Reference no: EM133048174

Question 1 - True or False

1. A service concession arrangement may not provide for a financial asset agreement where the operator only receives an intangible asset.

2. The intangible asset recognized by an operator is an unconditional right to receive cash from the public.

Question 2 - A fire occurred at the factory of Bernardo Company on February 16, 2020 which damaged its merchandise inventory. You were given the following information: Inventory, January 1, 2010 $400,000, Sales (including sales delivered still in transit FOB shipping point, $50,000) $980,000, Purchases (including those still in transit, Shipped FOB shipping point $40,000, Shipped FOB destination, $35,000) $700,000. The merchandise saved from fire was estimated to be $8,500. Bernardo Company's policy is to add 40% on its cost. How much is the estimated value of inventory damaged by fire?

Question 3 - A flood damaged the merchandise inventory of Suzy Company on July 25, 2020. You have discovered the following information from the records salvaged from the flood: Inventory, January 1, 2020 $1,960,000, Sales, January 1 - July 25, 2020 (including goods sold but not delivered to customers, $76,000) $19,530,000, Merchandise purchases including those still in transit, shipped FOB shipping point, $138,000) $10,470,000, Mark-up on goods sold 40% of cost. The merchandise saved from the flood has an estimated value of $163,000. How much is the estimated value of inventory damaged by the flood?