... 75012-1 Cash 50024-1 J.Carlton 95 ____ 11345 Balance b\d | Dr Capital Cr 20071-1 Bank 10,000 ____ 10,000 | | Dr Purchases Cr | 2007 2-1 Creditors 1,063 9-1 Cash 546 10-1 Creditors 755 _____ 2,364 | Dr T.Braham Cr 20072-1 Purchases 36010-1 Purchases 598 ____ Balance b\d 958 | 2007...
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...(White, 2012). Elders plan to proceed as a going concern and meet their objectives as and when they fall due (Sprague, 2013). The majority of Elders limited business operations are at risk of economic and marketing fluctuations, particularly due to the recent global recession (Elders Financial Statement, 2013). The auditing focus will be to consider whether an entity possess the ability to proceed with operations for the foreseeable future, given the circumstances of the business and the environment in which it operates (SAS 130, Para 8). Potential misstatements Management may be compelled not disclose all relevant facts pertaining to the entity. This insufficient disclosure is a material misstatement on the financial statements (ASA 315). Audit Evidence: The auditor should check sufficiency and correctness of disclosures of financial indicators. The auditor should carry out an extensive review level to which losses are caused by the non-recurrent transactions or events, how cash is expected to flow as well as...
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...statements. 1. Which method should be used? 2. How should the resulting translation adjustment be reported on the consolidated financial statements? C. Translation methods differ on the basis of which accounts are translated at the current exchange rate and which are translated at a historical exchange rate. Translating accounts at the current exchange rate creates a translation adjustment. D. Historically, accountants have experimented with a number of different translation methods. The dominant methods currently in use are the temporal method and the current rate method. E. Translation adjustments can be either (1) reported as a gain or loss in income or (2) deferred in the stockholders' equity section of the balance sheet. II. The primary objective of the temporal method is to maintain the underlying valuation method used by the foreign entity to account for its assets and liabilities. A. Assets and liabilities carried at current or future value are translated at the current exchange rate. Assets and liabilities carried at cost and stockholders' equity items are translated at a historical exchange rate. B. By translating some assets at the current exchange rate and others at historical rates the temporal method distorts financial ratios calculated in the foreign currency. C. Most income statement items are translated at average-for-the-period rates. However,...
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...Balance Sheets (Dollars in millions) | | 2012 | 2011 | 2010 | | Assets | | | | | Current Assets | 22,706 | 22,985 | 20,854 | | Long term Assets and Other Assets | 249,608 | 247,457 | 248,537 | | | | | | | Total Asset | 272,314 | 270,442 | 269,391 | | | | | | | Current Liabilities | 31,787 | 30,892 | 34,854 | | Long-term Debt | 66,358 | 61,300 | 58,971 | | Other Noncurrent Liabilities | 81,475 | 72,453 | 63,616 | | Stockholder Equity | | | | | Common Stock, paid in capital and Retained earning | 125,583 | 126,547 | 90,867 | | Treasury Stock | -32,888 | -20,750 | 21,083 | | Stockholder Equity | 92,695 | 105,797 | 111,950 | | Total liabilities and Stockholder's Equity | 272,315 | 272,315 | 269,391 | | | | | | | Income Statements (Dollars in millions) | | 2012 | 2011 | 2010 | | | | | | | Operating Revenues | 127,434 | 126,723 | 124,280 | | Operating Expense | 114,437 | 117,505 | 104,707 | | Operating Income( loss) | 12,997 | 9,218 | 19,573 | | Interest Expense | 3,444 | 3,535 | 2,994 | | Equity in net Income od Affiliate | 752 | 784 | 762 | | Other Income (expense) | 134 | 249 | 897 | | Income tax expense( benefit) | 2,900 | 2,532 | -1,162 | | Net Income | 7,539 | 4,184 | 20,179 | | Less:Net income Attributable to noncontrolling Interest | -275 | -240 | -315 | | Net Income Attributable to AT&T | 7,264 | 3,944 | 19,864 | | EPCS: Net Income Attributable...
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...statements. 1. Which method should be used? 2. How should the resulting translation adjustment be reported on the consolidated financial statements? C. Translation methods differ on the basis of which accounts are translated at the current exchange rate and which are translated at a historical exchange rate. Translating accounts at the current exchange rate creates a translation adjustment. D. Historically, accountants have experimented with a number of different translation methods. The dominant methods currently in use are the temporal method and the current rate method. E. Translation adjustments can be either (1) reported as a gain or loss in income or (2) deferred in the stockholders' equity section of the balance sheet. II. The primary objective of the temporal method is to maintain the underlying valuation method used by the foreign entity to account for its assets and liabilities. A. Assets and liabilities carried at current or future value are translated at the current exchange rate. Assets and liabilities carried at cost and stockholders' equity items are translated at a historical exchange rate. B. By translating some assets at the current exchange rate and others at historical rates the temporal method distorts financial ratios calculated in the foreign currency. C. Most income statement items are translated at average-for-the-period rates....
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...the retirement of debt and the amortization of any debt premium or discount. 3. The key criterion is financial accountability the primary government either appoints a voting majority of the units governing body or a majority of the units governing body is composed of primary government officials and the primary government is able to impose its will upon the potential component unit or there is the potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. 4. Discrete presentation is when one or more component units are reported in separate columns, in addition to those pertaining to the primary government. Blending is when the component units transactions and balances are reported as if they were part of the primary government that is, the component units funds are accounted for just as they were funds of the primary government. Blending is required when the primary government and the component units are controlled by governing boards having the same members or the component unit provides services solely to the primary government. If those conditions are not satisfied then discrete presentation is required. 5. Discrete presentation, as it must be applied in government-wide statements, allows for the aggregation of any number of...
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...(this task is for the course Introduction to Financial Accounting (11th Edition) by Charles T. Horngren (Author), Gary L. Sundem (Author)) Write your answer in the space provided or on a separate sheet of paper. QUESTION 1 Designate how each transaction would be reported on the statement of cash flows using OP for operating activities, IN for investing activities, FI for financing activities, I for an inflow of cash and O for an outflow of cash. If the transaction is included only in a supplemental schedule, denote this as SS. Section Inflow or Outflow 1. Paid cash dividends ________ ________ 2. Purchased 6 months of insurance in advance ________ ________ 3. Sold inventory for cash ________ ________ 4. Purchased equipment signing a two-year note ________ ________ 5. Collected accounts receivable balance from a customer ________ ________ 6. Sold shares of another company's stock held for speculative purposes ________ ________ 7. Reclassified a note from long term to short term ________ ________ 8. Issued bonds at a premium ________ ________ QUESTION 2 The following data pertains to Joss Decorating for the year of 2012: a. Salaries and wages: accrued, $175,000; paid in cash $200,000. b. Depreciation, $50,000. c. Interest expense, all paid in cash, $12,500. d. Other expenses, all paid in cash, $112,000. e. Income taxes accrued, $35,000; income taxes paid in cash, $33,000. f. Bought plant and facilities for $365,000 cash. g. Sales of $1...
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...Ford Motor Company | Spring 2013 Final Project | By Drake Dukes, Sarah Miller, Josh McKeon, Mackenzie Sowers, and Danny Lee | 5/9/2013 | Introduction Ford Motor Company aka “Ford” is an American multinational automaker headquartered in a suburb of Detroit, Michigan founded by Henry Ford and incorporated in 1903, 109 years ago. Ford introduced methods for large-scale manufacturing of cars through the use of the world famous assembly lines. Ford Motor Company engages in the development, manufacture, distribution, and service of vehicles, parts, and accessories worldwide. Ford markets cars, trucks, parts, and accessories through retail dealers in South America, Europe, Turkey, Russia, and the Asia Pacific region (SEC). Ford is the second-largest US-based automaker behind General Motors and the 5th largest in the world behind its domestic counterpart, GM and foreign rivals Volkswagen, Toyota, and Hyundai. The company operates through two sectors, Automotive and Financial Services. Under the Automotive sector, the company sells automobiles and commercial vehicles under the Ford brand and luxury cars under the Lincoln brand. Ford also owns small stakes in Mazda of Japan and Aston Martin of the United Kingdom. The financial services sector provides financing products, which include retail installment sale contracts for new and used vehicles; leases for new vehicles to retail customers, government entities, daily rental car companies, and fleet customers; wholesale financing...
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...Case – Drill Exercises* ACCT5910 Business Analysis and Valuation The University of New South Wales School of Accounting Lecturer Dr Peter Vassallo Question 1 Below is Target Corporation’s Income Statement for 2008. 1. Compute Target’s Net Operating Income Before Tax (NOBT). Provide a formal argument for including/excluding “Net Credit Revenues” in Target’s NOBT. Ans: COBT = 5,272 (see spreadsheet) Net credit revenues should be included. While the term”credit” suggests that it is a a financial activity, the firm has control on the conditions it sets its customers. More importantly, the firm will vary those conditions in order to yield best overall ROE. You can see here how the aggregation of assets and activities within the firm is conducive to overall firm value as being greater than the sum of its parts. Hence goodwill. Thus some firms include credit to customers within the value chain portion that the firm that they purposefully occupy – financing customer. We can thus see how all this translates into an opportunity to pursue positive residual earnings. Comment: (1) While you are not told what to do, your instinct should be to get your answer from a reformulation rather than computing a ratio from a formula. Doing so will earn you higher marks because you are being more explicit and efficient in the presentation of your answer. Your answers should show how you are integrating your knowledge. By linking the classificication to ROE, then to Residual earnings, then to...
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...and risk. The statement of cash flows is useful because it provides answers to the following important questions: Where did cash come from? What was cash used for? What was the change in the cash balance? Specifically, the information in a statement of cash flows, if used with information in the other financial statements, helps external users to assess: 1. A company’s ability to generate positive future net cash flows, 2. A company’s ability to meet its obligations and pay dividends, 3. A company’s need for external financing, 4. The reasons for differences between a company’s net income and associated cash receipts and payments, and 5. Both the cash and noncash aspects of a company’s financing and investing transactions. What can we learn from SCF that is not already available in the other financial statements? It provides answers to important questions like: Where did cash come from? What was cash used for? What was the change in the cash balance? Couldn’t we just look the balance sheet? The change in cash could be determined, but the statement of cash flows provides detailed information about a company’s cash receipts and cash payments during the period. Many things you want to know about a company is...
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...flexibility, operating capabilities, and risk. The statement of cash flows is useful because it provides answers to the following important questions: Where did cash come from? What was cash used for? What was the change in the cash balance? Specifically, the information in a statement of cash flows, if used with information in the other financial statements, helps external users to assess: 1. A company’s ability to generate positive future net cash flows, 2. A company’s ability to meet its obligations and pay dividends, 3. A company’s need for external financing, 4. The reasons for differences between a company’s net income and associated cash receipts and payments, and 5. Both the cash and noncash aspects of a company’s financing and investing transactions. What can we learn from SCF that is not already available in the other financial statements? It provides answers to important questions like: Where did cash come from? What was cash used for? What was the change in the cash balance? Couldn’t we just look the balance sheet? The change in cash could be determined, but the statement of cash flows provides detailed information about a company’s cash receipts and cash payments during the period. Many things you want to know about a company is summarized in this one...
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...FINAL CASE 1.10 1. There were many adjustments that were made in the original balance sheet to properly record overstatements made by DHB Inc. In the current assets, one major entry that was heavily overstated was inventory. Inventory went from $47,560,000 to $38,231,000. The difference of $47,742,000 is a material due to the magnitude of the difference. Another material difference is deferred income tax assets that went from $483,000 to $19,094,000. Totaling a significant difference of $18,611,000. Total current assets changed from $142,266,000 to $106,467,000. The majority of the differences of 35,799,000 came from the above. Under current liabilities, two accounts that were significant were notes payable and income tax payable. Notes payable was restated for a difference of $10,500,000 and income tax payable had a difference of $9,885,000. Under stockholder’s equity, one major account that was restated is additional paid in capital. Addition paid in capital had a difference of $28,236,000 ($35,540,000-$63,776,000) Like the balance sheet, income statement had many adjustments as well. On major change was a net sale of $17,799,000 ($340,075,000-322,276,000). Cost of Good Sold had a difference of $19,667,000 ($245,940,000 - $265,607,000). Both accounts impacted the gross profit by $37,466,000. 2. Under AU Section 316, it gives the auditor a standard to consider what fraud is in the financial statement. The factors that I believe the auditors...
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...EVENT 1: On 19 November 2012, reliance on ‘securing financing’ and the success and timeliness of ‘planned asset sales’ resulted in ‘material uncertainty’ acknowledged by auditors and directors as to whether Elders ‘will continue as a going concern and meet its obligations as and when they fall due’ (Sprague 2013b, White 2012). Discussion: The auditor is required to evaluate the ability of Elders to continue as a going concern (Arens et al. p. 690, ASA 570). Significant uncertainty affects audit planning and requires the auditor to assess disclosure of relevant facts. Inadequate disclosure ‘constitutes a material misstatement of the financial report’ (Arens et al. 2013, p. 728; ASA 315, Appendix 2). Evidence: * Re-calculate to ensure accuracy of assets and expenses, e.g,. inventory, asset classification, book values, depreciation and prepaid expenses (ASA500, A19; Arens et al. 2013, p. 154). * Discuss with Elders management plans to secure financing and expected timing and outcome of planned asset sales to determine the ability of Elders to avoid insolvency (ASA500, A22; Arens et al. 2013, p. 690). Request ‘written representations’ of these plans (ASA500, A25; ASA 570, para 16(e)). * Review results of preliminary assessments performed by management on the ability of Elders to continue as a going concern (ASA 570, para 10). * Examine Elders financial position (assets, liabilities) to evaluate level of uncertainty (PCAOB, AU Section 341(02)). *...
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...MANAGEMENT COLLEGE OF SOUTHERN AFRICA (MANCOSA) ASSIGNMENT COVER SHEET SURNAME FIRST NAME/S STUDENT NUMBER MODULE NAME ASSIGNMENT NUMBER TUTOR’S NAME EXAMINATION VENUE DATE SUBMITTED SUBMISSION (√) BWALYA CHILALA MWIINGA 113444 BUSINESS ADMINISTRATION 3A 03 MR. THUSABANTU MANCOSA CAMPUS 28 APRIL 2012 1ST SUBMISSION P O BOX 25632 POSTAL ADDRESS GABORONE BOTSWANA chilalabwalya@ymail.com WORK: +267 3975025 HOME: +267 3975025 MOBILE: +267 72853488 BBA YEAR 3 – JANUARY 2012 √ RE-SUBMISSION E-MAIL CONTACT NUMBERS COURSE/INTAKE DECLARATION: I hereby declare that the assignment submitted is an original piece of work produced by myself. SIGNATURE: _____CMB_____ DATE: 28/04/2012 Page | 1 Table of Contents Question 1 – FINANCIAL PROJECTION 1.1 1.2 Prepare a production schedule .............................................................................................4 Prepare the Proforma balance sheet of CVB Enterprises ....................................................5 Question 2 – MANAGEMENT OF WORKING CAPITAL 2.1 If the cost of borrowing is 18% per annum, would it be wise for Umlazi Traders to settle its accounts with Sharpe Wholesalers? ................................................................................7 2.2 Trojan Manufacturing 2.2.1 Calculate the value of inventory as at 31 December 2011 using LIFO method ..................8 2.2.2 Calculate the value of inventory as at 31 December 2011 using weighted average method.......................
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...worth 35 points. Terminal Course Objectives A, B, C, D, and E are all addressed on this exam. For the multiple choice questions worth 90 points, you should know: 1. Know what information is desired by external users of financial statements 2. Know about operating activities, investing activities, and financing activities 3. Be able to calculate net cash provided by operating activities in a simple situation (by identifying which activities are operating activities) 4. Know the definitions of asset, liability, equity, revenue, and expense 5. Know what items appear under each classification in the balance sheet 6. Know how to compute Earnings per Share 7. Know the composition of a Retained Earnings statement 8. Know about a ledger account, its different parts, the rules of debit and credit, and the meaning of the term normal balance of an account 9. Know about revenue recognition principle, matching principle, and time-period assumption 10. Know the computation net income under accrual accounting (revenues - expenses) 11. Know the meaning and purpose of adjusting entries, and the different types of adjusting entries 12. Know the difference between periodic and perpetual inventory systems 13. Know how to calculate net cost of purchases when terms of payment look like, for example, 3/10 n/45 14. Know the components of cost of merchandise...
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