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You are the CFO of Diversi?ed Industries. Diversi?ed has suffered through 4 or 5 tough years. This has deteriorated its ? financial condition to the point that Diversi?ed is in danger of violating two loan covenants related to its largest loan, which is not due for 12 more years. The loan con-tract states that if Diversi?ed violates any of these covenants, the loan principal becomes immediately due and payable. Diversi?ed would be unable to make this payment, and any additional loans taken to repay this loan would likely be at higher rates, forcing Diversi?ed into bankruptcy. An investment banker suggests forming another entity (called ‘‘special purpose entities'' or SPE) and transferring some debt to this SPE. Structuring the SPE very carefully will have the effect of moving enough debt off Diversi?ed's balance sheet to keep the company in compliance with all its loan covenants. The investment banker assures you that accounting rules permit such accounting treatment. Required: How do you react to the investment banker?
GoFlo is a small growing firm that is considering the purchase of another truck to serve GoFlo's expanding customer base. The new truck will cost $21,000 and should generate annual
cheque issued and presented for payment 400 in cash book debit balance
Illustration: Computation of retained profits acquisition Normal 0 false false false EN-US X-NONE X-NONE MicrosoftIn
LIQUIDATION OF COMPANIES (a) Methods of Winding Up: A company may be wound up:By the court, Voluntarily, either as a members' or a creditors' winding up; or Subject to the s
Nieland Industries had one patent recorded on its books as of January 1, 2014. This patent had a book value of $288,000 and a remaining useful life of 8 years. During 2014, Nieland
PROVABLE DEBTS All debts and liabilities present or future, certain or contingent, are provable in bankruptcy, except: 1) Claims for unliquidated damages in tort; 2) Debts
What is the difference between financial statements prepared from the expanded accounting equation and those prepared from a trial balance?
Cost of goods sold minus sales
#Hi! would you mind to help me? is there such an accounting term as Withholding Tax Payable??? please help me.. thanks
According to the FASB, the usefulness of accounting is judged by which of the following two qualitative characteristics of accounting information? Comparability and neutrality Unde
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