User Account

All Pages

Evaluate management decision to undertake asset revaluation

Assignment Help Accounting Basics
Reference no: EM132749488

Question: Assume Kangaroo Ltd. decides to undertake an upward revaluation of its non-current assets just prior to the end of the financial year. This transaction will result in an increase in the total assets and shareholder's equity of the company. Using your own words, critically evaluate the management's decision to undertake the asset revaluation.

Your answer should address the following requirements:

(a) Explain the decision of management to undertake an asset revaluation in relation to the debt hypothesis of Positive Accounting Theory.

(b) Explain the decision of management to undertake an asset revaluation in relation to the bonus plan hypothesis of Positive Accounting Theory.

(c) Evaluate which of the two hypotheses (debt hypothesis and bonus plan hypothesis) can better explain the decision of management.

Reference no: EM132749488

Questions Cloud

Calculate the net cost of ricos merchandise purchases : RiCo uses the perpetual method for inventory and records purchases at gross. In 20X4, it has total merchandise purchases of $324,000. It returns $19,000.
Describe elements and purpose of each financial statement : Explain the impact of accounting transactions in financial statements. Describe the elements and purpose of each financial statement.
What are the standard audit completion procedures : What are the standard audit completion procedures? What is a provision? What is a contingent liability? A contingent asset? Enumerate the procedures to test.
Calculate the amount of depreciation expense : A factory machine was purchased for $20,000 on March 1, 2021. It was estimated that it would have a $4,000 residual value at the end of its 5-year useful life.
Evaluate management decision to undertake asset revaluation : Assume Kangaroo Ltd. decides to undertake an upward revaluation of its non-current assets just prior to the end of the financial year. This transact ion will.
What is the first procedure you should do : If you were either a preparer of the consolidation workpapers or the external auditor of those workpapers, what is the FIRST procedure you should do?
What are some of the challenges and issues auditors face : What are some of the challenges and issues auditors face when performing audits on acquisitions and payment cycles? The response must be typed.
What is breakeven units of sales revenue for the month : A restaurant has fixed costs of $53,400 for the month of March 0006. The average check is $12.95, with an average variable cost of $7.38.
Identify three different descriptive analytics : Identify three different descriptive analytics that are used in an audit setting and describe how they can help decision makers.

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is ratchets rotators rate of return

During the year it generated Php 4,000 in cash flow. If Ruzty sells it, he could receive Php 6,100 for it. What is ratchets rotator's rate of return

  During 2014 lowes company sold equipment with a book value

during 2014 lowes company sold equipment with a book value of 90000 for proceeds of 109000. the company purchased new

  What is the net income or net loss for the year

The Stay Healthy Medical Clinic's Balance sheet on December 31, 2014 showed an owner's equity of 1,280,000. What is the net income or net loss for the year 2015

  Winfrey cos march 31 inventory of raw materials is 150000

winfrey co.s march 31 inventory of raw materials is 150000. raw materials purchases in april are 400000 and factory

  Hiilemeyer companys standards for its hunter model include

hiilemeyer companys standards for its hunter model include 50 ounces of borolox at a cost of 6.30 per ounce. during may

  Discuss straight-line amortization for bond issue costs

The company uses straight-line amortization for bond issue costs and bond premium. Acme decides to call the bonds on January

  Disclosures required in various situations ace inc

Recently Ace interrupted its policy of paying cash dividends quarterly to its stockholders.

  How could unethical behavior related to the use of

how could unethical behavior related to the use of information systems impact a business?how can a business secure its

  Are jay and tina acting in an ethical manner

Sizemo Elektroniks sells semiconductors that are used in games and small toys. The company has been extremely successful in recent years

  Determine the equivalent discount rate for a period

Your bank is offering you an account that will pay 12% interest in total for a? two-year deposit. Determine the equivalent discount rate for a period

  Computerize the main functions of system

Include a discussion about problem areas that could arise, assuming that you will eventually have many more clients and several more employees.

  Compute the companys contribution margin for july

Estimate the company's total variable cost per unit and its total fixed costs per year. Compute the company's contribution margin for July.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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