Fin

How should warrants atached to a debt security be accounted for

no amount assigned

Trol inc has self-insurance plan. Each year RE is appropriated for contingencies in an amount egual to insurance premiums saved minus recognized losses from lawsuits and other claims. As a result of a current-year accident, tyrol is a defendant in a lawsuit in which it will probable have to pay damages of 190000. what are the effects of this lawsuit's probable outcome on Tyrols current year financial statements

AN increase in both expenses and liabilities

When a note payable as properly been recorded at its present valu, any resulting discount should be disclosed in the financial statements

AS a direct reduction of the face amount of the note

IF the payment of employees compensation for future absences is probable, the amount can be reasonably estimated, and the obligation relates to rights that vest, the compensation should be

Accrued if attributable to employees services already rendered

Y1 phineas co issued 10 par value common stock for 25 per share. no other common stock transactions occurred until march 31 y3 when phineas acquired some of the issued shared for 20 and retired them. which of the following states the effect on acquisition and retirment

Additional paid in capital is decreaseed

What us the preferred method of accounting for unamortized discount, unamortized issue costs and the costs of implementing a conversion of debt into common stock

Charge them to paid in capital in excess of the par value of the stock issued

Management can estimate the amount of loss that will occur if a foreign government expropriates some company assets. If expropriation is reasonably possible, a loss contingency should be

Disclosed but not accrued as a liability

An issuer of a convertible security may attempt to induce prompt conversion of its convertible debt to equity securities by offering additional securities or other consideration used to induce conversion should be reported as

Expense of the current period but not an extraordinary item

An issuer of a convertible security may attemp to induce prompt conversion of its convertible debt to equity securities by offering additional securities or other consideration as a sweetener. The additional consideration used to induce conversion should be reported as an

Expense of the current period, not an entraordinary item

Which of the following best describes the accrual method of accounting for warranty costs?

Expensed based on estimate in year of sale

The preemptive right of shareholders is the right

Purchase shares of stock on a pro rata basis when new issues are offered for sale

Which of the following is a condition for accruing a liability for the cost of compensation for future absences?

Payment of the compensation is probable. All of these are conditions for the accrual. The obligation relates to the rights that vest or accumulate. The obligation is attributable to employee services already performed.

An entity is most likely to account for an asset retirement obligation (ARO) by

Recognizing the fair value of the liability using an expected present value technique

Instead of the usual cash dividend, smalty Corp. declared and distributed a property dividend from it overstocked merchandise. The excess of the merchandise carrying amount over its fair value should be

Reported as a reduction in income before extraordinary

Depending on whether the book value method or the market-value method was used, Kiril should recongize gains or losses on conversion when using the

book vale method- neither gain or loss. Market value method-loss

When reporting contingencies

a loss that is probable but not estimable must be disclosed with a notation that the amount of the loss cannont be estimated

Information available prior to the issuance of the financial statements indicates that it is probable that, at the date of the financial statements, a liability has been incurred for obligations related to product warranties. The amount of the loss involved can be reasonably estimated. Based on the above facts, an estimated loss contingency should be

accrued

To record an asset retirement obligation (ARO), the cost associated with the ARO is

included in the carrying amount of the related long-lived asset

Darren Company becomes aware of a lawsuit after the date of the financial statements, but before they are issued. A loss and related liability should be reported in the financial statements if the amount can be reasonably estimated, an unfavorable outcome is highly probable, and

the cause for action occurred during the accounting period covered by the financial statements.

Martinez Co. has a loss contingency to accrue. The loss amount can only be reasonably estimated within a range of outcomes. No single amount within the range is a better estimate than any other amount. The amount of loss accrual should be

the minimum of the range.

In accounting for compensated absences, the difference between vested rights and accumulated rights is that

vested rights are not contingent upon an employee's future service.