Reference no: EM132945680
Questions -
Q1) When is revenue recognized under earnings approach?
Q2) Explain principal-agent relationship and what is the revenue for agents in this relationship?
Q3) Explain the cost to cost basis in determining the progress toward completion of service contract.
Q4) Because of changes in the extent to which a piece of equipment is being used, a Company decides to review it for possible impairment. The asset's carrying amount is $600,000 ($800,000 cost less $200,000 accumulated depreciation).
The expected future undiscounted net ash flows from the use of the equipment and its later disposal are estimated to be $650,000, and its fair value is $525,000. Use the recover-ability test to determine if the asset would be considered impaired under the cost recovery impairment model.
Q5) At year-end, A company's ending inventory cost and net realizable value were like the following. What would be the ending inventory value to be measured?
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Food
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Cost
|
Net Realizable Value
|
|
Cut beans
|
$50,00
|
$40,000
|
|
Peas
|
$90,00
|
$72,000
|
|
Mixed vegetables
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$95,000
|
$92,000
|
|
Spinach
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$80,00
|
$120,000
|
|
Carrots
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$100,000
|
$100,000
|
6) Provide 2 examples of inventory types that are exceptions to the LC&NRV rule.
7) Assume that Investor company pays $19,231 on March 15 for a $20,000 six-month treasury bill that matures on September 15. The investment, purchased to yield an 8% return, is designate as an FV-NI investment. Prepare the journal entries for the initial recognition and the maturity.
8) Provide 2 examples of PP&E impairment indicator.