On the December 31, year 1 balance sheet of the Stat Company, the current assets were comprised of the following items: Cash $ 70,000 Accounts receivable 120,000 Inventories 60,000 An examination of the accounts revealed that the accounts receivable were composed of the following items: Trade accounts $ 93,000 Allowance for uncollectible accounts (2,000) Claim against shipper for goods lost in transit (11/Y1) 3,000 Selling price of unsold goods sent by Stat on consignment at 130% of cost (and not included in Stat’s ending inventory) 26,000   $120,000 What is the correct amount of current assets as of 12/31/Y1?

In 20×5, a firm decided to discontinue a segment with a book value of $200 million and a fair value of $250 million. The cost to dispose of the segment in 20×6 is estimated to be $10 million. In the 20×5 income statement, what amount of disposal gain or loss will be reported in the discontinued operations section?

If a company issues both a balance sheet and an income statement with comparative figures from last year, a statement of cash flows

On January 15, 2008, Able Co. made a significant investment in the debt securities of Baker Co., which it intends to hold until the debt matures. Able’s fiscal year‐end is December 31. If Able Co. intends to measure and report its investment in Baker Co. debt securities at fair value as permitted by ASC 820 on which one of the following dates must Able elect to implement the fair value option?

Bixby Company is in its first year of operations.  Bixby estimates its annual warranty expense at 2% of net annual sales. Bixby provides its customers with a three‐year warranty plan.  Expected warranty expense is shown below: Year Expected warranty expense Present value discounted at 8% Year 1 $40,000 $37,037 Year 2   10,000     8,573 Year 3   10,000     7,938 Total $60,000 $53,548 The current borrowing rate for Bixby is 8%. Bixby can contract with a third party to provide the warranty work. The cost for a contract to settle the warranties is $57,000.  If Bixby elects the fair value option to report warranty obligations, at what amount will the warranty liability be recorded on the balance sheet?

Which of the following items would best enable Driver Co. to determine whether the fair value of its investment in Favre Corp. is properly stated in the balance sheet?

Which of the following statements best describes an operating procedure for issuing an Accounting Standard Update (ASU) by the Financial Accounting Standards Board?

The FASB’s conceptual framework classifies gains and losses based on whether they are related to an entity’s major ongoing or central operations. These gains or losses may be classified as Nonoperating Operating

A company holds a financial asset that is actively traded in two different markets. The company transacts in both markets equally. The price of the asset in market A is $50. If the company sells the asset in market A, it incurs a transaction cost of $4. The price of the asset in market B is $48. If the company sells the asset in market B, it incurs a transaction cost of $1. What is the fair value of the financial asset?

Which of the following statements is true regarding the fair value option for valuing financial assets and liabilities?