Acc 205 Week 3_DQs and Journal Week 3 DQ 1 1. The controller of Sagehen Enterprises believes that the company should switch from the LIFO method to the FIFO method. The controllers bonus is based on the next income. It is the controllers belief that the switch in inventory methods would increase the net income of the company. What are the differences between the LIFO and FIFO methods? Week 3 DQ 2 2. A variety of depreciation methods are used to allocate the cost of an asset to all of the accounting
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loss in sales that causes them to use the machinery less often. With that being said‚ the machinery would last longer and will lose their value more slowly. In Note 7‚ Harnischfeger describes the effect of LIFO inventory liquidation on its reported profits in 1984. Describe what is meant by LIFO liquidation and how liquidation
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Discuss the following proposition in the context of the professional sporting clubs in this case (you may choose to focus upon only the Essendon Football Club): ‘Principal-Agent problems are caused by insufficient oversight by company directors.’ Corporate Governance is a complex field that started to develop very quickly this last decade. The collapse of international firms‚ the financial crisis‚ the international scandals‚ the pressure from the governments and non-profit organizations… are all
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http://http://www.nytimes.com/1984/06/08/business/market-place-analysts-favor-harnischfeger.html Markgraf‚ B. (n.d.). What Is a LIFO Liquidation? The Houston Chronicle. Retrieved from http://http://smallbusiness.chron.com/lifo-liquidation-51049.html Bank‚ E. (n.d.). The Effects of LIFO Liquidation on Balance Sheets. The Houston Chronicle. Retrieved from http://smallbusiness.chron.com/effects-lifo-liquidation-balance-sheets-67480.html
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There are various methods in the accounting world used to keep track of inventory and cost of goods used. FIFO stands for first in first out method which is the opposite of LIFO‚ last in first out. Both methods have disadvantages and advantages when it comes to tax time or preparing a financial statement for the investors. As the name suggest‚ FIFO will account inventory that came in first will be sold first. This method is effective for companies selling products with expiration dates. Obviously
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Purchases (Inventory) 15‚630 Accounts Payable 15‚630 (To record purchase of merchandise in 2007) Transaction 8 Sales Returns and Allowances 2‚600 Accounts Receivable 2‚600 EXERCISE 8-14 (20–25 minutes) (a) (1) LIFO 600 @ $6.00 = $3‚600 100 @ $6.08 = 608 $4‚208 (2) Average cost Total cost = $33‚655* = $6.35 average cost per unit Total units 5‚300 700 @ $6.35 = $4‚445 EXERCISE 8-14 (Continued) *Units
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him 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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Units Unit Cost Total Cost From the Beginning Inventory 1840.00 20.00 36800.00 From the first purchase 600.00 20.25 12150.00 From the second purchase 380.00 21.00 7980.00 2820.00 56930.00 From the Second purchase 420.00 21.00 8820.00 From the third purchase 400.00 21.25 8500.00 From the second purchase 200.00 21.50 4300.00 1020.00 21.20 21620.00 Units Unit Cost Total Cost From the Beginning Inventory 1020.00 21.20 21624.00 From the first purchase 700.00 21.50 15050.00 From the second
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1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements. In 1984‚ the Corporation has computed depreciation expense on plants‚ machinery and equipment using the straight-line method for financial reporting purposes. Prior to 1984‚ the Corporation used principally accelerated methods for its U.S. operating plants. 2. What is the effect of the depreciation accounting method change on the reported income in 1984? How will this change
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Textron Case 1) How does Textron make money? Textron is able to make money as a result of 4 defining aspects of its business model: a. Textron is a conglomerate: by purchasing a variety of companies‚ Textron is able to share technology between its business units thus increasing its competitive advantage in these respective units. For instance‚ lessons learned in aerodynamics at Bell Helicopters can be used in the construction of aircraft at Cessna. Additionally‚ because of Textron ’s
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