Financial Aid: It refers to a grant provided by state, federal government school, colleges, foundations, and corporations in the form of scholarship, loan or paid employment for helping the students in meeting their studying fees. Earnings Management: It refers to the practice of adopting certain accounting strategies and techniques which would make a company’s financial position look better and positive to its users of the financial information. To discuss: whether each of the given actions to increase the chances of receiving financial aid is ethical.

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Answer 1

Question

Chapter 1, Problem 1.10EYCT

(a)

To determine

Financial Aid: It refers to a grant provided by state, federal government school, colleges, foundations, and corporations in the form of scholarship, loan or paid employment for helping the students in meeting their studying fees.

Earnings Management: It refers to the practice of adopting certain accounting strategies and techniques which would make a company’s financial position look better and positive to its users of the financial information.

To discuss: whether each of the given actions to increase the chances of receiving financial aid is ethical.

(b)

To determine

To explain: the reasons for a company to want to overstate its earnings.

(c)

To determine

To explain: the reasons for a company to want to understate its earnings.

(d)

To determine

To state: the circumstances under which an otherwise ethical person might decide to illegally overstate or understate earnings.

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Bowtock purchased an item of plant for $2 million on 1 October 20X0. It had an estimated life of 8 years and an estimated residual value of $400000. The plant is depreciated on a straight line basis. The tax authorities do not allow depreciation expense .Instead a tax expense of 40% of the cost of this type of asset can be claimed against income tax in the year of purchase and 20% per annum (on a reducing balance method) of tax base thereafter.The rate of income tax can be taken as 25% . Calculate deferred tax charger / credit in the statement of profit or loss and deferred tax balance in statement of financial position

Answer 2

Question

Chapter 1, Problem 1.10EYCT

(a)

To determine

Financial Aid: It refers to a grant provided by state, federal government school, colleges, foundations, and corporations in the form of scholarship, loan or paid employment for helping the students in meeting their studying fees.

Earnings Management: It refers to the practice of adopting certain accounting strategies and techniques which would make a company’s financial position look better and positive to its users of the financial information.

To discuss: whether each of the given actions to increase the chances of receiving financial aid is ethical.

(b)

To determine

To explain: the reasons for a company to want to overstate its earnings.

(c)

To determine

To explain: the reasons for a company to want to understate its earnings.

(d)

To determine

To state: the circumstances under which an otherwise ethical person might decide to illegally overstate or understate earnings.

Expert Solution & Answer

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Answer 3

Question

Chapter 1, Problem 1.10EYCT

(a)

To determine

Financial Aid: It refers to a grant provided by state, federal government school, colleges, foundations, and corporations in the form of scholarship, loan or paid employment for helping the students in meeting their studying fees.

Earnings Management: It refers to the practice of adopting certain accounting strategies and techniques which would make a company’s financial position look better and positive to its users of the financial information.

To discuss: whether each of the given actions to increase the chances of receiving financial aid is ethical.

(b)

To determine

To explain: the reasons for a company to want to overstate its earnings.

(c)

To determine

To explain: the reasons for a company to want to understate its earnings.

(d)

To determine

To state: the circumstances under which an otherwise ethical person might decide to illegally overstate or understate earnings.

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Answer 4

Question

Chapter 1, Problem 1.10EYCT

(a)

To determine

Financial Aid: It refers to a grant provided by state, federal government school, colleges, foundations, and corporations in the form of scholarship, loan or paid employment for helping the students in meeting their studying fees.

Earnings Management: It refers to the practice of adopting certain accounting strategies and techniques which would make a company’s financial position look better and positive to its users of the financial information.

To discuss: whether each of the given actions to increase the chances of receiving financial aid is ethical.

(b)

To determine

To explain: the reasons for a company to want to overstate its earnings.

(c)

To determine

To explain: the reasons for a company to want to understate its earnings.

(d)

To determine

To state: the circumstances under which an otherwise ethical person might decide to illegally overstate or understate earnings.

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Answer 5

Chapter 1, Problem 1.10EYCT

(a)

To determine

Financial Aid: It refers to a grant provided by state, federal government school, colleges, foundations, and corporations in the form of scholarship, loan or paid employment for helping the students in meeting their studying fees.

Earnings Management: It refers to the practice of adopting certain accounting strategies and techniques which would make a company’s financial position look better and positive to its users of the financial information.

To discuss: whether each of the given actions to increase the chances of receiving financial aid is ethical.

(b)

To determine

To explain: the reasons for a company to want to overstate its earnings.

(c)

To determine

To explain: the reasons for a company to want to understate its earnings.

(d)

To determine

To state: the circumstances under which an otherwise ethical person might decide to illegally overstate or understate earnings.

Answer 6

Chapter 1, Problem 1.10EYCT

(a)

To determine

Financial Aid: It refers to a grant provided by state, federal government school, colleges, foundations, and corporations in the form of scholarship, loan or paid employment for helping the students in meeting their studying fees.

Earnings Management: It refers to the practice of adopting certain accounting strategies and techniques which would make a company’s financial position look better and positive to its users of the financial information.

To discuss: whether each of the given actions to increase the chances of receiving financial aid is ethical.

Answer 7

Chapter 1, Problem 1.10EYCT

(a)

To determine

Financial Aid: It refers to a grant provided by state, federal government school, colleges, foundations, and corporations in the form of scholarship, loan or paid employment for helping the students in meeting their studying fees.

Earnings Management: It refers to the practice of adopting certain accounting strategies and techniques which would make a company’s financial position look better and positive to its users of the financial information.

To discuss: whether each of the given actions to increase the chances of receiving financial aid is ethical.

Answer 8

(b)

To determine

To explain: the reasons for a company to want to overstate its earnings.

Answer 9

(b)

To determine

To explain: the reasons for a company to want to overstate its earnings.

Answer 10

(c)

To determine

To explain: the reasons for a company to want to understate its earnings.

Answer 11

(c)

To determine

To explain: the reasons for a company to want to understate its earnings.

Answer 12

(d)

To determine

To state: the circumstances under which an otherwise ethical person might decide to illegally overstate or understate earnings.

Answer 13

(d)

To determine

To state: the circumstances under which an otherwise ethical person might decide to illegally overstate or understate earnings.

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 1 - Prob. 1Q Ch. 1 - Prob. 2Q Ch. 1 - Prob. 3Q Ch. 1 - Accounting is ingrained in our society and is...Ch. 1 - Prob. 5Q Ch. 1 - Prob. 6Q Ch. 1 - What are the three main types of business...Ch. 1 - Prob. 8Q Ch. 1 - Prob. 9Q Ch. 1 - Prob. 10Q

Concept explainers

To explain: the reasons for a company to want to overstate its earnings.

To explain: the reasons for a company to want to understate its earnings.

To state: the circumstances under which an otherwise ethical person might decide to illegally overstate or understate earnings.

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Chapter 1 Solutions