469 550 81 375 1‚500 400 1‚600 495 1‚600 95 0 7‚500 7‚500 7‚500 0 5‚867 17‚732 35‚000 $0.507 16 0 5‚500 5‚867 16‚844 17‚336 31‚250 31‚250 $0.539 $0.5548 15 16 PROBLEM 24-2 EXPENSES (percent of sales) ASSETS Cash $14‚000 COGS 60 Inventory 29‚000 Bad debts 2 Land 31‚000 Variable selling expense 14
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identified numerous debits to accumulated depreciation of equipment. Which of the following is most likely? A. The estimated remaining useful lives of equipment were increased. B. Plant assets were retired during the year. C. The prior year’s deprecation expense was erroneously understated. D. Overhead allocations were revised at year-end. 12. In testing for unrecorded retirements of equipment‚ an auditor might: A. Select items of equipment from the accounting
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the budget period and reflects operating activities involving revenues and expenses. The most common types of operating budgets are expense‚ revenue‚ and profit budgets Expense Budget An expense budget is an operating budget that documents expected expenses during the budget period. Three different kinds of expenses normally are evaluated in the expense budget -fixed‚ variable and discretionary (Discretionary expenses - costs that depend on managerial judgment because they cannot be determined
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lower) than loans permit; and Provides protections against the risk of equipment obsolescence‚ since the lessee can get rid of the equipment at the end of the lease.” There may also tax benefits in leasing. Lease payments are deductible as operating expenses if the arrangement is a true lease. Ownership‚ however‚ usually has greater tax advantages through depreciation. Naturally‚ you need to have enough income and resulting tax liability to take advantage of those two benefits. Cons to leasing Pros
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IBM Corporation In the seven years (since 1994)‚ that Lou Gerstner reigned over IBM‚ the company’s earnings per share increased an average of 27% per year. This remarkable increase in earnings did not go unnoticed by the securities markets. Indeed‚ the company’s market value grew from less than $30 billion to over $200 billion during the period. Use the following financial statement data to: 1. Decompose IBM’s ROE (by quarter) and discuss the factors (and trends) that contribute to Big Blue’s profitability
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IBM Corporation In the seven years (since 1994)‚ that Lou Gerstner has reigned over IBM‚ the company’s earnings per share have increased an average of 27% per year. This remarkable increase in earnings‚ has not gone unnoticed by the securities markets. Indeed‚ the company’s market value has grown from less than $30 billion to over $200 billion during this period. Use the following financial statement data to: 1. Decompose IBM’s ROE and discuss the factors (and trends) that contribute to Big Blue’s
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set out to open his business in August of 1998 with the plan of completing 30 canoes annually. The following analysis details Steve’s marketing and pricing strategies for his business‚ Catfish Creek Canoe Company (CCC)‚ and his estimated income and expenses for 1998. SWOT Analysis Conducting a SWOT analysis will be helpful to Steve in determining whether it would be profitable to enter the canoe building industry. In order to make such a decision; Steve would need to examine his strengths‚ weaknesses
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recording process 3. Analyze and journalize transactions and post journal entries to the ledgers 4. Prepare and use a trial balance 1. Copyright © 2014 Pearson Education‚ Inc. Publishing as Prentice Hall. 3-2 Learning Objectives Close revenue and expense accounts and update retained earnings 6. Correct erroneous journal entries and describe how errors affect accounts 7. Explain how computers have transformed the processing of accounting data 5. Copyright © 2014 Pearson Education‚ Inc. Publishing
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4-25 Billy Dent‚ as the owner of an apartment building‚ receives and makes the following payments during 2011: How much rental income must Billy Dent include on his 2011 income tax return? 5‚000+4‚000= $9‚000 4-32 Arnold and Barbara Cane were divorced in June 2011. Pursuant to the divorce decree‚ Arnold is obliged to perform as follows: a. Transfer title of their personal home to Barbara. They purchased the house in 1998 and their basis today is $400‚000. The fair market value of
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FRS 15 ‘Tangible fixed assets‘ FRS 15 was issued in February 1999 and sets out the principles of accounting for tangible fixed assets‚ with the exception of investment properties. The objective of the FRS is to ensure that tangible fixed assets are accounted for on a consistent basis. Fixed assets are held in our company for the profit of their use not from their resale. Tangible fixed assets should be capitalized when they are ready for use‚ which means when its physical completion is complete
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