I only Need Alternative two you have the codifications in the attached document, Alternative one already has been done you can see how it has been done and use alternative two codifications to write a paragraph. At least 350 words. Background: You are a new staff accountant working in the Financial Reporting Department of Philadelphia Communications Inc. (“Philly”). Philly is a public company that completed an initial public offering (IPO) a few months ago. Decedents of the founding family still own a significant amount of the company’s stock. John Sigar, the eldest grandchild of the founder, is the current CEO of the company and member of the board of directors. He is the only family member still involved in the business. You have been assigned to review the reconciliation of receivables from shareholders. There are a number of notes receivable from several of Mr. Sigar’s cousins. These cousins have taken advances frequently over the years and have never failed to repay notes when they came due. These notes are secured by shares of Philly’s convertible preferred stock purchased by the family members following the IPO, but no other terms for the notes were specified in the supporting documentation. You remember from your first quarter in intermediate accounting that there are some special presentation or classification issues regarding these sorts of receivables. You also understand the family members are considered “related parties” and there are some extra disclosures required as a result. You have reviewed your old notes and looked over Chapter 7 of your “Kieso” textbook, but there is nothing included on this sort of situation. You do not think collectibility is an issue primarily because (1) the Sigars are very wealthy, (2) they have paid in the past and (3) the preferred stock that secures the notes is worth a good deal more than the amounts due. After thinking about this issue, you bring it to the attention of the Eli, the Financial Reporting Manager. Eli agrees that there is a potential concern here about the correct presentation of the receivables on the financial statements. Eli says that based on her recollection of the authoritative literature, there are two possibilities on how this could be reported: Alternative 1 — Notes are classified as assets separate from other receivables and related party disclosures are provided. Alternative 2 — Notes are classified as a reduction of equity (either as a receivable within equity or as a distribution to shareholders). Required: Eli has asked you to research this issue using the FASB Codification database available ( I already made the research and found the codifications, you will find them in the other attachment ) . After you have researched the issue, you should write a memo detailing the authoritative support for these two alternatives and the circumstances under which each alternative would be appropriate. She asks that your memo specify the following: 1. Applicable .

1. I only Need Alternative two you have the codifications in the
attached document, Alternative one already has been done you
can see how it has been done and use alternative two
codifications to write a paragraph. At least 350 words.
Background:
You are a new staff accountant working in the Financial
Reporting Department of Philadelphia Communications Inc.
(“Philly”). Philly is a public company that completed an initial
public offering (IPO) a few months ago. Decedents of the
founding family still own a significant amount of the company’s
stock. John Sigar, the eldest grandchild of the founder, is the
current CEO of the company and member of the board of
directors.
He is the only family member still involved in the business.
You have been assigned to review the reconciliation of
receivables from shareholders.
There are a number of notes receivable from several of Mr.
Sigar’s cousins. These cousins have taken advances frequently
over the years and have never failed to repay notes when they
came due. These notes are secured by shares of Philly’s
convertible preferred stock purchased by the family members
following the IPO, but no other terms for the notes were
specified in the supporting documentation.
You remember from your first quarter in intermediate
accounting that there are some special presentation or
classification issues regarding these sorts of receivables. You
also understand the family members are considered “related
parties” and there are some extra disclosures required as a
result.
You have reviewed your old notes and looked over Chapter 7 of

2. your “Kieso” textbook, but there is nothing included on this sort
of situation. You do not think collectibility is an issue primarily
because (1) the Sigars are very wealthy, (2) they have paid in
the past and (3) the preferred stock that secures the notes is
worth a good deal more than the amounts due.
After thinking about this issue, you bring it to the attention of
the Eli, the Financial Reporting Manager.
Eli agrees that there is a potential concern here about the
correct presentation of the receivables on the financial
statements.
Eli says that based on her recollection of the authoritative
literature, there are two possibilities on how this could be
reported:
Alternative 1 — Notes are classified as assets separate from
other receivables and related party disclosures are provided.
Alternative 2 — Notes are classified as a reduction of equity
(either as a receivable within equity or as a distribution to
shareholders).
Required:
Eli has asked you to research this issue using the FASB
Codification database
available (
I already made the research and found the codifications, you
will find them in the other attachment
)
.
After you have researched the issue, you should
write a memo detailing the authoritative support for these two
alternatives

3. and
the circumstances under which each alternative would be
appropriate.
She asks that your memo specify the following:
1. Applicable Codification references. (The format of your
reference should follow ASC xxx-xx-xx)
2. Related presentation and disclosure issues for the notes.
3. Any additional clarifying information needed from company
management.