PAMANTASAN NG LUNGSOD NG MAYNILA FINANCIAL ACCOUNTING QUIZ 7 NAME: ____________________________ TRUE OR FALSE: 1. Assets under construction for a company’s own use do not qualify for interest cost capitalization. 2. Avoidable interest is the amount of interest cost that a company could theoretically avoid if it had not made expenditures for the asset. 3. When a company purchases land with the intention of developing it for a particular use‚ interest costs associated with those
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accelerated method for its US operating plants. 2. What is the effect of the depreciation accounting method change on the reported income in 1984? How will this change affect profits in future years? Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life by changing the depreciation method to straight line method the economic life of the asset was increased then depreciation expense was lowered resulting in higher net income. This change resulted in
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Table of Contents Accounting Concepts and policies…………………………………………………………….. 3 – 7 Relevance of accounting concepts and policies on financial report…………….. 7 – 10 Discount allowed and received………………………………………………………………… 11 – 13 Difference between carriage inwards and carriage outwards……………………. 11 – 13 Differences between straight line and reducing balance methods……………… 11 – 13 References……………………………………………………………………………………………… 14 - 16 Introduction Accounting Concepts and Principles These are rules and
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the beginning of 2009‚ Glass Manufacturing purchased a new machine for its assembly line at a cost of $600‚000. The machine has an estimated useful life of 10 years and estimated residual value of $50.000. Under the straight-line method‚ how much depreciation would Glass take in 2010 for financial reporting purposes? A. $55‚000. B. $60‚000. C. $65‚000 4. For 2009‚ Flamingo Products had net income of $1‚000‚000. At 1 January 2009‚ there were 1‚000‚000 shares outstanding. On 1 Ju1y 2009‚ the
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Because the methods employed in treating certain items within the accounting records may be varied from time to time‚ the concept of consistency has come to be applied more and more rigidly. For example‚ because there can be no single rate of depreciation chargeable on all fixed assets‚ every business has potentially a lot of discretion over the precise rate
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Exercises and Problems XACC/291 Principles of Accounting II Week 2 February 8‚ 2015 Exercise E9-1 The following expenditures relating to plant assets were made by Spaulding Company during the first 2 months of 2011 (determine cost of the plant acquisitions). 1. Paid $5‚000 of accrued taxes at time plant site was acquired. 2. Paid $200 insurance to cover possible accident loss on new factory machinery while the machinery was in transit. 3. Paid $850 sales taxes on new delivery
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same class are evaluated in the same way (Summary of Statements‚ 2015) . In component depreciation‚ depreciation occurs when assets have fundamentally different parts that depreciate in different ways. With IFRS a company is required to use component depreciation if the parts of an asset are varied. The same holds true for GAAP but companies in the US rarely practice in this way. An example of component depreciation would be large machinery consisting of a computerized unit. Each unit is the same part
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in the amounts above. All amounts are before taxes: Extraordinary gain Correction of a 20Y0 revenue understatement Loss from operations of a discontinued textiles division Gain on sale of the textiles division Omission of depreciation charges from January and February 20Y1 $31‚000 $50‚000 $22‚000 $60‚000 $10‚000 Prepare a partial income statement for 20Y1 starting with Income From Continuing Operations before Taxes. What is the 12/31/Y1 balance in the Retained Earnings
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CHAPTER 2 FINANCIAL STATEMENTS‚ CASH FLOW‚ AND TAXES True/False Easy: (2.1) Annual report F K Answer: a EASY 1. The annual report contains four basic financial statements: the income statement‚ balance sheet‚ statement of cash flows‚ and statement of stockholders’ equity. a. True b. False (2.1) Annual report and expectations F K Answer: a EASY 2. The primary reason the annual report is important in finance
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Integrated Case 3-16 D¡¦Leon Inc.‚ Part I Financial Statements and Taxes Donna Jamison‚ a 2000 graduate of the University of Florida with 4 years of banking experience‚ was recently brought in as assistant to the chairman of the board of D¡¦Leon Inc.‚ a small food producer that operates in north Florida and whose specialty is high-quality pecan and other nut products sold in the snack-foods market. D¡¦Leon¡¦s president‚ Al Watkins‚ decided in 2004 to undertake a major expansion and to ¡§go
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