Discuss the validity and implications

Assignment Help Accounting Basics

Reference no: EM13133457

ABC, Inc. has just entered into the business of selling antique cars. The company management decided to lease the premises for the business instead of buying the office premises. They ended up paying an advance rent of $5 million dollars for the initial period of 5 years. The entire amount was recorded as an asset in the form of prepaid expense. When questioned by the auditors, the CFO of ABC, Inc. mentioned "An asset is just an expense waiting to happen." Discuss the validity and implications of this statement.

Reference no: EM13133457

Questions Cloud

Determine the flexible budgeting : The department actually completed 750 hours of production. Determine the budget for the department, assuming that it uses flexible budgeting.

Calculate the total amount of a cash dividend : Calculate the total amount of a cash dividend of $1.00 per share. What accounts for the difference between issued shares and outstanding shares?

Vectors-resultant displacement : A person walks 18m East and then 32m in a direction of 65 degrees N of E. What is the resultant displacement?

Are three events pairwise-independent events : B is independent of C or not? Focus on probabilities assigned in the subsets, 0.05 is repeated in C, but 0.10 is repeated in B, so P(A∩C)=?

Discuss the validity and implications : When questioned by the auditors, the CFO of ABC, Inc. mentioned "An asset is just an expense waiting to happen." Discuss the validity and implications of this statement.

Determine the total bond interest expense to be recognized : Determine the total bond interest expense to be recognized over the bonds’ life. Prepare the first two years of an amortization table using the straight-line method.

Analysis of vectors : A river 35 m wide flows south at a speed if 15 m/s. What must be the velocity and heading of the boat if it is to move directly from the west bank to the east bank in 5 seconds?

What was the actual fixed overhead incurred for may : Stoker Corporation applies fixed overhead at the rate of $0.65 per unit. For May, budgeted fixed overhead was $524,745. The production volume variance amounted to $5,070 unfavorable, and the price variance was $11,100 unfavorable.

Find percentage of such males that weigh a given value : Find the percentage of such males that weigh between 190 and 210 lb. (Note: Make sure you choose the flag value closest to 190 and 210.) Give the proportion as a decimal rounded to thousandths.

User Account

All Pages