...Case Paper on Pinetree Motel ACC5000 Financial Accounting Submitted to: Professor Fe Violeta G. Baluran Submitted by: Presenting Group 2 Kelvin Go Alice C. Lee Kristian Jewel P. Taiño 17 October 2009 CASE BACKGROUND The Pinetree Motel is owned by Mr. and Mrs. Ilyong Kim and was purchased way back 1998. It is a 20-unit motel and was located near a vacation area that was [popular during summer and winter seasons. The Kims had been longing to have a business of their own – that’s why they ventured in this kind of. The couple felt that they had been successful. Each year saw a growth in revenue from room rentals, their bank balance had also increased. Their customer turnaround had been evident as well, maybe because of their efforts in providing a consistently clean rooms and up-to-date furnishings. Because of the lack of formal training, problems started to arise and this alerted them to management issues and concerns. Though the couple devoted their time in the business, they have hired a part-time help for daily room cleaning tasks. They also lack dining facilities the reason why the vending machines are installed to supplement room rentals; in which the vending machine company provides the servicing and maintenance. Mr. Marcus Carter is a frequent guest in Pinetree Motel became acquainted with the Kims. In the year 2006, Mrs. Kim showed Mr. Carter the current issue of the motel trade journal that contains data for...
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...Chapter 3 BASIC ACCOUNTING CONCEPTS: THE INCOME STATEMENT Changes from Tenth Edition The chapter has been updated. Additional topics include proforma earnings, EBITDA and SEC financial report certification and affirmation requirements for CEO’s and CFO’s. Approach Undoubtedly, the accrual idea is the most difficult of all basic accounting matters for the student to grasp. As a matter of fact, we sometimes say that the proper recognition of revenue and expense is the only important accounting problem. Although this is an exaggeration, it is not far from the truth. The text and cases in this chapter constitute only a beginning in understanding and it is to be expected that students will understand the matter thoroughly only after they have attacked it from several different angles. Sometimes we ask the class “Suppose a company received a lawyer’s bill for $1,000. Explain all the different ways in which this bill could be recorded in the accounts.” The answer is that if the bill relates to services rendered in a prior year (or accounting period) but not recorded in that time, it is nevertheless an expense of the current year; if it represents a charge for a previous year that was recorded in that year, the payment of the bill merely represents a decrease in a liability; if it represents a charge in the current year, it is recorded as an expense; and if it represents a retainer for services to be rendered in the following year it is recorded as an asset, prepaid...
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...Changes from Tenth Edition The chapter has been updated. Additional topics include proforma earnings, EBITDA and SEC financial report certification and affirmation requirements for CEO’s and CFO’s. Approach Undoubtedly, the accrual idea is the most difficult of all basic accounting matters for the student to grasp. As a matter of fact, we sometimes say that the proper recognition of revenue and expense is the only important accounting problem. Although this is an exaggeration, it is not far from the truth. The text and cases in this chapter constitute only a beginning in understanding and it is to be expected that students will understand the matter thoroughly only after they have attacked it from several different angles. Sometimes we ask the class “Suppose a company received a lawyer’s bill for $1,000. Explain all the different ways in which this bill could be recorded in the accounts.” The answer is that if the bill relates to services rendered in a prior year (or accounting period) but not recorded in that time, it is nevertheless an expense of the current year; if it represents a charge for a previous year that was recorded in that year, the payment of the bill merely represents a decrease in a liability; if it represents a charge in the current year, it is recorded as an expense; and if it represents a retainer for services to be rendered in the following year it is recorded as an asset, prepaid expense. It may be desirable to introduce a number of short questions...
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