to up – date the accounts at the end of the financial period Adjustments in respect of the following are required i) Prepaid Expenses ii) Accrued Expenses iii) Income Accrued iv) Income received in advance v) Bad Debts vi) Doubtful Debts vii) Depreciation a) Cash Basis Accounting - means that revenues and expenses are not recognized until the cash is received or paid - it ignores credit transactions b) Accrual Basis Accounting - means that revenue is recognized when earned and expenses when incurred
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Week Three Exercise Assignment Inventory 1. Specific identification method. Boston Galleries uses the specific identification method for inventory valuation. Inventory information for several oil paintings follows. Painting Cost 1/2 Beginning inventory Woods $21‚000 4/19 Purchase Sunset 21‚800 6/7 Purchase Earth 31‚200 12/16 Purchase Moon 4‚000 Woods and Moon were sold during the year for a total of $35‚000. Determine
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Chapter 1: Environment and Theoretical Structure of Financial Accounting Accounting Principles Board (APB) The Accounting Principles Board (APB) followed the CAP. Asset/liability approach With the asset/liability approach‚ recognition and measurement of assets and liabilities drives revenue and expense recognition. Auditors Auditors express an opinion on the compliance of financial statements with GAAP. Capital markets The capital markets provide a mechanism to help our economy allocate
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indicate the proper accounting treatment of those items that are not included in the cost of the equipment. c. Compute the total cost debited to the college’s Equipment account. d. Prepare a journal entry at the end of the current year to record depreciation on the exercise equipment. Podunk College will depreciate this equipment by the straight-line method (half-year convention) over an estimated useful life of 4 years. Assume a zero residual value. Problem 9.2A Comparison of Straight-Line and
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the following: a. prescription of the period of assessment and collection b. error in disallowing claimed depreciations (upon these supplemented facts) i. Basilan Estates‚ Inc. claimed deductions for the depreciation of its assets up to 1949 on the basis of their acquisition cost. ii. Accordingly‚ from 1950 to 1953 it deducted from gross income the value of depreciation computed on the reappraised value. iii. Upon investigation and examination of taxpayer’s books and papers‚ the
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CASH FLOW AND FINANCIAL PLANNING: A. ANALYZING A FIRM’S CASH FLOW THE STATEMENT OF CASH FLOW “Cash flow‚ the lifeblood of the firm‚ is the primary ingredient in any financial valuation model.” - the summary of a firm’s cash flow over a given period‚ which uses the data from income statement‚ along with the beginning and end of period balance sheets. - allows the financial manager and other interested parties to analyze the firm’s cash flow - used to evaluate progress toward projected
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indirect method of operating cash flow. The largest adjustment to net income for both companies was the depreciation and amortization expense. In 2006 the net cash provided by operating activities for General Mills was $1‚771 millions‚ which was an increase of $60 millions from the $1711 millions in 2005. The largest adjustment to convert accrual net income into cash from operation was depreciation and amortization expenses totaling $424 millions in 2006. As for Kellogg’s in 2006 the net cash provided
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years is $28‚751‚000. The amount is 2010 is $14‚838‚000. The amount in 2011 is $13‚913‚000. B) The amount of depreciation expense in 2009 is $1‚104 (millions)‚ 2010 is $1‚093 and 2011 is $1‚086. C) Amounts on Cash Flow Statement for the most recent year that relate to depreciation‚ gains and sales of property and equipment‚ and purchases and sale of property of equipment is: Depreciation: 2011 - $954 (mill) Amortization: 2011 - $132 (mill) Proceeds from sale of equipment‚ property and investments/subsidiaries:
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Case Study: Hansson Private Label‚ Inc. Executive Summary The owner of Hansson Private Label (HPL) must determine whether or not to accept an aggressive expansion project that would preclude the company from pursuing any alternative investment opportunities for several years. The investment‚ if successful‚ would offer numerous benefits to the company‚ capturing greater market share‚ strengthening relationships with major customers‚ crowding out competition and increasing firm value. Nonetheless
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Problems/Answers: FIN 534 I have provided the answers to Chapters 6 and 7‚ you are to provide the solutions and explanations‚ namely‚ how were you able to determine the same answers. I want to see‚ how you go about solving these problems. I would encourage you to use the MyFinanceLab and go over the previous Chapters. Keep in mind that these responses are due‚ November 1‚ 2010. I will use your submission to grade you and not the group work that you did in class‚ last Thursday. I trust that you will
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