Case 09-5a Pit Stop Closed Auto World Inc. (“Auto World”)‚ a calendar year-end SEC registrant‚ is a leading automotive retail and service chain. Auto World operates exclusively in the automotive aftermarket industry. Auto World is engaged principally in the retail sale of automotive parts‚ tires‚ and accessories‚ automotive repairs and maintenance‚ and the installation of parts. Auto World has two primary operating unit formats: (1) Auto Boyz Retail Centers (“Auto Boyz Centers”) and
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Under the U.S. GAAP Codification of Accounting Standards‚ Codification Topic 805: Business Combinations; Colton Jones accounted for the acquisition of Chempla as they should have. The acquisition method was used as it should have been‚ one entity was identified as the acquirer‚ an acquisition date was stated‚ and the recognition and measurement principals are present. All parts of the acquisition that needed to take place were present in the case.1 1 GAAP Codification of Accounting Standards
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Accounting Irregularity Analysis Issue: Zale Corporation is a jewelry retailer with headquarters in Irving‚ Texas. Zale’s common stock is registered with the United States Securities and Exchange Commission and trades on the New York Stock Exchange under the symbol “ZLC”. Zale misstated financial reports for the fiscal years ended July 31‚ 2004 through 2008‚ and for fiscal quarters ended October 31‚ 2008‚ January 31‚ 2009 and April 30‚ 2009. The misstatement resulted from recording television advertising
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RE: Sony’s Goodwill and Segment Reporting Facts: Sony have been known worldwide as a Japanese multinational company‚ its efforts trying to expanding business in United States‚ have made that Sony acquires CBS Records and Columbia Pictures. Thus‚ creating Sony Music and Sony Pictures‚ which represent Sony entertainment. This involved to the company in $1.2 billion of debt‚ and assigned goodwill assets for $3.8 billion. The last filing with SEC reported just two main segments: electronics and
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what is secured by the direct lease. Eliminating any question or doubt about the ability to cover the lease is the ultimate goal. If you would prefer to go with the Capital lease option then it must meet one of the four criteria according to FASB ASC 840-10-25-1. There has to be a transfer of ownership to the lessee by the end of the lease term‚ the lease contains a bargain purchase option‚ the lease term is equal to 75% or more of the estimated economic life of the leased property‚ or the present
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fair values are continually changing‚ some argue that recognizing this gains and losses in net income is misleading. Issues: My client has asked: What is the definition or example of comprehensive income? Applicable Accounting Standard (Codification) ASC 220-10-55-2 enumerates the items that are required to be reported as other comprehensive income. Some of these items are: (a) Foreign currency translation adjustment; (b)Gains and losses of foreign currency transactions; (c) Gains and losses
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or existing purchases. Required: 1. How should the $25 Referral Credit be recorded in Runway’s Income Statement — as a reduction of revenue or as a marketing expense? Explain your answer and support it using the FASB Codification. Your answer should include the Codification reference where you found the applicable guidance. 2. When would Runway record the $25 Referral Credit? What are the entries Runway would record when the $25 Referral Credit is earned by the Existing Customer
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in order to provide management with the best estimate for Medical Benefits Payable. This new information increases Medical Benefits Expense by $0.75 million and decreases Medical Benefits Payable by $0.75 million. The Accounting Standards Codification (ASC) defines subsequent events as “Events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued”. In addition‚ recognized subsequent events are defined as “events or transactions
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Understandability The quality of information that lets reasonably informed users see its significance is understandability. “It is a qualitative characteristic that enables users to comprehend the information and therefore make it useful for making decisions” (FASB‚ 2010‚ p. 30). It creates a link between the users and the decisions they make. Effective accounting information must be useful and understandable so a decision maker can determine which alternative provides the most useful information to make a decision
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ncurred and the staff salaries. I am able to confirm that the marketing consultancy charges and the staff salaries can be capitalized and amortized over more than one tax year. In reaching this conclusion‚ I referred to relevant authority from codifications from the Financial Accounting Standards Board. In addition‚ I have also reviewed the documents provided to this firm during our earlier meeting. Facts The facts as was provided to us are as follows: Western hired a high-priced marketing consultancy
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