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Choosing the correct accounting convention

Under the accounting framework, a company needs to follow the accounting conventions and asset valuation principles in preparing and publishing its financial declarations. According to Atrill and McLaney (2008), a company's financial position is measured and reported based on the following conventions and asset valuation: (i)

Activity Based Costing - Masters level course

Problem/Scenario is attached. The management of Magnet Diversified Corporation is concerned about overhead cost allocations. The corporation has been using the plant-wide rate based on direct labor costs since it began operations. The CEO, Gogo McDermitt, has been hearing a lot about Activity Based Costing and is beginning

Over and Underabsorbed Overhead

The Alphonse Company allocates fixed overhead costs by machine hours and variable overhead costs by direct labor hours. At the beginning of the year the company expects fixed overhead costs to be $600,000 and variable costs to be $800,000. The expected machine hours are 6,000 and the expected direct labor hours are 80,000. The

Critical Thinking Exercise on Topic of Non-Statutory Profit

Financial Accounting You work for the Sydney office of an international firm of public accountants. You have been asked to prepare a report for the partners on the topic of non-statutory (underlying) profit, as reported by many of the firm's corporate clients. The partners are concerned that these profit figures depart from

Cambridge Construction Company: Business Analyst

1. Cambridge Construction Company follows the percentage-of-completion method for reporting long-term contract revenues. The percentage of completion is based on the cost of materials shipped to the project site as a percentage of total expected materials costs. Cambridge's major debt agreement includes restrictions on net worth

Nova Company high low method

Nova Company's total overhead costs at various levels of activity are presented below: Month Machine Hours Total Overhead Costs April 70,000 $198,000 May 60,000 $174,000 June 80,000 $222,000 July 90,000 $246,000 Assume that the total overhead costs above consist of utilities, supervisory salaries, and maintenance. The

Conceptual framework in accounting

Explain the conceptual framework, and discuss why it is important to the accounting profession. In your opinion, do all professional accountants use the conceptual framework in their daily work activities, and if so, how?

debt and credits

Mr. Bryant invested $50,000 cash in a new corporation. The new corporation will record this transaction with a debit to: a. paid in capital and credit to retain earnings b. cash and a credit to retained income c. retained earnings and a credit to cash d. cash and a credit to paid in capital Non operating items of the

Company Analysis - Poway

Managerial Accounting, 3rd Edition, by Weygandt, Kieso, and Kimmel Solving Managerial Accounting Problems Using Microsoft Excel for Windows Exercise E6-10 Maggie Sharrer, a recent graduate of Rolling's accounting program, evaluated the operating performance of Poway Company's six divisions. Maggie made the foll

Activity-Based Costing; Budgeted Operating Margin

Activity-Based Costing; Budgeted Operating Margin Stanley Cycle Company produces two subassemblies, JY-63 and RX-67, used in manufacturing motorcycles. The company is currently using an absorption costing system that applies overhead based on direct-labour hours. The budget for the current year ending December 31, 20x4 is as

Doggy World - Performance in Dayton

Please open the attached file (P7_18A) to see the problem, also please use the attached file (Solution_CH7) to write your solution. Doggy world operates a chain of pair store in the Midwest. The manager of each store reports to the regional manager, who, in turn, reports to the headquarters in the Milwaukee, Wisconsin. The ac

Taxation issues in land exchanges

Melissa owns a residential lot in Spring Creek that has appreciated substantially in value. She holds the lot for investment. She is exchanging the lot with her father for a residential lot in McComb that she also will hold for investment. Please identify any relevant tax issues for Melissa.

Detailed Accounting Assignment Tutorial

5.6A During the current year, Black Corporation incurred the following expenditures which should be recorded either as operating expenses or as intangible assets: A. Expenditures were made for the training of new employees. The average employee remains with the company for five years, but is trained for a new position eve

Tax/S Corp

Sam, Joe, and Lisa are equal shareholders in Friends, inc., and S corporation. in the conditions listed below, how much income should each report from Friends, inc. under both the daily allocation and the interim closing books allocation method. There should be 6 answers. Period

Accounting: Five Tax Questions

1. What is the purpose of Code Sec. 351 in regard to transfers of corporations? 2. What tax years are available to corporations? How do the options differ from other forms of business organizations? 3. What are the differences in the treatment of capital gains and capital losses of corporations and of individuals? 4. Su

Payroll Accounting Analyzing and Journalizing Payroll Transactions

The employees of Donnelly Music Company earned a total wages $4,690 during January. The total amount is taxable under FICA, FUTA, and SUTA. The state contribution rate for the company is 3.6%. The amount withheld for federal income taxes is $685. Journalize the payments of the monthly wages, and record the payroll taxes.

Corporate Tax/Partnerships

Lincoln, inc., Washington, inc, and Adams, inc. form presidential suites partnership on Feb. 15 2010. Now, presidential suites must adopt its required tax year-end. The partners year-ends, profits interts and capital interest are reflected below. Given this information, what tax year-end must Presidential Suites use and what rul

Corporate tax/S Corporations

XYZ Corp.(an S Corp) is owned by Jane and Rebecca who each 50% shareholders. At the beginning of the year, Jane's basis in her XYZ stock was 40,000. XYZ reported the following information for 2010: Sales revenue: 730,000, COGS (200,000), Long-term capital gain 8,000, Dividend income 5,000, tax-exempt interest 3,000, salary of

Three Economics Questions

Chapter 15 question 14 What are some of the Limitations of the national income accounts in how they represent our standard of living? Chapter 16 question 5 Why is frictional unemployment important to have in any economy? Chapter 16 question 6 Explain why hyperinflation has such a devastating impact on economies.

Payroll Accounting Analyzing and Journalizing payroll transaction for Cal Ruther

Cal Ruther, an employer, is subject to FICA taxes, but exempt from FUTA and SUTA taxes. During the last quarter of the year, his employees earned monthly wages of $8,500, all of which is taxable. The amount of federal income taxes each month is $1,040. Journalize the payments of wages, and record the payroll tax on November 30.

Product costs: Components of unit products under absorption vs variable costing

Your CFO attended an industry trade show and looked forward to sitting through one of the seminars offered that was titled "Why is it so important to know your product's costs?" Unfortunately, she missed this seminar. This is a very important topic that you plan to discuss with her yourself. Prepare notes for your meeting w

Intel Corporation: variable costing or absorption costing?

Intel Corporation is the world's largest manufacturer of computer processor chips. The Company's manufacturing processes are highly automated, so most manufacturing costs are fixed. You can access the company's most recent annual report in the Investor Relations section of its web site Its most recent operating in

Two Methods of Costing Employed

Describe at least two method of costing employed by the Tyco International. (If you are unable to locate specific information on-line, feel free to infer, as long as you discuss the approach in sufficient detail). Was this approach adequate, or did it contribute in any way to the firm's subsequent problems (financial scandal)?

Goal of not for profit organization. Return on investment in landscaping business

1. The main goal of all businesses is to make profit. How do the not-for-profit organizations set their goal? 2. If you were going to start your own business in a service industry such as a Landscaping business, what type of return on investment would you expect after the first year? What about for the second year? Please ju

Tax Questions... Multiple Choice

1. For federal tax purposes, royalty income not derived in the ordinary course of a business is classified as: Active income Portfolio income Passive income None of the above 2. Which of the following is not an example of a nontaxable like-kind exchange? An ice cream making machine for

Singular Corp.: Return on Assets

See the attached file. 1 . Singular Corp. has the following income statement data: 2006 2007 Sales $ 500,000 $ 700,000 Gross profit 161,300 205,000 Selling and administrative expense 45,200

Treatment of Intangible Assets

It has been argued on the grounds of conservatism that all intangible assets should be written off immediately after acquisition. Discuss the accounting arguments against this treatment.

Journal Entries and Treasury Stock Transactions

See the attached file. A company reported the following stockholders' equity on January 1 of the current year: Common stock, $10 par, 1,000,000 shares authorized, 400,000 shares issued ------------------------- $4,000,000 Paid- in capital in excess of par, common------------------- 1,200,000 Retained earnings---------

Indirect methods to reconstruct income

Please read and give your thoughts on this. The use of indirect methods to reconstruct income by the IRS is limited by Code Sec. 7602(e), which prohibits financial status or economic reality techniques to determine the existence of unreported income unless there is another reasonable indication of unreported income. Forensic

Cash Transaction Account Analysis for Certain Tax Filers

Please read and give your thoughts on this. For an individual who files a Schedule C or F with their Form 1040, it is possible to prepare a cash transaction account analysis to determine the understatement of income. A cash transaction account analysis is an analysis of all of the cash received by the individual and all of th