Reference no: EM132656071

Questions -

Q1. On July 1, 2019, Pistons Co. acquired 100% of Suns Co. It is now December 31, 2019, and Pistons is about to prepare its consolidated financial statements. The CFO of Pistons does not know whether the 2019 consolidated income statement should include the financial results of Suns for the full 2019 year or only from the acquisition date.

Research and cite a specific paragraph in the Accounting Standard Codification that can help the CFO of Pistons Co. to determine from what point of time the subsidiary's financial results should be included in the consolidated income statement. Enter the FASB ASC code your response in the answer fields below.

Q2. Magic Co.'s accounting department is implementing a new general ledger software package. The system provides definitions that enable it to automatically segregate between current and noncurrent assets. The company has no clearly defined its operating cycle. Which section of the authoritative guidance should Magic use to determine the appropriate time period to use as a basis for classifying current assets?

Q3. Tal Co. routinely manufactures cars. On January 1, Year 1, Tal started a massive production of a new model of cars. To finance the production, on January 1, Year 1, Tal took a 5%, $900 million loan from Bishop Bank. Which section of the authoritative guidance should Tal use to determine whether the Year 1 interest on the loan qualifies for capitalization to cars' cost?

Q4. Atlantis Travel, Inc., internally developed computer software for its reservations system. Atlantis correctly capitalized $136,500 for coding, testing, and payroll costs related to this software. The project was completed during the year and is expected to have a 5-year useful life. The CFO wants to know the correct way to amortize capitalized costs incurred from producing computer software. Which section of the authoritative guidance best describes the correct way to amortize capitalized costs incurred from producing computer software?