Limited (DCDL) has elected to report under the constraints of IFRS, although they could have elected ASPE as their reporting standards, since they are a private company. DCDL is a company with 40 dry cleaning stores in southern Ontario. DCDL has revenues of approximately $7 Million. DCDL has arranged for a $2,000,000 loan for the purchase of some new equipment for the business. The covenants of the new loan are as follows: * Maximum 2-to-1 debt-to-equity ratio * Minimum cash balance of $500
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current revenue recognition policy (ies)? 2. Using the limited information in the case, do the industry characteristics or the current revenue recognition policies encourage manipulation of revenues? If so, how could Wareham manipulate its earnings? 3. For each of the specific contracts described in the case, please describe the best revenue recognition policy considering the criteria in SAB 101. (Onsetcom, Cataumet, Sandham, XLSemi, Technical Devices and Ashaban) TechMall.com’s Revenues Note
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information to access the amounts, timing, and uncertainty of cash inflows and outflows. 3. Provide information about resources (assets) and claims to resources (liabilities). Recognition: An item should be recognized in the financial statements when it meets all 4 of the following criteria: 1. Definition: meets the definition of an element
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The Accounting Cycle and Accrual Accounting Concepts Accounting Information System | Journal, Ledger Accounts, and Trial Balance | Cash-Basis Versus Accrual-Basis Accounting | Accrual Accounting Concepts | Adjusting Entries, Adjusted Trial Balance, and Closing | Self-Assessment After learning about the income statement and the balance sheet in Chapters 1 and 2, we are now being introduced to the accounting cycle and certain underlying accounting concepts that influence the contents of those two
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Case 04-7: Lighthouse I. Summary The Lighthouse Company is dedicated to offer services to marine or shipping companies. Their services are based on the tracking and location of the boats of their clients. In order to offer the service, Lighthouse must install an equipment of tracking boats which will have a cost of sale of $10.000,00 dollars, no reimbursable and a tracking system with a monthly cost of sale of $300,00 dollars. This way their clients will continuously receive the data on the
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Clayton Construction Company Since the outcome of the contract can be reliably estimated, the percentage-ofcompletion method is to be applied for a fixed-price contract (AASB 111). The cost basis is used as per company policy. Schedule of profit recognition 2015 2016 2017 $ $ $ (a) Total contract price 4 500 000 4 500 000 4 500 000 (b) Costs incurred for year 600 000 1 750 000 2 400 000 (c) Costs to date 600 000 2 350 000 4 750 000 (d) Estimated costs to complete contract 2 900 000 2
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Having full costs enables managers of these entities to have appropriate data for determining user charges. An Accrual Accounting system, depreciation is a method of allocating the expense of the purchase of a long-term asset over the life of the asset. Conversely, under a cash accounting system, you would recognize expenses on the purchase of long-term assets as you pay cash for them. Under an accrual system, you first capitalize the asset on your balance sheet by debiting your asset (such as equipment
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pretax financial income. T 3. Taxable amounts. T 4. Deferred tax liability. F 5. Deductible amounts. T 6. Deferred tax asset. F 7. Need for valuation allowance account. T 8. Positive and negative evidence. F 9. Computation of income tax expense. T 10. Taxable temporary differences. F 11. Taxable temporary difference examples. T 12. Permanent differences. T 13. Applying tax rates to temporary differences. F 14. Change in tax rates. F 15. Accounting for a loss carryback. T 16
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© Path Finance, www. path2finance.com CFA® Level 1 2011 (Also applicable for June 2012) Financial Reporting Analysis (R 22 to R 29) Includes material presented in the video lectures1 © Path Finance, www. path2finance.com Table of Contents 1.1 Financial Statements Analysis (R 22) ..........................................................................................................2 1.1.1 Introduction .....................................................................................
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the financial statements to determine P&G’s revenue recognition policy and the impact of trade promotions on their financial statements; to determine some specific examples of where they have chosen to use historical cost versus fair value; to determine their accounting policy as it pertains to advertising, and finally to conclude whether P&G’s accounting principles are consistent with those of the previous years’ statements. Revenue Recognition Policy According to P&G’s notes to consolidated
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