Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Lucy Shafer wants to borrow 100,000 to expand her dog-breeding business. She is preparing a set of financial statements to take to the local bank with her loan application. She currently has an outstanding loan from her uncle for 50,000. Lucy's uncle is allowing her to borrow the money at a very low interest rate, and she does not have to make any principal payments for 5 years. Due to the favorable terms of her loan from her uncle, Lucy has decided that it is not significant enough to disclose on her financial statements. Instead, Lucy has classified the 50,000 as contributed capital (equity), and the interest payments are included in miscellaneous expenses on the company's income statement.
1. What are the effects of Lucy's classification on the financial statements?
2. Are there any ratios that might be of concern to the local bank that will be misstated by Lucy's actions?
3. Do you think Lucy's actions are unethical? Suppose Lucy's uncle agrees to be partner in the company and Lucy can afford to buy his share by repaying the 50,000 with interest. Does that change your opinion?
A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts.
Dave Ganz started a sole proprietorship by depositing $30,000 cash in a business checking account. During the accounting period the business earned $6,000 of net income and Ganz withdrew $2,000 cash from the business.
Let's say that you were one of the auditors auditing Enron and you found out that they were engaging in unethical accounting practices and that their financial situation was not as it seemed, What would/should u, as an auditor do? Brief answer...3..
Custom Computers is a company started by two engineering students to assemble and market personal computers to faculty and students. The company operates out of the garage of one of the students' homes. From the following costs of a recent month, ..
The credit manager of Gary prepared an aging schedule of accounts receivable and estimates that $4,800 will prove to be uncollectible.
During the first year of coperations,Shapiro tool accumulated the following manufacturing costs: Raw materials puschased on account 8000 factory labor accrued 6000 incurred manufacturing overhead on account 4000 Prepare separate journal entries for e..
Joe operates a business that locates and purchases specialized assets for clients, among other activities. Joe uses the accrual method of accounting but he doesn't keep any significant inventories of the specialized assets that he sells.
Jerry transfers two assets to a corporation as part of a Sec. 351 exchange. The first asset has an adjusted basis of $70,000 and a FMV of $50,000. The second asset has an adjusted basis of $70,000 and a FMV of $150,000. The FMV of the stock receiv..
Review an annual report of a popular company ie. Target, Kohl's Bass Pro shops, and answer the following questions with references:
What are the issues and complications that may arise when multinational corporations conduct performance measurement and comparisons among subsidiaries located in different countries?
JD Enterprises applies factry overhead based on dirct labor costs. The company incurred the following costs during 2003: dirct materials costs, $650000; direct labor costs, $3,000,000; and factory overhead costs applied, $1,800,000.
Outdoor expo provides guided fishing tours. The company charges $200 per person but offers a 10% for parties of four or more. Consider the following transactions during the month of May.
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd