1.Assume that Campo Jewelry Co. uses the LIFO inventory costing method for both tax and financial reporting purposes. The balance sheet reports inventories at $204 million. Then, in its footnotes, the company reports that inventories would have been $266 million had the company used the FIFO method. The difference between these two numbers ($62 million) is referred to as:

Select one:

A. LIFO reserve

B. LIFO conformity rule

C. LIFO holding gain

D. Inventory temporary difference

E. None of the answers are correct.

3. ABC Company plans to issue a bond of $5,000,000 with a coupon rate of 10% on January 1, 2013. The maturity date is January 1, 2018. If the market rate is 12%, ABC should issue the bond

Select one:

A. at par

B. At discount

C. at premium

D. the information is not sufficient.

5. The Environmental Protection Agency notifies Shevlin Company that a state where it has a plant is filing a lawsuit for groundwater pollution against Shevlin and another company that has a plant adjacent to Shevlins plant. Test results have not identified the exact source of the pollution. Shevlins manufacturing process often produces by-products that can pollute groundwater. Based on the above information, assume the loss is reasonably possible but the company cannot estimate the amount of potential obligations, what is the proper accounting treatment for Shevlin Company?

Select one:

A. Disclose the liability in a footnote

B. None of the answers are correct.

C. Increase stockholders equity

D. Record a liability on the balance sheet