QUESTION 1

You are in charge of giving a trial final exam to classmates. Choose two problems from different areas of financial reporting that you studied in this course. Submit them as your initial post as early as possible with any instructions or "hints."

In your second post, solve two problems submitted by another classmate. In a third post, submit the answer key to your original two problems. Find the answer key in other posts for the two problems you solved. As you go along, interact with others about problems and solutions and any other challenges you are facing in financial reporting.

Respond to this... 1. Mae Jong Corp. issues $1,000,000 of 10% bonds payable which may be converted into 10,000 shares of $2 par value ordinary shares. The market rate of interest on similar bonds is 12%. Interest is payable annually on December 31, and the bonds were issued for total proceeds of $1,000,000. In accounting for these bonds, Mae Jong Corp. will:

• (a) first assign a value to the equity component, then determine the liability component.
• (b) assign no value to the equity component since the conversion privilege is not separable from the bond.
• (c)first assign a value to the liability component based on the face amount of the bond.
• (d)use the "with-and-without" method to value the compound instrument.

2. Which of the following is not a criterion for a lease to be recorded as a finance lease?

• (a) There is transfer of ownership.
• (b) The lease is cancelable.
• (c) The lease term is for the major part of the economic life of the asset.
• (d) There is a bargain-purchase option.

Question 2

Please use this forum to discuss the most interesting element of Advanced Accounting, and the most challenging element to you. Discuss your desires to steer your career path to this high level of the profession.

Respond to this...I think the part I found most interesting was last week when we discussed partnerships. I didn't realize how easy it was to form a partnership, and also the responsibility that goes along with having a partnership. I think the most challenging week for me was the intercompany bonds, cash flows, eps, and unconsolidated investments. As much as I read the book and tried to get the answers correct, I just couldn't get a grasp on it. My career path is being steered in the direction of a CFO. I like working in a private company and will continue to do so for the remainder of my career.

Question 3

When a company converts from one system to another, more than one department is affected. In a manufacturing company, list at least two departments that will be affected and describe what the affect will be on each. What happens if one department is forgotten in the planning process?

Respond to this...When a company, such as a manufacturing company, switches from one system to another I think all departments will be affected. Each department plays their own role in how they operate through the company's system. Types of departments that would be included in a manufacturing company is sales, research and development, quality control, production, shipping, customer support, and marketing. Each one of these departments will use the system to do their job on a daily basis. If one department is forgotten in the planning process it can set the entire work cycle off track. The department that was not part of the plan will not know of the new system or how to work through it. If the department does not know how to work through the new system then they will not be able to finish their job and each department can spiral down from there.