explain why. a. Both the direct and indirect methods will produce the same cash flow from operating activities. True statement; the indirect approach is an alternative method for preparing the statement of cash flows for the direct method. b. Depreciation expense is added back
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Assignment 10-1 Depreciation policy 10 10-2 Valuation models 15 10-3 Depreciation or amortization policy 15 10-4 Component depreciation 20 10-5 Component depreciation 20 10-6 Depreciation: computation 20 10-7 Depreciation schedule 25 10-8 Interpreting depreciation disclosures … 20 10-9 Analysis of four depreciation methods—maximize income (*W) 20 10-10 Identify‚ recalculate depreciation 20 10-11 Depreciation and depletion—schedule‚ entries (*W) 25 10-12 Depreciation and sale
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capital leased planes comprised of 164 planes. “Capital Leases – Flight Equipment” totaling $107 is equal to the original present value of the planes under capital lease comprised of 7 planes under capital lease. F. Depreciation Expense $186.26 Accumulated Depreciation $186.26 This amount was calculated by using the amount corresponding to “Flight Equipment” of $6‚574 on the balance sheet minus the residual value of 15% divided by 30 years: [(6‚574 – (6‚574*.15)]/30 = 186.26
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10‚000 Additional depreciation on revaluation of equipment (25‚000) Impairment loss on intangible asset (5‚000) Recognition of deferred development costs 80‚000 Reversal of amortization of deferred gain on sale and leaseback (30‚000) Income under IFRS $1‚030‚000 2014 Stockholders’ equity under US GAAP $8‚000‚000 Adjustments: Reversal of write-down of inventory to replacement cost 10‚000 Original revaluation surplus on equipment 600‚000 Accumulated depreciation on revaluation of
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The initial conclusion is to accept this project as long as everything stays the same‚ and that they should evaluate themselves yearly as things may change. Blue Ridge Mill should take into account the depreciation expense per year when making an educated capital budgeting decision. Depreciation generated cash flows should be included in this project for many reasons. The depreciated generated cash flow gives us a better understanding of the financial breakdown of the project and tells the
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Revised Fall 2012 CHAPTER 12 STATEMENT OF CASH FLOWS Key Terms and Concepts to Know Basic Concepts The statement of cash flows highlights the major activities that impact cash flows and hence‚ affect the overall cash balance. Cash flows are important because they finance operations‚ pay bills‚ pay employees‚ pay dividends‚ repay loans and make investments. The statement analyzes the changes in the non-cash balance sheet from the perspective of whether the changes provided or used cash
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required to attempt in the F7 exam. IAS 16‚ Property‚ Plant and Equipment overview There are essentially four key areas when accounting for property‚ plant and equipment that you must ensure that you are familiar with: ¤ initial recognition ¤ depreciation ¤ revaluation ¤ derecognition (disposals). Initial recognition The basic principle of IAS 16 is that items of property‚ plant and equipment that qualify for recognition should initially be measured at cost. One of the easiest ways to remember
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accounted for on a consistent basis. It sets out the principles in making a decision as to whether a tangible fixed asset is stated at cost on a financial statement or at a revalued amount. It is acknowledged within the standard that in some cases no depreciation charge will be made on the grounds that it is immaterial. What is a fixed asset? The definition of a fixed asset was discussed in my last article1. As a reminder‚ these are such things as land‚ machinery‚ buildings‚ motor vehicles (school minibus)
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AC505 Course Project Hints: The beginning cash balance for April‚ is the cash from March 31 in the Asset section of the balance sheet. In the merchandise purchases budget‚ in April‚ we need 50% of March purchases (that amount is also given to us 3/31 Accounts payable of $100‚000 on page 415). Therefore‚ Total cash disbursements for April is (50% x $316‚000 April purchases) + ($100‚000 remaining March purchases to be paid) = $258‚000. Class‚ Here are some hints. Lets start from the beginning:
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CHAPTER 11 QUESTIONS 1. Distinguish among depreciation‚ depletion‚ and amortization expenses. Depreciation refers to the cost allocation of tangible long-term assets; depletion refers to the cost allocation of natural resources; and amortization refers to the cost allocation of intangible assets. All three terms have similar underlying principles governing their use. 2. What factors must be considered in determining the periodic deprecation charges that should be made for a company’s depreciable
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