Aviator Airways Ltd and Eagle Airlines Ltd This comparative study of accounting policies adopted by two international airlines for the depreciation of aircraft‚ spares and spare engines provides an insight into the differences in accounting policy that may emerge‚ even when accounting practice in the jurisdictions involved is regulated. Non-current assets Depreciation Depreciable amount Useful Comparability of results Financial statement analysis Aviator Airways Ltd (Aviator) and Eagle Airlines
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transaction #2 above * Insurance expense for February – refer to transaction #3 above * Depreciation expense on vehicle for February – refer to transaction #12 * Repair supplies on hand - $80 *Acct. No. Assets 101 Cash 102 Accounts Receivable 103 Prepaid Rent 104 Prepaid Insurance 105 Office Supplies 106 Repairs Supplies 107 Vehicle 108 Office Equipment 111 Accumulated Depreciation Liabilities 201 Accounts Payable 203 Salaries Payable 205 Unearned Revenue
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natural business year as the fiscal year. 4. A prepaid expense is reported as an asset on the balance sheet. 5. Depreciable plant assets (such as equipment‚ buildings‚ and machinery) lead to adjustments for depreciation. 6. The Accumulated Depreciation contra account is used for depreciation. It provides financial statement users with additional information about the relative age of the assets. Without the contra account information‚ the reader would not be able to tell whether the assets are
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Part A On 1 July 2011‚ Kookaburra Ltd acquired an item of plant at a cost of $200 000. The plant has an expected useful life of eight years‚ and Kookaburra Ltd adopts the straight-line method of deprecation. The tax depreciation rate for this type of plant is 25%. The company tax rate is 30%. Kookaburra Ltd measures plant at fair value. At 30 June 2012‚ Kookaburra Ltd determines the fair value of the plant to be $186 000. Due to recent developments in plant technology‚ the remaining useful
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From: WGU Student Date: 3/23/14 Re: Depreciation Method Recommendations The calculation of the straight line method of depreciation is by taking the cost of the item minus its salvage value then dividing that figure by the expected year’s life cycle of the item. This is a non complex calculation and it reduces net income and the equal amounts of depreciation are deducted from every life cycle year of the item. The double declining balance method of depreciation is calculated at double or 200% for
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accordingly within companies’ jurisdiction. In some cases‚ companies are required to keep two sets of accounting records. For example‚ publicly traded companies are required to use GAAP by the U.S. Securities and Exchange Commission. But GAAP and IFRS depreciation rules don ’t always match up. Companies routinely account for earnings and expenses differently on their annual reports‚ compared with their tax returns . A contributing factor to keeping separate records is the different treatment in measuring
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1- Multiple Choice Question 214 A company has the following assets: Buildings and Equipment‚ less accumulated depreciation of $2‚000‚000 $ 7‚600‚000 Copyrights 960‚000 Patents 4‚000‚000 Timberlands‚ less accumulated depletion of $2‚800‚000 4‚800‚000 The total amount reported under Property‚ Plant‚ and Equipment would be $16‚400‚000. $13‚360‚000. $12‚400‚000. $17‚360‚000. 2- Multiple Choice Question 144 Expenditures that maintain the operating efficiency and expected productive life
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reject the project. d. Yes‚ the annual depreciation expense must be taken into account when calculating the cash flows related to a given project. While depreciation is not a cash expense that directly affects cash flow‚ it decreases a firm’s net income and hence‚ lowers its tax bill for the year. Because of this depreciation tax shield‚ the firm has more cash on hand at the end of the year than it would have had without expensing depreciation. e. No‚ dividend payments should not
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and Management 2012” May 10-11‚ 2012‚ Vilnius‚ LITHUANIA ISSN 2029-4441 print / ISSN 2029-929X online ISBN 978-609-457-116-9 CD doi:10.3846/bm.2012.036 http://www.bm.vgtu.lt © Vilnius Gediminas Technical University‚ 2012 THE INFLUENCE OF DEPRECIATION POLICIES ON FINANCIAL STATEMENT ANALYSIS: A CASE STUDY OF AIRLINE INDUSTRY Xiaosong Zheng1‚ 2‚ Yingya Guo3‚ Jiali Xu4 Tallinn School of Economics and Business Administration‚ Tallinn University of Technology‚ 19086 Tallinn‚ Estonia Email: xiaosong
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ACC 808 Measuring International Accounting Harmonisation. Imad Alsuwaih University of Newcastle upon Tyne Department of Accounting and Finance International Financial Analysis Measuring International Accounting Harmonisation between Large Companies from France‚ Germany and the UK Supervised by Dr Simon Pallet Prepared by Imad Alsuwaih September 2002 Page 1 of 82 ACC 808 Measuring International Accounting Harmonisation. Imad Alsuwaih Acknowledgment I am most grateful
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