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sale require payment in francs on February 1, 2006. On
September 1, 2005, the spot exchange rate was $.20 per franc.
At December 31, 2005, Cano's year end, the spot rate was $.19,
but the rate increased to $.22 by February 1, 2006, when
payment was received. How much should Cano report as a
foreign exchange gain or loss in its 2006 income statement?
Question 20
During 2005, Rex Co. introduced a new product carrying a
two-year warranty against defects. The estimated warranty
costs related to dollar sales are 2% within 12 months following
sale and 4% in the second 12 months following sale. Sales and
actual warranty expenditures for the years ended December
31, 2005 and 2006 are as follows: At December 31, 2006, Rex
should report an estimated warranty liability of
Question 1
Which of the following should be disclosed for each reportable
operating segment of an enterprise?
Question 2
Advertising costs may be accrued or deferred to provide an
appropriate expense in each period for
Question 3
Ace Co. settled litigation on February 1, 2005 for an event that
occurred during 2004. An estimated liability was determined
as of December 31, 2004. This estimate was significantly less
than the final settlement. The transaction is considered to be