Disclosure notes on intermediate accounting

Unit 3 Homework Assignment (ACC303 Intermediate Accounting)

E 3–11 Disclosure notes


Hallergan Company produces car and truck batteries that it sells primarily to auto manufacturers. Dorothy Hawkins, the company’s controller, is preparing the financial statements for the year ended December 31, 2024. Hawkins asks for your advice concerning the following information that has not yet been included in the statements. The statements will be issued on February 28, 2025.

1. Hallergan leases its facilities from the brother of the chief executive officer.

2. On January 8, 2025, Hallergan entered into an agreement to sell a tract of land that it had been holding as an investment. The sale, which resulted in a material gain, was completed on February 2, 2025.

3. Hallergan uses the straight-line method to determine depreciation on all of the company’s depreciable assets.

4. On February 8, 2025, Hallergan completed negotiations with its bank for a $10,000,000 line of credit.

5. Hallergan uses the first-in, first-out (FIFO) method to value inventory.




For each of the above items, discuss any additional disclosures that Hawkins should include in Hallergan’s financial statements.


*Analysis Case 3–9 Balance sheet information


Real World Financials


Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in the Connect library. This material also is available under the Investor Relations link at the company’s website (www.target.com).




1. Does the company separately report current assets and long-term assets, as well as current liabilities and long-term liabilities?

2. Are any investments shown as a current asset? Why?

3. In which liability account would the company report the balance of its gift card liability?

4. What method does the company use to depreciate its property and equipment?