Concept explainers
Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.
Held-to-maturity security: The debt securities which are held by the investor with intent to hold the investment till its maturity, are referred to as held-to-maturity securities.
Other-than-temporary (OTT) impairment: When the market value of an investment declines to a value lower than its cost, it is referred to as OTT impairment.
Other Comprehensive income (OCI): OCI includes all financial items which result in changes in the
Comprehensive income: The total of net income and other comprehensive income (OCI) is referred to as comprehensive income. Comprehensive income should be reported on income statement, and statement of comprehensive income.
Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system.
Rules of Debit and Credit:
Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
- Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
- Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.
To Indicate: The effect of the following scenarios on the 2018 Income Statement of Company B.
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INTERMED. ACC. (LL) W/ 2 YR CONNECT >I
- Note 32 lists “other provisions.”a. Do the beginning and ending balances of total provisions and retirement benefitsshown in Note 32 for fiscal 2015 tie to the balance sheet? By how much has thetotal amount of AF’s “other provisions” increased or decreased during fiscal 2015?b. Write journal entries for the following changes in the litigation provision thatoccurred during fiscal 2015, assuming any amounts recorded on the incomestatement are recorded as “provision expense” and any use of provisions is paid forin cash. In each case, provide a brief explanation of the event your journal entry iscapturing.i. New provision.ii. Use of provision.c. Is AF’s treatment of litigation provision under IFRS similar to how it would betreated under U.S. GAAP?arrow_forward1. The required loss allowance at Dec. 31, 2019 is?2. The impairment gain to be recognized in 2020 is? Please include solutions. Thank you!arrow_forwardPaulina, Incorporated, owns 80 percent of Southport Company. On January 1, 2024, Paulina acquires half of Southport's $700,000 outstanding 13-year bonds. These bonds had been sold on the open market on January 1, 2021, at a 12 percent effective rate. The bonds pay a cash interest rate of 10 percent every December 31 and are scheduled to come due on December 31, 2033. Southport issued this debt originally for $610,070. Paulina paid $396,971 for this investment, indicating an 8 percent effective yield.arrow_forward
- Mirror Mart uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more efficiently, Mirror Mart decided to change past-due categories as follows. Complete the following. A. Complete each table by filling in the blanks. B. Determine the difference between total uncollectible. C. Explain how the new total uncollectible amount affects net income and accounts receivable.arrow_forwardLO 10-5 Corporation E10-10 Calculating and Interpreting the Debt-to-Assets Ratio and Times Interest Earned Ratio At May 31, 2019, FedEx Corporation reported the following amounts (in millions) in its financial statements: Total Assets Total Liabilities Interest Expense Income Tax Expense Net Income game Tot 1500 2019 $54,400 36,600 ainuoms 21000056 590 115 540 2018 $52,330 32,900 560 220 4,570arrow_forwardIn its Dec. 31, 2020 statement of financial position, how much current liabilities should be reported? (SEE ATTACHED FOR PROBLEM) CHOICES a. P 4,000,000b. P 3,640,000c. P 3,000,000d. P 1,500,000arrow_forward
- 2. The following trial balance was extracted from the books of Syarikat Wawa at 31 Mac 2020: Particulars Capital Carriage in Carriage out Purchases Office equipment Motor vehicle Sales Wages and salaries Rent and rates Lighting and heating Vehicles running cost Telephone expenses General office expenses Debtors |Creditors Provision for depreciation: Motor vehicle Office equipment Provision for doubtful debts Drawings Cash at bank Cash in hand Stock as at 1 April 2019 Return inwards Return outwards RM 63,030 1,620 800 145,800 10,000 8,500 232,950 68,000 3,600 8,400 4,300 9,600 3,180 28,400 16,440 4,250 4,000 500 13,570 6,200 300 8,000 3,800 2,900 Additional information as at 31 Mac 2020: i. Stock on hand was valued at RM8,800 ii. Rent and rates prepaid RM1,200 ii. Wages and salaries RM1,750 iv. Depreciation is to be provided as follows: a. Motor vehicles b. Office equipment 50 % reducing balance method 20% straight line methodarrow_forwardHow about these questions: 1. how much is the Net Income (Loss) in 2021? 2. assuming the collectability of the note is uncertain, how much is the Franchise Revenue to be recognized in 2021?arrow_forwardmake journal entries for recording interest income and interest received and recognition of FV at dec31, 2023, 2024, and 2025. the entries should be: to record interest collected (3 lines) to record Fair value adjustment to record interest collected (3 lines) to record Fair value adjustment to record interest collected (3 lines) to record gain or loss Dont use AI Tools. Thank youarrow_forward
- Provide answer please! If the collection of the note receivable is reasonably assured, what is the net income to be recognized by the entity for the year ended December 31, 2020 in relation to the initial franchise fee?A. 98,850 C. 70,028B. 94,850 D. 92,037arrow_forwardAnswer this please. Accounting question. If the collection of the note receivable is not reasonably assured, what is the gross profit to be recognized by the entity for the year ended December 31, 2020 in relation to the initial franchise fee?A. 60,028 C. 56,009B. 54,236 D. 45,037arrow_forwardElegant Linens uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more favorably, Elegant Linens considers changing the past-due categories as follows. A. Complete each table by filling in the blanks. B. Determine the difference between total uncollectible. C. Complete the following 2019 comparative income statements for 2019, showing net income changes as a result of the changes to the balance sheet aging method categories. D. Describe the categories change effect on net income and accounts receivable.arrow_forward
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