million. • Perhaps one of the most significant accounting changes would be changing the method for depreciation expenses on plants‚ machinery and equipment – from principally accelerated methods to straight line method. Although there was no significant reduction in depreciation expense in 1984‚ this change has brought about an increased after tax net income by $11m. • The estimated depreciation lives on certain U.S. plants‚ machinery and equipment and residual values on certain machinery and equipment
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Financial Statement Analysis K R Subramanyam John J Wild McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies‚ Inc. All rights reserved. 4-2 Analyzing Investing Activities 4 CHAPTER 4-3 Current Asset Introduction Classification Current (Short-term) Assets Resources or claims to resources that are expected to be sold‚ collected‚ or used within one year or the operating cycle‚ whichever is longer. Noncurrent (Longterm) Assets Resources or claims to resources
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arrived at over a stated period. Types of Income Statement: Single Step Income Statement: It consists of two groupings: revenues and expenses. Total expenses are subtracted from total revenues to arrive at net income or loss. Multiple Step Income Statement: It separates the operating transactions from non-operating transaction‚ and matching costs and expenses with related revenues. It highlights certain intermediate components of income. Condensed Income Statement: A condensed income statement
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Sales (net of P21‚000 returns) – Schedule 1 Cost of goods sold Merchandise inventory‚ January 1 Purchases (net of P13‚000 returns) – Schedule 2 Merchandise inventory‚ December 31 Gross profit on sales Other income Operating expenses – Schedule 3 Operating income Interest expense Profit 33 P725‚000 P 97‚200 551‚200 (105‚800) 542‚600 P182‚400 8‚000 (114‚000) P 76‚400 ( 2‚500) P 73‚900 Chapter 6 – Cash to Accrual/ Single Entry System Schedule 1 – Sales Receipts from customers Accounts receivable
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years and a $10‚000 residual value. Calculate depreciation expense and the year-end book value for 2010 and 2011 using the double declining-balance method of depreciation. *$120‚000 = $300‚000 2/5 **$72‚000 = $180‚000 2/5 Exercise 3: Hubbard Company purchased a truck on January 1‚ 2009‚ at a cost of $34‚000. The company estimated that the truck would have a useful life of 4 years and a residual value of $4‚000. A. Calculate depreciation expense under straight line and double declining balance
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COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS Susquehanna Equipment Rentals A mini-practice set illustrating the complete accounting cycle for a service-type business. Includes computation of income taxes expense (as a percentage of income before taxes) and an evaluation of solvency. Can be done as a group assignment. 5 to 6 hours Strong © The McGraw-Hill Companies‚ Inc.‚ 2010 CP1-Desc. 5 to 6 hours‚ Strong COMPREHENSIVE PROBLEM 1 SUSQUEHANNA EQUIPMENT RENTALS General Journal
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substance‚” (Kimmel‚ Weygandt‚ & Kieso‚ 2010‚ p. 414). Types of intangible assets include patents‚ copyrights‚ trademarks‚ franchises‚ licenses‚ and goodwill. These assets would be classified as long-lived assets. Depreciation “Depreciation is the process of allocating to expense the cost of a plant asset over its useful (service) life in a rational and systematic manner‚” (Kimmel‚ Weygandt‚ & Kieso‚ 2010‚ p. 402). Depreciable assets include land improvements‚ buildings‚ and equipment because
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Allowance for Doubtful Accounts has a $1‚200 credit balance‚ the adjustment to record bad debts for the period will require a debit to Allowance for Doubtful Accounts for $3‚300. debit to Bad Debt Expense for $4‚500. credit to Allowance for Doubtful Accounts for $4‚500. debit to Bad Debt Expense for $3‚300. The financial statements of the Melton Manufacturing Company reports net sales of $300‚000 and accounts receivable of $50‚000 and $30‚000 at the beginning of the year and end of year‚ respectively
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Safeco 600‚000 Investment in Safeco 650‚000 (E) Stockholders’ equity—Safeco‚ 1/1 7‚000‚000 Investment in Safeco 7‚000‚000 (R) Equipment‚ net 500‚000 Inventory 200‚000 Goodwill 300‚000 Investment in Safeco 1‚000‚000 (O) Depreciation expense 100‚000 Cost of goods sold 200‚000 Goodwill impairment loss 50‚000 Equipment‚ net 100‚000 Inventory 200‚000 Goodwill 50‚000 b. Calculation of equity in net income for 2015: Safeco’s reported net income $ 2‚000‚000 Revaluation
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contains a lease analysis of the case titled: Continental Airlines‚ Inc - Leases. All numbers contained in this memo are in millions. D. i. Rental Expense (Aircraft Equipment) $896 Rental Expense (Non-aircraft Equipment) $310 Cash $1‚206 ii. Rental Expense (Aircraft Equipment) $897 Rental Expense (Non-aircraft Expense) $360 Cash $1‚257 E. “Owned Property and Equipment – Flight Equipment” totaling $6‚574 represents the book value of all the planes that Continental
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