1. Your company purchases a different business at a bargain purchase properly accounted for as a business combination. They pay $1,000,000 for net assets that have a fair market value of $1,050,000. You are not certain how to account for difference of $50,000.
2. Your company is preparing computer software which will be sold directly to consumers. What activities make-up technological feasibility to determine which of the costs incurred can be capitalized?
3. Justify why you valued the inventory (goods for resale) at lower-of-cost or-market.
4. As accountant for the Shoe-Horse Casino, you have been asked to evaluate if it is necessary to make an adjustment to the casino's liability account for the outstanding gaming chips if it is believed that some will be unredeemable.
5. What financial instruments (financial assets and financial liabilities) are not eligible for an entity to use fair value option of accounting?
6. Your business has closed for two weeks due to flooding, but fortunately you have business interruption insurance which covers the estimated lost gross margin (profit) due to the flooding. In the period insurance recovery is recognized, what information should you disclose, if any, in notes to the financial statements?