List the two approaches to examining a firm’s long-term debt-paying ability. Discuss why each of these approaches gives an important view of a firm’s ability to carry debt.View Solution:
List the two approaches to examining a firm s long term debt pay
When can a company capitalize research and development costs? View Solution:
When can a company capitalize research and development costs
The assets of Fonzarelli Corporation are presented (amounts in thousands).FONZARELLI CORPORATIONStatement of Financial Position (Partial)December 31, 2015AssetsCurrent assetsCash€ 100,000Non-controlling interest27,500Trading securities (fair value €30,000) at cost37,000Accounts receivable (less bad debt reserve)75,000Inventory—at lower-of-cost (determined by the first-in, first-out method)-or-net realizable value240,000Total current assets479,500Tangible assetsLand (less accumulated depreciation)80,000Buildings and equipment€800,000Less: Accumulated depreciation250,000550,000Net tangible assets630,000InvestmentsBonds100,000Treasury shares70,000Total investments170,000Other assetsLand held for future factory site19,400Sinking fund975,000Total other assets994,400Total assets€2,273,900Instructions:Indicate the deficiencies, if any, in the foregoing presentation of Fonzarelli Corporation’s assets.
What role does a special purpose entity or variable interest entity serve in achieving off-balance-sheet financing involving the sale of receivables?View Solution:
What role does a special purpose entity or variable interest
Prepare headings for a purchases journal like the one in Exhibit 7A.3. Journalize the June transactions from QS 7-7 that should be recorded in the purchases journal assuming the periodic inventory system is used.View Solution:
Prepare headings for a purchases journal like the one in
The cash account for Brentwood Bike Co. at May 1, 2016, indicated a balance of $32,527. During May, the total cash deposited was $139,121, and checks written totaled $135,890. The bank statement indicated a balance of $43,660 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: A. Checks outstanding totaled $6,625. B. A deposit of $1,888 representing receipts of May 31, had been made too late to appear on the bank statement. C. The bank had collected for Brentwood Bike Co. $5,250 on a note left for collection. The face of the note was $5,000. D. A check for $260 returned with the statement had been incorrectly charged by the bank as $620. E. A check for $410 returned with the statement had been recorded by Brentwood Bike Co. as $140. The check was for the payment of an obligation to Adkins Co. on account. F. Bank service charges for May amounted to $37. G. A check for $1,418 from Jennings Co. was returned by the bank due to insufficient funds. Instructions 1. Prepare a bank reconciliation as of May 31. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.“Deduct:” or “Add:” will automatically appear if it is required. 2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles. 3. If a balance sheet were prepared for Brentwood Bike Co. on May 31, 2016, what amount should be reported as cash?
The following financial data were taken from the annual financial statements of Smith Corporation:Requireda. Based on these data, calculate the following for 2008 and 2009:1. Working capital2. Current ratio3. Acid-test ratio4. Accounts receivable turnover5. Merchandise inventory turnover6. Inventory turnover in daysb. Evaluate the results of your computations in regard to the short-term liquidity of thefirm.
View Solution:
The following financial data were taken from the annual financia
This chapter has described the fund structure in governments. Do you think that it is necessary to display individual funds in a government’s annual report? If so, then do you think it is any less necessary to display individual funds in a not-for-profit’s annual report? On what basis can you justify displaying funds in the annual report of a government but not in that of a not-for-profit entity?View Solution:
This chapter has described the fund structure in governments Do
It has been a hectic year at Abdalla Lodge. In January 20X4, Myesha Kind incorporated Abdalla as a not- for- profit organization. Its mandate is to provide counselling services for troubled youth. During the year, the organization organized a fundraising drive, signed a 10- year lease for office space, and commenced offering services to the public. The organization looks forward to many years of improving the lives of troubled youths in the community. The office space was found in a rundown building in an older area of Smallville. Most of the town’s poorest people live in this area of town. Abdalla took possession of the space on April 1, 20X4, and completed leasehold improvements by June 30, 20X4, at a cost of $ 30,000. On July 2, 20X4, Myesha opened the doors for business. She took on the job of director of the organization at an annual salary of $ 48,000. However, she worked July and August of 20X4 for free. On September 1, 20X4, two social workers were hired to meet the demands of the growing organization. It is now December 20X4. You, CGA, have been asked by Myesha to prepare the financial statements for Abdalla for the 10- month period ending October 31, 20X4. Myesha provided the following schedule of cash receipts and disbursements:Cash receipts Donations from individuals and businesses … $ 60,000Grant from provincial government ………………………………….. 70,000 130,000Cash disbursements Leasehold improvements ………………….. 30,000Furniture and equipment ………………………………………………… 24,000Rent ………………………………………………… …………………………. 10,500Office supplies ……………………………………………………………….. 5,000Wages and benefits ……………………………………………………….. 28,000Other expenses ……………………………………………………………….. 8,500 106,000Cash on hand at October 31, 20X4 …………………………………. $ 24,000Of the $ 60,000 received from individuals and businesses, $ 10,000 was designated for the purchase of furniture and equipment and $ 15,000 was designated for the purpose of hiring a program director in 20X5. The remaining funds were unrestricted. The provincial government agreed to provide an annual grant equal to 70% of all expenses to a maximum of $ 200,000 a year. To maximize the grant received from the provincial government, Myesha wants to record the value of all donated goods and services and to claim the full cost of the leasehold improvements and furniture and equipment in the year when these assets are acquired. The furniture and equipment is expected to have a useful life of five years. Revenue is to be recognized using the deferral method. At the end of October 20X4, $ 3,000 of wages and benefits had been earned but not yet paid for and $ 1,000 was owing for other expenses. RequiredPrepare a statement of operations and a statement of financial position for the 10- month period ended October 31, 20X4. Show supporting calculations. View Solution:
It has been a hectic year at Abdalla Lodge In
CIMA defines management accounting as:“The application of the principles of accounting and financial management to create, protect, preserve and increase value for the _________________ of for-profit and not-for profit enterprises in the public and private sectorsâ€.A. AuditorsB. StakeholdersC. OwnersD. Customers
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