Solution manual intermediate accounting 7th by nelson spiceland ch06

Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Chapter Time Value of Money Concepts QUESTIONS FOR REVIEW OF KEY TOPICS Question 6-1 Interest is the amount of money paid or received in excess of the amount borrowed or lent Question 6-2 Compound interest includes interest not only on the original invested amount but also on the accumulated interest from previous periods Question 6-3 If interest is compounded more frequently than once a year, the effective rate or yield will be higher than the annual stated rate Question 6-4 The three items of information necessary to compute the future value of a single amount are the original invested amount, the interest rate (i) and the number of compounding periods (n) Question 6-5 The present value of a single amount is the amount of money today that is equivalent to a given amount to be received or paid in the future Question 6-6 Monetary assets and monetary liabilities represent cash or fixed claims/commitments to receive/pay cash in the future and are valued at the present value of these fixed cash flows All other assets and liabilities are nonmonetary Question 6-7 An annuity is a series of equal-sized cash flows occurring over equal intervals of time Question 6-8 An ordinary annuity exists when the cash flows occur at the end of each period In an annuity due the cash flows occur at the beginning of each period Question 6-9 Table lists the present value of $1 factors for various time periods and interest rates The factors in Table are simply the summation of the individual PV of $1 factors from Table Solutions Manual, Vol.1, Chapter © The McGraw-Hill Companies, Inc., 2007 6-1 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Answers to Questions (continued) Question 6-10 Present Value ? Year Year Year Year _ $200 $200 $200 n = 4, i = 10% $200 Question 6-11 Present Value ? Year Year Year Year _ $200 $200 $200 $200 n = 4, i = 10% Question 6-12 A deferred annuity exists when the first cash flow occurs more than one period after the date the agreement begins Question 6-13 The formula for computing present value of an ordinary annuity incorporating the ordinary annuity factors from Table is: PVA = Annuity amount x Ordinary annuity factor Solving for the annuity amount, PVA Annuity amount = Ordinary annuity factor The annuity factor can be obtained from Table at the intersection of the 8% column and period row Question 6-14 Annuity amount = Annuity amount = $500 3.99271 $125.23 © The McGraw-Hill Companies, Inc., 2007 6-2 Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Answers to Questions (concluded) Question 6-15 Companies frequently acquire the use of assets by leasing rather than purchasing them Leases usually require the payment of fixed amounts at regular intervals over the life of the lease Certain long-term, noncancelable leases are treated in a manner similar to an installment sale by the lessor and an installment purchase by the lessee In other words, the lessor records a receivable and the lessee records a liability for the several installment payments For the lessee, this requires that the leased asset and corresponding lease liability be valued at the present value of the lease payments Solutions Manual, Vol.1, Chapter © The McGraw-Hill Companies, Inc., 2007 6-3 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com BRIEF EXERCISES Brief Exercise 6-1 Fran should choose the second investment opportunity More rapid compounding has the effect of increasing the actual rate, which is called the effective rate, at which money grows per year For the second opportunity, there are four, three-month periods paying interest at 2% (one-quarter of the annual rate) $10,000 invested will grow to $10,824 ($10,000 x 1.0824*) The effective annual interest rate, often referred to as the annual yield, is 8.24% ($824 ÷ $10,000), compared to just 8% for the first opportunity * Future value of $1: n=4, i=2% (from Table 1) Brief Exercise 6-2 Bill will not have enough accumulated to take the trip The future value of his investment of $23,153 is $347 short of $23,500 FV = $20,000 (1.15763* ) = $23,153 * Future value of $1: n=3, i=5% (from Table 1) Brief Exercise 6-3 FV factor = $26,600 = 1.33* $20,000 * Future value of $1: n=3, i=? (from Table 1, i = approximately 10%) Brief Exercise 6-4 John would be willing to invest no more than $12,673 in this opportunity PV = $16,000 (.79209* ) = $12,673 * Present value of $1: n=4, i=6% (from Table 2) © The McGraw-Hill Companies, Inc., 2007 6-4 Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Brief Exercise 6-5 PV factor = $13,200 = 825* $16,000 * Present value of $1: n=4, i=? (from Table 2, i = approximately 5%) Brief Exercise 6-6 Interest is paid for 12 periods at 1% (one-quarter of the annual rate) FVA = $500 (12.6825* ) = $6,341 * Future value of an ordinary annuity of $1: n=12, i=1% (from Table 3) Brief Exercise 6-7 Interest is paid for 12 periods at 1% (one-quarter of the annual rate) FVAD = $500 (12.8093* ) = $6,405 * Future value of an annuity due of $1: n=12, i=1% (from Table 5) Brief Exercise 6-8 PVA = $10,000 (4.10020* ) = $41,000 approximately * Present value of an ordinary annuity of $1: n=5, i=7% (from Table 4) Solutions Manual, Vol.1, Chapter © The McGraw-Hill Companies, Inc., 2007 6-5 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Brief Exercise 6-9 PVAD = $10,000 (4.38721*) = $43,872 * Present value of an annuity due of $1: n=5, i=7% (from Table 6) Brief Exercise 6-10 PVA = $10,000 x 4.10020* = $41,002 * Present value of an ordinary annuity of $1: n=5, i=7% (from Table 4) PV = $41,002 x 87344* = $35,813 * Present value of $1: n=2, i=7% (from Table 2) Or alternatively: From Table 4, PVA factor, n=7, i=7% – PVA factor, n=2, i=7% = PV factor for deferred annuity PV = = = 5.38929 1.80802 3.58127 = $10,000 x 3.58127 = $35,813 (rounded) Brief Exercise 6-11 Annuity = $100,000 6.71008* = $14,903 = Payment * Present value of an ordinary annuity of $1: n=10, i=8% (from Table 4) © The McGraw-Hill Companies, Inc., 2007 6-6 Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Brief Exercise 6-12 PV = $6,000,0001 (12.40904* ) + 100,000,000 (.13137** ) PV = $74,454,240 + 13,137,000 = $87,591,240 = price of the bonds $100,000,000 x 6% = $6,000,000 * Present value of an ordinary annuity of $1: n=30, i=7% (from Table 4) ** Present value of $1: n=30, i=7% (from Table 2) Brief Exercise 6-13 PVAD = $55,000 (7.24689* ) = $398,579 = Liability * Present value of an annuity due of $1: n=10, i=8% (from Table 6) Solutions Manual, Vol.1, Chapter © The McGraw-Hill Companies, Inc., 2007 6-7 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com EXERCISES Exercise 6-1 FV = $15,000 (2.01220* ) = $30,183 * Future value of $1: n=12, i=6% (from Table 1) FV = $20,000 (2.15892* ) = $43,178 * Future value of $1: n=10, i=8% (from Table 1) FV = $30,000 (9.64629* ) = $289,389 * Future value of $1: n=20, i=12% (from Table 1) FV = $50,000 (1.60103* ) = $80,052 * Future value of $1: n=12, i=4% (from Table 1) Exercise 6-2 PV = $20,000 (.50835* ) = $10,167 * Present value of $1: n=10, i=7% (from Table 2) PV = $14,000 (.39711* ) = $5,560 * Present value of $1: n=12, i=8% (from Table 2) PV = $25,000 (.10367* ) = $2,592 * Present value of $1: n=20, i=12% (from Table 2) PV = $40,000 (.46651* ) = $18,660 * Present value of $1: n=8, i=10% (from Table 2) Exercise 6-3 First payment: Second payment Third payment Fourth payment Payment $5,000 6,000 8,000 9,000 Total © The McGraw-Hill Companies, Inc., 2007 6-8 x x x x PV of $1 i=8% 92593 85734 73503 63017 = = = = PV $ 4,630 5,144 5,880 5,672 $21,326 n Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Exercise 6-4 FV = $10,000 (2.65330* ) = $26,533 * Future value of $1: n=20, i=5% (from Table 1) FV = $10,000 (1.80611* ) = $18,061 * Future value of $1: n=20, i=3% (from Table 1) FV = $10,000 (1.81136* ) = $18,114 * Future value of $1: n=30, i=2% (from Table 1) Exercise 6-5 FVA = $2,000 (4.7793* ) = $9,559 * Future value of an ordinary annuity of $1: n=4, i=12% (from Table 3) FVAD = $2,000 (5.3528* ) = $10,706 * Future value of an annuity due of $1: n=4, i=12% (from Table 5) First deposit: Second deposit Third deposit Fourth deposit Deposit $2,000 2,000 2,000 2,000 Total x x x x FV of $1 i=3% 1.60471 1.42576 1.26677 1.12551 = = = = FV $ 3,209 2,852 2,534 2,251 $10,846 n 16 12 $2,000 x = $8,000 Solutions Manual, Vol.1, Chapter © The McGraw-Hill Companies, Inc., 2007 6-9 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Exercise 6-6 PVA = $5,000 (3.60478* ) = $18,024 * Present value of an ordinary annuity of $1: n=5, i=12% (from Table 4) PVAD = $5,000 (4.03735* ) = $20,187 * Present value of an annuity due of $1: n=5, i=12% (from Table 6) Payment $5,000 5,000 5,000 5,000 5,000 Total First payment: Second payment Third payment Fourth payment Fifth payment x x x x x PV of $1 i = 3% 88849 78941 70138 62317 55368 = = = = = PV $ 4,442 3,947 3,507 3,116 2,768 $17,780 n 12 16 20 Exercise 6-7 PV = $40,000 (.62092* ) = $24,837 * Present value of $1: n=5, i=10% (from Table 2) $36,289 $65,000 = 55829* * Present value of $1: n=10, i=? (from Table 2, i = approximately 6%) $15,884 $40,000 = 3971* * Present value of $1: n=?, i=8% (from Table 2, n = approximately 12 years) $46,651 = $100,000 46651* * Present value of $1: n=8, i=? (from Table 2, i = approximately 10%) FV = $15,376 (3.86968* ) = $59,500 * Future value of $1: n=20, i=7% (from Table 1) © The McGraw-Hill Companies, Inc., 2007 6-10 Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Problem 6-7 Requirement PVA Annuity amount = Annuity factor Annuity amount = $250,000 = $78,868 = Payment 3.16987* * Present value of an ordinary annuity of $1: n=4, i=10% (from Table 4) Requirement PVA Annuity amount = Annuity factor Annuity amount = $250,000 = $62,614 = Payment 3.99271* * Present value of an ordinary annuity of $1: n=5, i=8% (from Table 4) Requirement PVA Annuity factor = Annuity amount Annuity factor = $250,000 = 4.86845* $51,351 * Present value of an ordinary annuity of $1: n=? , i= 10% (from Table 4, n = approximately payments) Requirement PVA Annuity factor = Annuity amount Annuity factor = $250,000 = 2.40184* $104,087 * Present value of an ordinary annuity of $1: n= 3, i= ? (from Table 4, i = approximately 12%) Solutions Manual, Vol.1, Chapter © The McGraw-Hill Companies, Inc., 2007 6-21 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Problem 6-8 Requirement Present value of payments 4-6: PVA = $40,000 x 2.48685* = $99,474 * Present value of an ordinary annuity of $1: n= 3, i= 10% (from Table 4) PV = $99,474 x 75131* = $74,736 * Present value $1: n= 3, i= 10% (from Table 2) Present value of all payments: $ 62,171 (PV of payments 1-3: $25,000 74,736 $136,907 x 2.48685* ) (PV of payments 4-6 calculated above) The note payable and corresponding building should be recorded at $136,907 Or alternatively: PV = $25,000 (2.48685* ) + 40,000 (1.86841** ) = $136,907 * Present value of an ordinary annuity of $1: n=3, i=10% (from Table 4) From Table 4, PVA factor, n=6, i=10% – PVA factor, n=3 i=10% = PV factor for deferred annuity = 4.35526 = 2.48685 = 1.86841** Requirement $136,907 x 10% = $13,691 = Interest in the year 2006 © The McGraw-Hill Companies, Inc., 2007 6-22 Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Problem 6-9 Choose the alternative with the highest present value Alternative 1: PV = $180,000 Alternative 2: PV = PVAD = $16,000 (11.33560* ) = $181,370 * Present value of an annuity due of $1: n=20, i=7% (from Table 6) Alternative 3: PVA = $50,000 x 7.02358* = $351,179 * Present value of an ordinary annuity of $1: n=10, i=7% (from Table 4) PV = $351,179 x 54393* = $191,017 * Present value of $1: n=9, i=7% (from Table 2) John should choose alternative Or, alternatively (for 3): PV = $50,000 (3.82037* ) = $191,019 (difference due to rounding) From Table 4, PVA factor, n=19, i=7% – PVA factor, n=9, i=7% = PV factor for deferred annuity = 10.33560 = 6.51523 = 3.82037* or, From Table 6, PVAD factor, n=20, i=7% — PVAD factor, n=10, i=7% = PV factor for deferred annuity Solutions Manual, Vol.1, Chapter = 11.33560 = 7.51523 = 3.82037* © The McGraw-Hill Companies, Inc., 2007 6-23 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Problem 6-10 PV = $20,000 (3.79079* ) + 100,000 (.62092** ) = $137,908 * Present value of an ordinary annuity of $1: n=5, i=10% (from Table 4) ** Present value of $1: n=5, i=10% (from Table 2) The note payable and corresponding merchandise should be recorded at $137,908 © The McGraw-Hill Companies, Inc., 2007 6-24 Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Problem 6-11 Requirement PVAD = Annuity amount x Annuity factor Annuity amount = PVAD Annuity factor Annuity amount = $800,000 7.24689* * Present value of an annuity due of $1: n=10, i=8% (from Table 6) Annuity amount = $110,392 = Lease payment Requirement Annuity amount = $800,000 6.71008* * Present value of an ordinary annuity of $1: n=10, i=8% (from Table 4) Annuity amount = $119,224 = Lease payment Requirement PVAD = (Annuity amount x Annuity factor) + PV of residual Annuity amount = PVAD – PV of residual Annuity factor PV of residual = $50,000 x 46319* = $23,160 * Present value of $1: n=10, i=8% (from Table 2) Annuity amount = $800,000 – 23,160 7.24689* * Present value of an annuity due of $1: n=10, i=8% (from Table 6) Annuity amount = $107,196 = Lease payment Solutions Manual, Vol.1, Chapter © The McGraw-Hill Companies, Inc., 2007 6-25 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Problem 6-12 Requirement PVA = Annuity amount x Annuity factor Annuity amount = PVA Annuity factor Annuity amount = $800,000 7.36009* * Present value of an ordinary annuity of $1: n=10, i=6% (from Table 4) Annuity amount = $108,694 = Lease payment Requirement Annuity amount = $800,000 15.32380* * Present value of an annuity due of $1: n=20, i=3% (from Table 6) Annuity amount = $52,206 = Lease payment Requirement Annuity amount = $800,000 44.9550* * Present value of an ordinary annuity of $1: n=60, i=1% (given) Annuity amount = $17,796 = Lease payment © The McGraw-Hill Companies, Inc., 2007 6-26 Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Problem 6-13 Choose the option with the lowest present value of cash outflows, net of the present value of any cash inflows (Cash outflows are shown as negative amounts; cash inflows as positive amounts) Buy option: PV = - $160,000 - 5,000 (5.65022* ) + 10,000 (.32197** ) * Present value of an ordinary annuity of $1: n=10, i=12% (from Table 4) ** Present value of $1: n=10, i=12% (from Table 2) PV = - $160,000 - 28,251 + 3,220 PV = - $185,031 Lease option: PVAD = - $25,000 (6.32825* ) = - $158,206 * Present value of an annuity due of $1: n=10, i=12% (from Table 6) Kiddy Toy should lease the machine Solutions Manual, Vol.1, Chapter © The McGraw-Hill Companies, Inc., 2007 6-27 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Problem 6-14 Requirement Tinkers: PVA = $20,000 x 7.19087* = $143,817 * Present value of an ordinary annuity of $1: n=15, i=11% (from Table 4) PV = $143,817 x 81162* = $116,725 = $179,772 * Present value of $1: n=2, i=11% (from Table 2) Evers: PVA = $25,000 x 7.19087* * Present value of an ordinary annuity of $1: n=15, i=11% (from Table 4) PV = $179,772 x 73119* = $131,447 = $215,726 * Present value of $1: n=3, i=11% (from Table 2) Chance: PVA = $30,000 x 7.19087* * Present value of an ordinary annuity of $1: n=15, i=11% (from Table 4) PV = $215,726 x 65873* = $142,105 * Present value of $1: n=4, i=11% (from Table 2) Or, alternatively: Deferred annuity factors: Employee Tinkers Evers Chance PVA factor, i=11% 7.54879 (n=17) 7.70162 (n=18) 7.83929 (n=19) © The McGraw-Hill Companies, Inc., 2007 6-28 - PVA factor, i=11% 1.71252 (n=2) 2.44371 (n=3) 3.10245 (n=4) = = = = Deferred annuity factor 5.83627 5.25791 4.73684 Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Problem 6-14 (concluded) Present value of pension obligations: Tinkers: $20,000 x 5.83627 = $116,725 Evers: $25,000 x 5.25791 = $131,448* Chance: $30,000 x 4.73684 = $142,105 *rounding difference Requirement Present value of pension obligations as of December 31, 2009: Employee PV as of 12/31/06 Tinkers Evers Chance $116,725 131,448 142,105 x FV of $1 factor, n=3, i=11% x 1.36763 x 1.36763 x 1.36763 Total present value = PV as of 12/31/09 = = = $159,637 179,772 194,347 $533,756 Amount of annual contribution: FVAD = Annuity amount x Annuity factor Annuity amount = FVAD Annuity factor Annuity amount = $533,756 = 3.7097* $143,881 * Future value of an annuity due of $1: n=3, i=11% (from Table 5) Solutions Manual, Vol.1, Chapter © The McGraw-Hill Companies, Inc., 2007 6-29 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com CASES Analysis Case 6-1 The settlement was determined by calculating the present value of lost future income ($200,000 per year)1 discounted at a rate which is expected to approximate the time value of money In this case, the discount rate, i, apparently is 7% and the number of periods, n, is 25 (the number of years to John’s retirement) John’s settlement was calculated as follows: $200,000 annuity amount x 11.65358* = $2,330,716 * Present value of an ordinary annuity of $1: n=25, i=7% (from Table 4) Note: In the actual case, John’s present salary was increased by 3% per year to reflect future salary increases 1In the actual case, John’s present salary was increased by 3% per year to reflect future salary increases © The McGraw-Hill Companies, Inc., 2007 6-30 Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Analysis Case 6-2 Sally should choose the alternative with the highest present value Alternative 1: PV = $50,000 Alternative 2: PV = PVAD = $10,000 (5.21236* ) = $52,124 * Present value of an annuity due of $1: n=6, i=6% (from Table 6) Alternative 3: PVA = $22,000 x 2.67301* = $58,806 * Present value of an ordinary annuity of $1: n=3, i=6% (from Table 4) PV = $58,806 x 89000* = $52,337 * Present value of $1: n=2, i=6% (from Table 2) Sally should choose alternative Or, alternatively (for 3): PV = $22,000 (2.37897* ) = $52,337 From Table 4, PVA factor, n=5, i=6% – PVA factor, n=2, i=6% = PV factor for deferred annuity = = = 4.21236 1.83339 2.37897* = = = 5.21236 2.83339 2.37897* or, From Table 6, PVAD factor, n=6, i=6% – PVAD factor, n=3, i=6% = PV factor for deferred annuity Solutions Manual, Vol.1, Chapter © The McGraw-Hill Companies, Inc., 2007 6-31 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Communication Case 6-3 Suggested Grading Concepts and Grading Scheme: Content (65%) 25 Explanation of the method used (present value) to compare the two contracts 30 Presentation of the calculations 49ers PV = $6,989,065 Cowboys PV = $6,492,710 10 Correct conclusion 65 points Writing (35%) Proper letter format Terminology and tone appropriate to the audience of a player's agent 12 Organization permits ease of understanding _ Introduction that states purpose _ Paragraphs that separate main points 12 English _ Sentences grammatically clear and well organized, concise _ Word selection _ Spelling _ Grammar and punctuation 35 points © The McGraw-Hill Companies, Inc., 2007 6-32 Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Ethics Case 6-4 The ethical issue is that the 21% return implies an annual return of 21% on an investment and misrepresents the fund’s performance to all current and future stakeholders Interest rates are usually assumed to represent an annual rate, unless otherwise stated Interested investors may assume that the return for $100 would be $21 per year, not $21 over two years The Damon Investment Company ad should explain that the 21% rate represented appreciation over two years Judgment Case 6-5 Purchase price of new machine Sales price of old machine Incremental cash outflow required $150,000 (100,000) $ 50,000 The new machine should be purchased if the present value of the savings in operating costs of $8,000 ($18,000 - 10,000) plus the present value of the salvage value of the new machine exceeds $50,000 PV = ($8,000 x 3.99271* ) + ($25,000 x 68058** ) PV = $31,942 + 17,015 PV = $48,957 * Present value of an ordinary annuity of $1: n=5, i=8% (from Table 4) ** Present value of $1: n=5, i=8% (from Table 2) The new machine should not be purchased Solutions Manual, Vol.1, Chapter © The McGraw-Hill Companies, Inc., 2007 6-33 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Real World Case 6-6 Requirement The effective interest rate can be determined by solving for the unknown present value of $1 factor (40 semiannual periods): PV of $1 factor = $751.8 = 45289* $1,660 * Present value of $1: n= 40, i= ? (from Table 2, i = 2%) The effective, semiannual interest rate is 2% We could also solve for the annual rate using the increase in the carrying value of the bonds: Balance, 2004 Less: Balance 2003 Accretion (interest expense) $608,092 (584,473) $23, 619 $23,619 ÷ $584,472 = approximately 4% annual rate Requirement Using a 2% effective semiannual rate and 40 periods: PV = $1,000 (.45289* ) = $452.89 * Present value of $1: n=40, i=2% (from Table 2) The issue price of one, $1,000 maturity value bond was $452.89 © The McGraw-Hill Companies, Inc., 2007 6-34 Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Analysis Case 6-7 Requirement The following liabilities are valued using the time value of money concept: — Long-term debt (Note 6) — Leases (Note 7) — Pension and postretirement benefit plans (Note 12) Requirement Disclosure Note 12: Employee Benefit Plans, indicates that the weighted-average discount rate used in determining the present value of pension obligations in 2004 was 6.78% Solutions Manual, Vol.1, Chapter © The McGraw-Hill Companies, Inc., 2007 6-35 ... $500 3.99271 $125.23 © The McGraw-Hill Companies, Inc., 2007 6-2 Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Answers to Questions... the present value of the lease payments Solutions Manual, Vol.1, Chapter © The McGraw-Hill Companies, Inc., 2007 6-3 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com... i=6% (from Table 2) © The McGraw-Hill Companies, Inc., 2007 6-4 Intermediate Accounting, 4/e Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Brief Exercise 6-5