According to the old standards (GAAP), companies have the choice to hide their liabilities to
attract investors and influence stock markets by publishing irrelevant reports to make think they
have more cash and long-term investment to reassure the markets
Tuesday, November 15, 2016
To: Eric Conner and Phil Martin, CM2 Corporation
Subject: Pension Retirement Plan
As part of employee compensation, companies need to implement a prearranged pension plan to
secure working benefits to its employ
Prepare the journal entry to record the change in depreciation method in 2015. (Credit account
titles are automatically indented when amount is entered. Do not indent manually. If no entry
is required, select "No Entry" for the
Glaus Leasing Company agrees to lease machinery to Jensen Corporation on January 1, 2014.
The following information relates to the lease agreement.
The term of the lease is 7 years with no renewal option, and the machi
As of December 15, 2008, the standard, FAS No. 158 stated clearly that Employers Accounting
for Defined Benefit Pension and Other Post-retirement must disclose not only three-quarters
worth of retirement-plan, but to reveal a whole year of
Pat Delaney Company leases an automobile with a fair value of $15,757 from John Simon
Motors, Inc., on the following terms.
Noncancelable term of 51 months.
Rental of $370 per month (at end of each month). (The present va
Brief Exercise 21-2
Waterworld Company leased equipment from Costner Company. The lease term is 4 years and
requires equal rental payments of $45,126 at the beginning of each year. The equipment has a
fair value at the inception of the lease of $155,400,
The following information is available for the pension plan of Radcliffe Company for the year
Actual and expected return on plan assets
Benefits paid to retirees
Prior service cost amortiz
Brief Exercise 20-1
AMR Corporation (parent company of American Airlines) reported the following for 2011 (in
Interest on P.B.O.
Return on plan assets
Amortization of prior service cost
Amortization of net loss
The following information is available for Remmers Corporation for 2014.
1 Depreciation reported on the tax return exceeded depreciation reported on the income
. statement by $132,800. This difference will reverse in equal amounts of $33,200 o
Brief Exercise 18-4
Aamodt Music sold CDs to retailers and recorded sales revenue of $682,300. During 2014,
retailers returned CDs to Aamodt and were granted credit of $59,800. Past experience indicates
that the normal return rate is 15%.
To: Eric Conner and Phil Martin, CMC Corporation
Re: Revenue Recognition Methods.
One of the most important financial reporting that measure a companys performance is
revenue. Today, I have learned that the SEC is investigating for
Globalization has affected the businesses world over and the need to coincide and
merge different standards into one. The emergence of one standard will be beneficial in many
ways. I believe they will be beneficial for the international businesses, Again,
To: Eric Conner and Phil Martin, CMC Corporation
Re: The different ways to raise capital of CM2 company.
I have learned that you are interested in raising money for CM2 company to expand and
ameliorate the company financial situatio
I remember when I was first starting to get my feet wet in the financial industry by working the
customer service center at a major bank. At the time, there was much debate in the media about
employees benefitting from having stock options in lieu of othe
Who are the stakeholders in this situation?
In this situation, the stakeholders are the stockholders who are criticizing Kenseth, other
stockholders, potential investors, creditors, and Kenseth herself.
What are the ethical issues involved?
Global trades and investment unquestionably grown up and expanded to becoming more and
more difficult to trace it growth losses or even fraud. The need of sets of rules and controlling
measures have become an urgent necessity. Generally accepted accountin
In 2014, Amirante Corporation had pretax financial income of
$143,580 and taxable income of $102,810. The difference is due to the
use of different depreciation methods for tax and accounting purposes.
The effective tax rate is 40%.
Jaycie Phelps Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on
December 31, 2013. The purchase price was $1,337,500 for 53,500 shares. Kulikowski Inc.
declared and paid an $0.78 per share cash dividend on June
For each of the unrelated transactions described below, present the entries required to record
1 Grand Corp. issued $20,326,000 par value 11% convertible bonds at 99. If the bonds had not
. been convertible, the companys in
Brief Exercise 17-1
Garfield Company purchased, as a held-to-maturity investment, $91,700 of the 9%, 5-year bonds
of Chester Corporation for $84,921, which provides an 11% return.
Prepare Garfields journal entries for (a) the purchase of the investment, a
Brief Exercise 16-1
Archer Inc. issued $3,661,200 par value, 7% convertible bonds at 97 for cash. If the bonds had
not included the conversion feature, they would have sold for 95.
Prepare the journal entry to record the issuance of the bonds. (Credit acc
Kathleen Battle Corporation was organized on January 1, 2014. It is authorized to
issue 10,830 shares of 8%, $54 par value preferred stock, and 504,000 shares of no-par common
stock with a stated value of $2 per share. The following stock tr
Brief Exercise 15-1
Buttercup Corporation issued 680 shares of $12 par value common stock for $12,240.
Prepare Buttercups journal entry. (Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is requi
On December 31, 2014, Faital Company acquired a computer from Plato Corporation by issuing a
$609,300 zero-interest-bearing note, payable in full on December 31, 2018. Faital Companys credit
rating permits it to borrow funds from its several lines of cred
The following amortization and interest schedule reflects the issuance of 10-year bonds by
Capulet Corporation on January 1, 2008, and the subsequent interest payments and charges. The
companys year-end is December 31, and financial st