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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space down the street from its previous location. This has incurred much lager expenses each year then in than prior to 2004. 2.) Yes‚ the company’s income would increase. The new breakeven point in sales dollars would be approximately $6.03 million. 3.) Eliminating sales commission would have a huge effect on the breakeven volume. If they follow through with Gretchen’s idea of eliminating sales commission their expenses would decrease a great deal each year. They would not have to make nearly as
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TB - BS Peach Blossom Cologne Company Working Trial Balance - Balance Sheet 12/31/2009 Working Paper Reference Per Audit 12-31-08 Per Books 12-31-09 Per Audit 12-31-09 Adjustments Credit Debit Assets: 101 Cash-Big City National Bank 105 Accounts receivable 106 Allowance for bad debts 339‚415 124‚021 (10‚485) 420‚678 235‚380 B-1 (4‚800) B-1 109 Inventory 777‚152 600‚580 110 Investments - Trading Securities - - 111 Dividends Receivable 112 Interest Receivable 201 Investments - Held
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– Dec. | Bad Debts Expense Accounts receivable-Fell | 1‚400 | 1‚400 | | | | | 31 – Dec. | Bad Debts Expense (840‚000 – 30000)*1% Allowance for Doubtful accounts | 8‚100 | 8‚100 | | | | | 31 – Dec. | Bad Debts Expense Allowance for Doubtful Accounts (120‚000*10%)-2100 | 9‚900 | 9‚900 | | | | | 31 – Dec. | Bad Debts Expense (840‚000 – 30‚000*.75%) Allowance for Doubtful Accounts | 6‚075 | 6‚075 | | | | | 31 – Dec. | Bad Debts Expense Allowance for
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problems. Cash flow is the movement of money in and out of the company’s bank account during a financial period. While profits are determined by the income earned with the expenses incurred in earning that income‚ which reveals the profit is simply the result of income minus expenses. However‚ transactions of income and expenses take place not only on a cash basis but also on a credit basis. Accounting‚ therefore‚ has to be used to adjust the timing difference in recording transactions to reflect
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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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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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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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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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