PART A (ESSAY FORMAT) 1. Jazeera Airways‚ as Parent Company‚ has two subsidiaries which are “Al Sahaab Aircraft Leasing Company W.L.L.” as an intermediate Parent Company‚ and “Al Sahaab Aviation LLC” as Subsidiary of Intermediate Parent Company. Jazeera Airways with the two subsidiaries companies together are called “Jazeera Group”. The group is operating its services in the field of air transportation and commercial passenger services under a license from the Directorate General of Civil Aviation
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CHAPTER 11 Internal Service Funds ANSWERS TO QUESTIONS Question 11-1 Among the advantages to the unit establishing such an Internal Service Fund are the following: 1. Centralized purchasing. Centralized purchasing might permit a more qualified purchasing agent to be employed; lead to the acquisition of better goods for the same price or goods of equal quality to those now being acquired at a lower price; result in better control of quantities ordered; increase both the quantity discounts received
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subtracted the annual expenses from the yearly revenue to determine the profit before depreciation or the profit before the drop in value. Depreciation moves the cost of an asset to depreciation expense during the asset ’s useful life. Depreciation expense results when the purchase price of a fixed asset is reduced over time‚ or its useful life (Keown‚ Martin‚ & Petty‚ 2014). In Corporation A‚ the Depreciation expense is $5‚000 a year. We deducted the $5‚000 year depreciation from the profit to
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| | Unearned Service Revenue | | 60 | 23 | Cash | 3000 | | | Service Revenue | | 3000 | | Accounts Receivable | 1000 | | | Service Revenue | | 1000 | 23 | Supplies | 1250 | | | Cash | | 1250 | 23 | Salary Expense | 800 | | | Cash | | 800 | 28 | Dividends | 500 | | | Cash | | 500 | | | | | b) Post the December transactions. (Use the general ledger accounts prepared in Ch. 3) | | | | | | Cash | | | | Nov. 8 500
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A) Because value is lost when a resource is used by another project‚ we should include the opportunity cost as an incremental cost of the project. B) Sunk costs are incremental with respect to the current decision regarding the project and should be included in its analysis. C) Overhead expenses are associated with activities that are not directly attributable to a single business activity but instead affect many different areas of the corporation. D) When computing the incremental earnings of an investment decision‚ we should include all changes
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Part A On 1 July 2011‚ Kookaburra Ltd acquired an item of plant at a cost of $200 000. The plant has an expected useful life of eight years‚ and Kookaburra Ltd adopts the straight-line method of deprecation. The tax depreciation rate for this type of plant is 25%. The company tax rate is 30%. Kookaburra Ltd measures plant at fair value. At 30 June 2012‚ Kookaburra Ltd determines the fair value of the plant to be $186 000. Due to recent developments in plant technology‚ the remaining useful
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and equipment to sales H&M: (420+222+7134) / 78346 = 9.9% Burberry: (58.2+99.2) / 995.4 = 15.8% (b) Ratio of depreciation to sales H&M: (14+1750) / 78346 = 2.25% Burberry: (1.9+27)/ 995.4 = 2.9% The above ratios can be used to measure the efficiency of a firm’s investment policy. Burberry has a higher land‚ buildings and equipment to sales ratio as well as a higher depreciation to sales ratio. The higher the ratio of land‚ buildings and equipment to sales‚ the smaller the investment required
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Other Issues Pro Forma Financial Statements and Project Cash Flows Getting Started: Pro Forma Financial Statements Project Cash Flows Projected Total Cash Flow and Value More about Project Cash Flow A Closer Look at Net Working Capital Depreciation Evaluating Equipment Options with Different Lives Project Cash Flows Relevant Cash Flows Cash flows that occur (or don ’t occur) because a project is undertaken. Cash flows that will occur whether or not we accept a
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ACCOUNTING FOR INCOME TAXES F 1. Taxable income is a tax accounting term and is also referred to as income before taxes. F 2. Pretax financial income is the amount used to compute income taxes payable. T 3. Deferred tax expense is the increase in the deferred tax liability balance from the beginning to the end of the accounting period. T 4. A deferred tax liability represents the increase in taxes payable in future years as a result of taxable temporary differences existing at the end
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refers broadly to both currency and cash equivalents such as certificates of deposit or money market instruments. Net income is not cash flow Net income is revenues less expenses Cash flows are the increases and decreases in the cash balance Cash does not always flow in the same accounting period as revenue is earned and/or expenses are incurred. This is why accrual basis accounting uses accounts such as accounts receivable and accounts payable to account for the difference in timing between revenue
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