reduces profits. 8-2 CLASSIFYING LONG-LIVED ASSETS Actively Used in Operations Expected to Benefit Future Periods Tangible Physical Substance Intangible No Physical Substance 8-3 CLASSIFYING LONG-LIVED ASSETS Land Assets subject to depreciation Buildings and equipment Furniture and fixtures Natural resource assets subject to depletion Mineral deposits and timber Tangible Physical Substance Definite life Patents Copyrights Franchises Indefinite life Trademarks Goodwill
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revenues of $12 million in 2007. Expenses other than depreciation totaled 75 percent of revenues‚ and depreciation expense was $1.5 million. All revenues were collected in cash during the year and all expenses other than depreciation were paid in cash. 1. Construct Brandywine’s 2007 income statement. Brandywine Homecare Income statement Month ending December 31‚ 2007 Revenue $12‚000‚000 Total revenue $12‚000‚000 Expenses: Depreciation $ 1‚500‚000 Other
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a. Delta Airlines Depreciation Method Depreciation Method Salvage Value For every $100 mil Depreciated Annual Depreciation Prior to 1986 Straight-line‚ 10 years 10% 100-(.1*100)=90 90/10=9 $9 mil 1968 – 1993 Straight-line‚ 15 years 10% 100-(.1*100)=90 90/15=6 $6 mil After 1993 Straight-line‚ 20 years 5% 100-(.05*100)=95 95/20=4.75 $4.75 mil b. Singapore Airlines Depreciation Method Depreciation Method Salvage Value For every $100 mil Depreciated Annual Depreciation Prior to 1989 Straight-line
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* All late transactions are taken into account * All calculations have been made correctly * All GAAPS have been compiled with Adjusting Entry – an entry made before finalizing the books for the period to apportion amounts of revenue or expense to the proper accounting periods or operating divisions. For example‚ the apportioning of wages between accounting periods when the current period ends between two paydays. The entries are made to bring accounts up to date. Why is it necessary?
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- Cash expenses paid – Revenues recorded when received – Expenses recorded when paid • Accrual basis • Profit = Income (incl. Revenues) - Expenses – Revenue is recognised when the anticipated inflow of economic benefit can be reliably measured – Expenses when the consumption of benefits can be reliably measured 2 Adjusting Entries • The need for adjusting entries- needed because the cash receipt or payment does not coincide with the recognition criteria for income and expenses. • Classification
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name for the actual Outsourcing & consulting MNC‚ Identity not revealed for security reasons) to identify non value added processes and eliminate or replace them for cost saving. -------------------- Transport (car pools) & billing of transport expenses in XYZ BPO Pvt Ltd‚. Services Pvt Ltd‚. For the purpose of this assignment we have considered transport system of XYZ BPO Pvt Ltd‚. alone. As a part of the company¡¦s policy XYZ BPO Pvt Ltd‚. provides transport facility for almost all its
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(f) Recorded depreciation of building for period used‚ $600. Cash 0/ Net Income -600 P4-2A A. | | GENERAL JOURNAL | PAGE | | | | | GENERAL | | 2012 | ACCOUNT TITLE | DEBIT | CREDIT | Jun | 30 | Supplies Expense | 1280 | | | | Supplies | | 1280 | | | (to record supplies used) | | | Jun | 30 | Utility Expense | 180 | | | | Utilities Payable | | 180 | | | (to record unpaid utility) | | | Jun | 30 | Insurance Expense | 240 | |
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income) are recognized when earned regardless of when collected and expenses are recognized when incurred regardless of when paid. The matching principle aims to align expenses with revenues; meaning‚ expenses should be reported when the revenue earned with it is reported. Why Are Adjusting Entries Necessary The purpose of adjusting entries is to update the accounts. At the end of the accounting period‚ some income and expenses may have not been recorded or taken up; hence‚ there is a need to update
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440 2‚440 2‚440 Supplies 1‚880 1‚580 300 300 Accounts Payable 1‚120 1‚120 1‚120 Unearned Revenue 240 140 100 100 Common Stock 3‚600 3‚600 3‚600 Service Revenue 2‚400 140 2‚540 2‚540 Salaries Expense 560 280 840 840 Miscellaneous Expense 160 160 160 Totals 7‚360 7‚360 Supplies Expense 1‚580 1‚580 1‚580 Salaries Payable 280 280 280 Totals 2‚000 2‚000 7‚640 7‚640 2‚580 2‚540 5‚060 5‚100 Net Loss 40 40 Totals 2
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BUSN1002 Financial Accounting Processes Semester 2‚ 2013 LECTURE OUTLINES 1 – 6 Topic Coordinator: Philip Palmer Room 3.70 Law and Commerce Building Email: philip.palmer@flinders.edu.au Ph: 8201 2013 FLINDERS UNIVERSITY FLINDERS BUSINESS SCHOOL BUSN1002 Financial Accounting Processes Philip Palmer Lecture Outline 1 Introduction to Financial Accounting Reading: Hoggett et al.‚ Chapters 1 and 2 1 Introduction to Accounting Accounting is an information system designed to
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