u un the balance sheet? 13. Does the interest expense increase or decrease each
ID: 2577467 • Letter: U
Question
u un the balance sheet? 13. Does the interest expense increase or decrease each period when the effective-interest method of a bond discount is used? 14. What method of depreciation ignores the salvage value in the early years of an asset's life? 15. What method of depreciation applies a uniform depreciation rate each period to an assets's book value 16. What does the par value of stock represent? 17. What is the journal entry to record the issuance for fully paid stock subscriptions 18. Where are the gains and losses on the purchase and resale of treasury stock recorded? 19. Where are the changes in the fair value of trading, AFS and equity securities reported? now how to apply the different depreciation methods. now how to calculate ending inventory & CoGS using the LIFO, FIFO and the average methods for both peric erpetual inventory systems ow how to allocate cost to the individual assets when you make a lump sum / basket purchase.Explanation / Answer
13)Interest expense increases because the carrying value of bond increases. As discount is amortised ,The carrying value of bond increases so as expense
14)Double declining method -This method ignores salvage value at initial period however the total depreciation charged over the period shall not exceed the cost less salvage.
15)straight line method -Under this method equal amount of depreciation is charged over the useful life of asset irrespective of book value.
16)It is value mentioned in corporate charter (memorandum of association) It is also called fave value .It is important to determine the par value as useful for calculating dividend (in case of preferred stock)
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