Posted: March 11th, 2022
please use the FASB CODIFICATION and cite which one as a references!! 1. 13. a. What is a valuation allowance as this term relates to income tax accounting? b. What guidance within ASC 740-10 req
please use the FASB CODIFICATION and cite which one as a references!! 1. 13. a. What is a valuation allowance as this term relates to income tax accounting? b. What guidance within ASC 740-10 requires that entities consider applying a valuation allowance to deferred tax assets? c. What are some considerations relevant in determining whether a valuation allowance is required? 14. What are some of the variables, or assumptions, that enter into the initial measurement of a company’s asset retirement obligation? Consider, for example, a nuclear power plant that produces radioactive waste. What are some factoring the company should consider when initially estimating the ultimate disposal cost of this asset? To fully respond, also consider implementation guidance7.1. Cheese Ahead Frankie’s Homemade Cheese Shop (“Frankie’s”) signed an advertising agreement with Simmons Boards (“Owner”) for billboard advertising rights along Route 33 in the town of Hampton. Frankie’s has the right to select and display advertising copy on billboard panels numbered 10 and 12 (panel numbers correspond to designated billboard locations) for a 3-year period from Jan. 1, 20X1, to Dec. 31, 20X3. In consideration for these rights, Frankie’s agrees to pay $10,000 in year 1, $12,000 in year 2, and $13,000 in year 3. Assume that Frankie’s is required to pay the annual fee on Jan. 1 of each contract year. Assuming Frankie’s incremental borrowing rate is 5%, what are the entries Frankie should record at inception of the contract, then at the end of years 1, 2, and 3?7.2. Making the Cheese Refer to the previous case study. Now evaluate the entries that Simmons Boards should record at inception of the advertising agreement with Frankie’s, as well as at the end of each contract year8.1 Spoiled Cheese? Recall Frankie’s Homemade Cheese Shop from Chapter 7 cases. Assume now that Frankie has finished construction of the new cheese superstore along Route 5 and capitalized $1.9 million related to the project as of the store’s opening on 1/1/20X1. As of 12/31/X1, the shop’s current carrying value is $1.805 million (assuming a 20-year life for the store and straight-line depreciation). As of 12/31/X1, Frankie’s notices that a few negative factors are at play and asks you whether it is required to test the superstore for impairment: 1. A key stock market index (the Dow) has slid 1,500 points, or 6% since the store was opened. 2. Monthly sales have slid by 10% since the store was opened, partially due to a construction project on Route 5 that has reduced traffic flow to the area. 3. As a result of the slide in monthly sales, the store operated at a deficit in October, November, and December of 20X1.Comparing Corporate Fair Value Disclosures Locate the most recent 10-K filings for two companies of your choice, but which are in the same industry. Compare their fair value disclosures. What are some differences between the categories of assets and liabilities the companies measure at fair value regularly? What are some differences in the hierarchy levels used by these companies? Explain these differences, using a tabular format with footnotes as necessary to summarize and explain differences noted.
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