Intermediate accounting answer chapter5

? The McGraw-Hill Companies, Inc., 2009

Solutions Manual, Vol.1, Chapter 5

5-1

AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments, and faculty may approach assessment and its documentation differently, one approach is to provide specific questions on exams that become the basis for assessment. To aid faculty in this endeavor, we have labeled each question, exercise and problem in Intermediate Accounting, 5e with the following AACSB learning skills:

Questions

AACSB Tags

Exercises (cont.)

AACSB Tags

5-1 Reflective thinking 5-9 Analytic 5-2 Reflective thinking 5-10 Analytic 5-3 Reflective thinking 5-11 Analytic 5-4 Reflective thinking 5-12 Analytic 5-5 Reflective thinking 5-13 Analytic 5-6 Reflective thinking 5-14 Analytic 5-7 Reflective thinking 5-15 Analytic 5-8 Reflective thinking 5-16 Analytic 5-9 Reflective thinking 5-17 Analytic

5-10 Reflective thinking

5-18 Reflective thinking 5-11 Reflective thinking, Communications

5-19 Analytic, Communications

5-12 Reflective thinking 5-20 Analytic 5-13 Reflective thinking 5-21 Analytic 5-14 Reflective thinking 5-22 Analytic 5-15 Reflective thinking 5-23 Analytic 5-16 Reflective thinking 5-24 Analytic 5-17 Reflective thinking 5-25 Analytic

5-18

Reflective thinking

Brief Exercises

CPA/CMA

5-1 Analytic 5-1 Analytic 5-2 Analytic 5-2 Analytic 5-3 Analytic 5-3 Analytic

5-4 Analytic

5-4 Reflective thinking

5-5 Reflective thinking, Communications

5-5 Analytic 5-6 Analytic 5-6 Analytic

5-7 Analytic 5-1 Reflective thinking 5-8 Analytic 5-2 Reflective thinking

5-9 Analytic

5-3

Analytic

5-10 Reflective thinking

Problems

5-11 Reflective thinking

5-1 Analytic 5-12 Analytic 5-2 Analytic 5-13 Analytic 5-3 Analytic

5-14 Analytic 5-4 Communications, Analytic

5-15

Analytic

5-5 Analytic Exercises

5-6 Analytic

5-1

Analytic

5-7

Analytic

Chapter 5 Income Measurement and Profitability Analysis

? The McGraw-Hill Companies, Inc., 2009 5-2

Intermediate Accounting, 5/e

5-2

Analytic

5-8

Analytic, Reflective thinking

Exercises (cont.)

Problems (cont.)

5-3 Analytic 5-9 Analytic 5-4 Analytic 5-10 Analytic 5-5 Analytic 5-11 Analytic 5-6 Analytic 5-12 Analytic 5-7 Analytic 5-13 Analytic 5-8

Analytic

5-14

Analytic

Question 5-1

The realization principle requires that two criteria be satisfied before revenue can be recognized:

1. The earnings process is judged to be complete or virtually complete.

2. There is reasonable certainty as to the collectibility of the asset to be received (usually cash).

Question 5-2

At the time production is completed, there usually exists significant uncertainty as to the collectibility of the asset to be received . We don’t know if the product will be sold, nor the selling price, nor the buyer if eventually the product is sold. Because of these uncertainties, revenue recognition usually is delayed until the point of product delivery.

Question 5-3

If the installment sale creates a situation where there is significant uncertainty concerning cash collection and it is not possible to make an accurate assessment of future bad debts, revenue and cost recognition should be delayed beyond the point of delivery.

Question 5-4

The installment sales method recognizes gross profit by applying the gross profit percentage on the sale to the amount of cash actually received each period. The cost recovery method defers all gross profit recognition until cash has been received equal to the cost of the item sold.

Question 5-5

Deferred gross profit is a contra installment receivable account. The balance in this account is subtracted from gross installment receivables to arrive at installment receivables, net. The net amount of the receivables represents the portion of remaining payments that represent cost recovery.

QUESTIONS FOR REVIEW OF KEY TOPICS

Question 5-6

Because the return of merchandise can retroactively negate the benefits of having made a sale, the seller must meet certain criteria before revenue is recognized in situations when the right of return exists. The most critical of these criteria is that the seller must be able to make reliable estimates of future returns. In certain situations, these criteria are not satisfied at the point of delivery of the product.

Question 5-7

Sometimes a company arranges for another company to sell its product under consignment. The “consignor” physically transfers the goods to the other company (the consignee), but the consignor retains legal title. If the consignee can’t find a buyer within an agreed-upon time, the consignee returns the goods to the consignor. However, if a buyer is found, the consignee remits the selling price (less commission and approved expenses) to the consignor.

Because the consignor retains the risks and rewards of ownership of the product and title does not pass to the consignee, the consignor does not record revenue (and related costs) until the consignee sells the goods and title passes to the eventual customer.

Question 5-8

For service revenue, if there is one final service that is critical to the earnings process, revenues and costs are deferred and recognized after this service has been performed. On the other hand, in many instances, service revenue activities occur over extended periods and recognizing revenue at any single date within that period would be inappropriate. Instead, it’s more meaningful to recognize revenue over …… 此处隐藏：17617字，全部文档内容请下载后查看。喜欢就下载吧 ……