During 2004, Beam Co. paid $1,000 cash and traded inventory,…

During 2004, Beam Co. paid $1,000 cash and traded inventory, which had a carrying amount of $20,000 and a fair value of $21,000, for other inventory in the same line of business with a fair value of $22,000. The exchange was made to facilitate sales to their respective customers. What amount of gain (loss) should Beam record related to the inventory exchange?

The premium on a 3‐year insurance policy expiring on Decembe…

The premium on a 3‐year insurance policy expiring on December 31, year 3, was paid in total on January 1, year 1.  Assuming that the original payment was initially debited to an expense account, and that appropriate adjusting entries have been recorded on December 31, year 1 and year 2, the balance in the prepaid asset account on December 31, year 2, would be

Adel Inc. uses the allowance method of accounting for bad de…

Adel Inc. uses the allowance method of accounting for bad debts. During year 5, the financial condition of Botel Co., one of Adel’s major customers, deteriorated rapidly due to accounting and other scandals. In February year 6 it has become clear that Botel will go out of business, although the firm has not declared or been forced into formal bankruptcy proceedings. Adel’s receivable from Botel, 9 months old as of the issuance of Adel’s year 5 financial statements, is 20 times the amount of bad debt expense otherwise reported by Adel. How should the Botel situation be reflected in Adel’s year 5 financial statements?

On the December 31, year 1 balance sheet of the Stat Company…

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?