In this case‚ when Rob recorded the depreciation of computer equipment‚ he chose the straight-line method‚ acceptably so because the computer server’s output cannot be counted by unit. We also cannot determine that there is a higher amount of depreciation expense in the early years than in the later years. In addition‚ based on my research‚ some big companies like eBay and Amazon also use the straight-line method to record the depreciation expense of computer servers. In regards to this‚ I unfortunately
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given asset‚ liability‚ equity‚ revenue‚ or expense account. * Double-entry accounting system (two-sided effect). * Recording done by debiting at least one account and crediting another. * DEBITS must equal CREDITS. AED = LRC | | | | | | | | | | After eating dinner‚ lets read comics (AED=LRC) ASSETS = LIABILITIES + EQUITY 3. Financial Statements and Ownership Structure Income Statement: Revenues – Expenses Net Income (Loss) Retained Earnings Statement
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| Problem 8 – 2 TRUE OR FALSE 1. True 2. True 3. False – Business expenses related to business income outside the Philippines is deductible also. 4. False – Business expense is deductible from gross income. 5. True 6. True 7. True – Once OSD is opted‚ no capital loss could be deducted from capital gain. 8. False – Some business expenses are nondeductible or subject to limit. 9. False – Income outside the Philippines by a NRC is not taxable
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activities 5. Use the direct method to calculate cash flows from operations 6. Use the indirect method to explain the difference between net income and net cash provided by (used for) operating activities 7. Understand why we add depreciation to net income when using the indirect method for computing cash flow from operating activities 8. Show how the balance sheet equation provides a conceptual framework the statement of cash flows True False 1. The statement of cash flows
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excess of cash inflows from revenue over cash outflows for expenses Revenue is recognized when goods are sold Expenses are recognized when costs are consumed B and C 3 9 Judy’s Hairdressing Salon uses cash accounting. During 2005 the salon reported $41‚000 in wages paid on the income statement. At year-end 2005 wages owing but unpaid were $2‚400. If the salon changed to accrual accounting‚ how much would be reported as wages expense for 2005? A B C D $38‚600 $41‚000 $43‚400
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provisions(bad debts and depreciation)‚ it is not hard to distinguish the cash flow from the profit. Content It is vital to understand the cash position and the profit do not necessarily go together when running business. Profitable businesses still can go out of business because of cash flow problems. Cash flow is the movement of money in and out of the company’s bank account during a financial period. While profits are determined by the income earned with the expenses incurred in earning that
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CASE STUDY 1—THE COMPLETE ACCOUNTING CYCLE Name: ______________ The entire Case Study is due Sunday at midnight mountain time at the end of Week 3. This Case Study is worth 100 points or 10% of your final course grade. This Case Study relates to TCOs D and E and Chapters 3 and 4. MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW. There are 10 sheets in the Workbook including this one. All of the Information you need for the project is located in this Workbook. Requirements
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amounts. Cash $ 11‚360 Cash dividends $ 2‚000 Accounts receivable 14‚000 Consulting fees earned 14‚000 Office supplies 3‚250 Rent expense 3‚550 Land 46‚000 Salaries expense 7‚000 Office equipment 18‚000 Telephone expense 760 Accounts payable 8‚500 Miscellaneous expenses 580 Common stock 84‚000 Also assume the following: a. The owner’s initial investment consists of $38‚000 cash and $46‚000 in land in exchange
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statement summarizes the company’s performance during 2007. It reflects how much money the company brought in as revenues‚ how much spent on expenses‚ and the difference between the two is the net income profit. All figures above are in terms of millions. Excel rounded the depreciation value which was 1.5 to 2 and net income of 1.5 to 2 as well which gave total expense of 11 which is actually 10.5 million. I will attempt to explain the major components of this Income Statement. Revenue is the
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Compute the depreciation expense for year 2009 on the building using the straight-line method‚ assuming a 15-year life and a $30‚000 salvage value. 495‚500 – 30‚00015 = 31‚000 3. Compute the depreciation expense for year 2009 on the land improvements assuming a five-year life and double-declining-balance depreciation. Step 1 Straight-line rate = 100% / 5 years = 20% Step
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