forms cash flow statement, balance sheet, retained earnings, and income statement. The information contained in the reports provides a detailed picture to the condition of any business. A business evaluation containing all four documents is essential to form an accurate forecast in past and future objectives. Each document allows creditors, investors, and managers’ ability to further understand the financial workings of an individual company. Balance Sheet A balance sheet shows the dollar
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Worksheet for You Decide Questions: Q1: Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods, Inc. Solution: Since Smackey Dog Foods, Inc (“Smackey”) is not a publicly traded company, it would not be subject to SEC regulations and therefore would not need to file the required reports under the securities acts. It would however have indirect impact on the audit of Smackey due to the SEC’s influence in setting generally accepted accounting principles (“GAAP”), the
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Smith & Smith, LLC 456 West Ave. # 32 Anytown, AZ 12345 January 13, 2013 Apollo Shoes, Inc. 123 Main St. Anytown, AZ 12345 Dear Apollo Shoes, Inc. Management: It is with great pleasure that I introduce myself to you and say how pleased we are that you have chosen our firm for your auditing and assurance needs. My name is Paula Smith, and I am the Senior Auditor, in charge of your account. I will be working with you throughout the process of our engagement. I would also like
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FINANCIAL ACCOUNTING Fall 2012 Yvonne Hinson Work: 704-365-4710 Home: 704-765-9782 Cell: 336-407-0161 Email: hinsonyl@wfu.edu Course Description and Requirements The purpose of this course is to introduce you to the concepts, vocabulary and uses of Financial Accounting. As we proceed, we will adopt several different points of view. ← We will take the perspective of preparers of financial information. Preparers include accountants who work for companies that must produce
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CHAPTER 4 ------------------------------------------------- ANALYSIS OF FINANCIAL STATEMENTS 1. A firm wants to strengthen its financial position. Which of the following actions would increase its quick ratio? a. Offer price reductions along with generous credit terms that would (1) enable the firm to sell some of its excess inventory and (2) lead to an increase in accounts receivable. b. Issue new common stock and use the proceeds to increase inventories. c. Speed up the collection
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Fundamental Accounting Principles, Thirteenth Canadian Edition Concept Review Questions 1. Writing off a bad debt against the allowance does not reduce the estimated realizable value of a company’s accounts receivable because the write-off reduces the balances of both Accounts Receivable and Allowance for Doubtful Accounts by equal amounts so the difference between the two accounts remains the
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CHAPTER 20 Accounting for Pensions and Postretirement Benefits SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 20-1 Service cost $ 333,000,000 Interest on PBO 712,000,000 Return on plan assets (566,000,000) Amortization of prior service cost 13,000,000 Amortization of net loss 145,000,000 Pension expense $ 637,000,000 BRIEF EXERCISE 20-2 Ending plan assets $ 2,000,000 Beginning plan assets 1,780,000 Increase in plan assets 220,000 Deduct: Contributions
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Accounting Standards Board (FASB). 4. Outline the steps in the accounting cycle, and define double-entry bookkeeping and the accounting equation. 5. Explain the functions and major components of the four principal financial statements: the balance sheet, the income statement, the statement of owner’s equity, and the statement of cash flows. 6. Discuss how financial ratios are used to analyze a company’s financial strengths and weaknesses. 7. Describe the role of budges in a business
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Accounting Week 1 homework • Chapter 1: Problem 1-1 a. Calculate the tax disadvantage to organize a U.S. business today as a corporation, as compared to a partnership, under the following conditions. Assume that all earnings will be paid out in cash dividends. Operating income (operating profit before taxes) will be $500,000 per year under either organizational form. The tax rate on corporate profits is 35% (Tc = 0.35), the average personal tax rate for the partners is also 35% (Tc=0.35), and
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calculated as the total lease payments (cash, incorporating any discounts or deposits) under the contract, spread evenly over the lease term. * Lease payment typically covers both interest and principal payments (just like a mortgage) * Balance sheet * Recognise an asset item (for pre-payments) or liability item (accrual for lease) due to the timing differences between cash payments and lease expense. Accounting in Operating Leases as Lessor * Continue to hold the asset in its
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