1.What account is credited when a company receives donated assets? What is the rationale for this...

1.What account is credited when a company receives donated assets? What is the rationale for this choice?

2. In what situations is interest capitalized?

Expert Solution

1. )Donation is either recorded as revenue or reduced from cost of assets acquired. IF donated assets is related to business of user then it will be credited to Revenue account and if its not related to business revenue then asset is recorded at nominal value or fair vale of asset received.

Rationale for this choice is fair and true treatment of donated assets in financial accounts so that true picture is shown.

2.) Interest if capitalised when is assets is constructed from the proceeds of borrowed funds. Interest is capitalised from the date of start of construction till its is completed substantially.

Loans taken specifically for such assets is directly capitalised from such assets and in case of general borrowings of organisation is used then weighted average of the amount of borrowing costs on various borrowing is capitalised.

Another situation when interest is capitalised is when there is loss on foreign currency fluctuation on amount of loan taken in foreign currency for the construction of assets.

Amount to interest is capitalised to the extent of foreign currency loss.

ekkarill92 answered 2 hours ago

Under the direct write-off method, the account credited when an account is determined to be uncollectible...

Under the direct write-off method, the account credited when an account is determined to be uncollectible is Bad Debt Expense Sales; Allowance for Bad Debts Accounts Receivable

1. Accounts payable (a .k.a. trade accounts payable) is the account credited when goods or services...

1. Accounts payable (a .k.a. trade accounts payable) is the account credited when goods or services are purchased on open account (meaning payment has been delayed - often due in 30 days). a. Explain the following: 1.5/10, n/30 b. In the above example, what is the effective interest rate earned by taking advantage of the discount (paying before the 30 days). 2. Explain the difference between accounts Payable and notes Payable . 3. Explain the difference between an interest bearing...

QUESTION 1. A bookkeeper has debited an asset account for $6900 and credited a liability account...

QUESTION 1. A bookkeeper has debited an asset account for $6900 and credited a liability account for $3700. Which of the following would be an incorrect way to complete the recording of this transaction: 2. Credit a revenue account for $3200. Credit another asset account for $3200. Debit another asset account for $3200. Credit the common stock account for $3200. Credit another liability account for $3200. QUESTION 1. Savvy Sightseeing had beginning equity of $78,000; revenues of $108,000, expenses of...

1.When a net loss has occurred, Income Summary is debited and Owner’s Drawings is credited. credited...

1.When a net loss has occurred, Income Summary is debited and Owner’s Drawings is credited. credited and Owner’s Capital is debited. credited and Owner’s Drawings is debited. debited and Owner’s Capital is credited. 2. On September 23, Reese Company received a $350 check from Mike Moluf for services to be performed in the future. The bookkeeper for Reese Company incorrectly debited Cash for $350 and credited Accounts Receivable for $350. The amounts have been posted to the ledger. To correct...

Henley Inc. purchased $160,000 of goods on account. On May 1, the company receives

Henley Inc. purchased $160,000 of goods on account. On May 1, the company receives an invoice from the supplies with the credit terms 2/15, n/45. To pay the amount before the end of the discount period, Tiger would need to borrow 7% annual interest rate. How much will tiger outdoors save if it pays invoice by may 15?

Under current U.S. GAAP, assets that have been donated to a company are recorded at fair...

Under current U.S. GAAP, assets that have been donated to a company are recorded at fair value. By basing your argument on the conceptual framework, argue in favor of the current GAAP treatment for donated assets.

1. Under the allowance method, when a specific account is written off total assets will be...

1. Under the allowance method, when a specific account is written off total assets will be unchanged. net income will decrease. total assets will increase. total assets will decrease. 2. Blossom Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $310000 and credit sales are $3110000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Blossom Company make if the Allowance for Doubtful Accounts has a credit...

1. What is the rationale for requiring partners to defer most gains and all losses when...

1. What is the rationale for requiring partners to defer most gains and all losses when they contribute property to a partnership? 2. For partnerships, What is inside basis and outside basis, and why are they relevant for taxing partnerships and partners?

Answer each of the following questions What is the rationale for depreciating assets used in business?...

Answer each of the following questions What is the rationale for depreciating assets used in business? Do you agree with it? Does the rationale have any implications on capital formation – that is, investments by big businesses? Does it favor one group of taxpayers versus another? Are there any economic, social, revenue, or political implications?

What action does an ABR take when it receives a type 1 LSA? What period of...

What action does an ABR take when it receives a type 1 LSA? What period of time must elapse before an LSA is purged from the local LSBD if not updated with a new LSA? Which type of LSA only exists on networks containing a DR? hat is the function of the OSPF LSR packet?

Question