Managers should be allowed to manage earnings Our position is that managers should be allowed to manage earnings . 1) Our first argument is that managers and Investors share the same goal of the company ‚which is to keep their revenue and income growth rate constant and smooth . Consider the fact that many ventures or small companies go out of their business every day‚ if they are successful‚ they do in usually one fiscal year. Some of the failure might be due to the state of nature ‚ future
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Q 1 Explain the nature of accounting fraud? A1. Background: The origin of WorldCom can be traced to the breakup of AT&T in 1983. The company began as Long Distance Discount Services Inc during 1983. LDD name was changed to WorldCom in 1995. To build the economies of scale that were critical success factor in long distance market it was imperative for WorldCom to grow its available volume off bandwidth as it lowered the per unit costs. Also the Telecommunication act of 1996 permitted long
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Berhad has operating return on assets (OROA) is higher than the average for the RHB Bank Berhad. This is because managers of Public Bank Berhad have done a good job of controlling costs and generating sales. This means that Public Bank earned more net operating per ringgit of investment in assets than the RHB Bank. In year 2008‚ Public Bank Berhad generated RM0.0201 of the operating profits for every RM1 of its invested assets. That’s worse than the RHB Bank Berhad‚ which generated an average RM0
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months showing a profit and some months showing a loss. The company’s contribution format: • Income statement for the most recent month is given below: Sales (13‚500 units at $20 per unit) . . . .... $270‚000 Variable expenses . . . . . . . . . . . . . . . . . . . . 189‚000 Contribution margin . . . . . . . . . . . . . . . . . . . 81‚000 Fixed expenses . . . . . . . . . . . . . . . . . . . . . … 90‚000 Net operating loss . . . . . . . . . . . . . . . . . . . . $ (9‚000) 2 Requirements • 1.
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completion figure would result in increasing the reported net operating income by $62‚500 over the net operating income that would be reported in the 25% figure we used? According to the above calculations‚ the 25% complete work on 20‚000 units in the inventory cost $16‚320‚000 - $16‚000‚000 = $320‚000. So each 1% increase in completion will cost 1/25 $320‚000 = $12‚800. So to get an increase in the reported net operating income by $62‚500 over the net operating
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Studio Comparison of the Past and Recommendations for the Future Giberson’s Glass Studio Income Statement For the Year Ending August 31‚ 2007 Revenues: Sales $ 31‚080 Total Revenue $31‚080 Expenses: Materials $ 857 Gas 9‚200 Operating Expenses 10‚210 Depreciation 4‚625 Interest 460 Total Expenses 25‚352 Net Income 5‚728 Executive Summary This report is to provide an evaluation of the
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for power is $4.70‚ and the cost per revenue hour for operations hourly personnel is $24.00. Continuing with the analysis a contribution margin income statement has been created to determine the potential profits Salem Data Services could earn assuming the intracompany usage was 205 hours. Examining this income statement‚ operating income is a net loss of $30‚014 (see Exhibit 1). This shows a 5% decrease in revenue hours‚ as related to intracompany hour’s reduction‚ will result in a 27%
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sign-on to AOL for 100 free minutes as an asset on its Balance Sheet. In accounting‚ we say that the costs were "capitalized‚" meaning reported on the Balance Sheet as an asset. This is in contrast to the costs being "expensed‚" flowing to the Income Statement immediately as an expense. The asset‚ Deferred Subscriber Acquisition Costs was amortized‚ beginning the month after such costs were incurred‚ over a period determined by calculating the ratio of current revenues related to direct response
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48. Unit sales to break even = Fixed expenses / Unit CM $150‚000 / 12 = 12500 Dollar Sales to break even = Fixed expenses / CM ratio $150‚000 / 0.40 = $375‚000 * If 12‚000 pairs of shoes are sold in a year‚ what would be Shop 48’s net operating income or loss? The company is considering paying the store manager of Shop 48 an incentive commission of Shop 48 an incentive commission of 75 cents per pair of shoes (in addition to the salesperson’s commission). If this change is made‚ what will
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Introduction Computer/Technology Industry The computer/technology industry has many key players with two of the major competitors being Dell and HP. The computer industry has come a long way since its first inception with the invention of Electronic Numerical Integrator and Computer in 1946. This industry is comprised of many items such as computers‚ monitors‚ printers‚ scanners‚ mainframes‚ servers‚ electronic computer components‚ networking and workstations to name a few. The industry started
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