The most recent financial statements for Williamson, Inc., are shown here (assuming no income taxes): Income Statement Balance Sheet Sales $ 6,700 Assets $22,050 Debt $ 8,050 Costs 3,850 Equity 14,000 Net income $ 2,850 Total $22,050 Total $22,050 Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year’s sales are projected to be $7,906. What is the external financing needed?
Chapter 07 - The Revenue and Collection Cycle Chapter 07 The Revenue and Collection Cycle Multiple Choice Questions 1. To be recognized, revenues must also be realized or realizable and A. Foreseeable B. Collected C. Earned D. Shipped 2. The SEC requires all of the following for revenue to be recognized except A.
The conservatism principle involves “recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received” (The conservatism principle). Requirement 2 – B Hudson’s wholesale inventories should be reported on the balance sheet at the replacement cost amount. The text indicates that the replacement cost is less than the NRV (or ceiling) and more than the NRV-NP (or floor) making the
Week 2 Discussion Questions DQ#1: How do you define strategic planning? What are some differences between strategic and financial planning? What financial problems might an organization encounter when implementing a strategic plan? I believe strategic planning is the process, which takes place to set organizational goals to meet the expectations of the mission and direction of the organization. Strategic planning focuses on the long-term goals of an organization, therefore it differs from financial planning.
It distinguishes between fixed and variable costs in this way the budget can be adjusted automatically to a particular activity. The flexible budget is an excellent control tool because it is geared towards a range of activities rather than a single level of activity. By using the flexible budget formula, a series of budgets can be developed for various levels of activities. The following steps need to be followed by management in order to build a flexible budget: 1) estimate the range of expected activity for a given period, 2) analyze cost behavior trends, whether fixed, variable, or mixed, 3) separate costs by behavior, that is, breakup mixed costs into variable and fixed, and finally,
Decision Making Accounting (ACC) 561 November 11, 2010 Eddie Mattison, Facilitator Decision Making Budgets and Performance Reports “Budgets…help to coordinate and implement plans. They are the chief devices for disciplining management planning. Without budgets, planning may not get the front and center focus that it usually deserves.” (Horngren at el. 2008, p. 13) Guillermo must be able to operate within his budgets; otherwise he may begin to operate at a profit loss. Creating a budget will allow Guillermo to know the exact amount of money that he has to allocate to specific expenses.
When considering how Small Fries Inc and its other facilities should record the costs associated with OSHA compliance on their financial statements as either capitalized as an asset or charged to expenses. We should consider the types of repairs that will be done. Whether they are ordinary repairs or major and extraordinary repairs that will benefit the companies more than one year or operating cycle. According to ASC 360 -10- 25- 5 Planned Major Maintenance Activities, The use of the accrue-in-advance (accrual) method of accounting for planned major maintenance activities is prohibited in annual and interim financial reporting periods. GAAP defines a company's assets as the things it owns or controls that have measurable future economic
INTEREST ACCRUAL AND THE TIME VALUE OF MONEY* WALTER C. CLIFF" PHILIP J. LEVINE** * TABLE OF CONTENTS Introduction ................................................ I. The Accrual Method as a Distortion of Income ......... A. The Commissioner's Broad Discretion Under Section 446(b) .................................... B. Use of the Accrual Method for Reporting Interest Deductions on Long-Term Obligations Clearly Reflects Income ............................. 1.
The government uses the CAFR along with a budget document to compare the total financial standing to the general purpose annual budget with everything The CAFR shows the total of all financial accounting the basic general purpose budget reports so that these report are not used along with any other miscellaneous uses, such as investment accounts included in government budget. The responsibility is exercised by Harris County Commissioners Court, but not all the financial information of Harris County is not within the scope of Mental Health and Mental Retardation Financial Statement. MHMRA of Harris County, is included as a component unit under the general purpose financial statements of Harris County because of the County’s ability to significantly influence its operations. The definition of the reporting entity is based primarily on the notion of financial accountability. A financially accountable organization makes up a legal entity.
In addition it is considered a non-cash expense since the actual payment could have occurred many years before the expense is calculated. C – Explain the provision for bad debts entry The provision for bad debt takes into account only what is expected to be collected and is not collected and does not include contractual allowance or charity care. Bad debt would include what is expected to be collected (not total charges) less any amount the organization allocates as monies that will never be received even though the payers or patients are contracted or deemed able to pay. The monies organizations allocate that will never be collected is normally generated through a formula based on trended data.