Inventory 1. Specific identification method. Boston Galleries uses the specific identification method for inventory valuation. Inventory information for several oil paintings follows. Painting Cost 1/2 Beginning inventory Woods $21‚000 4/19 Purchase Sunset 21‚800 6/7 Purchase Earth 31‚200 12/16 Purchase Moon 4‚000 Woods and Moon were sold during the year for a total of $35‚000. Determine the firm’s a. Cost of goods sold.
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AB1102: Accounting 2 Notes Objective of Financial Statements – objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors‚ lenders and other creditors in making decisions about providing resources to the entity. 2 roles of financial reporting: Contracting (backward looking) and Valuation (forward looking) Qualitative Characteristics (QC) of Useful Financial Information - Relevance o Predictive
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ag‚a;es’g.;’gad;a’;ldg;gd;sal;‚ger’fa‚s.a;l‚gdlag‚dla‚g;ewlwetp;lq4pewql‚e;et‚q;g‚al‚gal;g‚dla;ew‚tqleg‚algm‚eksgtmaq;‚;’.E’S.AFD;Af?D/A>;T’‚;L‚EL;On January 1‚ 2010‚ Ameen Company purchased a building for $36 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31‚ 2012‚ the carrying value of the building was $30 million and its tax basis was $20 million. At December 31‚ 2013‚ the carrying value of the building was $28 million
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Week Three Exercise Assignment Inventory 1. Specific identification method. Boston Galleries uses the specific identification method for inventory valuation. Inventory information for several oil paintings follows. Painting Cost 1/2 Beginning inventory Woods $21‚000 4/19 Purchase Sunset 21‚800 6/7 Purchase Earth 31‚200 12/16 Purchase Moon 4‚000 Woods and Moon were sold during the year for a total of $35
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principle in determining the acquisition cost of plant assets. Pg. 402 Depreciation is the application of the cost principle in determining the acquisition cost of plant assets. This application applies the classes: land improvements‚ buildings‚ and equipment. To determine the acquisition cost of plant assets should be stated at the market value. It would also be reported on the balance sheet as a deduction. Depreciation of plant assets are determined on the assets wear and tear. As it gets older
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compare and contrast different types of accounting. The focus will be on the following types; accrual‚ cash flow and fund accounting. I aim to show the strength and weakness of each‚ how entries are made for each‚ how and if each method handles depreciation‚ how inventory is accounted for and if there any differences between organizations that use a certain method. Accrual accounting is mostly used by organizations that are for profit. Accounts using this method are prepared with financial transactions
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Acct 550c Week6 Homework E10-1 Item Land Land Improvements Bldg Other Accts (a) ($275‚000) Notes Payable (b) $275‚000 (c) $ 10‚000 (d) 7‚000 (e) 6‚000 (f) (1‚000) (g) 25‚000 (h) 250‚000 (i) 9‚000 (j) $ 4‚000 (k) 11‚000 (l) (5‚000) (m)
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e EDouble entry - Income statement 1. Sales When sales are made‚ capital increases by the amount of profit made on the sale. 2. Expenses When ongoing costs‚ such as wages or rent are incurred‚ capital decreases. 3. Income and expense accounts Periodically‚ usually once a year‚ the figure of profit (income - minus expenses) is added to capital. During the year figures are accumulated in separate accounts for each item of income and expenditure. 4. Cost of sales At the end of the year‚ the
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liabilities – long – term debt =14030 – 2470 – 3980 = 7580 Net working capital = current assest – current liabilities NWC = 3840 – 2470 NWC = 1370 2. Building an income statement Lifetime‚ Inc.‚ has sales of $585‚000‚ cost of $273‚000‚ depreciation expense of $71‚000‚ interest expense of $38‚000‚ and tax rate of 40%. What is the net income for this firm? Income statement Sales 585000 Costs 273000 Deprectiation 71000 EBIT 241000 Interest 38000 Taxable income
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• Depreciation according to the straight line method = (Cost - Residual value) / Useful life. For the rehabilitation alternative‚ residual value is zero at the end of year 20. • ATCF(After-tax cash flow) will be calculated using the formula = Operating Costs after taxes plus Tax shields from depreciation. Part A: Rehabilitation without parts Depreciation =(39500+115000)/20 = $7725 per year. Tax shield from depreciation = $7725*0.48 = $3708 per year Here are the depreciation cash
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