Answer:
1. Gain of $12,000 on sale of some equipment from one of the gas stations that Bakko still owns at 12/31/Year 4. - <u>Part of income from continuing operations.</u>
The gas station is still owned by Bakko so the gain received will form part of income from continuing operation.
2. Bakko receives $5,000 for a fuel contract that will begin in Year 5. - <u>Not part of net income for Year 4</u>
As per the Revenue Recognition principle of Accounting, revenue is only to be recorded when earned which means that this revenue will be in the Year 5 income.
3. Bakko has $100,000 gain on the sale of the gas stations on May 1, Year 4. - <u>As a discontinued operation.</u>
The gas station has been sold and so is a discontinued operation.
4. Operating results through April 30,Year 4 for the gas stations that were sold. -<u> As a discontinued operation.</u>
The gas station has been sold and so is a discontinued operation. Will be reported in the Income statement as such.
5. Bakko has a $20,000 loss on the sale of the donut stores on October 1. - <u>As a discontinued operation. </u>
The donut store was sold and is no longer a part of Bakko so is a discontinued operation.
It's true that when it comes to managing a corporation, the corporation relies on its board of directors and officers.
<h3>What defines corporation ?</h3>
An organization called a corporation is one whose shareholders choose a board of directors to manage its operations. The corporation, not the shareholders, is responsible for the operations and financial health of the company.
<h3>What is a corporation in business?</h3>
A corporation, also referred to as a C corp, is a separate legal entity from its owners. Corporations are able to generate revenue, pay taxes, and face legal consequences. The strongest protection against personal liability is provided to owners by corporations, although forming a corporation is more expensive than creating other types of entities.
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Answer:
<em>Warranty expense should be recorded in the period when the warranty service is performed.</em>
Explanation:
When the product is sold, a product guarantee liability and warranty cost should be reported if it is possible that consumers may make claims under the warranty and the amount can be calculated.
Those two provisions are part of the Financial Accounting Standards Statement No. 5 of the FASB, Accounting for Contingencies.
Answer:
Option A The impact of a change in the local currency on inflow and outflow variables can sometimes be indirect and therefore different from what is expected.
Explanation:
The reason is that the changes in the currency exchange rate in which the company receives the payment and is also not a home currency, such risk exposure is known as economic exposure. So the only option that correct here is option A.
Option B is incorrect because depreciation is non cash item and it is not exposed to currency fluctuations.
Option C and D are also incorrect because domestic firms don't face any economic exposure.
The answer & explanation for this question is given in the attachment below.
