Chapter 9 Sept

Question 1

When there is decline credit losses for AFS security what are the affect noncurrent asset and Net income?

Answer 1

No effect on net noncurrent assets and decrease in net income

Question 2

When we receive the product at the begin of the year 1 and don’t pay funds until year 3 do we use present value for calc or future?

Answer 2

Present value since we received the product at year 1 due to accrual accounting

Question 3

How to calc the gain on sale of half of investment?

Answer 3

Step 1

Voting Stock 200,000 + 24,000 earnings -15,000 dividends = 209,000

80,000 x 30% = 24,000 earnings
50,000 x 30% = 15,000

Step 2

100,000 reporting earnings
30%
= 30,000

209,000 + 30,000 south earnings = 239,000

239,000 / 2 = 119,500

150,000 cash
119,500
= 30,500 gain on sale

Question 4

Adjustment of the transaction price to reflect the time value of money results in

Answer 4

income statement on the revenue section

Question 5

Best describes a level 1 input for measuring fair value of an asset or liability?

Answer 5

Unadjusted quoted prices identical assets or liabilities in active market

Question 6

Transaction price to reflect the time value of money results

Answer 6

interest income or expenses must be presented in the income statement

Question 7

What is the formula to cal the bonds amortization or unamortization?

Answer 7

Cash paid - Interest Expense = Amortization

Question 8

Formula for to calc the cash paid bond?

Answer 8

Face amount x stated rate x period fraction

Question 9

Formula for the calc for interest expense for bonds?

Answer 9

Carrying amount x market rate x period fraction

Question 10

When Accounts Receivable is written off what happens to accounts receivable and allowance for credit lose?

Answer 10

Both are decreased