© The Hong Kong Polytechnic University T HE H ONG K ONG P OLYTECHNIC U NIVERSITY SCHOOL O F A CCOUNTING AND FINANCE Final Examination Programme BBA (Hons) in Accountancy (02002-BAC) BBA (Hons) in Accounting and Finance (02002-BAF) BBA (Hons) in Financial Services (02002-BFS) BBA (Hons) in Management (02002-MGT) BBA (Hons) in Marketing (02002-MKT) BBA (Hons) in Global Supply Chain Management (02002-GSC) (02004-GSC) (02004-IST) BBA (Hons) in International
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Module 6 Reporting and Analyzing Operating Assets DISCUSSION QUESTIONS Q6-1. When a company increases its allowance for uncollectible accounts‚ it also records bad debt expense in the income statement. If a company overestimates the allowance account‚ bad debt expense is too high and net income is understated. As well‚ accounts receivable (net of the allowance account) and total assets are both understated on the balance sheet. In future periods‚ the company will not need to add as much
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CHAPTER 10 SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 10-1 $27‚000 + $1‚400 + $10‚200 = $38‚600 BRIEF EXERCISE 10-2 |Expenditures | | | | | | | | | |Capitalization Period | |Weighted-Average Accumulated Expenditures | |Date | |Amount | |
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Dividends – Safeco 600‚000 Investment in Safeco 650‚000 (E) Stockholders’ equity—Safeco‚ 1/1 7‚000‚000 Investment in Safeco 7‚000‚000 (R) Equipment‚ net 500‚000 Inventory 200‚000 Goodwill 300‚000 Investment in Safeco 1‚000‚000 (O) Depreciation expense 100‚000 Cost of goods sold 200‚000 Goodwill impairment loss 50‚000 Equipment‚ net 100‚000 Inventory 200‚000 Goodwill 50‚000 b. Calculation of equity in net income for 2015: Safeco’s reported net income $ 2‚000‚000 Revaluation
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borrowed to finance construction: capitalized f) Local real estate taxes: capitalized g) Cost of mistakes: expensed h) Overhead costs capitalized i) Insurance & non-covered by insurance costs: expensed 2. a) Firstly‚ we need to match its depreciation to revenue still being earned from the theater‚ small stores‚ and apartment buildings‚ until the building gets razed. This demonstrates that Archer Company’s intentions when purchasing the land and buildings‚ was to raze the old building and construct
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Aviator Airways Ltd and Eagle Airlines Ltd This comparative study of accounting policies adopted by two international airlines for the depreciation of aircraft‚ spares and spare engines provides an insight into the differences in accounting policy that may emerge‚ even when accounting practice in the jurisdictions involved is regulated. Non-current assets Depreciation Depreciable amount Useful Comparability of results Financial statement analysis Aviator Airways Ltd (Aviator) and Eagle Airlines
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improvements on facilities) Cash 2‚500 Improvement Services 2‚500 Operating Revenue 5‚000 (To record printing services billed) Operating Expenses 9‚000 Cash 9‚000 Depreciation Expense Equipment 1‚500 Depreciation Expense Building 900 Accumulated Depreciation 2‚400 (To record depreciation for operations) Chapter 10 Question for Review and Discussion 1‚ 5‚ and 15 1. 1. The GASB states to identify all financial reporting by the government. The financial report will show
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|Does depreciation generate actual cash flow in a company and if so how? | |In: Business Accounting and Bookkeeping [Edit categories] | [pic]CFA Designation Certified Financial Accountant Designation www.socfa.org [pic] [Improve] [pic] Answer Depreciation does not generate cash flow. If a million dollar piece of equipment is purchased‚ an accountant
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natural business year as the fiscal year. 4. A prepaid expense is reported as an asset on the balance sheet. 5. Depreciable plant assets (such as equipment‚ buildings‚ and machinery) lead to adjustments for depreciation. 6. The Accumulated Depreciation contra account is used for depreciation. It provides financial statement users with additional information about the relative age of the assets. Without the contra account information‚ the reader would not be able to tell whether the assets are
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transaction #2 above * Insurance expense for February – refer to transaction #3 above * Depreciation expense on vehicle for February – refer to transaction #12 * Repair supplies on hand - $80 *Acct. No. Assets 101 Cash 102 Accounts Receivable 103 Prepaid Rent 104 Prepaid Insurance 105 Office Supplies 106 Repairs Supplies 107 Vehicle 108 Office Equipment 111 Accumulated Depreciation Liabilities 201 Accounts Payable 203 Salaries Payable 205 Unearned Revenue
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