1. (TCO 3) At the end of the period it is necessary to close all temporary accounts. (1) Explain why this process is required (10 points) and (2) provide an example of the closing of an expense account, Income Tax Expense in the form of a journal entry (10 points). (Points : 20) The process is required in order to zero out the income statement accounts for the next period. An example of closing the income tax expense account would be to credit income tax expense and debit income summary. 2
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Week Five Problems and Exercises ACC/290 Principles of Accounting I BE-5-1 Presented here are the components in Korinek Company’s income statement. Determine the missing amounts. |Sales Revenue | |Cost of Goods | | | | |Sold | | |Dec. 15
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of profit of a company? How are the profits appropriated ? How will the profits to be appropriated, affected, if the company issues debentures, instead of equity shares to finance its activities ? Discuss how? Q5. Distinguish between: a. FIFO and LIFO methods of Inventory valuation. b. Rights Shares and Bonus Shares c. Direct Material Price Variance and Direct Material Usage Variance d. Imputed Costs and Opportunity Costs. Q6. What do you understand by Break-even analysis ? Discuss the
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determination of specific amounts as well as how these amounts are recognized in financial statements and within the notes. One of these instances occurs in the measurement of inventory. Unlike GAAP which accepts the FIFO, LIFO, and weighted-average methods, IFRS does not accept LIFO. Also, when inventory is recorded on the balance sheet, IFRS requires that it be reported at the lower of historical cost or Net Realizable Value. GAAP, on the other hand, requires inventory to be reported at the lower
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1. List and describe the four basic financial statements included in a corporate annual report. The balance sheet shows the financial position—assets, liabilities, and stockholders' equity—of the firm on a particular date, such as the end of a quarter or a year. The income statement presents the results of operations—revenues, expenses, net profit or loss and net profit or loss per share—for the accounting period. The statement of shareholders' equity reconciles the beginning and ending balances
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Analyzing Pro Forma Statements Andre' D. Singleton FIN/571 March 17, 2016 Gregory Willis XYZ Company The selected company is a Bread and Pastry store which goal is to increase the company’s market share by implementing technology through telephones, text-orders, and emails. These processes will help in increasing interactivity. The financial performance of the company for the past years is as follows: Financial Performance With 100 employees manufacturing 6000 output units 5 day a week
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received cash payment and can use historical experience to determine FV 2. OR record at the carrying amount of the asset surrendered | Inventory | 1. FIFO, weighted average cost 2. Lower of cost or net realizable value (NRV = selling price – completion cost – selling cost) 3. Write down, write up | 1. FIFO, weighted average cost, LIFO 2. Lower of cost or market (market = replacement cost, NRV – normal profit margin < market < NRV) 3. Write down, no write up | PPE | 1. Cost
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common size statements and financial ratios to determine if the difference is valid. These decisions include Bicycles Inc’s choice to use a bad debt allowance, LIFO, straight line depreciation for building, accelerated depreciation for equipment, capital lease. Two-Wheelers Inc’s decided to write off bad debt as they become aware of them, FIFO, straight line depreciation for the building and equipment and not negotiate a capital lease. All of these decisions had direct impacts on their financial statements
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MULTIPLE CHOICE 1. The balance sheet reports: |a. |the assets, liabilities, gains, and losses for a period of time | |b. |the changes in assets, liabilities, and equity for a period of time | |c. |the assets, expenses, and liabilities as of a certain date | |d. |the probable future benefits, probable future sacrifices
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Reed’s Clothier Case Study FIN/370 November 02, 2011 The Reed’s Clothier Case Study Reed Clothier Case is a family owned and operated business that was established in 1934. Jim Reed, who is the founder of the establishment, is going through some financial difficulties. The first Virginia National Bank would not extend their line of credit, they also notified Jim on an overdue payment of $130,000, which needed to be paid within a month. Reed had made a choice to safe the business
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