Based on the vertical analysis done on the income statement‚ further explanation would be needed to explain the decrease in gross profit (as a percent to sales) over the three year period while overall expenses increase each year on both a percent-to-sales and total dollar amount increment. I would also be curious to understand why cost of goods sold is increasing year-over-year – are raw materials increasing‚ are inventory levels too high and we are writing off obsolete inventory‚ is part of the
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special consulting project which would generate revenue for the auditing firm. C Non accrual methods were used in which current period expenses were improperly deferred or eliminated to inflate earnings. Also there were repeated changes to depreciation estimates.The company capitalized cost and used irrational useful life for its assets.Use of Non GAAP methods by the company. D Geographical entries were used in which expenses were moved from current income statements to incorrect income statement.Also
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assigned to the contract. We‚ as their auditors‚ are asked by a company partner‚ to identify and analyze several accounting issues relating to this project. Issue #1 - Issue Identification The main issue is when to record the “safety bonus” of 1 million dollars as revenue. This additional condition will be granted only if PPBJ completes the project without safety problems. The PPBJ management will focus on how to avoid any of those problems in order to get the bonus. Our function‚ as auditors
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Solutions to Problems and Exercises TABLE OF CONTENTS * Chapter 1 1 Concepts for Analysis 1-5 1 Concepts for Analysis 1-6 2 Concepts for Analysis 1-10 3 Concepts for Analysis 1-11 3 * Chapter 2 4 Brief Exercise 2-3 4 Brief Exercise 2-4 4 Brief Exercise 2-5 4 Exercise 2-3 5 * Chapter 3 6 Exercise 3-6 6 Exercise 3-9 6 Exercise 3-11 8 Exercise 3-14 10 Exercise 3-15 10 Exercise 3-16 10 * chapter 4 12 Exercise 4-2 12 Exercise 4-4 13 Exercise 4-5 16 Exercise 4-12 17
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1992. It was based out of Toronto‚ Ontario and supplied small industrial water filtration systems and environmental products. It focused mostly on projects that required processing below 1 million litres per day. This was because competing companies were more interested in projects that required processing above 1 million litres per day. Problem Statement The problem Dragasevich faces with FII is that some of their current wastewater treatment designs did not meet some industrial and municipal guidelines
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Financial Statements‚ Cash Flow‚ and Taxes Learning Objectives After reading this chapter‚ students should be able to: ◆ Briefly explain the history of accounting and financial statements‚ and how financial statements are used. ◆ List the types of information found in a corporation’s annual report. ◆ Explain what a balance sheet is‚ the information it provides‚ and how assets and claims on assets are arranged on a balance sheet. ◆ Explain what an income statement is and
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Financial Statements ACC/290 September 14‚ 2012 Financial Statements This written essay will discuss the four basic financial statements used in accounting. It will describe the purpose of the four financial statements. How these statements would be useful to internal users‚ such as managers‚ and employees. How the external users‚ such as investors‚ and creditors would find these statements useful. Four Basic Financial Statements The four basic financial statements used in accounting
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background of the issues on financial statement analysis Financial statement analysis is an important part of overall financial analysis‚ based on the statements which are the end products of accounting system‚ viz.‚ Balance Sheet and Profit and Loss Account. A financial statement (or financial report) is a formal record of the financial activities of a business‚ person‚ or other entity. In British English—including United Kingdom company law—a financial statement is often referred to as an account
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reporting requirements for both accounting models while the reconciliation occurs. Because of ongoing convergence projects‚ the extent of the specific differences between IFRS and GAAP is shrinking. Yet significant differences do still remain. Such differences exist in the structure of an annual report. Formally known as the “Profit and Loss statement” under Nigerian GAAP‚ the Income Statement (under IFRS) recognizes that only operating costs and profits for continuing operations will be shown‚ and any
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Project The McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants‚ serving around 68 million customers daily in 119 countries. Headquartered in the United States‚ the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the
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