days goodwill was thought of as the good and valuable relationships of a proprietor of a business with his customers. The present concept is broader in that it encompasses many more intangible economic factors of a business enterprise and accountants now consider that goodwill results from the evaluation of the earning power of a business by investors (Johnson‚ 43). From an accountant ’s perspective‚ goodwill appears in accounts of a company only when the company has purchased some intangible and
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Learning Goal 6: Explain the relationships among financial decisions‚ return‚ risk‚ and the firm’s value. 1) Any action taken by the financial manager that increases risk will also increase the required return. True or False 2) In common stock valuation‚ any action taken by the financial manager that increases risk will cause an increase the required return. True or False 3) In common stock valuation‚ any action taken by the financial manager that increases risk will cause an increase
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PROBLEMS 1. Table 3.3 shows the December 31‚ 2009 pro- forma balance sheet and income statements for R& E Supplies‚ Inc. The pro- forma balance sheet shows that R& E Supplies will need external funding from the bank of $ 1.4 million. However‚ they show $ 1.27 million in cash and short- term securities. Why are they going to the bank when they have most of the required amount in their cash account? 2. Pro forma financial statements‚ by definition‚ are predictions of a company’s financial statements
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430 Sept. 30 515 Sept. 30 85 515 Depreciation Expense Sept 30 288 Sept. 30 288 b) Yasunari Kawabata D.D.S. Trial Balance September 30‚ 2012 Debit Credit Cash 12‚133 Accounts Receivable 6‚950 Supplies On hand 612 Furniture & Equipment 17‚280 Accumulated Depreciation 288 Accounts Payable 13‚680 Capital
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Planning a budget Introduction Davis Service Group is a large public limited company employing around 17‚000 people. Its shares are quoted on the London Stock Exchange. The business is based on service contracts to source‚ clean and maintain industrial textiles‚ such as protective clothing and linens. This is across four key sectors: workwear‚ healthcare‚ hotels and restaurants‚ and general facilities‚ such as washroom linen. The company’s headquarters are in London but its operations are spread
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whether each of the following items is an asset (A)‚ liability (L)‚ or part of equity (E). (A) Accounts receivable (L) Salaries and wages payable (A) Equipment (A) Supplies (E) Owner ’s capital (L) Notes payable ------------------------------------------------- BE1-8 Classify each of the following items as dividends (D)‚ revenue (R)‚ or expense (E). (E) Advertising expense (R) Service revenue (E) Insurance expense (E) Salaries and wages expense (D) Owner ’s Drawings (R)
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Chapter 12 Statement of Cash Flows True / False Questions 1. Interest and dividends from investments held by a company are reported as cash inflows from investing activities on the statement of cash flows. True False 2. Under the indirect method‚ changes in current assets are used in determining cash flows from operating activities and changes in current liabilities are used in determining cash flows from financing activities. True False 3. Using the indirect method‚ the increase
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A balance sheet is a statement businesses produce that outlines their assets and liabilities. It is a snapshot of their fixed assets‚ current assets‚ current liabilities and long term liabilities for a specific moment in time such as the end of a financial year. Using these figures‚ a business is able to calculate their net working capital; how much the business is worth‚ whether it can afford to expand and if it is a good venture for investors. There are different groups of people who are interested
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Profit and loss accounts and balance sheet By law companies are expected to produce financial statements each year. These statements appear in Company Reports. There are two main financial statements: 1. The profit and loss account‚ and 2. The balance sheet. 1.The profit and loss (P&L) account. This account can be updated regularly and shows how much profit or loss a business is making. A profit can be made in several ways‚ for example: * from trading‚ in the case of a High Street shop
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Chapter 3 The Balance Sheet and Financial Disclosures Questions for Review of Key Topics Question 3-1 The purpose of the balance sheet‚ also known as the statement of financial position‚ is to present the financial position of the company on a particular date. Unlike the income statement‚ which is a change statement that reports events occurring during a period of time‚ the balance sheet is a statement that presents an organized array of assets‚ liabilities
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