excluded from the cash flow statement How then is profit different from cash flow? 1 – Non cash expenses/revenue items: Profit uses some expenses which are not baked by cash outflow. Examples include: ➢ Depreciation and impairment expenses ➢ Bad debts ➢ Increase/decrease in provision
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causing them to increase by $5.4 million. They changed the way they compute depreciation expense by using the straight-line method‚ resulting in an increase in net income by $11 million or $.93 per common share. The depreciation policy and residual values were changed as well of machinery‚ plants‚ and equipment‚ which caused and increase in net income by $3.2 million or $.27 per share. What is the effect of the depreciation accounting method change on the reported income in 1984? How will this change
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overview in step (i). Test design to determine effectiveness of control when operated properly. Test operation of control to confirm nature‚ frequency and extent. Inspect asset records and registers and discuss procedures in place for processing depreciation expense. Observe whether amounts are processed in a timely manner. Review procedures in place by management to detect errors in calculation and evaluate effectiveness. Perform a walk-through of the system and re-perform or observe controls in place
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in Dec and Jan. 7. 5/12 purchase $50 supplies. 8. 6/12‚ sold on credit 50 mobiles at $80 each. 9. 7/12‚ customer returned 3 defective mobiles. 10. 10/12 Customer paid for the amount they owed on 6/12. 11. 31/12 utility expense accounted for $50‚ not yet paid and recorded. 12. 31/12 Paid interest rising from the bank loans for $30. 13. 31/12 inventory count showed $5 supplies still unused. 14. 31/12 Completed 30% work described in (6). Prepare general
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Cost of sales $2‚100 3. Rent expense is $1‚800 of $600 per month times three months. Paid in cash. 4. Part-time employee expenses ($1600) is the sum of cash paid ($1510) plus amount owed ($90). 5. Supplies expense ($80) is beginning supplies inventory ($100) less supplies inventory on hand on March 31 ($20). 6. The prepaid advertising ($150) was run by the local paper on April 2. The benefit of the asset expired so the asset became an expense. 7. The commercial sewing machine
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for: 1) rent expense 2) insurance expense 3) depreciation expense for equipment. The amount of depreciation for June is $20 4) electricity expense‚ estimated at $120 for June 5) group music lesson fees earned REQUIRED: a. b. c. Record the adjusting entries in the worksheet Complete the worksheet. Use the worksheet to prepare the closing entries. ACCM4000 Accounting Principles Topic 4 T1 2013 1 VERONICA’S VIOLIN SCHOOL - GENERAL JOURNAL page 3 Date June 30 Rent Expense Prepaid Rent
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Equipment 142 Accumulated Depreciation - Equipment LIABILITIES 202 Accounts Payable 211 Unearned Revenues OWNERS’ EQUITY 301 Common Stock 302 Paid in Capital 309 Retained Earnings REVENUE 410 Fees Income EXPENSES 511 Salaries Expense 514 Utilities Expense 517 Supplies Expense 520 Rent Expense 523 Depreciation Expense – Equipment 526 Insurance Expense 529 Advertising Expense 532 Telephone Expense 535 Maintenance Expense 540 Bad Debt Expense REQUIRED: 1. Analyze
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of this chapter. TRUe-FALSe—Conceptual Answer No. Description F 1. Taxable income. F 2. Use of pretax financial income. T 3. Deferred tax expense. T 4. Deferred tax liability. F 5. Deductible amounts. T 6. Deferred tax asset. F 7. Need for valuation allowance account. T 8. Positive and negative evidence. F 9. Computation of income tax expense. T 10. Taxable temporary differences. F 11. Taxable temporary difference examples. T 12. Permanent differences. T 13. Applying tax rates
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Corporation ………… $1‚000‚000.00 IFRS adjustments: Add: Reversal of inventory cost written down to replacement cost….. 10‚000.00 Less: Additional depreciation of building after 2011 revaluation…….. (25‚000.00) Impairment loss on intangible assets…………… (5‚000.00) Add: Deferred research and development costs…….. 80‚000.00
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Entertainment expense (non deductible) | 1 700 | | Depreciation – buildings (non deductible) | 7 600 | | Depreciation – plant | 22 500 | | Insurance expense | 4 200 | | Development expenditure | 15 000 | | Doubtful debts expense | 4 100 | | Annual leave expense | 46 000 | 101 100 | | | | Deduct: | | 357 800 | Royalty revenue (tax exempt) | 8 000 | | Bad debts written off | 3 500 | | Annual leave paid | 52 000 | | Insurance paid | 3 700 | | Depreciation – plant (tax)
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