Application: IFRS vs. U.S. GAAP 1. In this week's Discussion, you studied revenue recognition standards and related accounting issues for companies operating in international markets. Due to the scope of international markets and the differences in IFRS and U.S. GAAP accounting standards, accountants are also challenged with i
Brief summary on situation, Green Pastures is a 400-acre farm on the outskirts of the Kentucky bluegrass, specializing in the boarding of broodmares and their foals. A recent economic downturn in the thoroughbred industry has led to a decline in breeding activities, and it has made the boarding business extremely competitive.
ABC Ltd. produces an MP3 player. The market for this product is increasing, and for this reason, ABC is planning to expand its production capacity. This plan requires new machinery and an increase in working capital that would be financed with borrowing. Complete the following: 1. What are the main sources of finance that
Envelope budgeting: summarize and explain.
Angelo Diaz has decided to go into business selling colorful scarves which are popular among university students. He will operate the business out of a flea market, mostly on weekends. He is trying to get himself organized for the start of the first quarter. In order to do so, he will have to prepare a few budgets. Use the follo
What is meant by the term "secondary mortgage market"? How does it work? Explain in detail
The IRS audited S. Johnson's tax returns for the 2010 through 2012 and classified the $260,000 of distributions as salary income for each year. What IRC is used to support the claim of the distribution as income based on the following facts and for the tax research memo? S. Johnson and K. Morrison, attorneys at law, formed
What is the tax treatment of travel expenses for the purpose of data collection paid by a tenured full professor? Not sure what IRC this will relate to and need assistance getting started based on the following criteria. Professor James obtained tenure and promotion to full professor status many years ago. Yet, he continue
Myers Company provides you with the following condensed balance sheet information. Assets Current assets 43,600 Equity investments (ABC stock; 10,290 shares at cost) 41,160 Equipment (net) 252,900 Intangibles 60,310 Total assets397,970 Liabilities and Stockholders' Equity Current and long-term liabilities10
Transfer Pricing 1) What is your opinion on the questions below? Transfer pricing is an important topic from multiple perspectives. It is a global issue affecting taxation, financial results, performance evaluations, and managerial motivation. Ratios are based on the underlying financial information. Transfer pricing is a
1. International accounting is impacted by a wide range of factors, including accounting diversity, global accounting standards, multinational companies, and the global economy.Think about the meaning of international accounting. As you do so, consider the variety of factors that impact it. Consider how accounting diversity can
The following are selected 2012 transactions of Darby Corporation. Sept. 1 Purchased inventory from Orion Company on account for $54,700. Darby records purchases gross and uses a periodic inventory system. Oct. 1 Issued a $54,700, 12-month, 8% note to Orion in payment of account. Oct. 1 Borrowed $84,080 from the Shore Ba
Suppose on that on January 1st a Mexican firm borrows $20 million from Citibank (USA) for one year at 8.00% interest per annum. The loan was taken when the spot rate was USD/MXP3.40. At the end of the one year when the loan was repaid, the exchange rate was USD/MXP 5.80. Based on the above information, calculate the Mexican Pe
Hart Nance and Jason Symington operate gift boutiques in shopping malls. The partners split profits and losses equally, and each takes an annual drawing of $80,000. To even out the workload, Nance travels around the country inspecting their properties. Symington manages the business and serves as the accountant. From time to tim
The following amortization and interest schedule reflects the issuance of 11-year bonds by Capulet Corporation on January 1, 2006, and the subsequent interest payments and charges. The company's year-end is December 31, and financial statements are prepared once yearly. Amortization Schedule Year Cash Interest Amount Unamo
Using FIFO, LIFO, and the weighted average method, determine the gross profit, cost of goods sold, and cost of ending inventory. Use the form provided for your answers. Data below represents the purchases in August of Item ABC for Golson Company. Assume the company sold 1 unit during the month at a selling price of $50. D
Western Bank & Trust purchased land and a building for the lump sum of $3 million dollars. To get the maximum tax deduction, Western allocated 90% of the purchase price to the building and only 10% to the land. A more realistic allocation would have been 70% to the building and 30% to the land. Explain the tax advantage of al
Dos Passos Company sells televisions at an average price of $909 and also offers to each customer a separate 3 year warranty contract for $204 that requires the company to perform periodic services and to replace defective parts. During 2012, the company sold 303 televisions and 285 warranty contracts for cash. It estimates the
Quest Tech, Inc. manufactures and sells specialized data storage equipment and services to entertainment and media companies. The equipment is used to efficiently store large data files. Quest Tech is currently marketing its latest equipment, which includes the Company's new patented technology that significantly increases it
Employees are paid every Saturday for the preceding work week. If a balance sheet is prepared on Wednesday, December 31st, what does the amount of wages earned during the first three days of the week (12/29, 12/30, 12/31) represent? Explain. What journal entry would be made for the days worked and what entry would be made when t
School District #25 formally integrates the budget into the accounting system and uses the encumbrance system. All appropriations lapse at year-end. At year-end, before closing entries, the district had the following balances in its accounts. All accounts had normal balances. (a) Prepare the necessary closing entries. (b)
Real Manufacturing Company provided the following information for the year 2014: Purchases—direct materials $180,000 Direct materials used in production $192,000 Direct labor $235,000 Indirect materials
In a troubled debt situation, why might the creditor grant concessions to the debtor? b. What type of concessions might a creditor grant the debtor in a troubled debt situation? c. What is meant by "impairment" of a loan? Under what circumstances should a creditor or debtor recognize an impaired loan?
On July 31, 2012, Bismarck Company engaged Duval Tooling Company to construct a special-purpose piece of factory machinery. Construction began immediately and was completed on November 1, 2012. To help finance construction, on July 31 Bismarck issued a $628,800, 3-year, 12% note payable at Wellington National Bank, on which inte
1. What is activity-based Costing? How can banks use it in their business? Explain. 2. How can banks link activity-based costing to performance management? Explain. 3. How can activity-based costing provide useful information on costs? Explain. 4. How is activity-based costing useful in measuring customer profitability?
Jog Road Company's cost system assigns MSDA expenses to customers using a rate of 33% of sales revenue. The new CFO has discovered that Jog Roads's customers differ greatly in their ordering patterns and interaction with the company's sales force. Because the CFO believes Jog Road's cost system does not accurately assign MSDA ex
Beeline Manufacturing produces two types of industrial ventilation machines: heavy-duty and standard. The assignment basis for overhead costs has always been direct labor hours. For 2013, Beeline compiled the following data for the two products: Heavy-duty Standard Sales in units 4,000 45,000 Sales price per unit
Year-end inventory cannot merely be based on a company's cost and whichever cost flow method the company is currently using. It needs to be further tested under the Lower of Cost or Market Rule for the potential need to mark it down. What are the "tests" used to determine the ceiling and the floor values to which the market va
In need some help in answering these questions: 1) What is your opinion on the questions below? FASB promulgates US GAAP (Generally Accepted Accounting Standards) and IASB creates IFRS (International Financial Reporting Standards). US GAAP is a rule-based system while IFRS are principle-based. The accounting standards only
I need some help in answering these questions: 1. What is life-cycle costing? Under what circumstances can it be most useful? What are some potential problems with this approach? 2. What is target pricing? Under what circumstances can it be most useful? What are some potential problems with this approach? 3. What is cost-p