The following information relates to Starbucks for the year ended October 2, 2011: net income
1,245.7 million; unrealized holding loss of $10.9 million related to available-for-sale securities
during the year; accumulated other comprehensive income of $57
Zoop Corporation purchased for $300,000 a 30% interest in Murphy, Inc. This investment
enables Zoop to exert significant influence over Murphy. During the year, Murphy earned net
income of $180,000 and paid dividends of $60,000. Prepare Zoops journal entr
Assume the same information as in E17-3 except that the securities are classified as availablefor-sale. The fair value of the bonds at December 31 of each year-end is as follows.
(a) Prepare the journal entry at the date of the bond purchase.
On January 1, 2013, Phantom Company acquires $200,000 of Spiderman Products, Inc., 9%
bonds at a price of $185,589. The interest is payable each December 31, and the bonds mature
December 31, 2015. The investment will provide Phantom Company a 12% yield.
Hillsborough Co. has an available-for-sale investment in the bonds of Schuyler Corp. with a
carrying (and fair) value of $70,000. Hillsborough determined that due to poor economic
prospects for Schuyler, the bonds have decreased in value to $60,000. It is
On January 1, 2013, Hi and Lois Company purchased 12% bonds having a maturity value of
$300,000 for $322,744.44. The bonds provide the bondholders with a 10% yield. They are dated
January 1, 2013, and mature January 1, 2018, with interest receivable Decem
On January 1, 2013, Dagwood Company purchased at par 12% bonds having a maturity value of
$300,000. They are dated January 1, 2013, and mature January 1, 2018, with interest receivable
December 31 of each year. The bonds are classified in the held-to-matu
The following information is available for Barkley Company at December 31, 2014, regarding
(a) Prepare the adjusting entry (if any) for 2014, assuming the securities are classified as trading.
(b) Prepare the adjusting entry
For the following investments identify whether they are:
1. Trading Securities
2. Available-for-Sale Securities
3. Held-to-Maturity Securities
Each case is independent of the other.
(a) A bond that will mature in 4 years was bought 1 month ago when the pr
The Revenue Cycle
we examine the revenue cycle conceptually, Using
data flow diagrams (DFDs)
revenue cycle includes:
sales order procedures,
sales return procedures,
and cash receipts procedures
Cleveland Company has a stock portfolio valued at $4,000 (available-for-sale). Its cost was
$3,300. If the Fair Value Adjustment account has a debit balance of $200, prepare the journal
entry at year-end.
Fair Value Adjustment (available-
Table of Contents in
definitions and notations, e.g.
process efficiency, effectiveness,
A Note on Process Analysis
S U M A N TA B A S U
INDIAN INSTITUTE OF MANAGEMENT
C A L C U T TA
What is a Process?
A procedure that converts inputs into
Any production system
Service processes like education, customer care, loan
Briefly explain the meaning of decision-usefulness in the context of financial reporting.
Investors are interested in financial reporting because it provides information that is useful for
making decisions (referred to as the decision-us
What was the Committee on Accounting Procedure, and what were its accomplishments and
The Committee on Accounting Procedure was a special committee of the American Institute of
CPAs that, between the years of 1939 and 1959, iss
Explain the role of the Emerging Issues Task Force in establishing generally accepted accounting
The Emerging Issues Task Force often arrives at consensus conclusions on certain financial
reporting issues. These consensus con
How are FASB preliminary views and FASB exposure drafts related to FASB statements?
The technical staff of the FASB conducts research on an identified accounting topic and prepares
a preliminary views that is released by the Board for pu
Distinguish among Accounting Research Bulletins, Opinions of the Accounting Principles Board,
and Statements of the Financial Accounting Standards Board.
Accounting Research Bulletins were pronouncements on accounting practice issued by
Distinguish between FASB statements of financial accounting standards and FASB
statements of financial accounting concepts.
Statements of financial accounting standards constitute generally accepted accounting principles
and dictate acce
Differentiate broadly between financial accounting and managerial accounting.
Financial accounting measures, classifies, and summarizes in report form those activities and that
information which relate to the enterprise as a whole for us
Differentiate between financial statements and financial reporting.
Financial statements generally refer to the four basic financial statements: balance sheet, income
statement, statement of cash flows, and statement of changes in owners
Average WIP (number
of 60-shirt batches
1. Make Collar
2. Make cuffs
What is Rule 203 of the Code of Professional Conduct?
Rule 203 of the Code of Professional Conduct prohibits a member of the AICPA from expressing
an opinion that financial statements conform with GAAP if those statements contain a mater