All of the following are the general principles underlying the valuation of liabilities except:
a. Liabilities requiring future cash payments appear at the present value of the required future cash flows discounted at an interest rate that reflects the uncertainty that the firm will be able to make the cash payments.
b. The fair value of a liability cannot differ from the amount appearing on the balance sheet, particularly for long-term debt.
c. Liabilities representing cash advances from customers appear at the amount of the cash advance.
d. Liabilities requiring the future delivery of goods or services appear at the estimated cost of those goods and services.
B
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JG Inc. recognized $690,000 ordinary income, $48,000 net Section 1231 gain, and $77,000 net capital loss this year. JG's taxable income is $690,000.
Answer the following statement true (T) or false (F)
If a video game manufacturer required its resellers to stock a line of games based on the financially-disappointing movie War of the Worlds in order to carry games based on the very popular TV show Survivor, it would be an example of:
A. reciprocal selling. B. a tie-in sale. C. discriminatory selling. D. misrepresentation. E. a Green River dealership.
Stockholder investments always decrease equity.
Answer the following statement true (T) or false (F)
Cost standards for one unit of product no. C77:Direct material3 pounds at $2.50 per pound$7.50 Direct labor5 hours at $7.50 per hour 37.50 Actual results: Units produced7,800 units Direct material purchased26,000 pounds at $2.70$70,200 Direct material used23,100 pounds at $2.70 62,370 Direct labor40,100 hours at $7.30 292,730 Assume that the company computes variances at the earliest point in time.The direct-labor efficiency variance is:
A. $8,000F. B. $8,250U. C. $8,250F. D. $8,000U. E. None of the answers is correct.