What should you know about Financial Accounting? 1. How to measure assets? How to present assets? *Assets are economic resources owned or controlled by the company and can be measured by dollars. *Measure assets by the Principle of Historical Cost. *The cost of asset includes all expenditures that make that asset in place and ready for use. * Present assets in the Balance Sheet by the rank of liquidity. 2. How to measure profits? How to present profits? * Operating
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Assets and Depreciation (A) Fixed Assets Fixed Assets except freehold land are carried at cost of acquisition‚ construction or at manufacturing cost‚ as the case may be‚ including pre-operative expenses in the case of self manufactured assets / plants / undertakings‚ less accumulated depreciation and amortisation. (B) Depreciation and Amortisation: (a) Leasehold land: Premium on leasehold land is amortised over the period of lease. (b) On Plant & Machinery given on Lease: Depreciation on Plant
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QUESTION 1 Which of these is not an advantage of the straight line method of depreciation? A It is easy to work out due to a simple formula B Calculated once for all the years C Depreciation added to maintenance costs rise as the asset ages D The cost of the asset is spread evenly through its useful life. Which of the following is not correct regarding depreciation? A It is due to the use of an asset B Is not incurred if the asset is not used C It is a portion of a long term expense D
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following tasks: Prepare two different depreciation schedules for the equipment one using the double-declining balance method‚ and the other using the straight-line method. (Round to the nearest dollar). Determine which method would result in the greatest net income for the year ending December 31‚ 2005. How would taxes affect management’s choice between these two methods for the financial statements? 1. Straight-line Method Depreciation expense = Acquisition cost residual
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Health Care Budget HCS/577 Health Care Budget Based upon a review of the Patton-Fuller Community Hospital 2009 operating budget variances‚ the long and short-term plans of the various hospital departments and an in-depth analysis of general economic conditions‚ the following assumptions have been concluded and will be used in the preparation of the 2010 operating budget projections. In general‚ Patton-Fuller Community Hospital should anticipate a 3% total “deflation
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ACCT2542 – Week 1 – Self Study Module Basic Journal Revision Questions & Solutions The learning objectives for this self study are: • • To test whether you have a solid understanding of basic journal entries and key concepts covered in ACCT 1501 to ensure that you are prepared for ACCT 2542. To be able to work through the exercises WITHOUT looking at the solution. Once you have completed the exercises then check your work to the solution for accuracy. Accounting for Inventory - (Reference:
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The ratio helps in boosting the effectiveness of the company to generate income at 21.78%. The common method used is the straight-line approach. In this approach‚ the depreciation is calculated annually. The method is indicated in the formula below‚ and it is very simple and easy to use. In the case scenario of Delta Airlines‚ the company depreciates the fixed assets with a straight-line approach. The approach is used
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Chapter 9 Property Acquisition and Cost Recovery SOLUTIONS MANUAL Problems 39. [LO 1] Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $24‚500. In addition‚ Jose incurred the following expenses before using the van: shipping costs of $650; paint to match the other fleet vehicles at a cost of $1‚000; registration costs of $3‚200 which included $3‚000 of sales tax and a registration fee of $200; wash and detailing for $50; and an engine
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revenue that can be used or reinvested in similar or future projects because it is money that has been received. If Caledonia chose to focus on the accounting profits the profit would be much lower because of depreciation. Since depreciation is considered an expense the greater the depreciation the greater the costs to the organization. What are the incremental cash flows for the project in years1 through 5 and how do these cash flows differ from accounting profits or earnings? Ans: The
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36-month‚ straight-line amortization period. 5) What was the effect on earnings per share of the change in depreciation method for “hit” tapes (assume that hit tapes made up 25% of new tape purchases‚ and that the average hit tape was owned for half the year)? EPS = NI-Pref Div / Avg Oustanding Common Stock. So if the depreciation method changes from straight-line to accelerated. More depreciation expense is recognized up front and NI decreases. So the EPS ratio decreases. 6) What was the effect on
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