardrrrrrrrarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Accounting Information SystemsFinanceISBN:9781337552127Author:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan HillPublisher:Cengage Learning
Accounting Information Systems
Finance
ISBN:9781337552127
Author:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan Hill
Publisher:Cengage Learning