You work as an accountant for a small land development

Assignment Help Accounting Basics
Reference no: EM13587640

You work as an accountant for a small land development company that desperately needs additional financing to continue in business. The president of your company is meeting with the manager of a local bank at the end of the month to try to obtain this financing. The president has approached you with two ideas to improve the company's reported financial position. First, he claims that because a big part of the company's value comes from its knowledgeable and dedicated employees, you should report their Intellectual Abilities as an asset on the balance sheet. Second, he claims that although the local economy is doing poorly and almost no one is buying land or new houses, he is optimistic that eventually things will turn around. For this reason, he asks you to continue reporting the company's land on the balance sheet at its cost, rather than the much lower amount that real estate appraisers say its really worth.

Why do you think the president is so concerned with the amount of assets reported on the balance sheet? What accounting concept relates to the presidents first suggestion to report Intellectual Abilities as an asset? What accounting concept relates to the presidents second suggestion to continue reporting land at its cost? Who might be hurt by the presidents suggestions, if you were to do as he asks? What should you do?

Reference no: EM13587640

Questions Cloud

During 2011 comet cares inc decided to sell an unprofitable : during 2011 comet cares inc. decided to sell an unprofitable segment of its business. the sale of this segment
Complete the contribution format income statement at : lucky products markets two computer games predator and runway. a contribution format income statement for a recent
A car is hauling a 858-kg trailer to which it is connected : a car is hauling a 85.8-kg trailer to which it is connected by a spring. the spring constant is 2360 nm. the car and
The balanced equation for the combustion of ethanol is how : the balanced equation for the combustion of ethanol is2c2h5ohg 7o2g reg 4co2g 6h2oghow many grams of dioxygen are
You work as an accountant for a small land development : you work as an accountant for a small land development company that desperately needs additional financing to continue
1 what is the minimum necessary power output rating of the : 1. what is the minimum necessary power output rating of the water pump in watts?2. what is the minimum necessary power
Acquisition cost on january 1 2014 pearl inc purchased a : acquisition cost on january 1 2014 pearl inc. purchased a piece of equipment with a list price of 60000. the following
Calculate deltas universe for the decomposition of 1 mol of : calculate deltas universe for the decomposition of 1 mol of liquid water to form gaseous hydrogen and oxygen. is this
A 20-kg block is hanging stationary from the end of a : a 2.0-kg block is hanging stationary from the end of a vertical spring that is attached to the ceiling. the elastic

Reviews

Write a Review

Accounting Basics Questions & Answers

  Calculating amount of deductible expenses

Jimmy owns a trucking business. During the current year he incurred the following:

  What is their earned income credit in the following

in 2013 amanda and jaxon stuart have a daughter who is one year old. the stuarts are full-time students and they are

  Financial year jackson ltd sell inventory to action ltd at

financial year jackson ltd sell inventory to action ltd at a sales price of 700 000. the inventory cost jackson ltd 420

  Which of the following might not limit the effectiveness of

which of the following may not limit the effectiveness of internal control systems in an organization?a. costs not

  Find out the average product function for input l determine

a certain production process employs only labor l. output q is a function of labor given by the following relationship

  How much can she deduct

Although her records of the expenses incurred in the breeding activity are spotty, she can establish that in year 10 she spent $1,000 on transportation and lodging to attend cat shows, $400 on cat food, $700 on veterinary expenses, and $300 on gro..

  How would i do these accounting entries correctly

The total premium for each policy was paid in full (for all months) at the purchase date, and the Prepaid Insurance account was debited for the full cost. (Year-end adjusting entries for Prepaid Insurance were properly recorded in all prior years...

  Jones corporation uses a budgeted factory overhead rate to

jones corporation uses a budgeted factory overhead rate to apply overhead to production.direct labor costs are the cost

  Prepare the journal entry for the issuance of the bonds

On June 1, 2013, Madison notified bondholders of its intent to call the bonds at face value plus a 1% call premium on July 1, 2013. By June 30 all bondholders had chosen to convert their bonds into shares as of the interest payment date. On June 3..

  Income statement as income from investment

On December 31, 2010, the fair value of the Ranger stock owned by Howdy Doody had increased to $70,000. How much should Howdy Doody show in the 2011 income statement as income from this investment?

  At the end of the prior year the fair value of the security

a companys portfolio of available-for-sale securities consists of the common stock of one company. at the end of the

  Ez curb company completed the following transactions during

ez curb company completed the following transactions during 2010. the annual accounting period ends december 31

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd