b. Advance customer payment $ 72,000 — (current unearned revenue) c. 3-year instalment notes receivable $300,000 — (within normal operating cycle) d. Pension asset — $330,000 e. 2-year bank loan — $600,000 (no implicit interest, thus no discounting is necessary) f. Credit arrangement over 4 years $ 60,000 $ 180,000 (assumes equal payments; should be discounted) g. Short-term bond investment $ 58,000 — (reported at market value) h. Share investment not available for sale — $140,000 (long-term investment; carried at cost) Assignment 4-3 1. C (given) 11. K 2. G 12. E 3. G 13. A (separate line item) 4. C 14. E 5. K 15. K 6. A 16. K 7. C 17. A 8. A 18. –A 9. B (investment property) 19. A 10. F (disclose nature of loan in note) 20. F (could be G, if payment is delayed or it’s zero-interest debt. Assignment 4-4 1. F 9. G 2. F 10. J 3. G 11. X 4. A 12. –A (contra account) 5. D 13. X 6. H 14. A 7. E or C 15. F 8. J 16. E
b. Advance customer payment (current unearned revenue) $ 72,000 — c. 3-year instalment notes receivable (within normal operating cycle) $300,000 — d. Pension asset — $330,000 e. 2-year bank loan (no implicit interest, thus no discounting is necessary) — $600,000 f. Credit arrangement over 4 years (assumes equal payments; should be discounted) $ 60,000 $ 180,000 g. Short-term bond investment (reported at market value) $ 58,000 — h. Share investment not available for sale (long-term investment; carried at cost) — $140,000 Assignment 4-3 1. C (given) 2. G 3. G 4. C 5. K 6. A 7. C 8. A 9. B (investment property) 10. F (disclose nature of loan in note) 11. K 12. E 13. A (separate line item) 14. E 15. K 16. K 17. A 18. –A 19. A 20. F (could be G, if payment is delayed or it’s zero-interest debt. Assignment 4-4 1. F 2. F 3. G 4. A 5. D 6. H 7. E or C 8. J 9. G 10. J 11. X 12. –A (contra account) 13. X 14. A 15. F 16. E
FA2_Ch4_text_solutions.docx