Assignment Details and RubricGEL 1.2: Demonstrate college-level communication through the composition of originalmaterials in Standard English.Assignment Directions:In the study of accounting it is important to have the necessary skills to use electroniclibraries and databases for research purposes.Professional ResearchStudents will complete the "Bridge to the Profession: Professional Research" casescenario found on p. 77 of the Wiley text. Students will submit a written Assignmentaddressing the required prompts.BRIDGE TO THE PROFESSIONProfessional Research: FASB CodificationWie Company has been operating for just 2 years, producing specialty golf equipmentfor women golfers. To date, the company has been able to finance its successfuloperations with investments from its principal owner, Michelle Wie, and cash flowsfrom operations. However, current expansion plans will require some borrowing toexpand the company’s production line.As part of the expansion plan, Wie will acquire some used equipment by signing azero-interest- bearing note. The note has a maturity value of $50,000 and matures in 5years. A reliable fair value measure for the equipment is not available, given the ageand specialty nature of the equipment. As a result, Wie’s accounting staff is unable todetermine an established exchange price for recording the equipment (nor the interestrate to be used to record interest expense on the long-term note). They have askedyou to conduct some accounting research on this topic.InstructionsIf your school has a subscription to the FASB Codification, go tohttp://aaahq.org/ascLogin.cfm to log in and prepare responses to the following.Provide Codification references for your responses.(a) Identify the authoritative literature that provides guidance on the zero-interest-bearing note. Use some of the examples to explain how the standard applies in thissetting.(b) How is present value determined when an established exchange price is notdeterminable and a note has no ready market? What is the resulting interest rateoften called?(c) Where should a discount or premium appear in the financial statements? Whatabout issue costs?Case Scenario:Your aunt recently received the annual report for a company in which she hasinvested. The report notes that the statements have been prepared in accordancewith "generally accepted accounting principles." She has also heard that certain termshave special meanings in accounting relative to everyday use. She would like you toexplain the meaning of the terms she has come across related to accounting.Go to http://www.fasb.org and access the FASB Concepts Statements and respond to the followingitems. (Provide paragraph citations.) When you have accessed the documents, you can use the searchtool in your Internet browser.a) How is "materiality" defined in the conceptual framework?b) The concepts statements provide several examples in which specific quantitative materialityguidelines are provided to firms. Identify at least two of these examples. Do you think materialityguidelines should be quantified? Why or why not?c) The concepts statements discuss the concept of "articulation" between financial statement elements.Briefly summarize the meaning of this term and how it relates to an entity's financial statements.
