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Your company has recently decided to change its method of depreciating long-term assets to be consistent with major competitors. Your company has always used the straight-line method while most other companies in the industry use a declining-balance method. Preliminary computations indicate that changing this accounting principle will reduce Earnings per Share by about 10% in the current year. Naturally, those to whom you report would like to know if there is any way to lessen the impact of this change. You know that other factors in computing depreciation expense are the estimates of useful life and salvage value. You reason that if the estimated useful life of long-term assets is reassessed with minor modifications to the estimated lives, then switching the depreciation method will not decrease net income this period. 1. Can the plan of reassessing the estimated lives of long-term assets achieve the desired result of allowing the company to change depreciation accounting methods to a declining-balance method without reducing net income this period? 2. Will the company have a higher cash inflow as a result of either the change in principle or the change in estimate? 3.Should the level of a company’s income determine the accounting.
Use (a) liquidity analysis and (b) profitability analysis to document Villegas's financial position. Discuss Villegas's profitability and liquidity. Do you think it will qualify for a bank loan?
Determine the cost assigned to ending inventory and to cost of goods sold for the following. (Do not round weighted average per unit costs and round your answers to 2 decimal places.)
Determined with absorption costing and direct costing and When the high-low method of estimating a cost behavior pattern
The following information relates to Mystic Manufacturing's 2013 accounting period: Raw materials used $17,400 Direct labor wages 33,400 Sales salaries and commissions 25,400 Depreciation on production equipment 3,040 Rent on manufacturing facilities..
Lewis Company’s standard labor cost of producing one unit of Product DD is 3.20 hours at the rate of $14.00 per hour. During August, 42,900 hours of labor are incurred at a cost of $14.18 per hour to produce 13,300 units of Product DD. Compute the la..
A foreign company prepares its financial statements in a foreign language and does not provide any convenience translation. Required How might this affect an analyst’s decision to invest in this company? What are different features of financial state..
A company put together a preliminary version of its financial statements. Its Net Income was $200, its Depreciation Expense was $40, and its Cash Flow from Operations was $90. The accountant found an error in computing straight-line Depreciation Expe..
On the basis of this information, what will be the forecast for Roberts' year-end net income and Calculation of net income
His employees can be found on many of the major intersections hawking his wares out of the backs of station wagons and pickup trucks. What is best way for this business to ensure that sales data entry is efficient and accurate?
To balance the United States budget without raising the debt ceiling, the government would need to cut spending by 40% and raise taxes. Speaker of the House, John Boehner recently commented, “When government spending is slashed, jobs are lost and con..
Miguel decides to set up a retirement fund by depositing 15,000 at the end pf each year for 40 years. How much will he have then, if the interest rate is 8% compounded semi annually
Accounts Receivables includes customer or noncustomer transactions with interest component. Trade Discounts can be accounted under the gross and net method: Land could include additional land improvements that have an indefinite life. Cost of buildin..
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