Hydromaint Year Essay -- Essays Papers

Hydromaint YearDuring Hydromaints audit, you and Pam had a number of discussions. You, Pam, and Mike Johnson are generally satisfied that the accounts are in accordance with GAAP and are supported by underlying facts. Pam tested Jerrys pension accounting (which she found to be correct) by preparing a pension worksheet based on data contained in the actuarys report authorized service cost $1,064,043ABO at 12/31/X7 2,840,000Interest on the PBO8%Interest on plan assets8Jerry has agreed to typeset his accounts and note disclosures for all corrections proposed by C & L. Pam raised a number of questions that may require adjustment. nary(prenominal)other matters were found to be questionable. Pams questions are as follows1. Accounting for R&D does not appear to be in compliance with SFAS No. 2. The work is of the nature described in SFAS No. 2, para. 9, and is not being conducted for others under contract.2. Pam also noted that warranty contracts are given on all sales of pumps an d valves. LS-Pump/Valve and now Hydromaint, have accounted for warranties only on the costs to make good when warranty claims were actually filed by customers. If warranty costs had been recognized as sales were made, the liability at January 1, 20X7, would have been $500,000. Pam noted, however, that break off Riley and Ray Ballard were aware of the warranty contracts and took these into account in valuing the acquisition of LS-Pump/Valve. Nick and Ray did ...