Balance Sheet And Accounting Standards

Balance Sheet and Accounting Standards
ANSWER SHEET STUDENT'S SURNAME........................................... OTHER NAMES......................................................... STUDENT
NUMBER............................................... TUTORIAL DAY & TIME.................................... TUTOR'S FULL NAME......................................... Test 1
– Version 2 Session 2, 2012 Course Code: ACCG 224 Course Name: INTERMEDIATE FINANCIAL ACCOUNTING Time allowed: 55 minutes plus
5 minutes reading time Total No. of questions: Three Questions Instructions 1. You must answer ALL questions in the test booklet. No separate booklet
will be provided to answer the questions. 2. This is a closed–book test. You are not allowed to refer to any text material for the... Show more content on
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The qualitative characteristics for financial reporting contained in the Conceptual Framework are: a. b. c.* 9. a contingent item depending on another
event occurs at some time in the future a future benefits controlled by an entity as the result of a future transaction a future benefit controlled by an
entity as the result of past transactions or events an item that has a physical existence and can be converted into cash. a voluntary change to improve
the relevance of information presented a change due to the adoption of a new accounting standard a change due to the adoption of a new
interpretation all of the above. A company's workforce went on strike for an indefinite period commencing on 5 August 20X1. The strike was
expected to cause severe financial conditions for the company. The financial statements for the year ended 30 June 20X1 were expected to be
completed by 7 August 20X1. In accordance with AASB 110 Events after the Reporting Date, the appropriate treatment regarding the strike is: a.* b. c.
d. disclosure as a note to the financial statements, as it is a non–adjusting event; disclosure as a note to the financial statements, as it is an adjusting
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Balance Sheet and Current Liabilities
Ch8 Student: ___________________________________________________________________________ 1. Delta, Northwest, and United Airlines
have all, at one time, filed for bankruptcy. True 2. In a classified balance sheet, we categorize all liabilities as current. True 3. False A line of credit
is an informal agreement that permits a company to borrow up to a prearranged limit without having to follow formal loan procedures and
paperwork. True 9. False We record interest expense in the period in which we pay it, rather than in the period we incur it. True 8. False Interest is
stated in terms of a percentage rate to be applied to the face value of the loan. True 7. False When a company borrows cash from a bank promising to
repay the... Show more content on Helpwriting.net ...
True False 30. Regarding a contingent liability, when no amount within a range of potential losses appears more likely than others, we record the
maximum amount in the range. True False 31. If the likelihood of a loss is reasonably possible rather than probable, we record no entry, but make
full disclosure in a footnote to the financial statements to describe the contingency. True False 32. If the likelihood of loss is remote, disclosure
usually is not required. True False 33. A contingent liability is recorded only if a loss is at least reasonably possible and the amount can be
reasonably estimated. True False 34. The balance in the Warranty Liability account is always equal to Warranty Expense. True False 35. A gain
contingency is an existing uncertain situation that might result in a gain, which often is the flip side of loss contingencies. True False 36. We record
gain contingencies when the gain is probable and can be reasonably estimated. True False 37. A company is said to be liquid if it has sufficient cash
to pay currently maturing debts. True False 38. The current ratio is calculated by dividing current liabilities by current assets. True False 39. The
acid–test ratio, or quick ratio, is similar to the current ratio but is based on a more conservative measure of current assets available to pay current
liabilities. True False 40. Quick assets include only cash, short–term investments, and accounts

What Is Balance Sheet And Its Legal Form
Producing financial accounting statement is very crucial for business because it should adequately provide a picture of the financial performance of a
business. To concern this issue businesses produce financial statements on regular basis adhering to one common standard. On of these documents is
the statement of financial position, also known as a balance sheet. It basically shows business's assets or resources that it holds against its obligations
or claims to other parties (McLaney and Atrill, 2014). Balance sheet analysis is useful for investors to verify the profitability of investment for a
business. Analysis can warn of potential problems and, if done accurately determine what the business really "worth". The aim of this essay is to ...
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If the information listed in the document matches this formula than the company is liquid, i.e. it can pay debts timely. Each of the three sections has
several accounts within it to give an investor idea about what the company owns and owes. Total assets on the balance sheet are grouped into two
categories: current and non–current, referring to the time period that they are held. All assets should be measured in monetary terms and controlled by
the business. Also assets are divided into tangible (machinery, plant, cars) and intangible assets (patent, brand). Equities and liabilities, which constitute
claims, should balance the assets (Accountingtools.com, 2015). It is called the principle of double entry: for example, cash balance might decrease by
the amount of a purchase but capital will increase by the same amount. Liabilities are also classified into current and non–current to indicate the amount
of obligations that must be shortly met and long–term raised finance. Figures of liabilities and capital show how much finance the owners invest and
how much is contributed by the outside lenders. Potential investors can derive a lot of useful relationships from the balance sheet figures, especially if
comparison is made over time – in dynamics. Businesses usually prepare a statement of financial position on the last day of its annual reporting
period. In the UK companies are free to choose this period and it is

Balance Sheet : Financial Position
Balance Sheet: The balance sheet is also referred to as Statement of Financial Position. The Balance sheet at a particular point in time reports a
company's financial position. The balance sheet has both right and left sides. The left–hand side of the balance sheet takes the company's assets into
consideration because the assets are what they use in generating their income. The right–hand side, however, has the company's liability and the
stockholder's equity. In a nutshell, a balance sheet indicates what is owned and owed by a company. According to Parrino and Kidwell (2012), "the
balance sheet identity can thus be stated as follows: Total assets = Total liabilities + Total stockholder's equity and, Total stockholder's equity = Total
assets – Total liabilities
Income Statement: The income statement makes a summary of the revenue, expenses, and the profitability of a company over a period of time.
Parrino and Kidwell (2012) expressed the basic equation for income statement as follows: Net income = Revenues – Expenses
Cash Flow Statement: The cash flow statement shows a company's cash receipts and also cash payments for a period of time. It is pertinent to know
and understand the use of cash and also the sources of cash in any company. The cash flow statement is derived by taking a look at the company's net
income during a period of time, and also at changes in balance sheet from the beginning of the period to the end (Parrino & Kidwell, 2012).
It is important for

Balance Sheet and Net Sales
PROBLEMS
1. Table 3.3 shows the December 31, 2009 pro– forma balance sheet and income statements for R& E Supplies, Inc. The pro– forma balance sheet
shows that R& E Supplies will need external funding from the bank of $ 1.4 million. However, they show $ 1.27 million in cash and short– term
securities. Why are they going to the bank when they have most of the required amount in their cash account?
2. Pro forma financial statements, by definition, are predictions of a company's financial statements at a future point in time. So why is it important to
analyze the historical performance of the company before constructing pro forma financial statements?
3. Suppose you constructed a pro forma balance sheet for a company and the ... Show more content on Helpwriting.net ...
Continuing problem 8, Pepperton's annual income statement and balance sheet for December 31, 2008 appear below. Additional in–formation about
the company's accounting methods and the treasurer's expectations for the first quarter of 2009 appear in the footnotes.
Pepperton Annual
Income Statement
December 31, 2008 ($ thousands)
Net sales $6,000 Cost of goods sold1 3,900
Gross profits 2,100 Selling and administrative expenses2 1,620 Interest expense 90 Depreciation3 90 Net profit before tax300 Tax (33%) 99 Net profit
after tax $ 201
Balance Sheet
December 31, 2008 ($ thousands)
Assets

Cash $300 Accounts receivable 960 Inventory 1,800 Total current assets $3,060
Gross fixed assets900 Accumulated depreciation 150 Net fixed assets 750 Total assets $3,810
Liabilities
Bank loan $0 Accounts payable

The Income Statement And The Balance Sheet
(Introduction)
Throughout the entirety of the paper I will discuss the purposes of the income statement and the balance sheet; while also identifying the major types of
expenses shown on the income statement, and listing major types of assets inside the typical balance sheet. I will also discuss the three different
accounts that comprise the owner's equity on a corporate balance sheet and the three categories of ratios that a business may use in an analysis of its
financial statements. Lastly I will explain a statement of cash flows and describe the three standard sections contained in cash flow statements. Since I
will be discussing multiple categories, I want to clearly state each one by dividing them into separate sections. Each topic holds dominant relevance to
finance and the ability to fully understand a business by comprehending how they work. Having the ability to understand the data projected from a
business, is the bone structure for seeing how it grows or regresses. To aid in this understanding I would like to first start off with theincome statement.
Income Statement For businesses to have an overview of what direction their company is going, whether it be profiting or declining, they will conduct
a quarterly or yearly income statement. An income statement "reports the earnings and expenses incurred over a certain time period" (Melicher &
Norton, 2014, p.357). There are different types of expenses listed inside the income statement that give businesses

Balance Sheet and Points
1. A NSF check should appear in which section of the bank reconciliation? (Points : 2) Addition to the balance per books. Deduction from the balance
per bank. Addition to the balance per bank. Deduction from the balance per books.|
2. A consequence of separation of duties is that (Points : 2) theft by employees becomes impossible. operations become extremely inefficient because
of constant training of employees. more employees will need to be bonded. theft is still possible when several employees are involved.|
3. Which of the following is not included in the cash disbursements section of a cash budget? (Points : 2) Payments for materials. Payments ... Show
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Creates a claim against the maker for the amount of principal only. Is one that is not paid in full within 10 days of maturity.|
14. The following information is related to December 31, 2011 balances.
During 2012 sales on account were $145,000 and collections on account were $86,000. Also, during 2012 the company wrote off $8,000 in
uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that bad debts should be estimated at $54,000. The
change in the cash realizable value from the balance at 12/31/11 to 12/31/12 was (Points : 2) $50,000 increase. $59,000 increase. $42,000 increase.
$51,000 increase.|
15. If a company sells its accounts receivables to a factor (Points : 2) the seller pays a commission to the factor. the factor pays a commission to the
seller. there is a gain on the sale of the receivables. the seller defers recognition of sales revenue until the account is collected.|
16. The face value of a note refers to the amount (Points : 2) that can be received if sold to a factor. borrowed plus interest received at maturity from
the maker. at which the note receivable is recorded. remaining after a service charge has been deducted.|
17. Net credit sales for the month are $900,000. The accounts receivable balance is $180,000. The allowance is calculated as 5% of the receivables
balance

Balance Sheet and Mr. Wiles
Background:
Miniscribe was founded in the 1980s when the personal computer was on the rise. It had great potential during this period and large growth capacity.
During the first years the company grew fast and furious. By 1983 it has outgrown its ability to remain private and needed the public investment to
continue to grow its operations and gain greater equity. In 1983 the company went public for $11.50 a share. As soon as it went public, new entrants
into the market and the decline in consumer demand for personal computers had caused the market to decline. Miniscribe was on the verge of going
down with many other companies that could not make it through the economic slump. During 1985 an investment banker, Hambrecht and ... Show more
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Inventory becomes obsolete quickly thus having inventory that cannot be sold. Inventory could be overstated also if it has become impaired. Increase
in property plant and equipment for a growing company is normal but for one that should be past it rapid growth it may not be a good idea. Inventory
turnover is decreasing over time confirming inventory is becoming harder to sell or they are producing too much in a market that is not purchasing it
quickly.
Property, Plant and Equipment in a growing firm is expected to be increasing. Property plant in equipment is increasing but the turnover or the rate at
which the assets are being used are decreasing.
Accounts payable is increasing every year with a substantial growth in 1988 which may be due to a large amount of unpaid balances that will
reduce assets. Accrued expenses increased dramatically in 1988. The long term debt was manageable in 1985 and 1986 but in 1987 quadruples.
Being leveraged is good to some extent such as in 1985 and 1986 but in 1987 and 1988 it becomes being too leveraged.
In 1987 and 1988 the long term debt increased dramatically possibly due to increased loans to manage cash flows. See Capital Structure and Solvency
graph and ratios below. Total debt to equityLong–term debt to equity
19851.050.52
19861.060.36
19871.700.97
19882.150.69

The Income Statement
The Income Statement prior to

Balance Sheet and Value
Learning Goal 6:
Explain the relationships among financial decisions, return, risk, and the firm's value.
1)
Any action taken by the financial manager that increases risk will also increase the required return. True or False 2)
In common stock valuation, any action taken by the financial manager that increases risk will cause an increase the required return. True or False 3)
In common stock valuation, any action taken by the financial manager that increases risk will cause an increase in value. True or False 4)
An action on the part of a firm that increases the level of expected cash flows without a corresponding increase in risk should reduce share value; An
action that reduces the level of expected cash flows without a ... Show more content on Helpwriting.net ...
True or False 6)
The book value per share of common stock is the amount per share of common stock that would be received if all of the firm's assets were sold for
their accounting value and the proceeds remaining were divided among common stockholders. True or False 7)
________ is the value of the firm's ownership in the event that all assets are sold for their exact accounting value and the proceeds remaining after
paying all liabilities (including preferred stock) are divided among common stockholders. A)
Liquidation value B)
Book value C)
The P/E multiple D)
The present value of the common stock 8)
________ is the actual amount each common stockholder would expect to receive if the firm's assets are sold, creditors and preferred stockholders are
repaid, and any remaining money is divided among the common stockholders. A)
Book value C)
The P/E multiple D)
The present value of the dividends 9)
________ is a guide to the firm's value if it is assumed that investors value the earnings of a given firm in the same way they do the average firm in the
industry. A)

Book value C)
The P/E multiple D)
The

Balance Sheet and Customer Segments
What is DLJdirect's financial situation?
Exhibit 16 of the document showed DLJdirect's income statement from 1994–1999 (in millions). Exhibit 17 showed DLJdirect key financial and
operating performance. The revenue increased steadily from 1994 to 1997. The revenue increase $50 million in 1998 which is equivalent to 43%
increase. In 1999 the revenue increased about $44 million. The income was stable prior to 1997 when the company experienced a loss and able to
recovered the next year in 1998. In 1999, the company reached the highest income because of the huge commission increase in that year. Overall, the
company is making good progress over the years with steady increment of commissions, total trades, average daily trades, total ... Show more content
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PCC would be the last segment. Although they have an excess amount of average balances, they do not prefer to trade online which makes them has the
least profit potential.
Should DLJdirect target the Get Rich Fast (day trader) segment? Why?
Since this segment traded more frequently than others, they value DLJdirect fast and reliable service that the company could offer. DLJdirect could
provide the services that GRF segment sought which are low fees, transaction confidence and site performance. The company could attempt to target
this segment but they should not spend a huge amount of money for this customer acquisition. Based on exhibit 10 in the document, it showed that the
size of this market segment is reducing as the years go by. When compared to high–end customers, the company needs to assign a higher discount rate
to this segment because they swing the health of the stock market. Another problem is that this segment consists of less affluent traders. Therefore, it is
advisable for them not to go into this market because the company could not build a long–term profitability in this segment.
In your opinion, are there other customer segments that DLJdirect should target? Why?
In my opinion, DLJdirect should not target other customer segments besides AA and GRF. The reason is because the company has been doing well in
AA segment which is proven by the company good financial standing.

Business: Balance Sheet and Cash
BACC 100 Assignment # 1 1. Jellybean Company reported equity of $32,000 on its December 31, 2014 balance sheet. The following information
is available for the year ended December 31, 2015: Revenues $73,000 Expenses 59,000 Liabilities 11,000 What are the total assets of Jellybean
Company at December 31, 2015? A) $14,000. B) $25,000. C) $35,000. D) $46,000. E) $57,000. 2. At the end of its first year of operations, Matlocke
Company has total assets of $2,000,000 and total liabilities of $1,200,000. The owner originally invested $200,000 in the business, but has not made
any further investments or taken any withdrawals. What is the first year 's net income for Matlocke Company? A) $ 600,000. B) $... Show more content
(2) Received $1,500 cash from Barbara Hanson, the owner of the business. (3) Received $800 from a customer in partial payment of his account
receivable which arose as a result of sales during June. (4) Rendered photography services to a customer on credit, $500. (5) Borrowed $2,500
from the bank by signing a promissory note. (6) Received $1,000 from a customer in payment for services to be rendered next year. How much
revenue was earned in July? A) $1,200. B) $2,000. C) $3,000. D) $5,500. E) $7,000. 13. Janfer Book Store purchased a new automobile that cost
$10,000, made a down payment of $3,000, and signed a note payable for the balance. The entry to record this transaction is: A) Cash 3,000 Note
Payable 7,000 Automobile 10,000 B) Cash 3,000 Automobile 3,000 C) Automobile 10,000 Cash 3,000 Janfer, Capital 7,000 D) Automobile 3,000
Cash 3,000 E) Automobile 10,000 Notes Payable 7,000 Cash 3,000 14. Aimes opened a new business by investing the following assets: cash, $4,000;
land, $20,000; building, $80,000. Also, the business will assume responsibility for a note payable of $32,000. Aimes signed the note as part of his
payment for the land and building. Which journal entry should be used on the books of the new business to record the investment by Aimes? A) Assets
104,000 Aimes, Capital 104,000 B) Assets

Balance Sheet and Cookie Creations
Continuing Cookie Chronicle
CCC1Natalie Koebel spent much of her childhood learning the art of cookie–making from her grandmother. They passed many happy hours mastering
every type of cookie imaginable and later creating new recipes that were both healthy and delicious. Now at the start of her second year in college,
Natalie is investigating various possibilities for starting her own business as part of the requirements of the entrepreneurship program in which she is
enrolled.
A long–time friend insists that Natalie has to somehow include cookies in her business plan. After a series of brainstorming sessions, Natalie settles on
the idea of operating a cookie–making school. She will start on a part–time basis and offer her services in ... Show more content on Helpwriting.net ...
Natalie, too, would like to know if the company has been profitable or not during November. Natalie realizes that in order to determine Cookie
Creations' income, she must first make adjustments. Natalie puts together the following additional information. 1.A count reveals that $35 of baking
supplies were used during November. 2.Natalie estimates that all of her baking equipment will have a useful life of 5 years or 60 months and no
salvage value. (Assume Natalie decides to record a full month's worth of depreciation, regardless of when the equipment was obtained by the
business.) 3.Natalie's grandmother has decided to charge interest of 6% on the note payable extended on November 16. The loan plus interest is to
be repaid in 24 months. (Assume that half a month of interest accrued during November.) 4.On November 30, a friend of Natalie's asks her to teach a
class at the neighborhood school. Natalie agrees and teaches a group of 35 first–grade students how to make Santa Claus cookies. The next day,
Natalie prepares an invoice for $300 and leaves it with the school principal. The principal says that he will pass the invoice along to the head office,
and it will be paid sometime in December. 5.Natalie receives a utilities bill for $45. The bill is for utilities consumed by Natalie's business during
November and is due December 15. Instructions Using the information

Balance Sheet Essay
The balance sheet, also known as the statement of financial position, includes an analysis of all the firm's assets and liabilities. The balance sheet is
a description of the firm's financial standing at an instance in time. When navigating through a balance sheet one notices that it is divided into two
sections, the left side includes all of the firm's assets and the right side lists all of the firm's liabilities. A firm's assets accounts for the cash, property,
inventory, facility, equipment, and other investments the firm has made in order to operate. The liabilities of a firm are the legal debts and
obligations the firm obtains during its course of business. Included on the side of liabilities is the stockholders' equity, which accounts for the
difference between the firm's assets and liabilities. Stockholders' equity is a measure of the net worth of a firm. The expression "balance" sheet
describes the equilibrium set by the balance sheet identity:
Assets = Liabilities + Stockholders' Equity The poise between a firm's assets (capital and investments) versus its liabilities (source of capital), and
stockholders' equity are detrimental to the integrity of the balance sheet.
The Income Statement
The income statement, also known as a statement of financial performance, illustrates the revenues and expenses of a firm over a period of time. The
"bottom" line expression represents the last or bottom line of a financial statement, which provides a measure of the firm's net

Balance Sheet and Accounting
WHAT HAS THE INVISIBLE HAND ACHIEVED? Ross L. Watts Sloan School Massachusetts Institute of Technology January 27, 2006
_____________________________ This paper was presented at the Institute of Chartered Accountants in England & Wales Information for Better
Capital Markets Conference in London on December 20, 2005. I am grateful to Ryan LaFond, Karthik Ramanna, Sugata Roychowdhury and Joseph
Weber for their comments. All remaining errors are mine. 1. INTRODUCTION When I was invited to present at this conference I was asked to
address the question: "What has the invisible hand achieved (in financial reporting)." This is a rather broad question and an impossible one to answer
using the evidence in the empirical accounting... Show more content on Helpwriting.net ...
Section 5 predicts the eventual outcomes if the FASB and International Accounting Standards Board (IASB) continue in their apparent resolve to
fundamentally change the nature of accounting and financial reporting. Finally section 6 provides a summary and my conclusions. 1 Evidence of the
market ignoring unverifiable accounting numbers can be found in Leftwich (1983) who reports that debt contracts exclude goodwill when measuring
total assets. 3 2. PRIVATE MARKET FORCES & FINANCIAL REPORTING 2.1 Agency costs and financial reporting. The original development of
accounting and financial reporting appears to be driven by control of agency costs. These costs arise when a principal delegates decision–making
ability to an agent who maximizes his own welfare rather than that of the principal. There is considerable evidence that writing itself was developed
in order to allow for accounting and control of the costs of agency relations such as that between a noble and a steward (de Ste Croix 1956; Yamey,
1962; Chadwick, 1992). Millennia later the wardens of English medieval guilds would prepare and present audited financial accounts as a mechanism
to reduce agency costs (Watts and Zimmerman, 1983). The early English companies inherited this mechanism from the guilds. For example, even in its
first years the British East India Company prepared annual audited financial statements and presented those statements

Pro Forma Balance Sheet Analysis
Pro Forma Balance Sheet
The Balance Sheet table below shows the Pro–Forma Balance Sheet projections. As is illustrated, the asset base will grow through accumulated cash
balance and retained earnings will grow through accumulated net profits. Based on these financial projections, the management of DELIGHT TYME
expects to build a business with a solid balance sheet for years to come.
The balance sheet shows the firm's financial position with respect to assets and liabilities at a specific point in time. An example of a balance sheet is
presented in Table..... The balance sheet provides three types of information: assets, liabilities, and owners' equity. Assets are what the company owns,
and they include current assets those that can be converted ... Show more content on Helpwriting.net ...
The projection for cash indicates that each year within the three–year projection will end with a positive accumulated cash flow total.
With continued sales growth, cost controls, and gross margin maintenance, the financial projections contained in this Business Plan should allow
DELIGHT TYME Enterprise to maintain a positive cash flow and cash balance for years to come. This indicates the DELIGHT TYME will have the
ability to sustain its operational cash requirements and provide DELIGHT TYME's ownership with dividend distribution.
For clarification, dividend distribution in addition to their salaries can be taken by owners whenever desired. However, even though loan repayment (if
applicable) has been accounted for in the Projected Cash Flow, dividend distribution had not been accounted for in the Projected Cash Flow. Therefore,
the ending cash balance for
Year 3 represents the total cash that would be available for divided distribution if all financial projection is accurate.
Breakeven Point (BEP)
A company has achieved breakeven when its total sales or revenues equal its total expenses. No profit has been made at the breakeven point, nor have
any losses been incurred. This calculation is critical for any business owner because the breakeven point is the lower limit of profit when determining

Southwest Airlines Balance Sheet
The income statement are the financial statements outline of a firm's performance over a period of time, either quarterly or yearly. In the income
statement of Southwest Airlines Co., the statement of operations (in millions) provides the following information; "The operating revenues at the year
ended, December 31, 2016 total is $20,425 million, the operating expenses total is $16,665 million with an operating income of $3,760 million, and the
net income total is $2,244 million." The balance sheet are the financial statements showing a firm's accounting worth on a particular point in time, a
snapshot of the firm. In the balance sheet of Southwest Airlines Co., the snapshot of the sheet (in millions). "The current assets at the year ended,

Balance Sheet and Goodwill
Goodwill is an intangible asset, probably the most intangible of all intangible assets, hard to measure and even more difficult to account for. Goodwill
today constitutes a much larger part of acquisition prices than it did previously, resulting in a much greater impact on financial statements.
During the twentieth century the concept of goodwill has changed significantly. In the earlier days goodwill was thought of as the good and valuable
relationships of a proprietor of a business with his customers. The present concept is broader in that it encompasses many more intangible economic
factors of a business enterprise and accountants now consider that goodwill results from the evaluation of the earning power of a business by investors
... Show more content on Helpwriting.net ...
It is no wonder that managements, in order to avoid this reduction in reportable earnings, frequently opt to use the pooling of interest method when they
complete a merger. Since no goodwill is created, over–eager managers are able to pay outrageous prices for acquisitions with little or no accountability
on the balance sheet. Since it makes no sense to have two different ways for accounting for a merger, the FASB decided they should eliminate the
pooling of interest method and force all transactions to be done via the purchase method. Executives and politicians claimed this will significantly
reduce the number of mergers since the new standards would cause reportable earnings to drop as soon as a company had completed an acquisition.
As a concession, the FASB will no longer require goodwill to be written off unless the assets became impaired (which means it becomes clear that the
goodwill is not worth what the company paid for it).
The FASB 's six members unanimously approved two new accounting standards on Friday July 23, 2001. Financial Accounting Statement 141 will
eliminate the pooling–of–interest method for booking mergers. The method had been popular with dealmakers because it allowed companies to do
deals at a premium without marking up their assets. These markups inflate the size of future amortization expenses and depressed reported earnings,
supporters of pooling said. The FASB also passed Financial Accounting Statement 142– a closely– related standard

Financial Statement Analysis : The Balance Sheet
Financial Statement Analysis
The balance sheet for my company, Intel, has provided the financial position for the past few years. The information provided by the balance sheet
shows that Intel Corporation has many assets. These are things that the company owns and the assets are also considered the resources of the company.
The resources have been acquired through transactions that have been made between certain dates. Intel's assets include, cash and cash equivalents,
which have been on the rise. However cash and cash equivalents are just one factor of the company's assets. All together the total current assets have
been declining, and rising. In September of 2014 the total current assets were at 27,509,000 and it declined until ... Show more content on
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As of June 2015 that number has dropped to 3,440,000, which is bad because that means that, the changes in inventories and liabilities has decreased.
These numbers are in millions, so when the numbers change this dramatically, it means something happened. For cash flow sales, the higher the
number, the better. For the operation index, the higher the percentage, the better. For the operating cash flow ratio, if the ratio falls below 1.00 then
the company is not bringing in enough sales and cash. They will have to find additional sources to finance their operations if they wish to continue
their business. For a company as large as Intel, it would not be so challenging to do so.
Ratio Analysis
ROE
The Return on Equity (ROE) for my company is 20.27% and has been mostly decreasing within the past five years. Compared to one of Intel's many
competitors, Microchip Technology Inc. (MCHP), their Return on Equity is currently 19.2% and has been jumping from high to low numbers these
past few years. A return on equity of 20% is considered excellent, so as of currently it appears that my company is in good standings with their ROE.
Intel's competitor MCHP is also in good standings as their ROE is almost at 20% as well. From the data that we are given from the two companies we
can tell that they are in good standings. The information is telling us that the management has been performing well.
ROA
The Return on Assets (ROA)

The analysis and application of the balance sheet
The analysis and application of the balance sheet Kuang xin Financial accounting is one of the most popular major in the world. In the study of
accounting, people must know and use expertly the three accounting statement, balance sheets, cash flow, and income statement. It is the most basic
and useful skill in one's career of accounting. But in the four basic financial statement, the balance sheet or called statement of financial position is the
only one which describe a single point in time of a business' calendar year. "In financial accounting, a balance sheet or statement of financial position
is a summary of the financial balances of a sole proprietorship, a business partnership, a ... Show more content on Helpwriting.net ...
Contingent liabilities such as warranties are noted in the footnotes to the balance sheet. The small business 's equity is the difference between total
assets and total liabilities."[Small Business Administration]
There are anther type of balance sheet is US small business balance sheet. It is a small business balance sheet lists current assets such as cash, accounts
receivable, and inventory, fixed assets such as land, buildings, and equipment, intangible assets such as patents, and liabilities such as accounts payable,
accrued expenses, and long–term debt. Contingent liabilities such as warranties are noted in the footnotes to the balance sheet. The small business 's
equity is the difference between total assets and total liabilities.
Guidelines for balance sheets of public business entities are given by the International Accounting Standards Board and numerous country–specific
organizations/companys. "Balance sheet account names and usage depend on the organization 's country and the type of organization. Government
organizations do not generally follow standards established for individuals or businesses."[Personal balance] If applicable to the business, summary
values for the following items should be included in the balance sheet:[16] Assets are all the things the

Analyzing The Balance Sheet For Tootsie Roll
Classifying Assets
Let's look at the balance sheet for Tootsie Roll in more detail. First, the assets on a balance sheet are listed by how easy it is for the asset to be
converted into cash. The easiest asset to convert to cash is listed first and the hardest to convert is listed last. The ease which an asset can be converted
to cash is called liquidity.
Current Assets
Current assets are assets that can be easily converted to cash or will be used within one year. Tootsie Roll 'sbalance sheet lists cash first. Tootsie Roll
lists investments, next. Investments may also be listed on a balance sheet as marketable securities. Investments are short–term investments such as
stocks, bonds, or other investments that can be turned into cash ... Show more content on Helpwriting.net ...
Finished goods inventory is the finished Tootsie Roll В® candies' inventory value after they have been created, wrapped, packaged, and are ready to
be sold. The total value of inventory at Tootsie Roll on December 31, 2015 was $62.263 million.
Prepaid expenses are goods and services that have been paid for but not yet used. Some examples could be internet service, insurance premium, and
rent on office space. These are all items that can be paid in advance but are used during the year. In the case of Tootsie Roll, prepaid expenses were
$5.935 million December 31, 2015.
Tootsie Roll's total current assets December 31, 2015 were $293.806 million.
Fixed Assets
Fixed assets are assets that will be held or used over a period longer than one year. Companies typically have land, equipment, and buildings as their
fixed assets. The account is usually called property, plant, and equipment or PP&E.
The value of fixed assets typically decreases over time. The amount of the decrease each year is accounted for and is called depreciation. Depreciation
for the year is expensed on the income statement and added to the accumulated depreciation account on the balance sheet. So the value of the fixed
assets on the balance sheet is reduced by the accumulated depreciation.

Tootsie Roll's total PP&E at the end of 2015 was $499.535 million and their accumulated depreciation was $314.949 million, so the net PP&E was
$184.586 million.
Intangible Assets
Intangible assets are assets that don't

Balance Sheet and Cost
E12–1 (Classification Issues–Intangibles) Presented below is a list of items that could be included in the intangible assets section of the balance sheet.
Instructions
(a) Indicate which items on the list would generally be reported as intangible assets in the balance sheet. (b) Indicate how, if at all, the items not
reportable as intangible assets would be reported in the financial statements. 1. Investment in a subsidiary company.
2. Timberland.
3. Cost of engineering activity required to advance the design of a product to the manufacturing stage.
4. Lease prepayment (6 months' rent paid in advance).
5. Cost of equipment obtained.
6. Cost of searching for applications of new research findings.
7. Costs ... Show more content on Helpwriting.net ...
The amortization expense is 75,000/12=$6,250
.
Dec 31 ,2012
Amortization expense 6,250
Patents 6,250
E12–12 (Accounting for Goodwill)
The entry in Graff's books is
Cash 100,000
Land 120,000
Buildings 200,000
Equipment 170,000
Copyrights 30,000
Liabilities 350,000
Fair value of net assets 270,000
Cash 380,000

Goodwill=380,000–270,000=$110,000
E12–16 (Accounting for R&D Costs) Margaret Avery Company from time to time embarks on a research program when a special project seems to
offer possibilities. In 2011, the company expends $325,000 on a research project, but by the end of 2011 it is impossible to determine whether any
benefit will be derived from it.Instructions
(a)What account should be charged for the $325,000, and how should it be shown in the financial statements?
The amount of $325,000

The Balance Sheet and Financial Disclosures Essay
Chapter 3 The Balance Sheet and Financial Disclosures
Questions for Review of Key Topics
Question 3–1
The purpose of the balance sheet, also known as the statement of financial position, is to present the financial position of the company on a particular
date. Unlike the income statement, which is a change statement that reports events occurring during a period of time, the balance sheet is a statement that
presents an organized array of assets, liabilities, and shareholders' equity at a point in time. It is a freeze frame or snapshot picture of financial
position at the end of a particular day marking the end of an accounting period.
Question 3–2
The balance sheet does not portray the ... Show more content on Helpwriting.net ...
Retained earnings equals net income less dividends paid to shareholders from the inception of the corporation.
Question 3–11
Disclosure notes provide additional detail concerning specific financial statement items. Included are such data as the market values of financial
instruments and off–balance–sheet risk associated with financial instruments and details of pension plans, leases, debt, and assets. Common to all
companies' disclosures are certain specific notes such as a summary of significant accounting policies, descriptions of subsequent events, and related
third–party transactions. However, many notes are designed to fit the disclosure needs of the particular reporting company. In fact, any explanation that
helps investors and creditors make decisions should be included.
Answers to Questions (continued)
Question 3–12

The disclosure of the company's significant accounting policies is extremely important to external users in terms of their ability to compare financial
information across companies. It is critical to a financial analyst involved in assessing future cash flows of two construction companies to know that
one company uses the percentage–of–completion method in recognizing gross profit, while the other company uses the completed contract method.
Question 3–13
A subsequent event is an event that occurs after the date of the financial statements

Financial Statements And Balance Sheet
Manager within the farm, as well as the firm owners and those in leadership roles, help keep track of the firm's performance by reviewing its financial
statements like income statements and balance sheet. The income statement is one of the major financial statements used by accountants and business
owners. The income statement is sometimes called profit and loss statement, statement of operations or statement of income. It is important because it
shows the profitability of a company during the time interval specified on the heading. The income statement shows revenues, expenses, gains, and
losses; it does not show cash receipts nor cash disbursements. People pay attention to the profitability of a company for many reasons, and the income
statement helps in doing this in that it helps current lenders and investors, company management, competitors, government agencies, labor union, and
others. The expense items located on the income statement appear under five major categories
1.Expense for cost of goods sold or cost of services or sales
2.Operating expenses–selling
3.Operating expenses–general and administration
4.Financial expenses
5.Extraordinary expenses
BALANCE SHEET It is one of the major financial statements used by accountants and business owners. The balance sheet presents a company
financial position at the end of the specified date. Because the balance sheet informs the reader of a company's financial position as

Aol's Balance Sheet
AOL was able to beat out Prodigy and CompuServe because of the amount of marketing that AOL used to gain customers. AOL was famous for
blanketing college campuses, book stores and random people by buying mailing list shipping out free CD's that gave customer a free trial period to
try AOL and then successfully converting those customers to paying customer. Because of the unprecedented amount of CD's they gave to potential
customers via the mail, as well as being available in public places, providing access to a carrier that was previously only available if the customer
actually went to the effort to acquire a disc for access. They also invested in their network to increase modem capacity, had low prices, an extraordinary
marketing campaign,... Show more content on Helpwriting.net ...
The outcome is either a net income or net loss. This net income or loss is the extra money the company gained or lost during it's fiscal year which
cannot be seen in the balance sheet unless income statement is prepared. You will find Net income or loss from income statement exists in the equity
section of the balance sheet.
The Balance Sheet give investors an idea what the company owns, and owes, as well as the amount invested by shareholders. The Balance Sheet also
provides a glimpse of the company's assets, liabilities and shareholders' equity at a specific point in time. The Balance Sheet helps to give us the
financial status of the company. (Investopedia 2016)
The main purpose of the cash flow statement is to show the entrance and exit of cash, and whether the cash gained as a result of the company's
operations activities, investing or financing activities. A cash flow statement of a healthy company would show that the density of cash entrance comes
from its operating activities. The net entrance or exist of cash should be equal to the difference between beginning and ending balance of cash that
appears in the balance sheet

Balance Sheet and Income Statement
Balance Sheet and Income Statement Jennifer Grayson BSA/500 June 4, 2011 Brian Keltch Balance Sheet and Income Statement The following
four companies are related to the companies that have been in review over the last four weeks. These four following companies show how well the
company has been doing over the last two years or not so well. The company has pulled their balance sheets and income statement to see if all the
company's financial needs are being met. If the company's needs are not being met, the company will show where the company needs to cut back and
where the company needs to improve. National Plastic Co Nation Plastic Co is a Korea–based company that engages in synthetic resin products. The
company 's products... Show more content on Helpwriting.net ...
The company is located in Reno, NV. The company is related to Huffman Trucking both companies are in the trucking company. AMERCO Inc.
Income Statement: Period End Date| 12/31/2011| 9/30/2011| | | Revenue| 633.09| 703.18| | | – Cost of Revenue| 556.69| 452.02| | | Gross Profit| 76.40|
251.16| | | – Operating Expenses| 51.53| 66.72| | | Operating Income| 24.87| 184.43| | | – Interest Expense| 22.74| 22.96| | | – Foreign Exchange Losses
(Gains)| 0.00| 0.00| | | – Net Non–Operating Losses (Gains)| 0.00| 0.00| | | Pretax Income| 2.13| 161.47| | | – Income Tax Expense| 1.40| 60.46| | |
Income Before XO Items| 0.73| 101.01| | | – Extraordinary Loss Net of Tax| 0.00| 0.00| | |– Minority Interests| 0.00| 0.00| | | Net Income| 0.73| 101.01| |
| – Total Cash Preferred Dividends| 0.00| 0.16| | | – Other Adjustments| 0.00| 0.00| | | Net Inc. Avail to Common Shareholders| 0.73| 100.85| | | Abnormal
Losses (Gains)| 30.66| –7.92| | | Tax Effect on Abnormal Items| 0.25| 2.77| | | Normalized Income| 31.64| 95.70| | | Basic EPS Before Abnormal Items|
1.63| 4.94| | | Basic EPS Before XO Items| 0.04| 5.20| | | Basic EPS| 0.04| 5.20| | | Basic Weighted Avg. Shares| 19.48| 19.47| |

The Balance Sheet For Microsoft
According to Bruns (2004), the balance sheet is a financial document, which identifies a company's assets and liabilities. By deducting asserts from
liabilities, a company's net worth can be calculated to show the value of the company. Further, it shows the financial of the company on a particular
date and "it provides a snapshot of a business' health at a point in time" (Bond, n.d. p. 4). However, the fact that the balance sheet is a snapshot denotes
that it is only valid at the time it was created. Thus, it may not represent a true and fair view of the company. In this essay, I will discuss different
aspects of the balance sheet for Microsoft. I will also focus on the importance of the balance sheet and the role it carries out.
Microsoft was founded in 1975 by Bill Gates and Paul Allen from Seattle, and incorporated in 1981 (Liquori, 2011). Being the number one software
company in the world Microsoft employs about 52,000 people working full–time, 21,000 in product research and development, 23,500 in sales,
marketing, and support, 2,200 in manufacturing and distribution, and 4,000 in finance and administration. The following report will include an
analysis of financial reports, income statements, Balance sheets, and cash flow statements (Liquori, 2011).
Several companies use the balance sheet to make sound business decisions. The balance sheet is like a quantitative summary of a company's financial
condition at a specific point in time, including the assets, liabilities,

Increasing Competition On The Balance Sheet
With the increasing competition on the balance sheet both between banks and from non–banks financial institutions, banks have diversified their
product into non–intermediary financial services as a result. One of the results of this has been the remarkable growth in the percentage of
off–balance–sheet (henceforth OBS) activities. Generally, OBS item refers to an asset or debt that does not appear on the banks'balance sheet, e.g.
standby letters of credit, currency and interest rate swaps etc. In the last two decades, with the deregulation of the financial markets and
improvement in financial innovations, banks are encouraged to offer new financial products and services to increase their profit (Jurman, 2005).
Actually, decreasing profitability of traditional banking and increasing competitiveness of markets force banks to undertake OBS activities.
Therefore, banks have expanded OBS activities dramatically, not only on the volume of 'traditional' OBS items, but also the use of risky
innovations (Khambata and Hirche, 2002). The data of European commercial banks shows, the OBS activities increased from less than 50% of total
outstanding loans in the early 1990s to 150% of loans in the early 2000s. A similar trend has also occurred among commercial banks in the United
States (Bos and Kolari, 2013). Specifically, on the one hand, as we can see from table 1, the share of OBS activities have been growing dramatically
among sample developed markets' banking industry. On the other

Off Balance Sheet Financing Practices
[Student Name]
[Course Title]
[Instructor Name]
[Date]
The traditional accounting methods have been replaced by a number of new accounting techniques. Some of which are observable while other remain
hidden. Off Balance Sheet Financing or OBSF is one of these new accounting techniques. It is a mode of obtaining finance for a business without
disclosing significant capital expenditures on the balance sheet of a company by means of using different ways of classifying such expenses. OBSF is
most of the times used by business enterprises to maintain their leverage or gearing positions in such a way which would not have any negative
implications on the company. ... Show more content on Helpwriting.net ...
In addition, these expectations pose pressure on the management to find ways which may result in better presentation of the financial statements and
improved earnings (Boot and Thakor 1991). The Banking sector in particular and other sectors in general are mostly seen following this approach. As
for instance, there has been observed a trend of investing in such portfolios and instruments which are regarded as high risk investments. But the
intention behind this is to improve or strictly stating 'inflate' the earnings of an enterprise without having regard to the riskiness of such investment
decisions and the fact that the stakeholders of the business need justification of such improvements in the performance in the form of financial
statements disclosures. For the purposes of obtaining security on the risky investments, corporations tend to enter into complex third party
arrangements which cannot be disclosed in the financial statements. Apart from this, one other motivating factor which is regarded as the major reason
behind this approach of management is that they have their own interests and objectives. As for instance, managers are better off in their performance
appraisals when the company is showing profits consistently (Boone and Raman 2001).
The practices of off balance sheet financing and accounting, as stated earlier, comprise of operating leases, joint venture and collaborations with respect
to R&D. Among these options,

Balance Sheet and Statement of Cash Flow
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C H A P T E R
5
BALANCE SH EET AN D STATEMENT OF CASH FLOWS
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1 2 3 4 5 6 7 8 9
Explain the uses and limitations of a balance sheet. Identify the major classifications of the balance sheet. Prepare a classified balance sheet using the
report and account formats. Determine which balance sheet information requires supplemental disclosure. Describe the major disclosure techniques for
the balance sheet. Indicate the purpose of the statement of cash flows. Identify the content of the statement of cash flows. Prepare a basic statement of
cash flows. Understand the usefulness of the statement of ... Show more content on Helpwriting.net ...
USEFULNESS OF THE BALANCE SHEET
Op
Liquidity era tio ns

How quickly will my assets convert to cash?
By providing information on assets, liabilities, and stockholders' equity, the balance sheet provides a basis for computing rates of return and evaluating
the capital structure of the enterprise. As our opening story indicates, analysts also use information in the balance sheet to assess a company's risk2 and
future cash flows. In this regard, analysts use the balance sheet to assess a company's liquidity, solvency, and financial flexibility. Liquidity describes
"the amount of time that is expected to elapse until an asset is realized or otherwise converted into cash or until a liability has to be paid."3 Creditors
are interested in short–term liquidity ratios, such as the ratio of cash (or near cash) to short–term liabilities. These ratios indicate whether a company,
like Amazon, will have the resources to pay its current and maturing obligations. Similarly, stockholders assess liquidity to evaluate the possibility of
future cash dividends or the buyback of shares. In general, the greater Amazon's liquidity, the lower its risk of failure.
GROUNDED
The terrorist attacks of September 11, 2001, showed how vulnerable the major airlines are to falling demand for their services. Since that infamous date,

Applying A Balance Sheet On The World Of Finances
Excited to enroll in this class from the very beginning, I found it to be very informative. Not just it taught me the important terminology used in the
world of finances, but also allowed to apply these concepts into my own financial life.
First of all, thanks to you, Professor Rutter, I have finally devoted time to make a balance sheet, a document stating my current assets and income, and
liabilities at the certain period of time. Now I have been deliberately reviewing my credit card statements for the previous month, and calculating how
much money I have spent on the food each month, or how much I have spent on shopping at amazon.com, etc. And even though my consuming
behavior was never driven by materialism completely, this class reminded me to be realistic about my general spendings, and to strictly separate the
needs from the wants. Additionally, I have expanded my skill of setting financial goals and working towards them. For example, because of Christmas
time that is approaching fast, which usually includes gifts and travels, I suggested and pursued that my family (me, my husband, and our child) stick to
the weekly budget for food, including dining out. And it is been very helpful method to save some money.
Then, the topic regarding financial institutions, as well as services and fees related to these institutions, I found to be very empowering: this topic
convinced me that doing a research prior making any commitment to any institution is extremely important. As we

Goodwill Balance Sheet
GOODWILL
What is the definition of Goodwill?
Goodwill is an intangible asset that mostly appears as the biggest intangible asset on the balance sheet. The Goodwill can only be identified with the
business as a whole. Therefore, the goodwill cannot be sold individually in the marketplace, while some other intangible assets can be sold.
Goodwill is not easy to measure, because it includes exceptional management, desirable locations, customer relations, and so on. The determination of
the Goodwill is therefore most of the time very subjective.
Companies only record the goodwill when there is an exchange transaction the involves the purchase of an entire business.
When the company is purchased by another company, the goodwill ... Show more content on Helpwriting.net ...
Goodwill booking in the balance sheet
According to Harold Averkamp (2015), Goodwill is reported on the balance sheet as a noncurrentasset.
Since 2001, U.S. companies are no longer required/allowed to amortize the recorded amount of goodwill.
"In accounting we use the word amortization to mean the systematic allocation of a balance sheet item to expense (or revenue) on the income
statement." Harold Averkamp (2015)
The amortization of an asset means that a company is allowed to split the value of the expenses stated in the income statement over several months
instead of a one–time booking.
However, the amount of goodwill is subject to a goodwill impairment test at least once per year.
The companies have to verify at least once a year if the value of their assets is aligned with the fair value of the market.
The test verifies if the value of the assets is bigger than the market value. An adjustment is recorded in order to bring the value of the asset at the fair
value in case of inequality.
References

Ausick, P (9 May 2014) 3.2 Billion for beats– is apple crazy? Assesed at 26 April 2015 from :http://247wallst.com/consumer–electronics/2014/05/09
/3–2–billion–for–beats–is–apple–crazy/
Business Goodwill. (n.d.). Retrieved 04 27, 2015, from Value Adder: http://www.valuadder.com/glossary/business
–goodwill.html
Doorn, van P (October 29, 2014) Don't wory about facebooks 18,1 billion in goodwill from whatsapp.

Financial Statement : The Balance Sheet
Financial Statement Relationships Separately, the balance sheet reports a company's financial position while the income statement reports a company's
fiscal year profits and losses. The balance sheet measures a company's financial position by reporting its assets, liabilities, and owner's (shareholder's)
equity. The income statement measures a company's financial performance by reporting its revenues, expenses, and net income/loss. When combined,
they serve two vital purposes: (1) expand the accounting equation and (2) enable analysis using ratios to determine industry position or potential
material misstatements. The increase or decrease in owner's (shareholder's) equity on the balance sheet is a direct result of the net ... Show more content
Therefore, the company utilized 4.37% of its assets in 2000, but decreased to 1.48% in 2001 to earn net income of $4,153,000,000 and
$1,501,000,000 respectively. The 2.89% decrease between the two years shows that the company did not utilize its assets as effectively as they could
have (WorldCom 10–K 2002) (Rufus, Miller, & Hahn 2015) (Sherman 2016). Fraud Hypothesis Potential
After completing both vertical and ratio analyses, there is potential evidence to substantiate the need for a fraud hypothesis. Out of the five financial
relationships that could lead to fraud, the relationship in question for WorldCom's financial statements is Assets versus Liabilities. It is customary
that companies maintain a balance between what they own and what they owe. However, a shift in the balance in either direction could result from
a change in company policy or fraud. Overall, WorldCom's Debt to Assets' ratio is relatively stable with a slight increase of 1.69% from 2000's
40.55% to 2001's 42.24%. However, the decrease in the Current Liabilities account from $17,673,000,000 in 2000 to $9,210,000,000 in 2001 results
in a 52% drop in Total Current Liabilities. The source of the significant drop is the $7,028,000,000 decrease in Short–Term Debt and Current Maturities
of Long–Term Debt. There is a possibility that WorldCom paid off these debts, but there is also the possibility that WorldCom wrote them off. Current
Ratio, Acid Test, and Net Working

Partial Balance Sheet
exercises
Exercise 5–1
Installment sales; alternative recognition methods
( LO1 LO2 On June 1, 2006, the Luttman and Dowd Company sold inventory to the Ushman Corporation for $400,000. Terms of the sale called for a
down payment of $100,000 and four annual installments of $75,000 due on each June 1, beginning June 1, 2007. Each installment also will include
interest on the unpaid balance applying an appropriate interest rate. The inventory cost Foster $150,000. The company uses the perpetual inventory
system.
Required:
1.Compute the amount of gross profit to be recognized from the installment sale in 2006, 2007, 2008, 2009, and 2010 using point of delivery revenue
recognition. Ignore interest charges.
2.Repeat ... Show more content on Helpwriting.net ...
Prepare the necessary journal entries for the following dates (ignoring interest charges):
1. November 15, 2006, and 2. February 15, 2007.
Exercise 5–5
Evaluating efficiency of asset management
( LO6 The year 2006 income statement of Garret & Sons Music Company reported net sales of $10 million, cost of goods sold of $6 million, and net
income of $1 million. The following table shows the company's comparative balance sheets for 2006 and 2005:
($ in 000s) Assets:20062005 Cash$ 240$ 280 Accounts receivable800600 Inventory850700 Property, plant, and equipment (net)2,6002,520 Total
assets$4,490$4,100 Liabilities and Shareholders' Equity: Current liabilities$ 720$ 650 Notes payable6001,000 Paid–in capital2,0002,000 Retained
earnings1,170450 Total liabilities and shareholders equity$4,490$4,100

Some industry averages for the company's line of business are: _______________________________________
inventory turnover 6 times average collection period28 days asset turnover2times _______________________________________
Required: Assess Garret & Son's asset management relative to its industry.
Exercise 5–6
Profitability ratios
(

Balance Sheet and Sales
MBA Financial Management and Markets Exam 1 Spring 2009 The following questions are designed to test your knowledge of the fundamental
concepts of financial management structure [chapter 1], financial valuation [chapter 2], financial statements and tax planning [chapter 3], and
short–term financial forecasting and financing [chapter 14]. Choose the best possible answer to the questions given. Each question is equally
weighted. Papers are due 2/26/09 at the beginning of class. True/False Indicate whether the statement is true or false. ____ 1. There are three primary
disadvantages of a regular partnership: (1) unlimited liability, (2) limited life of the organization, and (3) difficulty of transferring ownership. These
combine to... Show more content on Helpwriting.net ...
d. Corporate investors are exposed to unlimited liability. e. Corporations generally face relatively few regulations. Which of the following statements is
CORRECT? a. In a regular partnership, liability for other partners ' misdeeds is limited to the amount of a particular partner 's investment in the
business. b. Partnerships have more difficulty attracting large amounts of capital than corporations because of such factors as unlimited liability, the
need to reorganize when a partner dies, and the illiquidity (difficulty buying and selling) of partnership interests. c. A slow–growth company, with little
need for new capital, would be more likely to organize as a corporation than would a faster growing company. d. In a limited partnership, the limited
partners have voting control, while the general partner has operating control over the business. Also, the limited partners are individually responsible,
on a pro rata basis, for the firm 's debts in the event of bankruptcy. e. A major disadvantage of all partnerships relative to all corporations is the fact
that federal income taxes must be paid by the partners rather than by the firm itself. Which of the following statements is CORRECT? a. The proper
goal of the financial manager should be to attempt to maximize the firm 's expected cash flows, because this will add the most to the wealth of the
individual shareholders. b. The financial manager should seek that combination of

The Value Of The Balance Sheet
The main purpose of the balance sheet is to reflect and explain the accounting equation: Assets = Liabilities + Owner's Equity. This equation is the
fundamental model for recording and reporting transactions. It is essentially useful for showing what the company owns, what the company owes, and
what does the owner's equity remains. The ordering of the assets and the liabilities help the user to assess the liquidity of the company. For our
purpose focusing on Walt Disney World, we are primarily focused on their assets and liabilities. In analyzing thebalance sheet of our company, we will
explain each aspects of the balance sheet in three separate parts.
To understand how the total assets changed within a year, we shall look at each aspects of the assets. In the cash and cash equivalent, we have seen
that the cash in hand decreased in 2013 from $3,931 to $3,421 in 2014. This shall shows that the company may have spent cash on inventories and
other goods for the benefit of the company. In the receivables aspect, the amount of receivables has begun to increase from 2013 to 2014 with an
increase rate of 11.6%. In other terms, it increased from $6,967 in 2013 to $7,822 in 2014. This was an infinitesimal increase and it shows that the
company had a lot of companies owing them for the purchase of the Walt Disney Products and land usage. Another way of saying is that other
companies may be purchasing land from Disney to sell their products and expand their companies to wider

Balance Sheet and Direct Labor
Problem 1–7A (75 minutes)
Part 1
DE LEON COMPANY
Manufacturing Statement
For Year Ended December 31, 2013
Direct materials
Raw materials inventory, December 31, 2012
$ 166,850
Raw materials purchases925,000
Raw materials available for use
1,091,850
Less raw materials inventory, December 31, 2013182,000
Direct materials used
$ 909,850
Direct labor
675,480
Factory overhead
Depreciation expense–Factory equipment

33,550
Factory supervision
102,600
Factory supplies used
7,350
Factory utilities
33,000
Indirect labor
56,875
Miscellaneous production costs
8,425
Rent expense–Factory building
76,800
Maintenance ... Show more content on Helpwriting.net ...
Note that the company carries fewer days' supply (25.3 days) in its finished goods inventory.
Problem 2–4B (35 minutes)
Part 1
a.Predetermined overhead rate
=== 50%
b. Overhead costs charged to jobs
Direct
Applied

Job No.
Labor
Overhead (50%)
625
$ 354,000
$177,000
626
330,000
165,000
627
175,000
87,500
628
420,000
210,000
629
184,000
92,000
63010,000 5,000
Total
$1,473,000
$736,500
c.Overapplied or underapplied overhead determination
Actual overhead cost
$725,000
Less applied overhead cost736,500
Overapplied overhead
$ (11,500)
Part 2
Dec. 31
Factory Overhead

11,500
Cost of Goods Sold
11,500
To assign overapplied overhead.
Problem 3–1A (45 minutes)
Part 1: Cost of goods transferred and cost of goods sold
Beginning goods in process inventory
$ 435,000
Direct materials used in production
157,500
Direct labor used in production
780,000
Overhead applied (115% of direct labor cost)897,000 Total production costs
2,269,500
Less ending goods in process inventory(515,000)
Transferred to finished goods inventory (a)
$1,754,500
Beginning finished goods inventory
$ 633,000
Plus goods transferred from production 1,754,500
Goods available for sale 2,387,500
Less ending finished

Balance Sheet and Net Income
On January 4, 2010, Harley, Inc. acquired 40% of the outstanding common stock of Bike Co. for $2,400,000. This investment gave Harley the ability to
exercise significant influence over Bike. Bike's assets on that date were recorded at $10,500,000 with liabilities of $4,500,000. There were no other
differences between book and fair values. During 2010, Bike reported net income of $500,000. For 2011, Bike reported net income of $800,000.
Dividends of $300,000 were paid in each of these two years. 49. How much income did Harley report from Bike for 2010? вЂЁA. $120,000.вЂЁB.
$200,000.вЂЁC. $300,000.вЂЁD. $320,000.вЂЁE. $500,000.
26. Under the equity method, when the company's share of cumulative losses equals its investment and the company has no ... Show more content on
Helpwriting.net ...
What is consolidated net income for 2014?
Consolidated NCI = $406,000
All of the following are variable interests except
A. Asset purchase options
B. Participation rights
C. Lease residual value guarantees
D. Guarantees of debt
E. Stock Options
8. On June 1, CamCo received a contract to sell inventory for '500,000. The sale would take place in 90 days. CamCo immediately signed a 90–day
forward contract to sell the yen as soon as they are received. The spot rate on June 1 was $1 = п‚ґ240 and the 90–day forward rate was $1 = п‚ґ234. At
what amount would CamCo record the Forward Contract on June 1?
B. $0
8. Mills Inc. had a receivable from a foreign customer that is due in the local currency of the customer (stickles). On December 31, 2010, this

receivable for В§200,000 was correctly included in Mills' balance sheet at $132,000. When the receivable was collected on February 15, 2011, the
U.S. dollar equivalent was $144,000. In Mills' 2011 consolidated income statement, how much should have been reported as a foreign exchange gain?
вЂЁ
A. $0.вЂЁB. $36,000.вЂЁC. $48,000.вЂЁD. $10,000.вЂЁE. $12,000.
9. All of the following data may be needed to determine the fair value of a forward contract at any point in time exceptвЂЁ
A. The forward rate when the forward contract was entered into.вЂЁ
B. The current forward rate for a contract that matures on the same date as the forward contract entered into.
C. The future spot rate.
D. A discount rate.
E. The

Essay on Balance Sheet and Factory Overhead
Chrome–It, Inc., manufactures special chromed parts made to the order and specifications of the customer. It has two production departments, stamping
and plating, and two service departments, power and maintenance. In any production department, the job in process is wholly completed before the
next job is started. The company operates on a fiscal year, which ends September 30. Following is the post–closing trial balance as of September 30:
[pic]
.:.
Additional information:
1. The balance of the materials account represents the following:
[pic]
.:.
The company uses the FIFO method of accounting for all inventories. Material A is used in the stamping department, and materials B and C are used in
the plating department.
2. The balance ... Show more content on Helpwriting.net ...
i. After the actual factory overhead expenses have been distributed to the departmental accounts and the applied factory overhead has been recorded and
posted, any balances in the departmental accounts are transferred to Under– and Overapplied Overhead.
j. Jobs 905 and 1001 were finished during the month. Job 1002 is still in process at the end of the month.
k. During the month, Jobs 803 and 905 were sold at a markup of 50% on cost.
l. Received $55,500 from customers in payment of their accounts.
m. Checks were issued in the amount of $43,706 for payment of the payroll.
Required:
1. Set up the beginning trial balance in T–accounts.
2. Prepare materials inventory ledger cards and enter October 1 balances.
3. Set up job cost sheets as needed.
4. Record all transactions and related entries for the month of October and post to T–accounts.
5. Prepare a service department expense distribution work sheet for October.
6. At the end of the month:
a. Analyze the balance in the materials account, the work in process account, and the finished goods account.
b. Prepare the statement of cost of goods manufactured, income statement, and balance sheet for October 31.

Balance Sheet and Deferred Tax
From its origins in 1914 as a Western Australian farmers' cooperative, Wesfarmers has grown into one of Australia's largest listed companies.
Headquartered in Western Australia, its diverse business operations covers supermarkets and department stores; home improvement and office
supplies; coal mining; insurance; chemicals, energy and fertilisers; and industrial and safety products. Wesfarmers is one of Australia's largest
employers and has a shareholder base of approximately 500, 000.
Subsidiaries of Wesfarmers
Wesfarmers owns vast range of subsidiaries ranging from retail industry to insurance and chemicals and energy sectors all the below subsidiaries are
100 % owned and controlled by Wesfarmers Ltd otherwise the controlling... Show more content on Helpwriting.net ...
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability
is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
Journal Entries of land where its Fair Value appreciated which creates Deferred Tax Liability is as follows:
LandDr
Deferred Tax LiabilityCr
BCVRCr
Subsequently when the liability has been settled with Income Tax the entries would be as follows:
Deferred Tax LiabilityDr
Income Tax ExpenseCr

In the case of Wesfarmers Ltd it reviews Fair Value of the Assets acquired assets and if the fair value of the assets is increased it will give rise to
Deferred Tax Liabilities which stood at 552 m, However Wesfarmers have Deferred Tax Assets resulting from decrease in the Fair value of the
Different Class of Assets and increase in Fair Value of Liabilities which was 1027 m which could be net off against Deferred Tax Liabilities resulting
475 m Net Deferred Tax

Balance Sheet And Accounting Standards

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