Solution Manual for Intermediate Accounting (Volume 2), 8th Canadian Edition By Thomas H. Beechy, Joan E. Conrod, Verified Chapters 12 - 22, Complete Newest Version 2025!!!

© v2022 vMcGraw vHill vLtd. vAll vrights
Solutions vManual vto vaccompany vIntermediate vAccounting, vVolume v2, v8th vreserved.

v
edition 14-1

,Solution Manual for v v



Intermediate Accounting Volume 2 8th Edition Thomas H. Beechy, Joan E.
v v v v
v
v v v v v



vConrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel
v v v v v v v v



v Chapter 12-22
v




Chapter 12: Financial Liabilities and Provisions
v v v v v




Case 12-1 Winter Fun Incorporated
v v


12-2 Prescriptions Depot Limited v v


12-3 Camani Corporation
v


Suggested Time v


Technical Reviewv


TR12-1 Financial liabilities and provisions (IFRS) ......
v v v v v 10
TR12-2 Financial liabilities and provisions (ASPE).....
v v v v v 10
TR12-3 Provision, measurement...................................
v v 10
TR12-4 Guarantee .........................................................
v 10
TR12-5 Provision, warranty ..........................................
v v 5
TR12-6 Foreign currency ..............................................
v v 5
TR12-7 Note payable ....................................................
v v 5
TR12-8 Discounting, note payable................................
v v 10
TR12-9 Discounting, provision.....................................
v v 10
TR12-10 Classification, liabilities...................................
v 10

Assignment A12-1 v Financial versus non-financial liabilities…….
v v v 10
A12-2 Common financial liabilities…………………
v v 10
A12-3 Common financial liabilities............................
v v 10
A12-4 Common financial liabilities: taxes .................
v v v v 20
A12-5 Common financial liabilities: taxes ................
v v v v 20
A12-6 Foreign currency payables…………………….
v v 10
A12-7 Foreign currency payables ...............................
v v v 10
A12-8 Common financial liabilities and foreign currency
v v v v v 25
A12-9 Provisions......................................................... 20
A12-10 Provisions ........................................................
v 20
A12-11 Provisions......................................................... 20
A12-12 Provision measurement....................................
v v 15
A12-13 Provision measurement....................................
v v 15
A12-14 Provisions; compensated absences…………...
v v 15
A12-15 Provisions; compensated absences ..................
v v v 15
A12-16 Provisions; warranty ........................................
v v 15
A12-17 Provisions; warranty .......................................
v v 20
A12-18 Provisions; warranty .......................................
v v 25
A12-19 Discounting; no-interest note...........................
v v v 15
A12-20 Discounting; low-interest note ........................
v v v 20

Solutions vManual vto vaccompany vIntermediate vAccounting, vVolume v2, v8th 14-2
v
edition

, A12-21 Discounting; low-interest note......................... v v v 20
A12-22 Discounting; provision..................................... v 15
A12-23 Discounting; provision..................................... v 25
A12-24 Discounting; provision..................................... v 25
A12-25 Classification and SCF..................................... v v 20
A12-26 SCF ..................................................................
v 20
A12-27 Liabilities – IFRS and ASPE .......................... v v v v v 10
A12-28 Liabilities - ASPE ........................................... v v v 20
A12-29 Liabilities - ASPE ............................................ v v v 20
A12-30 Provisions/Contingencies – IFRS and ASPE…. v v v v 20
A12-31 DAIS – warranty provision trend……………... v v v v 15
A12-32 DAIS – provision for coupon refund………… v v v v v 15




Cases

Case 12-1 (LO12.3, LO12.5, LO12.6)
v v v v


Winter Fun Incorporated v v




To: Members of Board of Directors
v v v v v


From: Accounting Consultant
v v v


RE: Winter Fun Incorporated
v v v




Overview

Winter Fun Incorporated (WFI) uses IFRS for financial reporting. The bank loan has a
v v v v v v v v v v v v v


minimum current ratio so you will need to be careful and watch for any impacts on the
v v v v v v v v v v v v v v v v v


ratio. You have had a tough year this year and faced a loss so the bank financing is critical
v v v v v v v v v v v v v v v v v v v


to your operations.
v v v




Issues

1. Revenue recognition memberships v v


2. Revenue recognition guests v v


3. Special promotions v


4. Coupons
5. Manufacturer Loan v


6. Lawsuit
7. Warranty
8. Gasoline storage tanks v v


9. Foreign currency payables v v


10. Compensated absences v




© v2022 vMcGraw vHill vLtd. vAll vrights vreserved.
© v2022 vMcGraw vHill vLtd. vAll vrights
Solutions vManual vto vaccompany vIntermediate vAccounting, vVolume v2, v8th vreserved.

v
edition 14-3

, Analysis and Recommendations v v




1. Revenue recognition memberships v v




Following the 5 step IFRS model:
v v v v v v


Initiation fee v


Step 1: The contract with the customer is for the membership in the club. This would be a
v v v v v v v v v v v v v v v v v


written agreement between the member and WFI.
v v v v v v v




Step 2: There is one performance obligation, the promised service is membership in the
v v v v v v v v v v v v v


ski club. There is no transfer of the service until the membership is provided.
v v v v v v v v v v v v v v




Step 3: The contract price is $10,000. The non-refundable deposit is an advance payment
v v v v v v v v v v v v v


towards this initiation fee and is part of the overall transaction price.
v v v v v v v v v v v v




Step 4: No allocation since there is only one performance obligation.
v v v v v v v v v v




Step 5: The performance obligation for the initiation fee is satisfied over the period of
v v v v v v v v v v v v v v


time that the member belongs to the club. The $10,000 would be recognized over the
v v v v v v v v v v v v v v v


average period a member belongs. There should be enough historical data available to
v v v v v v v v v v v v v


come up with a reasonable estimate. There would be no cash collection risk since the
v v v v v v v v v v v v v v v


amount is paid upfront.
v v v v




Annual fee v


Step 1: The annual fee is a written agreement between the member and WFI.
v v v v v v v v v v v v v




v Step 2: There is again one performance obligation, the service for this year.
v v v v v v v v v v v v




Step 3: The fee of $2,000 is the total contract price and is received in 20X5 for the 20X6
v v v v v v v v v v v v v v v v v v


ski season. This would be unearned revenue when received.
v v v v v v v v v




Step 4: There is no allocation since there is only one performance obligation.
v v v v v v v v v v v v




Step 5: Assuming the ski season goes from Dec 1 until March 31 $500 would be
v v v v v v v v v v v v v v v


recognized in 20X5 and the remainder in 20X6 which would be the period in which the
v v v v v v v v v v v v v v v v


service is performed. There would be no cash collection risk since the amount is paid
v v v v v v v v v v v v v v v


upfront.
v




2. Revenue recognition guests v v




v Following the 5 step IFRS model: v v v v v




Step 1: The contract with the guest is the written contract when they receive the ticket to
v v v v v v v v v v v v v v v v


ski, not when the reservation is made since this reservation could be cancelled.
v v v v v v v v v v v v v




Solutions vManual vto vaccompany vIntermediate vAccounting, vVolume v2, v8th 14-4
v
edition