C. Define profit. Profit is a financial gain that a company receives when the revenue of products and services are more than the cost to provide the service and / or product. 1. Explain the concept of profit
Case 13-8: Accounting for a Loss Contingency for a Verdict Overturned on Appeal 1. According to the case, it shows that management of M determined that a loss would be “probable” and the estimate range would be $15 million to $20 million. However, they determined $17 million would be the “most likely” amount of loss. According to ASC 450-20-25-1, “When a loss contingency exists, the likelihood that the future event or events will confirm the loss or impairment of an asset or the incurrence of a liability can range from probable to remote. As indicated in the definition of contingency, the term loss is used for convenience to include many charges against income that are commonly referred to as expenses and others that are commonly referred to as losses.
-When should the milestone payments received to date be recognized as revenues? -What are the deliverables for the arrangement under IFRS? -When would the milestone payments recognized under International Financial Reporting Standards (IFRS)? Alternatives: - Recognize revenue as cash is received. - Recognize revenue at the inception of the contract - Recognize revenue at the termination of the contract - Recognize revenue as the different versions are launched - allocate the contract consideration awards on a pro-rata basis to the revenue received
| | | present value of future lease payments as an asset and also showing this same amount as an offsetting liability. | | | undiscounted sum of future lease payments as an asset and as an offsetting liability. | | | undiscounted sum of future lease payments, less the residual value, as an asset and as an offsetting liability. | 8 points Question 3 Which of the following statements is most CORRECT? Answer | | If new debt is used to refund old debt, the correct discount rate to use in the refunding analysis is the before-tax cost of new debt.
Capital Budgeting Measurement Criteria U05a1 Carla Hagood 1. Describe the Net Present Value (NPV) method for determining a capital budgeting project's desirability. What is the acceptance benchmark when using NPV? The NPV determines the monetary increase that can be expected from an investment. It will tell if the return will be above or below the needed amount to complete a project.
The present value of the minimum lease payments plus the present value of the unguaranteed residual value. 45. For a sales-type lease, a. the sales price includes the present value of the unguaranteed residual value. b. the present value of the guaranteed residual value is deducted to determine the cost of goods sold. c. the gross profit will be the same whether the residual value is guaranteed or unguaranteed.
| Lessee Inc. | Memo Date: | March 28, 2015 | To: | CFO of Lessee Inc. (“Lessee”) | From: | Sergei Chunkovsky | cc: | Dr. Walters | Re: | Recommendations for Lessee’s lease agreement with Lessor Inc. | | | Per your request, CS consulting reviewed your lease agreement with Lessor Inc. (“Lessor”). We determined the lease as a capital lease. In forming our opinion, we relied on the following guidance: I. Financial Accounting Standard Board (FASB) Accounting Standards Codification (ASC) Topic 840, Leases, II. Research Report of Federal Accounting Standards Advisory Board, October 2003.
2. Which of the following statements about valuing a firm using the APV approach is most CORRECT? a. The value of operations is calculated by discounting the horizon value, the tax shields, and the free cash flows at the cost of equity. b.
If the marginal revenue is greater than marginal cost this would be when a profit maximizing firm would need to increase production until marginal revenue is equal to marginal cost. However, if the opposite situation exist were the firm finds that the marginal revenue
. . 14 Part IV Total Losses Allowed 15 16 0 15000 Add the income, if any, on lines 1a and 3a and enter the total . . .