Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1- Martha signed a 16-month contract on September 1, 2017. Martha was paid an upfront signing bonus of $80,000, a monthly salary of $2,000, and

1- Martha signed a 16-month contract on September 1, 2017. Martha was paid an upfront signing

bonus of $80,000, a monthly salary of $2,000, and a bonus of 15% of 2018 net income. The signing

bonus was paid in September, and expensed in fiscal 2017 as part of the wages and benefits, admin-

istration. The bonus is not repayable if Martha leaves prior to the 16 months.

2- On July 1, 2017, GHA exchanged 10,000 coffee makers to TeleCo, a large telecom company, in

exchange for $280,000 worth of telecom services. The coffee makers have a cost of $14 and a retail

value that ranges between $25 and $30 per unit. TeleCo plans to use the coffee makers in the staff-

rooms of its offices across North America. Martha posted the following journal entry:

Dr Other Assets 250,000 Cr Inventory $250,000

3- GHA operates a small number of outlet stores that distribute their products. Martha has accrued a $100,000 liability for the closing of two unprofitable stores. Martha is currently unsure which stores will be closed, but is very sure that two stores will be closed in 2018, resulting in severance pay and other closing costs. The expense has been included in the general and administrative expenses.

4- In fiscal 2016, 10,000 can openers held in inventory were written down from their historical cost of

$5.50 each to their net realizable value of $4.00. The write-down was a result of a decrease in demand for the product due to child safety concerns. In fiscal 2017, a total of 5,000 of these can openers were sold. The can openers were sold for $7.50 each as it appears that the child safety concerns have subsided.

5- On December 1, the company paid $250,000 in order to undertake a large marketing campaign. The marketing campaign is intended to help re-brand the company's products and to increase customer awareness of the company's product offering. The marketing campaign began in December and will run for four months over the Internet, television, radio, and on billboards. The entire $250,000 is included in the marketing and sales expense.

6- During the year, GHA designed and developed a new technology for a toaster that toasts bread more evenly than the toasters on the market. The following costs were incurred during the year related to the toaster and were expensed:

Developing heat insulation technology: 35,450

Developing inner toaster technology: 95,900

Design of toaster outer casing: 37,500

Patenting of toaster technology: 21,500

Testing the prototypes prior to commercialization 48,000

$238,350

The toaster technology is expected to generate additional net cash flows of $35,000 for the next five years. Martha has expensed all of the costs as part of general and administrative expenses.

Required:

Analyze financial accounting issues using IFRS standards supported by case facts and provide recommendations for each financial accounting issue.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

How is the NDAA used to shape defense policies indirectly?

Answered: 1 week ago

Question

6. Identify seven types of hidden histories.

Answered: 1 week ago

Question

What is the relationship between humans and nature?

Answered: 1 week ago