Mapleleaf Gardens Case Study
Maple Leaf Gardens Case Study
Concepts:
Ai) There are several different people that would use the financial statements of Maple Leaf Gardens. Investors, whether they are existing or potential, would use the financial statements to help make a decision on how much or if they want to invest in the company. Lenders would use the statements to determine if they are going to lend financial assistance to the company. Government bodies review the statements to make sure they comply with all regulations and to make sure no ethical issues are present. Obviously the upper management uses the financial statements to gain a prospective on how the company is doing. Competitors may use the financial statements as a way to improve their own company.
Aii) The accrual basis of accounting provides a better measure of current performance because it takes into account the company’s accomplishments and resource sacrifices during the period, no matter when the cash is received or paid. Accrual based accounting provides a more accurate picture of a company’s current condition. Maple Leaf Gardens, Ltd uses the accrual based accounting method.
Aiii) The term “going concern” typically means the company prepares it’s financial statements with the intent of continuing to operate in the foreseeable future and that it will be able to realize assets and discharge liabilities in the normal course of operations. Since Maple Leaf Gardens is using the “going concern” assumption, their figures on the financial statements must reflect the value of the company as if it was to remain in business for the foreseeable future. If the company was not using the “going concern” assumption then the figures would need to be at Net Realizable Value.
Bi) Most public companies, such as Maple Leaf Gardens, typically report their financial performance, financial position, and cash flows quarterly and annually.
Bii) I would speculate that Maple Leaf Gardens has a May 31
Concepts:
Ai) There are several different people that would use the financial statements of Maple Leaf Gardens. Investors, whether they are existing or potential, would use the financial statements to help make a decision on how much or if they want to invest in the company. Lenders would use the statements to determine if they are going to lend financial assistance to the company. Government bodies review the statements to make sure they comply with all regulations and to make sure no ethical issues are present. Obviously the upper management uses the financial statements to gain a prospective on how the company is doing. Competitors may use the financial statements as a way to improve their own company.
Aii) The accrual basis of accounting provides a better measure of current performance because it takes into account the company’s accomplishments and resource sacrifices during the period, no matter when the cash is received or paid. Accrual based accounting provides a more accurate picture of a company’s current condition. Maple Leaf Gardens, Ltd uses the accrual based accounting method.
Aiii) The term “going concern” typically means the company prepares it’s financial statements with the intent of continuing to operate in the foreseeable future and that it will be able to realize assets and discharge liabilities in the normal course of operations. Since Maple Leaf Gardens is using the “going concern” assumption, their figures on the financial statements must reflect the value of the company as if it was to remain in business for the foreseeable future. If the company was not using the “going concern” assumption then the figures would need to be at Net Realizable Value.
Bi) Most public companies, such as Maple Leaf Gardens, typically report their financial performance, financial position, and cash flows quarterly and annually.
Bii) I would speculate that Maple Leaf Gardens has a May 31