section of the balance sheet. 1. Investment in a subsidiary company. …. LT Investment in Balance Sheet 2. Timberland. ……………………………………..… PPE in Balance Sheet 3. Cost of engineering activity required to advance the design of a product to the manufacturing stage. …………R& D Expense in Income Statement 4. Lease prepayment (6 months’ rent paid in advance). …………………………………………………. Prepaid Rent in Balance Sheet 5. Cost of equipment obtained. …………………………………….. PPE in Balance Sheet 6. Cost of searching
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supplies worth $1‚800. The balance sheet reflected a balance in the office supplies account of $3‚700 before any year-end adjustments were made. What is the amount of supplies expense that will be included on the current year income statement? 2. On December 1‚ 20Y1‚ Nelson collected rent of $7‚200 (for December‚ January‚ and February rent) from a tenant renting some space in its warehouse and credited Unearned Rent Revenue for the entire amount. What is the balance sheet value of Unearned Rent
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statement. Let’s look at some of the differences between cash flow and funds flow statement – 1. While funds flow statement reveals the change in the working capital of a company between two balance sheet dates while cash flow statement reveals the change in the cash position of the company between two balance sheet dates. 2. As funds flow statement shows the change in working capital it deals with all the components of working capital while cash flow statement deals only with cash and cash equivalents
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defined as an account which offsets another account. A contra-asset account has a credit balance and offsets the debit balance of the corresponding asset. A contra-liability account has a debit balance and offsets the credit balance of the corresponding liability (InvestorWords‚ 2009). Let us move on to Historical Cost‚ which is a measure of value used in accounting in which the price of an asset on the balance sheet is based on its nominal or original cost when acquired by the company. The historical-cost
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CHAPTER 2 INVESTING AND FINANCING DECISIONS AND THE BALANCE SHEET CHAPTER CONTENTS Brief Chapter Outline 2.2 What’s New in This Edition 2.2 Chapter Summary 2.3 Chapter Learning Objectives 2.4 Chapter Lecture Outline 2.4 Additional Teaching Notes 2.8 Teaching Resources Chart (Organized by Learning Objective) 2.10 Ideas for Incorporating the Study Guide 2.11 End of Chapter Materials Chart (Organized by Learning Objective) 2.12 End of Chapter Materials Comparison Chart (4th Edition
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Case 3-6 Accounting Standards A. Given the income statement effects of LIFO versus FIFO‚ how will the balance sheet inventory amounts differ between General Motors and Ford versus Honda and Daimler-Benz? In other words‚ will inventory be reported amounts representing recent costs or older historical costs? In your opinion‚ which balance sheet amounts would be more useful to financial statement users in making decisions to buy or sell shares of a company’s stock? Inventory is an asset that
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additionally for “Baron”. 2. What financial statements should we prepare? Solution: The financial statements which should be prepared are as following: Income Statement Statement of Retained Earnings Statement of Cash Flows Balance Sheet 3. What period do these statements cover and why (e.g.‚ year‚ quarter‚ month‚ etc..?) Solution: The statements will cover two quarters. 1st Quarter – Summer: When the farmers will grow the wheat. 2nd Quarter – Fall: When the wheat will
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successful in the technology industry. The company has increased its net sales from 2006 to 2007‚ which proves they are making good capital budgeting decisions. A pro forma income statement and balance sheet showing the future planning and growth of a company. The pro forma income statement and balance sheet will explain a cash budget‚ underlying assumptions of calculations‚ calculations of different ratio analysis‚ and make recommendations to management. “The most comprehensive means of financial
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statement‚ balance sheet‚ cash flow statements and statement of retained earnings. Income Statement Beginning with the income statement‚ the information provided includes the amount of revenue that the company earns over a certain period of time. The period of time is usually a year or some a portion of a year. An income statement reveals the net worth or loss of a company reporting on the costs and expenses associated with the revenue earnings. Balance Sheet The balance sheet is a snapshot
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88 | 3.00 | Favorable | 11. Salary and benefit/NPSR | 84.08% | 82.82% | 55% | Unfavorable | 1. Current ratio = Total Current Assets in Balance Sheet / Total Current Liabilities in Balance Sheet 2011 | 2010 | $54‚306/$15‚425 | $39‚715/$15‚315 | 3.52 | 2.59 | 2. Days Cash on Hand = Cash and Cash Equivalents from Balance Sheet / [(Total Expenses – Depreciation – Provision for Bad Debts in Statement of Operations) / 365] 2011 | 2010 | $12‚102/[($168‚232 - $6‚405 -
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