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Wayne Terrago, controller for Robbin Industries, was reviewing production cost reports for the year. One amount in these reports continued to bother him-advertising. During the year, the company had instituted an expensive advertising campaign to sell some of the slower moving products. It was still too early to tell whether the advertising campaign was successful.
There had been much internal debate as how to report advertising costs. The Vice President of finance argued that advertising costs should be reported as a cost of production, just like direct materials and direct labor. He therefore recommended that this cost be identified as manufacturing overhead and reported as part of inventory cost until sold. Others disagreed; Terrago believed that this cost should be reported as an expense of the current period, based on the conversation principle. Others argued that it should be reported as Prepaid Advertising and reported as a current asset.
The President finally had to decide the issue. He argued that these costs should be reported as inventory. His arguments were practical ones. He noted that the company was experiencing financial difficulty and experiencing this amount in the current period might jeopardize a planned bond offering. Also, by reporting the advertising costs as inventory rather than as prepaid advertising, less attention would be directed to it by the financial community.
During 2011 Thomas earned $36,000 of cash revenue, paid $20,000 for cash expenses, and paid a $2,000 cash dividend to the stockholders.
Stephanie Martinez opened a Latin Fusion restaurant downtown in a large southerncity.
what is net present value of the following cash flows1 investment now of 450002 revenues of 13000 for 15 years and3
coffee bean inc. cbi is a processor and distributor of a variety of blends of coffee. the company buys coffee beans
List three types of consulting services that audit firms have provided to their audit clients in recent years. For each item, indicate the specific threats, if any, that the provision of the given service can pose for an audit firm's independence.
Oct. 1 Stockholders invest $31,940 in exchange for common stock of the corporation.
the sports equipment division of jorgensen company is operated as a profit center. sales for the division were budgeted
Discuss at least three significant differences between IFRS and GAAP.
on january 1 2013 cameron inc. bought 10 of the outstanding common stock of lake construction company for 160 million
Please complete the following problems CPC-1 and CPC-2, Leases = LS-1 and LS-2, Long-term Liabilities = LTL-3, Property, Plant and Equipment = PPE-1 and PPE-5, Deferred Taxes = DT-3 and DT-4, Investments = IN-1 and IN-2
Shupe Inc. estimates uncollectible accounts based on the percentage of account receivable. What effect will recording the estimate of uncollectible accounts have on the accounting equation?
rfs is considering adding a new product line home equity loans which rfs believes will make the mortgage business more
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