Since the focus of capital budgeting is on cash flows rather than on net income, changes in noncash balance sheet accounts such as inventory are not included in a capital budgeting analysis.
Answer the following statement true (T) or false (F)
False
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A justified departure from GAAP will result in the issuance of an adverse opinion
a. True b. False Indicate whether the statement is true or false
Legal and ethical are synonymous terms
Indicate whether the statement is true or false
The seller of a futures contract
A) has the option of canceling the contract the following day if the price is not acceptable to him/her. B) is legally bound to make delivery of the specified item on the specified day. C) receives the entire contract amount at the time the contract is made. D) must make delivery before receiving any monies on the contract.
Spice Company issued $200,000 of 10 percent first mortgage bonds on January 1, 20X4, at 105. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Pumpkin Corporation purchased $140,000 of Spice's bonds from the original purchaser on December 31, 20X8, for $125,000. Pumpkin owns 75 percent of Spice's voting common stock.Based on the information given above, what amount of gain or loss on bond retirement will be reported in the 20X8 consolidated financial statements?
A. $17,000 loss B. $12,800 loss C. $22,200 gain D. $18,500 gain