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!
Assume you work as an assistant accountant in the head office of a national movie rental business, a la Blockbuster Inc. With the increasing popularity of online movie rental operations, your company has struggled to meet its earnings targets for the year. It is important for the company to meet its earnings targets this year because the company is renegotiating a bank loan next month, and the terms of that loan are likely to depend on the company's reported financial success. Also, the company plans to issue more stock to the public in the upcoming year, to obtain funds for establishing its own presence in the online movie rental business. The chief financial officer ( CFO) has approached you with a solution to the earnings dilemma. She proposes that the depreciation period for the stock of reusable DVDs be extended from 3 months to 15 months. She explains that by lengthening the depreciation period, a smaller amount of depreciation expense will be recorded in the current year, resulting in a higher net income. She claims that generally accepted accounting principles require estimates like this, so it would not involve doing anything wrong.
Required: Discuss the CFOs proposed solution. In your discussion, consider the following questions. Will the change in depreciation affect net income in the current year in the way that the CFO described? How will it affect net income in the following year? Is the CFO correct when she claims that the change in estimated depreciation is allowed by GAAP? Who relies on the video company's financial statements when making decisions? Why might their decisions be affected by the CFOs proposed solution? Is it possible that their decisions would not be affected? What should you do?
wilson wonderss bonds have 12 years remaining to maturity. interest is paid annually the bonds have a 1000 par value
Why is data security important now more than ever? What are some of the steps that we can take to ensure that our database is protected and secure? How can you use user views to enhance security and restrict access?
Journalize the entry Escape used to write off customer Ken Ford for $50. (the $50 is included in the 1700 total written off). The balance in Accounts Receivable on December 31, 2011, is. Journalize Escape's adjusting entry to record bad debt expense ..
What amounts of the current general business credit and carryovers are utilized against the 2008 income tax liability? What is the amount of unused credit carried forward to 2009?
You suspect that your immediate supervisor is involved in a significant fraud involving diverting of company assets to personal use. Briefly descrube the steps you might take.
explain how the perpetual and periodic inventory systems differ especially in determining cost of goods sold and ending
What types of businesses property qualify for the business energy credit? Please provide a solution in at least 150 words. Thanks
Why is equity capital generally more expensive than debt financing?
The partnership made an ordinary cash distribution of $10,000 to Marcie, and paid guaranteed payments to partners Marcie, Alice, and Pat of $20,000 each ($60,000 total). How much will Marcie's adjusted gross income increase as a result of the abov..
Mercury's consolidated earnings were ____ affected by the euro's movement, and Mercury's hedge position was ____ affected by the euro's movement.
if paid the total amount owing of 6858 to ato via my national australia bank visa card. a credit card fee of 45
The real property tax year in Adams County is the calendar year. The real property tax becomes a person liability of the owner of real property on January 1 in the current real property tax year 2009.
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