Reference no: EM132231798

Question: Chapter 1 Questions: Goal - Continue to practice navigating the Codification

For this set of four questions, identify the ASC reference - down to the paragraph level of detail - that you would look to for guidance on each issue. You may list more than one ASC reference per question, but if you do so, please indicate which one you think is the most relevant.

1. An airline has incurred significant cost to update the interior of its aircraft, changing the configuration of seats and overhead storage space (these parts are considered part of the airframe). The airline must determine whether these costs should be expensed or capitalized. For this question only, after citing the relevant guidance, also briefly state the conclusion that you reach and why.

Chapter 2 Questions: Goal - Practice applying the research process steps to a case

Steps from Chapter 2:

1. Understand the facts / background of the transaction.

a. Who are the parties to the transaction and why are they entering into it?

b. What are the cash flows associated with the transaction, from UTS's perspective?

c. What questions, if any, might you like to ask about this transaction?

2. What is one researchable question related to this problem, based on the information you have? (Do not restate the bolded "case question" on the previous page.)

3. Stop and think: what accounting treatment will likely be appropriate, based on your accounting knowledge? Explain your intuition prior to searching the Codification.

4. Search potentially relevant sources of guidance, documenting your process (i.e., show the path searched or search terms you used to find each piece of guidance) and copying and pasting guidance into a Word document. Include this Word file as an Appendix rather than in the body of your response.

5. Using the accounting guidance you found in Step 4.

a. Provide definitions for the two alternatives (inventory vs. prepaid / other current asset), citing the Codification.

b. State arguments for and against each alternative, documenting how the accounting guidance for each alternative does or doesn't fit with the case facts.

6. Finally, briefly state your conclusion regarding which accounting treatment appears to be more appropriate given the circumstances. If you must make any assumptions in reaching this conclusion, state these.

Information related to above question is enclosed below:

Attachment:- Project.rar