skip to Main Content
The smarter way
to do assignments.

Please note that this is just a preview of a school assignment posted on our website by one of our clients. If you need assistance with this question too, please click on the Order button at the bottom of the page to get started.

(4) Herb Construction Company is building a hotel for speculative purposes.  That is, the Company has not yet found a buyer for the hotel, but expects to do so within a few months.  Herb, who expects to spend about another two years to complete construction of the hotel, asks his accountant if interest and property taxes associated with this construction site should be capitalized or expensed.   At what rate of interest should Herb use, if any, to capitalize any interest costs?
(5) In order to help induce Jill Gregory to remain as president of the Reed Company, in 2000 it promises to pay her (or her estate) $200,000 per year for the next 15 years—even if she leaves the company or dies.  Reed wants to properly record this transaction as deferred compensation, but is unsure of how many years it should use to amortize this cost.  Moreover, Reed also purchased a “whole life” life insurance policy for Jill, naming the company as the sole beneficiary.  Reed wants to ascertain if it can offset the cash surrender value of the policy against the above deferred compensation liability.
Guidelines for the assignment:

Read the case linked in the assignments below carefully and identify the problem. Using FASB codification answer the problem correctly. See the following example to get an idea how to analyze the case study.
Example:
Example:
Case: Mead Motors purchases an automobile for its new car inventory from Generous Motors, which finances this transaction through its financial subsidiary, Generous Motors Credit Company (GMCC). Mead pays no funds to Generous Motors or GMCC until it sells the automobile. Mead must then repay the balance of the loan plus interest to GMCC. How should Mead report the acquisition and repayment transactions in its Statement of Cash Flows?
Case:
Solution:
Solution:
Problem Identification: How should a company report, if at all, cash and non-cash transactions owed to an entity’s financial subsidiary?
Problem Identification
Keywords: Cash flows; financ* subsidiaries; operating income.
Keywords
Conclusion: Per ASC 230-10-50-5), Mead should exclude transactions that involve no cash payments or receipts. However, per 230-10-45-17, it should record cash payments to GMCC for repayments of principle (and interest thereon) due to suppliers or their subsidiaries as operating cash (out) flows.
Conclusion
Case Solutions will be released on this page after the case study is due.
Case Solutions

GET HELP WITH THIS ASSIGNMENT TODAY

Clicking on this button will take you to our custom assignment page. Here you can fill out all the additional details for this particular paper (grading rubric, academic style, number of sources etc), after which your paper will get assigned to a course-specific writer. If you have any issues/concerns, please don’t hesitate to contact our live support team or email us right away.

How It Works        |        About Us       |       Contact Us

© 2018 | Intelli Essays Homework Service®

Back To Top