THE UNIVERSITY OF HONG KONG School of Economics and Finance FINA1001: Financial Statement Analysis Second Semester 2009-2010 Dr. Kam-Ming Wan Midterm Examination (90 minutes) April 1‚ 2010 10:40a.m.(12:10p.m. Candidates may use any self-contained‚ silent‚ battery-operated and pocket-sized calculator. The calculator should have numeral-display facilities only and should be used only for the purposes of calculation. It is the candidate’s responsibility to ensure
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Retail Method vs. FIFO or LIFO In the case‚ the University Store provided plenty of goods and services with various costs. They frequently have their costs‚ selling prices and discounted prices changed. This process would contain a large amount of work since the Store kept large number of books. Although the Store has planned to record data by establishing a new software system‚ they used the retail method easing and simplifying inventory tracking. Comparing the FIFO or the LIFO method‚ the retail
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that the company is in the process of implementation program of related IASs on various accounting issues. As there has been no application of IAS’s in the company‚ therefore‚ the inventory has been treated on many valuation techniques including LIFO‚ FIFO‚ moving average‚ and some others keeping in view the convenience to the accountant. Mr. B suggested applying an appropriate valuation policy so as to produce consistency in the financial reporting. He emphasized that it will let the company
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Gross Margin • Gross Margin percentage of Sales • Income Before Taxes • Income Tax Expense • Pre-tax return on sales‚ and pre-tax return on assets Using LIFO vs. FIFO affects the ability to directly compare results because of the impact on gross margin and profit. Assuming merchandise costs are rising over time‚ accounting under LIFO will understate the net income (profit) for the current period by assigning the revenue to the highest cost merchandise. Assuming two companies had similar
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the most recent costs to cost of goods sold is a. FIFO b. LIFO c. Average d. specific identification 12. Inventory costing methods place primary emphasis on assumptions about a. flow of goods b. flow of costs c. flow of goods or flow of costs depending on the method d. neither flow or goods or flow of costs 13. The inventory costing method that reports the most current prices in ending inventory is a. FIFO b. Specific identification c. LIFO d. Average cost The following lots of a particular
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Key Formulas SEE Articulation- Pg. 16 Income= Revenues - Expenses Assets = Liabilities + Equity Gross Profit = Sales Revenue- COGS Pg. 12 Assets (Listed in order of solvency) Cash………………………………………………………………..$1‚955 Non-Cash………………………………………………………..13‚043 Total Assets….....................................................$14998 Current yr net income % Return on = Net Income = [(Prev. yr S/E + Current yr. S/)/2] Equity (ROE) Average S/E Pg. 21 Beginning retained Earnings + Net Income
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|Accounting I (ACC 101) | | | |2012 | |Kroger Co (KR:New York) |Project | Yakub Hashim Noor 9403 American Collage Dubai
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the firm have? A= $97‚118 3.2 Inventory accounting: Differentiate between FIFO and LIFO. A= FIFO stands for First In‚ First Out‚ which means the goods that are unsold are the ones that were most recently added to the inventory. Conversely‚ LIFO is Last In‚ First Out‚ which means goods most recently added to the inventory are sold first so the unsold goods are ones that were added to the inventory the earliest. LIFO accounting is not permitted by the IFRS standards so it is less popular. It does
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Financial Accounting Summary Financial Accounting – Summary Notes Financial Accounting – Summary Notes 1 Financial Statement Basics 3 Understanding of the 3 financial statements – (balance sheet‚ income statement and statement of cash flows). What does each financial statement represent? 3 What is the structure of each statement? 3 What is the link between the three statements? 4 Understanding of the basic mechanics of financial accounting – (debits‚ credits‚ transaction journal entries‚ adjusting
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approximately the same under different inventory costing methods and the choice of method does not materially affect net income. To see this‚ remember that FIFO profits include holding gains on inventories. If the inflation rate is low (or inventories turn quickly)‚ there will be less holding gains (inflationary profit) in inventory. Q6-3. FIFO holding gains occur when the costs of earlier purchased inventory are matched against current selling prices. Holding gains on inventories increase with an
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