more likely to manipulate production but make smaller abnormal inventory changes than companies with low fixed-costs ratios; ii. LIFO firms are less likely than other companies to manage earnings by using the production lever (i.e. shifting fixed costs between COGS and inventory) because they may also manage earnings by liquidating LIFO layers and releasing the LIFO reserve. Before we begin our analysis, we put together a brief rundown of the essential concepts the article’s authors go through
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Direct labor (bottling charge) 3. How would you calculate Compass Box’s cost of goods sold (i.e., would you use FIFO, LIFO, average cost, or some other method)? What are the trade-offs across the different methods? -It would be necessary to calculate by FIFO, because to the initial purchase price it is necessary to add all the extra costs incurred during the 12 years, if LIFO or average cost is done then these costs will be understated. 4. The costs in Exhibit 3a demonstrate significant
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|[pic] | |ASSIGNMENT COVER SHEET | | | |Electronic or manual submission | | | | | |UNIT
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Per Unit $1,500 1,800 5,000 5,000 2,000 5,000 5,000 2,200 Total $90,000 216,000 400,000 250,000 200,000 300,000 150,000 220,000 1. Record the inventory, purchases and cost of goods sold in a Perpetual Inventory record using the FIFO method. Date 3-Mar Quantity Purchases Unit Cost Total Cost 8-Mar 120 1,800 216,000 Quantity Cost of Goods Sold Unit Cost Total Cost Quantity 60 Inventory On Hand Unit Cost Total Cost 1,500 90,000 60 120
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The choice of inventory accounting methods, specifically for the case of FIFO and LIFO, has developed into a decision, which includes varying consequences and comes with specific implications and benefits, such as communicating private information with FIFO (Hughes, and Schwartz, 1988, p.42) or tax benefits for the choice of LIFO (Morse and Richardson, 1983, p.125). Every firm and manager has to face the decision of which accounting method to choose, and has to include several aspects into their
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Return on equity =Profit after taxShareholders equity×100 Return on capital employed = PBITCapital Employed×100 Gross profit=Sales-Cost of Goods sold Sales×100 net Margin= NET INCOME(PBIT) SALES×100 Asset turnover=Sales RevenueCapital employed Inventory turnover=Average inventories Cost of sales×365 Working capital ratio= Current AssetsCurrent Liabilities Activity Ratios Inventory Turnover: Cost of goods soldAverage turnover Debtor days:Trade receivablesrevenue×365 Creditor
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AN OVERVIW OF CREATIVE ACCOUNTING AND WINDOW DRESSING Introduction: Every organization is expected to operate within the confinement of best practices or core competence at least, which has tendency of leading them to distinctive competence or exceptional practice. Since business operations center basically on finance, firms therefore take the accounting records of their organizations very serious as it determines their stay in industry or extinction from the market (business operations). It is
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | HND Hospitality Management Unit code: R/601/1789 Edexcel Assessment Brief Front Sheet Assessor Name: | Internal Verifier Name: Anne Williams | Date Issued: /2014 | Hand in Date: 27/04/2014 by midnight | Qualification:BTEC Higher National Diploma in Business | Unit Title: Finance in the Hospitality Industry | INTRODUCTION A business
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Absorption: the sharing out of the costs of a cost center amongst the products which use the cost center. Account: a record in a double entry system that is kept for each (or each class) of asset, liability, revenue and expense. Accounting equation: an expression of the equivalence, in total, of assets = liabilities + equity. Accounting period: that time period, typically one year, to which financial statements are related. Accounting policies: the specific accounting bases selected and followed
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Business Information Management Academy of Finance BIM Exam Review February 2012 Exam Structure Total 2 hours 15 minutes Total 3 questions to answer 2 questions of a “calculative” nature 1 question of a “theoretical” nature, where you will have to explain something in words Closed-book (no textbooks, notes, computers, or cell phones allowed) You will need a non-programmable calculator Academy of Finance MBA Program - Business Information Management 2 Study material Lecture
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