Using the FASB Web Site, Answer:

#5 While auditing a non-public client, a new auditor Maria, notices that in the long-term asset section of the balance sheet there is a $25,000 note receivable due from John C. Suite. John is the son of the CEO of the client. Maria is concerned that there may be some accounting issues associated with the loan. REQUIRED - Is Maria correct to be concerned? Cite the specific authoritative reference stating the appropriate treatment and presentation for these types of loans. #6 Rosa is a new staff auditor on her first engagement. She was told that tomorrow she will be working with a senior auditor examining loss contingencies. To prepare, Rosa wants to familiarize herself with the 3 areas in the range of likelihood for loss contingencies. REQUIRED - Determine the specific authoritative reference that identifies the 3 areas in the range of likelihood for loss contingencies. Include in your answer the 3 areas. #7 Bob Derstine is preparing the cost capitalization schedule for a new building that his corporation, Derstine Inc. built during 2020. Mr. Derstine is confident that all 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. #8 Two intermediate accounting students, Marco and Jess, were discussing their financial statement project for a private company (not a public company) for the year ending December 31, 2018. The conversation went as follows: Marco - I was reviewing the financial statements last night and I believe there is an error on the balance sheet. Jess - Really? I thought I went over the balance sheet and it looked great. Marco - I think the deferred income tax asset and liability need to be split between current and non-current. Right now, we have all the deferred tax as 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? Who is correct, Marco or Jess?