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Chapter 12: Q33. (page 610)
What is the purpose of a cash flow hedge?
The primary purpose of a cash flow hedge is to hedge exposure to the cash flow risk.
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Question: Treasure Land Corporation incurred the following costs in 2017.
Cost of laboratory research aimed at the discovery of new knowledge | \(120,000 |
Cost of testing in search for product alternatives | 100,000 |
Cost of engineering activity required to advance the design of a product to the manufacturing stage | 210,000 |
Prototype testing subsequent to meeting economic viability | 75,000 |
\)505,000 |
Prepare the necessary 2017 journal entry(ies) for Treasure Land.
Question: Treasure Land Corporation incurred the following costs in 2017
Cost of laboratory research aimed at discovery of new knowledge | \(120,000 |
Cost of testing in search for product alternatives | \)100,000 |
Cost of engineering activity required to advance the design of a product to the manufacturing stage | \(210,000 |
\)430,000 |
Prepare the necessary 2017 journal entry or entries for Treasure Land.
Question: Where can authoritative IFRS guidance related to intangible assets be found?
Stave Company invests \(10,000,000 in 5% fixed rate corporate bonds on January 1, 2017. All the bonds are classified as available-for-sale and are purchased at par. At year-end, market interest rates have declined, and the fair value of the bonds is now \)10,600,000. Interest is paid on January 1. Prepare journal entries for Stave Company to (a) record the transactions related to these bonds in 2017, assuming Stave does not elect the fair option; and (b) record the transactions related to these bonds in 2017, assuming that Stave Company elects the fair value option to account for these bond.
Question: R. Wilson Corporation commenced operations in early 2017. The corporation incurred \(60,000 of costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its formation. Prepare journal entries to record the \)60,000 expenditure and 2017 amortization, if any.
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