Intermediate Accounting Assignment
Assignment Title: Advanced Topics in Intermediate Accounting
(Revenue, Inventory, PPE, Bonds & Cash Flows)
Course: ACCT – Intermediate Accounting
INTRODUCTION (Attractive & Professional)
Intermediate Accounting is one of the most critical courses in U.S. university accounting programs. This
assignment covers five high‑weight topics commonly tested across ACCT 302 and 303 courses: Revenue
Recognition, Inventory Cost Flow, Property–Plant–Equipment (PPE), Bonds & Long-Term Liabilities, and the
Statement of Cash Flows.
These topics directly relate to U.S. GAAP under the Financial Accounting Standards Board (FASB) and help
students build accuracy in journal entries, financial analysis, and conceptual understanding. The questions
in this assignment include both conceptual and problem‑solving components, ensuring full academic-level
practice.
This assignment is structured exactly like university submissions: each section
contains clear questions followed by detailed, well‑explained answers written in
professional American English with no grammar mistakes.
QUESTION 1: Revenue Recognition (ASC 606)
Q1. Revenue Recognition Concepts
Explain the five-step revenue recognition model under ASC Topic 606. Then analyze the following scenario:
A company signs a \$50,000 contract to deliver three different software modules and one year of technical
support. Determine:
1. How many performance obligations exist.
2. Whether revenue ought to be identified at a point in time or over time.
3. How the transaction price should be allocated.
ANSWER 1
ASC 606 requires entities to follow a structured five-step model to ensure accurate revenue reporting. The
steps include identifying the contract, identifying performance obligations, determining the transaction
price, allocating the price, and recognizing revenue when obligations are satisfied.
1
, In the given scenario, each software module represents a separate performance
obligation because each has distinct functionality. Technical support also qualifies as a
separate obligation because it provides a standalone service. Revenue for each
module is recognized at the point in time when control transfers to the customer.
However, revenue for the technical support is recognized over time during the
twelve‑month period. The \$50,000 contract price should be allocated using
standalone selling prices for each module and support service.
QUESTION 2: Inventory Cost Flow Assumptions
Q2. FIFO, LIFO, and Weighted Average
A company reports the following purchases:
• 200 units @ \$10
• 300 units @ \$12
• 400 units @ \$14 Ending inventory shows 350 units remaining.
Required:
1. Compute Ending Inventory and COGS using: FIFO, LIFO, and Weighted-Average methods.
2. Explain how each method affects the Income Statement and Balance Sheet.
3. Discuss the meaning of the LIFO Reserve.
ANSWER 2
Under the FIFO method, the company assumes that the earliest-purchased goods are sold first. Therefore,
ending stock includes the most recent purchases.. Under LIFO, the most recent costs are expensed first,
leaving older costs in ending inventory. The weighted average takes the total cost of the available units and
divides it by the total number of units.
FIFO results in a higher ending inventory in times of rising prices, which increases
total assets and net income. LIFO results in higher expenses and lower income. The
LIFO Reserve reconciles the difference between inventory reported under LIFO and
FIFO.
QUESTION 3: Property, Plant & Equipment
Q3. PPE Cost and Depreciation
A machine is purchased for \$80,000. Additional costs include:
• Freight: \$2,000
• Installation: \$3,000
2
Assignment Title: Advanced Topics in Intermediate Accounting
(Revenue, Inventory, PPE, Bonds & Cash Flows)
Course: ACCT – Intermediate Accounting
INTRODUCTION (Attractive & Professional)
Intermediate Accounting is one of the most critical courses in U.S. university accounting programs. This
assignment covers five high‑weight topics commonly tested across ACCT 302 and 303 courses: Revenue
Recognition, Inventory Cost Flow, Property–Plant–Equipment (PPE), Bonds & Long-Term Liabilities, and the
Statement of Cash Flows.
These topics directly relate to U.S. GAAP under the Financial Accounting Standards Board (FASB) and help
students build accuracy in journal entries, financial analysis, and conceptual understanding. The questions
in this assignment include both conceptual and problem‑solving components, ensuring full academic-level
practice.
This assignment is structured exactly like university submissions: each section
contains clear questions followed by detailed, well‑explained answers written in
professional American English with no grammar mistakes.
QUESTION 1: Revenue Recognition (ASC 606)
Q1. Revenue Recognition Concepts
Explain the five-step revenue recognition model under ASC Topic 606. Then analyze the following scenario:
A company signs a \$50,000 contract to deliver three different software modules and one year of technical
support. Determine:
1. How many performance obligations exist.
2. Whether revenue ought to be identified at a point in time or over time.
3. How the transaction price should be allocated.
ANSWER 1
ASC 606 requires entities to follow a structured five-step model to ensure accurate revenue reporting. The
steps include identifying the contract, identifying performance obligations, determining the transaction
price, allocating the price, and recognizing revenue when obligations are satisfied.
1
, In the given scenario, each software module represents a separate performance
obligation because each has distinct functionality. Technical support also qualifies as a
separate obligation because it provides a standalone service. Revenue for each
module is recognized at the point in time when control transfers to the customer.
However, revenue for the technical support is recognized over time during the
twelve‑month period. The \$50,000 contract price should be allocated using
standalone selling prices for each module and support service.
QUESTION 2: Inventory Cost Flow Assumptions
Q2. FIFO, LIFO, and Weighted Average
A company reports the following purchases:
• 200 units @ \$10
• 300 units @ \$12
• 400 units @ \$14 Ending inventory shows 350 units remaining.
Required:
1. Compute Ending Inventory and COGS using: FIFO, LIFO, and Weighted-Average methods.
2. Explain how each method affects the Income Statement and Balance Sheet.
3. Discuss the meaning of the LIFO Reserve.
ANSWER 2
Under the FIFO method, the company assumes that the earliest-purchased goods are sold first. Therefore,
ending stock includes the most recent purchases.. Under LIFO, the most recent costs are expensed first,
leaving older costs in ending inventory. The weighted average takes the total cost of the available units and
divides it by the total number of units.
FIFO results in a higher ending inventory in times of rising prices, which increases
total assets and net income. LIFO results in higher expenses and lower income. The
LIFO Reserve reconciles the difference between inventory reported under LIFO and
FIFO.
QUESTION 3: Property, Plant & Equipment
Q3. PPE Cost and Depreciation
A machine is purchased for \$80,000. Additional costs include:
• Freight: \$2,000
• Installation: \$3,000
2
