When there is a transfer in a lease, all benefits along with risk are transferred to the lessee and will be capitalized by the lessee as well. b. How should Lani account for this lease at its inception and determine the amount to be recorded? Lani should account for the lease from the beginning as an asset and the obligation to equal the current value towards the beginning of the term at minimum payment during the term. When the amount goes over the fair value of the lease the amount should be documented as an asset.
Once the predicted demand is frozen, L.L. Bean uses its historical demand and forecast data to analyze the forecasting errors. The forecast errors are calculated for each individual item and a frequency distribution of these is made, which is further used as a probability distribution for future errors. Thus, if 50% of the errors were within 0.7 and 1.6, the forecast for this year would be adjusted accordingly. Next, each item commitment quantity was calculated using its contribution margin and its total contribution in dollar to the revenue of the company.
Harry W. Pedroso Intermedia Financial Accounting I Section 03 Aren’t We Done Yet? LabCo is a contracting firm that specializes in the construction of machinery and equipment for different types of industries. All LabCo projects contracts are unique and they require some design and development. LabCo charges its customers two ways fixed-price or cost basis. LabCo uses the percentage of competition method to recognize revenue.
The Financial Accounting Standard Board Statement No. 5, Accounting for Contingencies, states a contingency as an existing condition, situation, or circumstances, in which the company can gain or loss when one or more future events occur or not occur. The FASB Statement No. 5 defines two types of contingencies—gain contingencies and loss contingencies. The company requires determination of the likelihood of loss to recording loss contingencies.
“Under the proposed model, all leases are essentially treated the same for lessees and in a manner more akin to the traditional capital/finance lease mode” (Deloitte, 2011). Lessees record a right-of-use asset and a corresponding obligation to compensation of payments. Lessors would either follow a derecognition model or a performance obligation model, depending on their level of exposure to “risks or benefits” during or after the lease term associated with the original asset. Furthermore, under U.S. GAAP, the lease term is set forth by the lessor. The lessor owns the asset, therefore he/she determines the lease term.
Quiz #6 Question 1 of 8 12.5 Points The relationship between the aggregate plan and Master Production Schedule (MPS) is: A. The aggregate plan balances the plant’s capacity with demand and the MPS translates this plan into numbers of specific products in time frames B. The aggregate plan is for 6 months and the MPS is for 3 months C. The aggregate plan uses simulation and the MPS uses regression analysis D. The MPS calculates labor time and the aggregate calculates labor and material E. MPS starts with macro units and the aggregate plan starts with micro Answer Key: A Question 2 of 8 12.5 Points Just-In-Time (JIT) production planning relies on: A. Close to zero defects from suppliers B. Low inventory with materials sent directly to work stations C. Long term, collaborative contracts with suppliers D. The ability to “pull” production rather than “push” it from the front end E. All of the above Answer Key: E Question 3 of 8 12.5 Points Which of the following is not a definition of SCM?
Direct materials, direct labor and variable manufacturing overhead costs would ordinarily be included in product costs under variable costing. Fixed manufacturing overhead is not treated as a product cost under this method. Rather, fixed manufacturing overhead is treated as a period cost and is charged against income each period. Absorption costing treats all production costs as product costs, regardless of whether they are variable or fixed. Under absorption costing, a portion of fixed manufacturing overhead is allocated to each unit of product.
According to paragraph 605-50-25 certain sales incentives entitle a customer to receive a reduction in the price of a product or service of a specified amount of a prior purchase price charged to the customer at the point of sale. A vendor shall recognize a liability for those sales incentives at the later of the date at which the associated revenue is recognized by the vendor or the date at which the sales incentive is offered based on the estimated amount of refunds or rebates that will be claimed by customers.
LP will earn extra profit of $28,500 on this order and production done on low peak seasonal. 2. What assumptions did you make in calculating the incremental cost in Question 1? What additional information would be helpful in making these calculations? Assumptions did we make in this calculating the incremental cost in question 1 is plant overhead, administrative and selling expenses are fixed
Explain the accounting procedures for depletion of natural resources. Explain how to report and analyze property, plant, equipment, and natural resources. Describe income tax methods of depreciation. 2, 3, 4, 5, 7 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 1, 2, 3, 4, 8, 10, 11, 12 1, 2, 3, 4, 5, 8, 10, 11, 12 Brief Exercises Exercises Problems 3. 2, 3, 4, 5 4.