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Mikco, a foreign corporation, owns 100% of Flagco, a domestic corporation. Mikco manufactures a wide variety of fl ags for worldwide distribution. Flagco imports Mikco's fi nished goods for resale in the United States. Flagco's average fi nancial results for the last three years are as follows:Sales$20 millionCost of goods sold($15 million)Operating expenses($4 million)Operating profi t$1 millionFlagco's CFO has decided to use the comparable profi ts method to assess Flagco's exposure to an IRS transfer pricing adjustment by testing the reasonableness of Flagco's reported operating profi t of $1 million. An analysis of fi ve comparable uncontrolled U.S. distributorsindicates that the ratio of operating profi ts to sales is the most appropriate profi tability measure. After adjustments have been made to account for material differences between Flagco and the uncontrolled distributors, the average ratio of operating profi t to sales for each uncontrolled distributor is as follows: 6%, 8%, 10%, 10%, and 14%.Using this information regarding comparable uncontrolled U.S. distributors, apply the comparable profi ts method to assess the reasonableness of Flagco's reported profi ts. In addition, if an adjustment to Flagco's reported profi ts is required, compute the amount of that adjustment.
Provide an example of financial institutions, and state what role they play in securities markets.
What would be Altoona's finished-goods inventory cost on Dec 31 under the variable costing method?
Indicate the effect of each of these errors on working capital, current ratio (assume that the current ratio is greater than 1), retained earnings, and net income for the current year and the subsequent year.
The Audit Committee of the board of Directors is unfamiliar with the professional and ethical standards that govern the conduct of an audit and the issuance of an audit opinion.
Write a 1750- to 2,050-word paper in APA format with citations and references that provides a financial comparison of the two companies and your recommendations to improve the financial status of each.
Calculate what cost of sales would have been for the year if the company had used FIFO to value its inventory. Calculate inventory turnover for the year using the reported numbers.
1.On June 30, 2010, Parks Co. had outstanding 8%, $2,000,000 face amount, 15-year bonds maturing on June 30, 2025. Interest is payable on June 30 and December 31.
Can you give an example of what this number may look like by using the income statement of a real-life company?
Beige's earnings and profits are $300,000. Beige redeems 200 of Lois' shares for $100,000. Determine the amount of Lois' recognized gain (1) if she is Sam's mother and (2) if they are unrelated.
During the current year merchandise is sold for $795,000.the cost of the merchandise sold is $477,000. (A) whats is the amount of gross profit?
1.why are top management support and cross-functional involvement crucial when attempting to implement an activity-based costing system? 2. why is the activity-based costing unacceptable for external financial reports?
General Products Company bought Special Products Division in 2010 and appropriately recorded 500,000 of goodwill related to the purchase.
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