Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

This assignment is about the FASB Codification. For research, MUST use http://aaahq.org/asclogin.cfm , so I'm looking for someone who has an account for this website.

image text in transcribed

This assignment is about the FASB Codification. For research, MUST use http://aaahq.org/asclogin.cfm , so I'm looking for someone who has an account for this website. You can find all information in the 'ASC Research Questions' attachment. I also attach a sample paper ('Example' attachment).

Please remember to cite as the following format:

ASC XXX=Topic, YY=Subtopic, ZZ=Section, PP=Paragraph

image text in transcribed Research Questions #5 through #8 5) Mr. Sullivan is preparing the cost capitalization schedule for a new building that his corporation, Sullivan Inc. built during 2016. Mr. Sullivan is confident that all of the building construction costs must be capitalized however he is uncertain about the interest expense on the construction loan. REQUIRED: Cite a specific authoritative reference indicating whether construction period interest should be capitalized into the cost of the building. 6) In January 2017, Maria Lopez, the CFO of Hunter Industries, announced at the morning accounting department meeting that she had good news. In the future, the staff would have an easier time performing goodwill impairment accounting because the FASB simplified the rules for goodwill impairment. REQUIRED: Cite a specific authoritative reference indicating the new change in the measurement to goodwill impairment and briefly summarize the change. 7) While auditing a non-public client, a new auditor Marina Park, notices that in the long term asset section of the balance sheet there is a $25,000 note receivable from John S. Suspicious. John is a corporate officer of the audit client. Marina is concerned that there may be some accounting issues associated with the loan. REQUIRED: Is Marina correct to be concerned? Cite the specific authoritative reference stating the appropriate treatment and presentation for corporate officer loans. 8) A Katie Tucker new staff accountant at Bartley, Sullivan and Sheehan CPA is preparing the calculation of diluted earnings per share for her new client. She suddenly becomes concerned because the assumed converted calculation for convertible bonds to common stock increase earnings per share. Something doesn't seem correct, Katie needs to determine the proper presentation for this impact to earnings per share. REQUIRED: Cite specific authoritative references to advise Katie regarding the proper accounting and presentation. Tu Mai Fall 2017 - ACC 2310-100 Instructor: Jennifer Altamuro ASC Research Questions #1 to #4 1) Grace Ann Ithan, CPA is preparing for a meeting with an audit client. One topic for the meeting is whether it is necessary to record a valuation allowance against a material deferred tax asset that the client recorded during the current year. Grace Ann is reviewing the criteria that determine whether a valuation allowance is required. REQUIRED: Cite a specific authoritative reference indicating the standard for determining whether recording a valuation allowance is required. (where do you find the answer for the question) According to 942-740-25-3, the entity shall assess the need for a valuation allowance for deferred tax assets related to a savings and loan association's bad-debt reserve for financial reporting. There are four sources of taxable income to consider in determining the need for an amount of valuation allowance a. Future reversals of existing taxable temporary differences b. Future taxable income exclusive of reversing temporary differences and carryforwards c. Taxable income in prior carryback year(s) if carryback is permitted under the tax law d. Tax-planning strategies that would, if necessary, be implemented to, for example: o Accelerate taxable amounts to utilize expiring carryforwards o Change the character of taxable or deductible amounts from ordinary income or loss to capital gain or loss o Switch from tax-exempt to taxable investments. Note that future reversals of taxable differences for which a deferred tax liability has not been recognized based on the exceptions cited in paragraph 740-10-25-3, however, shall not be considered. 2) Two Villanova University intermediate accounting students, Mary and John were having a discussion about their financial statement project for a private company for the year ending December 31, 2016. The conversation went as follows: 1 Mary: \"I was reviewing the financial statements last night and I believe there is an error on the balance sheet.\" John: \"Really? I thought I went over the balance sheet and it looked great.\" Mary: \"I think the deferred income tax asset and liability need to be split between current and non-current.\" REQUIRED: Cite the specific authoritative reference stating the appropriate treatment and presentation for deferred income tax assets and liabilities for private companies at the balance sheet date? Answer the question, \"Who is correct, Mary or John?\" 740-10-45-4: in statement of financial position, an entity shall separate deferred tax liabilities and assets into a current amount and a noncurrent amount. Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. For now, Mary is correct. However, in the future the company will have to follow the pending content, which states that an entity shall classify deferred tax liabilities and assets as noncurrent amounts. 3) Wright, Inc. entered several new transactions during the current year including the establishment of a defined benefit plan. Wright's comptroller is concerned that Wright may need to include items of \"other comprehensive income\" for the first time this year. REQUIRED: Is the comptroller correct? Determine the list of items that could be included in other comprehensive income and cite the specific authoritative reference. According to 220-10-45, it is not necessary to record the establishment of defined benefit plan. Only gains or losses associated with pension or other postretirement benefits (that are not recognized immediately as a component of net periodic benefit cost) will be recorded. What's needed in Other Comprehensive Income: Foreign currency translation adjustments Gains and losses on foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity, commencing as of the designation date Gains and losses on intra-entity foreign currency transactions that are of a long-terminvestment nature (that is, settlement is not planned or anticipated in the foreseeable 2 future), when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting entity's financial statements Gains and losses (effective portion) on derivative instruments that are designated as, and qualify as, cash flow hedges Unrealized holding gains and losses on available-for-sale securities Unrealized holding gains and losses that result from a debt security being transferred into the available-for-sale category from the held-to-maturity category Amounts recognized in other comprehensive income for debt securities classified as available-for-sale and held-to-maturity related to an other-than-temporary impairment recognized in accordance with Section 320-10-35 if a portion of the impairment was not recognized in earnings Subsequent decreases (if not another-than-temporary impairment) or increases in the fair value of available-for-sale securities previously written down as impaired Gains or losses associated with pension or other postretirement benefits (that are not recognized immediately as a component of net periodic benefit cost) Prior service costs or credits associated with pension or other postretirement benefits Transition assets or obligations associated with pension or other postretirement benefits (that are not recognized immediately as a component of net periodic benefit cost) 4) Several years ago Lancaster, Inc. executed a stock buyback program where 5,000 shares per quarter for six quarters were reacquired. Subsequently the shares appreciated significantly and the CFO of Lancaster determined that it was time to sell the shares during the current year. The CFO stated that the benefits of selling the shares will be twofold: (1) the cash proceeds from the sale will increase liquidity and (2) the gains on the sale of the stock will improve net income. Lancaster's comptroller has concerns that the CFO statement is not entirely correct. REQUIRED: Determine the specific authoritative references that the comptroller will need for her conversation with the CFO. State the correct accounting treatment. Determine whether the CFO's concerns are warranted or whether the CFO is correct. 320-10-40: the sale of a trading securities does not necessarily give rise to a gain or a loss. 3

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

Step: 3

blur-text-image

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

Financial Accounting and Reporting

Authors: Barry Elliott, Jamie Elliott

18th edition

1292162406, 978-1292162409

More Books

Students also viewed these Accounting questions

Question

1. Follow directions the first time.

Answered: 1 week ago

Question

How easy the information is to remember

Answered: 1 week ago

Question

The personal characteristics of the sender

Answered: 1 week ago

Question

The quality of the argumentation

Answered: 1 week ago