Question

FASB Codification Case #6 Statement of Cash Flow Reporting Insurance Proceeds Facts On June 1, YR01...

FASB Codification Case #6

Statement of Cash Flow

Reporting Insurance Proceeds

Facts

On June 1, YR01 a tornado completely destroyed a storage warehouse owned by Target Inc. The

warehouse had a cost basis of $1,000 and accumulated depreciation of $400. Insurance proceeds

of $1,200 were received from Target’s insurance company.

Question

Should the $1,200 of cash proceeds from the insurance policy be reported on Target’s statement

of cash flow? If so, how?

Required

1. With respect to the statement of cash flow, provide a brief written description of the proper

reporting of the $1,200 cash received from insurance.

2. Identify the specific paragraph of the FASB Codification which addresses this issue and

submit a printout of this paragraph with your solution.

Grade Value

This case counts as a bonus question (maximum 2 percentage points) for examination #3.

You must work independently on this case (this is not a group project).

0 0
Add a comment Improve this question Transcribed image text
Answer #1

1.

A large warehouse was destroyed by a tornado. It had a cost basis of $1,000 and accumulated depreciation of $400. Insurance proceeds of $1,200 were received from the insurance company.

Storage warehouse is a FIXED ASSET. Any transaction related to a fixed asset is shown under CASH FLOW FROM INVESTING ACTIVITIES.

(Additional note- The impact of Gain from this transaction will have an impact on Cash Flow from Operating Activities)

2.

The relevant FASB

Add a comment
Know the answer?
Add Answer to:
FASB Codification Case #6 Statement of Cash Flow Reporting Insurance Proceeds Facts On June 1, YR01...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • FASB Codification Case #3 Classification of Bond Investment Facts On December 1, YR01 Target Inc. purchased,...

    FASB Codification Case #3 Classification of Bond Investment Facts On December 1, YR01 Target Inc. purchased, as an investment, bonds issued by General Steel Co. These bonds have a face amount of $1,000,000 and were purchased at 106. The management of Target Inc. has the positive intent and financial ability to hold these bonds until they mature on July 1, YR05. The bond indenture agreement includes a provision which permits General Steel Co. to call the bonds any time after...

  • Sharpson, Inc. Treatment under the ASC Codification Facts: You are a first-year associate at the accounting...

    Sharpson, Inc. Treatment under the ASC Codification Facts: You are a first-year associate at the accounting firm, Wesson & Richardson LLP (WR or the Firm). One of the Firm’s clients is Sharpson, Inc., (the Company), which is located in Detroit, Michigan.  It designs, manufactures and sells a broad range of automotive components. The Company’s primary sources of liquidity are internally generated cash flows, its debt and revolving credit facilities, and the sale of its trade accounts receivables. The Company’s liquidity and...

  • che QE 6-9 Statement of Cash Flow The following is a Statement of Cash Flows for...

    che QE 6-9 Statement of Cash Flow The following is a Statement of Cash Flows for the risk management internal service fund of the City of Wrightville. An inexperienced accountant prepared the statement using the FASB format rather than the format required by GASB. All long-term debt was issued to purchase capital assets. The transfer from the General Fund was to establish the internal service fund and provide the initial working capital necessary for operations. CITY OF WRIGHTVILLE Risk Management...

  • A cash-flow budget uses the same format as a cash-flow statement. It is prepared on a...

    A cash-flow budget uses the same format as a cash-flow statement. It is prepared on a monthly basis and it reflects budgeted income and expenses.In addition to the cash-flow statement, Deon and May made a list of budget assumptions: . Deon's income will increase by 5%, effective January 1 . His bonus is generally 10% of his income in the previous year, and he receives it in January. . May's raise will be 3%, effective January 1, Interest and dividend...

  • A cash-flow budget uses the same format as a cash-flow statement. It is prepared on a...

    A cash-flow budget uses the same format as a cash-flow statement. It is prepared on a monthly basis and it reflects budgeted income and expenses. In addition to the cash-flow statement, Deon and May made a list of budget assumptions, listed for you here: • Deon’s income will increase by 5%, effective January 1. His bonus is generally 10% of his income in the previous year, and he receives it in January. • May’s raise will be 3%, effective January...

  • A Aa 6. Cash-flow statement Prabakar and Gta lain have been married for two years. They...

    A Aa 6. Cash-flow statement Prabakar and Gta lain have been married for two years. They have been trying to save but that there is never anything ever after expenses Gas taking right course on personalance, and she suggested that they prepare show statement for the year ended December 31, 2016 in the missing amounts on the show statement for the year Use the worksheet that Prabakar and Gta provided plus the aditional information to ended December 31, 2016 Catalog...

  • Required: 1. Provide the summary journal entry which shows the cash flow for each of the following for Mike Roe Computers during the reporting period: received from customers, paid to suppliers, paid...

    Required: 1. Provide the summary journal entry which shows the cash flow for each of the following for Mike Roe Computers during the reporting period: received from customers, paid to suppliers, paid to employees, paid for interest, paid for insurance, paid for income taxes. 2. Prepare the cash flows from operating activities section of the statement of cash flows (direct method). MIKE ROE COMPUTERS Income Statement For the Year Ended December 31, 2018 Sales $150.40 (90.20 60.20 Cost of goods...

  • Ch 1 1. Given the following dat Dec 31 Year 2 Dec 31 Year 1 Total...

    Ch 1 1. Given the following dat Dec 31 Year 2 Dec 31 Year 1 Total liabilities S128,250 $120,000 Total stockholders oquity 95.000 80.000 compute the ratio of liabilities to stockholders' equity for each year Round to two decimal places 1.50 and 107, 11.35 and 1.50 respectively respectively 1.07 and 1.19. 1.1.19 and 1.35 respectively respectively The liabilities and stockholder's equity of a company are $132,000 and $244.000, respectively. Assets should equal SS188.00 $132.00 p $376,00 12.000 A financial statement...

  • CASE 1-5 Financial Statement Ratio Computation Refer to Campbell Soup Company's financial Campbell Soup statements in...

    CASE 1-5 Financial Statement Ratio Computation Refer to Campbell Soup Company's financial Campbell Soup statements in Appendix A. Required: Compute the following ratios for Year 11. Liquidity ratios: Asset utilization ratios:* a. Current ratio n. Cash turnover b. Acid-test ratio 0. Accounts receivable turnover c. Days to sell inventory p. Inventory turnover d. Collection period 4. Working capital turnover Capital structure and solvency ratios: 1. Fixed assets turnover e. Total debt to total equity s. Total assets turnover f. Long-term...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT