1‚400 Supplies 3‚000 (e) 100 2‚900 2‚900 Equipment 34‚800 34‚800 34‚800 Accumulated depreciation $1‚600 (b) 300 $1‚900 $1‚900 Accounts payable 5‚400 5‚400 5‚400 Salary payable (c) 800 800 800 Thomas‚ capital 35‚700 35‚700 35‚700 Thomas‚ drawing 2‚100 2‚100 2‚100 Service revenue 8‚600 (a) 600 9‚200 $9‚200 Depreciation expense (b) 300 300 $300 Salary expense 1‚700 (c) 800 2‚500 2‚500 Rent expense (d)
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Statement of Cash Flows Preview of Chapter Usefulness and Format Usefulness of the Statement of Cash Flows Provides information to help assess: 1. Entity’s ability to generate future cash flows. 2. Entity’s ability to pay dividends and obligations. 3. Reasons for difference between net income and net cash provided (used) by operating activities. 4. Cash investing and financing transactions during the period. SO 1 Indicate the usefulness of the statement of cash flows. Usefulness
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Eagle Impairment Case Question 1 IFRS According to the facts provided for Eagle in Italy‚ we assume that the commercial building‚ which represents a cash-generating unit (CGU)‚ meets the requirement for a recoverable test under IFRS. The impairment loss is required when the building’s book value exceeds the higher of the asset’s value-in-use and fair value less costs to sell. Carrying value 1‚100 > 900 Higher of Value in use (900)
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ACCOUNTING FOR INCOME TAXES F 1. Taxable income is a tax accounting term and is also referred to as income before taxes. F 2. Pretax financial income is the amount used to compute income taxes payable. T 3. Deferred tax expense is the increase in the deferred tax liability balance from the beginning to the end of the accounting period. T 4. A deferred tax liability represents the increase in taxes payable in future years as a result of taxable temporary differences existing at the end
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Q1 - Internal Controls (lecture 3): 15 Marks. ------------------------------------------------- He said he will ask either a petty cash question or a bank reconciliation one but not both. The question will also probably test us on e-controls or cash control for cash receipts and cash payments. What is internal control? It is the organisational plan and all the related measures that an entity adopts to: * safeguard assets * encourage adherence to company policies * promote operational
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Accounting Alternatives Case At the beginning of the year 20x1‚ two companies began operations to sell home heating units. Eads Heaters Inc. is located in Eads‚ Colorado‚ and Glenwood Heating Inc. is in Glenwood Springs‚ Colorado. The companies operate under similar economic conditions and have identical operations during the year. However‚ each manager makes different accounting choices and estimates when applying generally accepted accounting principles (GAAP) in preparing the company’s financial
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Depreciation is an expense that indicates the decrease in value of a fixed asset over a period of time. The cost price minus the asset’s depreciation calculates the carrying value of the asset. Depreciation is accounted for in order to know the carrying value of a vehicle and to help when determining the price at which the business should sell the vehicle. 2. F 3. Besides model‚ describe FOUR other factors that influence the price of a second hand car. - The price may be determined by the kilometers
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Harnischfeger Corporation Teaching Note INTRODUCTION The purpose of the "Harnischfeger Corporation" case is to expose students to the managerial motives for making major financial reporting policy changes. Generally accepted accounting principles (GAAP) allow companies wide latitude in the choice of accounting policies. After a firm chooses a set of accounting policies‚ current accounting rules permit changes from one alternative policy to another at the discretion of the management
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PRINCIPLES OF ACCOUNTING(POA)/ACCOUNTING FOR MANAGERS(AFM) Basic Accounting Concepts & Terminologies ACCOUNTING- DEFINITION Accounting means the various technical activities performed by accountants‚ including financial accounting‚ bookkeeping and management accounting. Accounting is considered to be as old as money. However in 1494 Lucas Fra Pacoili‚ an Italian Merchant is universally regarded as the father of modern system of accounting or double entry system of accounting. Accounting has
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a conventional nor an FHA mortgage. Page 585 #33 – Replacing the Asset A‚B‚C‚ & D A – The annual depreciation for the original equipment was $17‚000 Total depreciation = Total Cost – Salvage Value $388‚000-$48‚000 = $340‚000 Replacing an Asset #33 Page 585 a‚ b‚ c‚ & d A- The annual depreciation for the original equipment is $17‚000 Total depreciation value = total cost – salvage value $388‚000 – $48‚000 = $340‚000 B- The residual value for the
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