1- Choose a company from the US market-(If you wish you can choose the
docx
keyboard_arrow_up
School
Southern Leyte State University - Main Campus, Sogod, Southern Leyte *
*We aren’t endorsed by this school
Course
MISC
Subject
Accounting
Date
Nov 24, 2024
Type
docx
Pages
1
Uploaded by BaronExploration19887
1. Choose a company from the US market.
(If you wish you can choose the company from another country, but it should be IFRS reporting
available).
2. Take the most recent yearly financial statement available (called 10K report).
3. Explain how the company is doing revenue recognition. Does the company use any
managerial assumptions in the revenue recognition?
4. Which method company is using to recognize bad debts? Check how allowance for bad debts
changed over the last 2-3 years.
5. Which method company is using to recognize inventory? LIFO or FIFO? If a company uses
LIFO, compute approximate tax savings using tax rate of 30%. In addition, compute COGS and
Inventory under FIFO.
6. Check which assumptions your company is making for depreciation.
7. Make a conclusion. State any unusual assumptions you have found or summarize the main
findings.
Discover more documents: Sign up today!
Unlock a world of knowledge! Explore tailored content for a richer learning experience. Here's what you'll get:
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Related Questions
a. What do the accounting policies say in the annual report (footnotes) regarding the cost of revenue? What are the drivers to the cost of revenue and the trends?
b. Are there any trends in sales and marketing expenses or research and development? Are these amounts reasonable for the type of business?
c. Compare general and administrative expenses to similar companies. Are they reasonable?
d. What is the ratio of net interest income (expense) to income from operations? Is this a safe ratio for the company? Why or why not?
arrow_forward
Please answer all four questions within the attached document.
arrow_forward
If a company uses the direct write-off method of accounting for bad debts,a. it will report accounts receivable on the balance sheet at their net realizable value.b. it is applying the matching principle.c. it will reduce the Accounts Receivable account at the end of the accounting period for estimated uncollectible accounts.d. it will record bad debt expense only when an account is determined to be uncollectible.
arrow_forward
Match each of the following terms with its definition.
Terms
Definitions
_____ 1. Accounts receivable
a. Reductions in amount owed by customers because of deficiency in products or services.
_____ 2. Credit sales
b. Formal credit arrangements evidenced by a written debt instrument.
_____ 3. Sales allowances
c. Amount of cash owed to the company by customers from the sale of products or services on account.
_____ 4. Allowance method
d. Recording bad debt expense at the time the account is known to be uncollectible.
_____ 5. Notes receivable
e. Sales on account to customers.
_____ 6. Direct write-off method
f. Reductions in amount owed by customers if payment on account is made within a specified period of time.
_____ 7. Net revenues
g. Total revenues less returns, allowances, and discounts.
_____ 8. Sales discounts
h. Recording an adjustment at the end of each period for the estimate of future uncollectible accounts.
_____ 9. Aging method
i. Estimated percentage of…
arrow_forward
In each of the situations described below, indicate the accounting principles or concepts, if any, that have been violated and explain briefly the nature of the violation. If you believe the practice is in accord with generally accepted accounting principles, state this as your position and defend it. a. A small business in which credit sales fluctuate greatly from year to year uses the direct writeoff method both for income tax purposes and in its financial statements. b. Computer Systems often sells merchandise in exchange for interest-bearing notes receivable, maturing in 6, 12, or 24 months. The company records these sales transactions by debiting Notes Receivable for the maturity value of the notes, crediting Sales for the sales price of the merchandise, and crediting Interest Revenue for the balance of the maturity value of the note. The cost of goods sold also is recorded. c. A company has $400,000 in unrestricted cash, $1 million in a bank account specifically earmarked for the…
arrow_forward
27.A company writes off as uncollectible an account receivable from a bankrupt customer. The company has an adequate amount in its Allowance for Uncollectible Accounts. What would be the effect of this transaction in the company's financial statements?
a. Operating expenses for the period will increase.
b. Total current assets will decrease.
c. Net profit for the period will not be affected.
d. Net profit for the period will decrease.
arrow_forward
You are the staff accountant of ABC Company. Your work is mainly focuses on Accounts Receivable group. You record the accounts receivable and provide allowance for doubtful accounts based on company’s estimate. On Year 2012 the company suffered from loss due to environmental disobedience. The DENR fine them 1M pesos for the infraction of the sea. With this, the company revise its policy of recording allowance of bad debts from 5% to 2%. The company has significant account receivable for the year and collection for this accounts are highly possible. On your trending analysis report, you noticed that you rarely record and write off any bad debts as part of the policy.
You join the meeting with the new accounting policy and Hilary, the CFO said that the decrease of bad debts expense is immaterial to total accounts receivable. She insisted the accounting principles of materiality.
Your controller agrees and immaterial to present the changes in the financial statements and ask you to…
arrow_forward
Q3. A company wants to use the allowance method to account for bad debts. You are assigned to explain to the company the different ways it can use to estimate bad debts.
arrow_forward
Which of the following will affect net income?
O O
Writing off an Account Receivable.
Estimating bad debts at the end of the year
Re-establishing and collection of an account that was previously written off.
O All of the above transactions will affect net income.
arrow_forward
On December 1, Anson's Drug Store concluded that a customer's $325 account receivable was uncollected and that the account should be written off. What effect will this write-off have on the company's net income and balance sheet totals assuming the direct write-off method is used to account for bad debts?
a. decrease in net income; decrease in total assets
b. no effect on net income; no effect on total assets
c. increase in net income; no effect on total assets
d. no effect on net income; decrease in total assets
arrow_forward
Discuss the different methods available to account for bad debts. Assume
that
you have a company. And the management estimates that 2.5% of
sales will be uncollectible. Provide an amount of sales and prepare the
journal entry using the percent of sales method (-
arrow_forward
Match the terms with the definitions.
arrow_forward
Fictitious accounting entries are recorded that cause revenue to be overstated by $5 millionfor the year; the accounting manager was trying to make the company’s income look betteron the company’s upcoming loan application. This type of fraud is:a. asset misappropriation.b. fraudulent financial reporting.c. GAAP disordering.d. IFRS misalignment.
arrow_forward
On October 12 of the current year, a company determined that a customer's account receivable was uncollectible and that the
account should be written off. Assuming the allowance method is used to account for bad debts, what effect will this write-off have
on the company's net income and total assets?
Multiple Choice
No effect on net income; no effect on total assets.
Decrease in net income; no effect on total assets.
Decrease in net income; decrease in total assets.
No effect on net income; decrease in total assets.
arrow_forward
A company uses the direct write-off method to account for bad debts. What is the impact on the accounting equation of the entry to record the write-off of a customer’s account balance?
Assets and liabilities decrease.
Assets and shareholders’ equity decrease.
Assets increase and shareholders’ equity decreases.
Shareholders’ equity and liabilities decrease.
arrow_forward
How would each of the following items be reported on the balance sheet?
a. Accrued vacation pay.
b. Estimated taxes payable.
c. Service warranties on appliance sales.
d. Bank overdraft.
e. Employee payroll deductions unremitted.
f. Unpaid bonus to officers.
g. Deposit received from customer to guarantee performance of a contract.
h. Sales taxes payable.
i. Gift certificates sold to customers but not yet redeemed.
j. Premium offers outstanding.
k. Discount on notes payable.
l. Personal injury claim pending.
m. Current maturities of long-term debts to be paid from current assets.
n. Cash dividends declared but unpaid.
o. Dividends in arrears on preferred stock.
p. Loans from officers.
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you

Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Related Questions
- a. What do the accounting policies say in the annual report (footnotes) regarding the cost of revenue? What are the drivers to the cost of revenue and the trends? b. Are there any trends in sales and marketing expenses or research and development? Are these amounts reasonable for the type of business? c. Compare general and administrative expenses to similar companies. Are they reasonable? d. What is the ratio of net interest income (expense) to income from operations? Is this a safe ratio for the company? Why or why not?arrow_forwardPlease answer all four questions within the attached document.arrow_forwardIf a company uses the direct write-off method of accounting for bad debts,a. it will report accounts receivable on the balance sheet at their net realizable value.b. it is applying the matching principle.c. it will reduce the Accounts Receivable account at the end of the accounting period for estimated uncollectible accounts.d. it will record bad debt expense only when an account is determined to be uncollectible.arrow_forward
- Match each of the following terms with its definition. Terms Definitions _____ 1. Accounts receivable a. Reductions in amount owed by customers because of deficiency in products or services. _____ 2. Credit sales b. Formal credit arrangements evidenced by a written debt instrument. _____ 3. Sales allowances c. Amount of cash owed to the company by customers from the sale of products or services on account. _____ 4. Allowance method d. Recording bad debt expense at the time the account is known to be uncollectible. _____ 5. Notes receivable e. Sales on account to customers. _____ 6. Direct write-off method f. Reductions in amount owed by customers if payment on account is made within a specified period of time. _____ 7. Net revenues g. Total revenues less returns, allowances, and discounts. _____ 8. Sales discounts h. Recording an adjustment at the end of each period for the estimate of future uncollectible accounts. _____ 9. Aging method i. Estimated percentage of…arrow_forwardIn each of the situations described below, indicate the accounting principles or concepts, if any, that have been violated and explain briefly the nature of the violation. If you believe the practice is in accord with generally accepted accounting principles, state this as your position and defend it. a. A small business in which credit sales fluctuate greatly from year to year uses the direct writeoff method both for income tax purposes and in its financial statements. b. Computer Systems often sells merchandise in exchange for interest-bearing notes receivable, maturing in 6, 12, or 24 months. The company records these sales transactions by debiting Notes Receivable for the maturity value of the notes, crediting Sales for the sales price of the merchandise, and crediting Interest Revenue for the balance of the maturity value of the note. The cost of goods sold also is recorded. c. A company has $400,000 in unrestricted cash, $1 million in a bank account specifically earmarked for the…arrow_forward27.A company writes off as uncollectible an account receivable from a bankrupt customer. The company has an adequate amount in its Allowance for Uncollectible Accounts. What would be the effect of this transaction in the company's financial statements? a. Operating expenses for the period will increase. b. Total current assets will decrease. c. Net profit for the period will not be affected. d. Net profit for the period will decrease.arrow_forward
- You are the staff accountant of ABC Company. Your work is mainly focuses on Accounts Receivable group. You record the accounts receivable and provide allowance for doubtful accounts based on company’s estimate. On Year 2012 the company suffered from loss due to environmental disobedience. The DENR fine them 1M pesos for the infraction of the sea. With this, the company revise its policy of recording allowance of bad debts from 5% to 2%. The company has significant account receivable for the year and collection for this accounts are highly possible. On your trending analysis report, you noticed that you rarely record and write off any bad debts as part of the policy. You join the meeting with the new accounting policy and Hilary, the CFO said that the decrease of bad debts expense is immaterial to total accounts receivable. She insisted the accounting principles of materiality. Your controller agrees and immaterial to present the changes in the financial statements and ask you to…arrow_forwardQ3. A company wants to use the allowance method to account for bad debts. You are assigned to explain to the company the different ways it can use to estimate bad debts.arrow_forwardWhich of the following will affect net income? O O Writing off an Account Receivable. Estimating bad debts at the end of the year Re-establishing and collection of an account that was previously written off. O All of the above transactions will affect net income.arrow_forward
- On December 1, Anson's Drug Store concluded that a customer's $325 account receivable was uncollected and that the account should be written off. What effect will this write-off have on the company's net income and balance sheet totals assuming the direct write-off method is used to account for bad debts? a. decrease in net income; decrease in total assets b. no effect on net income; no effect on total assets c. increase in net income; no effect on total assets d. no effect on net income; decrease in total assetsarrow_forwardDiscuss the different methods available to account for bad debts. Assume that you have a company. And the management estimates that 2.5% of sales will be uncollectible. Provide an amount of sales and prepare the journal entry using the percent of sales method (-arrow_forwardMatch the terms with the definitions.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning

Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning