Chapter 8 - Solution Manual

10 a liability representing the underfunded status of

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210-10-45-10 A liability representing the underfunded status of a single-employer defined benefit pension or postretirement plan shall be classified pursuant to Subtopics 715-30 and 715-60. 210-10-45-11 If the amounts of the periodic payments of an obligation are, by contract, measured by current transactions, as for example by rents or revenues received in the case of equipment trust certificates or by the depletion of natural resources in the case of property obligations, the portion of the total obligation to be included as a current liability shall be that representing the amount accrued at the balance sheet date. 210-10-45-12 The current liability classification is not intended to include debts to be liquidated by funds that have been accumulated in accounts of a type not properly classified as current assets, or long- term obligations incurred to provide increased amounts of working capital for long periods. FASB ASC 8-2 Offsetting Assets and Liabilities 95 search results can be found by searching for offsetting Assets and liabilities. FASB ASC 8-3 Inventory The objective of accounting for inventory is found at FASB ASC 330-10-10. Search “objective of accounting for inventory.” FASB ASC 330 Inventory > 10 Overall > 10 Objectives General 10-1 A major objective of accounting for inventories is the proper determination of income through the process of matching appropriate costs against revenues. The original source of this definition was ARB 43, Paragraph Ch. 4. FASB ASC 8-4 Definitions From topic list select Presentation and Balance Sheet. Found under Glossary
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157 Current Assets Current assets is used to designate cash and other assets or resources commonly identified as those that are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business. Current Liabilities Current liabilities is used principally to designate obligations whose liquidation is reasonably expected to require the use of existing resources properly classifiable as current assets, or the creation of other current liabilities. Operating Cycle The average time intervening between the acquisition of materials or services and the final cash realization constitutes an operating cycle. Working Capital Working capital (also called net working capital) is represented by the excess of current assets over current liabilities and identifies the relatively liquid portion of total entity capital that constitutes a margin or buffer for meeting obligations within the ordinary operating cycle of the entity. FASB ASC 8-5 Examples of Current Assets From topic list select Presentation and Balance Sheet. Found under Other Presentation Matter Classification of Current Assets 45-1 Current assets generally include all of the following: a. Cash available for current operations and items that are cash equivalents b. Inventories of merchandise, raw materials, goods in process, finished goods, operating supplies, and ordinary maintenance material and parts c. Trade accounts, notes, and acceptances receivable d. Receivables from officers, employees, affiliates, and others, if collectible in the ordinary
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