Problem: P22-6, Accounting Change and Error Analysis Course: AC557 Intermediate Accounting III "On December 31, 2010, before the books were closed, the management and accountants of Madrasa Inc. made the following determinations about three depreciable assets." 1. Depreciable asset A was purchased January 2, 2007. It originally cost $540,000 and, for depreciation purposes, the straight-line method was originally chosen. The asset was originally expected to be useful for 10 years and have a zero salvage value.
Category: Finance Value: $9 Status: CLOSED Accepted Answer [pic] Expert: John Mark replied 456 days and 15 hours ago. HI, Thanks XXXXX a not-for-profit business, had revenues of$12 million in 2007. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5million. All revenues were collected in cash during the year and all expenses other than depreciation were paid in cash. 3.
Going private also allow management to restructure. Public companies have govermantal requlations that require management to shift focus from an operational and growth perspective to one of compliance. SOX requirements are stringent. Dollar General’s CEO Cal Turner was fined 1 million dollars personally in 2005 for accounting irregularities and 10 million corporately for reducing pretax inclome. Executives are focused on quarterly returns for public companies and are effected by external earnings reports that can keep managers short sighted.
During 10 years, the investors will reinvest all the cash flows into the company, so maintaining the growth of 7.45% each year. The return on equity used for the valuation is the rate of 7.45% which is the return on PacifiCorp equity on 2005. For the cost of equity, the capital would be invested in MidAmerican if the company did not take the acquisition. Therefore, I consider the rate of return on MidAmerican on 2004 (5.72%) as the cost of equity of PacifiCorp. Dividing the present value of future cash flows by the cost of the investment indicates that every dollar invested buys securities worth $1.18.
3) A company changes from straight-line to an accelerated method of calculating depreciation, which will be similar to the method used for tax purposes. The entry to record this change should include a A. credit to Accumulated Depreciation 4) Presenting consolidated financial statements this year when statements of individual companies were presented last year is an accounting change that should be reported by restating the financial statements of all prior periods presented. 13) If a short-term obligation is excluded from current liabilities because of refinancing, the footnote to the financial statements describing this event should include all of the following information EXCEPT: the number of financing institutions that refused to refinance the debt, if any 14) Stock dividends distributable should be classified on the balance sheet as an item of stockholders' equity. 15) Which of the following items is a current liability? A long-term debt maturing currently, which is to be paid with cash in a sinking fund b.
B. adjustment of an unearned revenue MM-DD-YY | Cash | | | $ 1,500 | | | Unearned Revenue | | $ 1,500 | | Advance collection from client | | | 12-31-YY | Unearned Revenue | | $ 750 | | | Revenue | | | $ 750 | | Adjusting entry for earned portion of prepayment | b. c. Increase total revenue by $750 2) Sally Corporation provided $1,500 of services to Artech Corporation; no billing had been made by December 31. a. D. adjustment to record an accrued revenue 12-31-YY | Accounts Receivable | | $ 1,500 | | | Revenue | | | $ 1,500 | | Adjusting entry to reflect services provided | | b. C. Increase total revenue by $1,500 3) Salaries owed to employees at year-end amounted to $1,000. a. C. adjustment to record an accrued expense 12-31-YY | Salaries Expense | | $ 1,000 | | | Salaries Payable | | | $ 1,000 | | Accrued salaries at end of period | | b. c. Increase total expense by $1,000 4) The Supplies account revealed a balance of $8,800, yet only $3,300 of supplies were actually on hand at the end of the period. a. A. adjustment of a
* ethical behavior of company not positive with product + compensation. Evaluation of financial issue - Profitability (Source:James Hardie 2011, Annual report 2011, James Hardie, viewed 16 June 2012, <http://www.ir.jameshardie.com.au/jh/artable.jsp >) * Location: gross profit of James Hardie from 2005 to 2011 * horizontal axis: year / vertical axis - gross profit in one year * main trends: - gross profit - 2005 - $426.4 million - substantial increase - $550.8 million dollars in 2006 - slower rise - 573 million dollars in 2007 -downward trend – 2007 - gross profit in 2008 $530 million dollars, -
Verizon owns 23.1% of this company and recorded Net Income of 925 million in 2013. When looking at notes to 10k, Verizon’s corporate eliminations policy is “Corporate, eliminations and other includes unallocated corporate expenses, intersegment eliminations recorded in consolidation, the results of other businesses, such as our investments in unconsolidated businesses, pension and other employee benefit related costs, lease financing, as well as other adjustments and gains and losses that are not allocated in assessing segment performance due to their non-operational nature. Although such transactions are excluded from the business segment results, they are included in reported consolidated earnings. Gains and losses that are not individually significant are included in all segment results as these items are included in the chief operating decision maker’s assessment of segment performance” (10K 2013, Edgar). In the reconciliation of total reportable segments, the total corporate eliminations were $912 million.
Flood damage losses to property where flooding is rare (not restructuring charges, losses from inventory obsolesce or impairment losses on intangible assets). - The gain or loss from disposal of a component of a business is shown as a (an): part of discontinued operations. - Clair, Inc. reports net income of $700,000. It declares and pays total dividends of $100,000 for the year, one-half of which relate to the preferred shares. The weighted-average number of common shares outstanding during the year is 200,000 shares, and the weighted-average number of preferred shares outstanding during the year is 10,000 shares.