income 3454 4490 Actual Percentage Increase(1997-1998) 29.99% 29.99% Q2. Briefly explain earnings management‚ income smoothing and “cookie jar reserves”. Is this type of accounting common outside the US? Earnings Management is an accounting techniques to produce financial reports that may paint a positive picture of a company’s business activities and financial position. It is believed that earnings management from legitimate accounting choices to fraud that violates generally accepted accounting
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Harley Davidson Case Analysis In 2007‚ Harley Davidson was the world’s most profitable motorcycle company. They had just released great earnings and committed to achieve earnings per share growth of 11-17% for each of the next three years. Their CEO of 37 years‚ James Ziemer‚ knew this would be an extremely difficult task seeing Harley’s domestic market share recently top off at just under 50%. The domestic market was where Harley’s achieved the most growth over the past 20 years and
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SATYAM SCANDAL I. Analyze the case and respond to the following questions: (a) Discuss the earnings management techniques employed by the management of Satyam. In this case of Satyam‚ I can conclude that the obvious technique employed by the said management are: 1. “Big Bet on The Future”. When an acquisition occurs‚ the company acquiring the other is said to have made a big bet on the future. As refer to this case‚ Ramalingam Raju the Chairman of Satyam Computer Services Ltd
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that many issues come out when truck accident happen. The outcome was not favourable‚ as Biovail ’s acquisition methods were labelled as unethical and their accounting practices were questioned. The company announced that the loss of the quarterly earnings which target in the range of $215 million to $235 million is because of the truck accident happened that contributed a significant unfavourable variance where the company estimated that revenue of the truck that involved in accident was in the range
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market value of equity and the book value of equity is the inability to record certain intangible assets such as brand value‚ customer loyalty‚ and perhaps most importantly‚ human capital. These intangible assets are likely to provide tremendous earnings growth in the future which determines the company’s market value. Notice also that the company’s choice of conservative accounting policies has the effect of depressing the company’s book value of equity. 2. What effect did Microsoft’s software
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accounting are the Income Statement‚ Balance Sheet‚ Retained Earnings Statement (a.k.a. Statement of Stockholders Equity)‚ and Statement of Cash Flows. The Income statement shows the profitability of the company over a specific period of time. Classifies financial data under two categories revenues and expenses. It represents revenues earned and expenses incurred. (Formula: Revenue-Expenses=Net Income or Net Loss). The Retained Earnings Statement a.k.a. Statement of Stockholder’s Equity shows increases
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Explain Cricks view of politics using contemporary examples This essay will explain Cricks views on politics‚ as outlined in his book ‘In defence of Politics’ (1962). That politics is a way to bring together differing opinions to resolves problems and disputes in a peaceful manner for the benefit of the majority and for the good of the populace. Cricks belief of what politics entails involves a democratic ideology and as we are considered to have a democratic society in which we live validating
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Case study: Rough Waters Ahead 1. Assuming Smooth Sailing uses US GAAP to prepare its financial statements‚ how should Smooth Sailings’ management perform the recoverability test for the cruise ship as of December 31‚ 2010? In addressing this question‚ consider: a. What assets and liabilities should be included in the asset group" for purposes of performing the recoverability test? Ans.: According to FAS 144.41‚ "Component of an entity" describes operations and cash flows that can be clearly
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Solutions Manual to accompany Accounting Theory 7e BY Allan Hodgson‚ Victoria Wise John Wiley & Sons Australia‚ Ltd 2010 Chapter 11: A positive theory of accounting policy and disclosure THEORY IN ACTION Theory in Action 11.1 Objections to crackdown 1. What are the likely components of a chief executive officer’s (CEO) management compensation package that might be affected by the proposed changes? It is most likely that the cash component of CEO compensation packages would
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liquidation of assets are known as ________ and are taxed as capital gains. A) return of capital B) rolling dividends C) alternate payments D) private earnings Answer: A 9) An alternate way to pay investors is when the firm uses cash to buy shares of its own outstanding stock‚ also known as A) dividend investment. B) retained earnings. C) initial public offering. D) share repurchases. Answer: D 10) A firm may announce its intention to buy its own shares in the open market like any
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