statements are prepared on the basis of the inputs and assumptions that are fed into the financial model. This paper presents an analysis of the pro forma income statement and pro forma balance sheet of a fictitious company called XYZ Company inc. Appendix A provides a sample of Profit and Loss statement and the Balance sheet of XYZ Company‚ INC.‚ provided by the UOP. It also provides a five year projected sales and cost of sales. XYZ Company assumes a 10% increase in sales for the upcoming five years
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the change in estimation takes place after December 31‚ the change should not be recognized but instead disclosed in financial reporting. We identified that the information pertaining to actual claims incurred as of the balance sheet date that became available after the balance sheet date should be considered in determining management’s best estimate of the medical benefits payable. ASC 450-20-25-6 states‚ "After the date of an entity’s financial statements but before those financial statements are
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"Assets are defined as broad resources‚ having their own distinctive economic value that might be owned and facilitated to produce income for the business. Assets are traditionally shown on the right-hand side of a company balance sheet‚ and are largely made up of two very distinct divisions‚ each having their own merits and utilities to the business. The two types of assets are current assets and non-current assets."(Tondom‚2010)A current asset is a type of asset that can be sold or can generate
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(www.investorwords.com) It consists of a balance sheet‚ income statements and a cash flow statement. This essay will critically asses the uses and limitations of each of these types of financial statements for a business. A balance sheet shows the financial condition of a business at a specific date (Langemeier & Klinefelter 2008). It shows what is owned by the business‚ what is owed and the owner’s share (net worth) of the business. The balance sheet has three main uses. Firstly‚ it is used
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is confused by a statement made in a recent class. Her instructor stated that the assets listed in the balance sheet of the IBM Corporation include computers that are classified as current assets as well as computers that are classified as noncurrent assets. In addition‚ the instructor stated that investments in marketable securities of other corporations could be classified in the balance sheet as either current or noncurrent assets. Required: Explain to the student the distinction between
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Accounting for securitizations treated as a financing (on-balance sheet) verses securitizations treated as a sale (off-balance sheet) The hypothetical example below is provided for informational purposes only to assist the reader in understanding the accounting treatment of securitizations structured as financings and sales and are not a projection of our future performance‚ financial position or cash flows. The hypotheticals are based upon (i) assumptions that‚ while presented with numerical
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Solutions Ch 3 Balance Sheet 3.22 (Nestlé; asset recognition and measurement.) a. Both U.S. GAAP and IFRS would recognize Investment in Bond (noncurrent asset)‚ CHF800 million. Nestlé would record the bond at acquisition cost‚ not the amount it will receive at maturity. b. Both U.S. GAAP and IFRS would recognize Prepaid Insurance (current asset); CHF240 million would be recorded initially. At Nestlé’s year-end‚ the balance in the Prepaid Insurance account would reflect the two months usage of
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________________________________ Financial Statement Analysis Financial statement analysis (or financial analysis) the process of understanding the risk and profitability of a firm (business‚ sub-business or project) through analysis of reported financial information‚ by using different accounting tools and techniques. Financial Statement Analysis Tools Financial statements are usually the final output of companies accounting operations. These statements contain information relating to the revenues
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Profit and loss accounts‚ balance sheets Profit and loss accounts‚ balance sheets Two of the most important financial statements for a business are the Profit and Loss Account‚ and the Balance Sheet. The Profit and Loss Account shows the profit or loss of a business over a given period of time e.g. 3 months‚ 1 year‚ etc. In contrast‚ the Balance Sheet is like a photograph taken at an instant in time giving a picture of what the business owns and what the business owes at that moment in time
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provision for uncollectible accounts affect the income statement and the balance sheet? Balance Sheet: When the Allowance for Uncollectible Accounts‚ a contra asset account‚ is reported on the balance sheet‚ the company expects that some of its accounts receivable will not be collected. It will debit Bad Debt Expense and credit Allowance for Uncollectible Accounts. This will result in reduction of “Current Assets” on balance sheet. Income Statement: This will also result in an expense on the income
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