Accounting

Chen Corporation, a new company, adds material at the beginning of its production process; conversion cost, in contrast, is incurred evenly throughout manufacturing. During May, the firm completed 15,000 units and had ending work in process of 2,000 units, 60% complete. Equivalent-unit costs were:materials, $15; conversion, 59. The cost of the company’s ending work-in-process inventory is:$22.

Chen Corporation, a new company, adds material at the beginning of its production process; conversion cost, in contrast, is incurred evenly throughout manufacturing. During May, the firm completed 15,000 units and had ending work in process of 2,000 units, 60% complete. Equivalent-unit costs were: materials, $15; conversion, $22. 59. The cost of the company’s ending …

Chen Corporation, a new company, adds material at the beginning of its production process; conversion cost, in contrast, is incurred evenly throughout manufacturing. During May, the firm completed 15,000 units and had ending work in process of 2,000 units, 60% complete. Equivalent-unit costs were:materials, $15; conversion, 59. The cost of the company’s ending work-in-process inventory is:$22. Read More »

Question: 3. Explain why a periodic-review system, in general, will carry mo

3. Explain why a periodic-review system, in general, will carry more inventory than a continuous-review system. 4. Caterpillar has its engine plant in Austin, Texas and its equipment assembly plant in Denver, Colorado. Engines are transported between the two plants using trucks. Each truck trip costs $1,500. The assembly plant sells 300 finished products each …

Question: 3. Explain why a periodic-review system, in general, will carry mo Read More »

Question: A Company owns land (cost BDT 200,000) for which it uses reva

A Company owns land (cost BDT 200,000) for which it uses revaluation accounting. It has the following information related to this asset, the only land asset that Wang owns.Date Fair ValueJanuary 1, 2014 BDT200, 000 December 31, 2014 215,000December 31, 2015 185,000December 31, 2016 205,000 Determine the amounts to be reported by the company at …

Question: A Company owns land (cost BDT 200,000) for which it uses reva Read More »

Almarai Company is a wholesale distributor of dairy products in Saudi Arabia. the company sells its products throughout the GCC countries include (Saudi Arabia, Qatar, and UAE). Unfortunately, the company’s profits have been declining, which has caused considerable concerns to the management. To help understand the condition of the company, Mr. Salim Albadr, the managing director of the company has requested that the monthly income statement to be segmented by sales country. Accordingly, Miss. Reem Aldosari, the managerial accountant, has prepared the following statement for March 2017, the most recent month. Sales country Saudi Arabic Qatar UAE Sales 240000 QR 640000 QR 560000 QR Country expenses (Traceable) : Cost of goods sold 74400 192000 252000 Salaries 43200 44800 89600 Insurance 7200 12800 11200 Advertising 84000 192000 196000 Depreciation 16800 25600 22400 Shipping 12000 25600 33600 Total Territorial expenses 237600 492800 604800 Territorial income (loss) before corporate Expenses 2400 147200 -44800 Corporate expenses : advertising (general) 12000 32000 28000 General administrative 16000 16000 16000 Total corporate expenses: 28000 48000 44000 Net operating income -25600 99200 -88800 The company consider the Cost of goods sold and shipping expenses are both variable; other costs are all fixed. Almarai produces dairy at its farms in Alkharg city in KSA, and it distributes its products to the three countries listed above. Each of the three sales countries has its own manager and sales staff. The dairy products vary widely in profitability; some have a high margin and some have a low margin. Required: 1- List any disadvantages or weaknesses of the statement format illustrated above. (1 Mark) 2. Prepare a new-segmented contribution format of income statement for March 2017. Show the data for each country as well as the “Total” column. In addition, for the company as a whole and for each sales country, show each item on the segmented income statement as a percent of sales. (3 Marks) 3. Analyze the statement that you prepare in (2) above. What points that might help to improve the company’s performance would you bring to management’s attention. (1 Mark) 4. If the company has allocated the total corporate expenses on the basis of advertising show times, and you know that the show times was as follows: Almarai Branches Advertising show times per geographic segment Saudi Arabia 30 Minutes Qatar 20 Minutes United Arab Emirates 10 Minutes (2 Marks)

Almarai Company is a wholesale distributor of dairy products in Saudi Arabia. the company sells its products throughout the GCC countries include (Saudi Arabia, Qatar, and UAE). Unfortunately, the company’s profits have been declining, which has caused considerable concerns to the management. To help understand the condition of the company, Mr. Salim Albadr, the managing …

Almarai Company is a wholesale distributor of dairy products in Saudi Arabia. the company sells its products throughout the GCC countries include (Saudi Arabia, Qatar, and UAE). Unfortunately, the company’s profits have been declining, which has caused considerable concerns to the management. To help understand the condition of the company, Mr. Salim Albadr, the managing director of the company has requested that the monthly income statement to be segmented by sales country. Accordingly, Miss. Reem Aldosari, the managerial accountant, has prepared the following statement for March 2017, the most recent month. Sales country Saudi Arabic Qatar UAE Sales 240000 QR 640000 QR 560000 QR Country expenses (Traceable) : Cost of goods sold 74400 192000 252000 Salaries 43200 44800 89600 Insurance 7200 12800 11200 Advertising 84000 192000 196000 Depreciation 16800 25600 22400 Shipping 12000 25600 33600 Total Territorial expenses 237600 492800 604800 Territorial income (loss) before corporate Expenses 2400 147200 -44800 Corporate expenses : advertising (general) 12000 32000 28000 General administrative 16000 16000 16000 Total corporate expenses: 28000 48000 44000 Net operating income -25600 99200 -88800 The company consider the Cost of goods sold and shipping expenses are both variable; other costs are all fixed. Almarai produces dairy at its farms in Alkharg city in KSA, and it distributes its products to the three countries listed above. Each of the three sales countries has its own manager and sales staff. The dairy products vary widely in profitability; some have a high margin and some have a low margin. Required: 1- List any disadvantages or weaknesses of the statement format illustrated above. (1 Mark) 2. Prepare a new-segmented contribution format of income statement for March 2017. Show the data for each country as well as the “Total” column. In addition, for the company as a whole and for each sales country, show each item on the segmented income statement as a percent of sales. (3 Marks) 3. Analyze the statement that you prepare in (2) above. What points that might help to improve the company’s performance would you bring to management’s attention. (1 Mark) 4. If the company has allocated the total corporate expenses on the basis of advertising show times, and you know that the show times was as follows: Almarai Branches Advertising show times per geographic segment Saudi Arabia 30 Minutes Qatar 20 Minutes United Arab Emirates 10 Minutes (2 Marks) Read More »

Accounting information provides useful information about business transactions. Those who provide and use financial reports must often select and evaluate accounting alternatives. The FASB statement on qualitative characteristics of accounting information examines the characteristics of accounting information that make it useful for decision-making. It also points out that various limitations inherent in the measurement and reporting process may necessitate trade-offs or sacrifices among characteristics of useful information.

Scenario: Accounting information provides useful information about business transactions. Those who provide and use financial reports must often select and evaluate accounting alternatives. The FASB statement on qualitative characteristics of accounting information examines the characteristics of accounting information that make it useful for decision-making. It also points out that various limitations inherent in the measurement and reporting …

Accounting information provides useful information about business transactions. Those who provide and use financial reports must often select and evaluate accounting alternatives. The FASB statement on qualitative characteristics of accounting information examines the characteristics of accounting information that make it useful for decision-making. It also points out that various limitations inherent in the measurement and reporting process may necessitate trade-offs or sacrifices among characteristics of useful information. Read More »

1.Information that has predictive value, confirmatory value, and is material is said to have this fundamental qualitative characteristic.( ) 2.Information that is complete, neutral, and reasonably free of error is said to have this fundamental qualitative characteristic.( ) 3.This enhancing qualitative characteristic requires that similar companies should apply the same accounting principles to similar events for successive accounting periods.( )

Choose the correct answer:: a. Comparability b. Completeness c. Confirmatory value d. Cost constraint e. Faithful representation f. Freedom from error or bias g. Materiality h. Neutrality i. Predictive value j. Relevance k. Timeliness l. Understandability m. Verifiability 1.Information that has predictive value, confirmatory value, and is material is said to have this fundamental qualitative …

1.Information that has predictive value, confirmatory value, and is material is said to have this fundamental qualitative characteristic.( ) 2.Information that is complete, neutral, and reasonably free of error is said to have this fundamental qualitative characteristic.( ) 3.This enhancing qualitative characteristic requires that similar companies should apply the same accounting principles to similar events for successive accounting periods.( ) Read More »

Match the listed qualitative charateristics of useful financial information discussed in this chapter to each of the following statements below. (a) Information that has predictive value, confirmatory value, and is material is said to have this fundamental qualitative characteristic. (b) Information that is complete, neutral, and free of error is said to have this fundamental qualitative characteristic. (c) Public accountants perform audits to determine this enhancing qualitative characteristic. (d) This quality requires that information cannot be selected to favour one position over another. This enhancing qualitative characteristic describes information that a reasonably informed user can interpret and comprehend. When information provides a basis for forecasting income for future periods, it is said to have this quality. (9) This enhancing qualitative characteristic requires that similar companies should apply the same accounting principles to similar events for successive accounting periods. (h) This quality results in information that has nothing important omitted. (i) This restriction requires that the value of the information presented should be greater than the cost of providing it. (i) This quality describes information that confirms or corrects users’ prior expectations. (k) This enhancing qualitative characteristic requires that information be available to decision makers before it loses its ability to influence their decisions. (1) Faithful representation means that information is complete, neutral, and this third quality. (m) This quality allows items of insignificance that would not likely influence a decision not to be disclosed. Comparability Understandability Faithful representation Completeness Cost constraint Freedom from error or bias Materiality Confirmatory value Timeliness Relevance Verifiability Neutrality Predictive value

EXPERT ANSWER (a) Relevance Information that has predictive value, confirmatory value, and is material is said to have this fundamental qualitative characteristic. (b) Faithful representation Information that is complete, neutral, and free of error is said to have this fundamental qualitative characteristic. (c) Verifiability Public accountants perform audits to determine this enhancing qualitative characteristic. (d) …

Match the listed qualitative charateristics of useful financial information discussed in this chapter to each of the following statements below. (a) Information that has predictive value, confirmatory value, and is material is said to have this fundamental qualitative characteristic. (b) Information that is complete, neutral, and free of error is said to have this fundamental qualitative characteristic. (c) Public accountants perform audits to determine this enhancing qualitative characteristic. (d) This quality requires that information cannot be selected to favour one position over another. This enhancing qualitative characteristic describes information that a reasonably informed user can interpret and comprehend. When information provides a basis for forecasting income for future periods, it is said to have this quality. (9) This enhancing qualitative characteristic requires that similar companies should apply the same accounting principles to similar events for successive accounting periods. (h) This quality results in information that has nothing important omitted. (i) This restriction requires that the value of the information presented should be greater than the cost of providing it. (i) This quality describes information that confirms or corrects users’ prior expectations. (k) This enhancing qualitative characteristic requires that information be available to decision makers before it loses its ability to influence their decisions. (1) Faithful representation means that information is complete, neutral, and this third quality. (m) This quality allows items of insignificance that would not likely influence a decision not to be disclosed. Comparability Understandability Faithful representation Completeness Cost constraint Freedom from error or bias Materiality Confirmatory value Timeliness Relevance Verifiability Neutrality Predictive value Read More »

Keystone Computer Timeshare Company entered into the following transactions during May 2015. Describe the effect of each transaction on assets, liabilities, and stockholders’ equity.

EXPERT ANSWER Answer: 1. Purchased computer terminals for $20,000 from Data Equipment on account. Answer: An increase in assets and an increase in liabilities Explanation: Computer is an asset thus increase asset account, and being purchased on account thus would increase liability 2. Paid $3,000 cash for May rent on storage space. Answer: A decrease …

Keystone Computer Timeshare Company entered into the following transactions during May 2015. Describe the effect of each transaction on assets, liabilities, and stockholders’ equity. Read More »

Here are some fundamental and enhancing qualitative characteristics of useful financial information: 6. 1. Comparability 2. Completeness Confirmatory value Faithful representation 5. Freedom from error Materiality Neutrality 8. Predictive value 9. Relevance 10. Timeliness 11. Understandability 12. Verifiability 7. Match each characteristic to one of the following statements. (a) Accounting information cannot be selected, prepared, or presented to favour one set of interested users over another. Accounting information must be available to decision makers before it loses its ability to influence their decisions. Accounting information is prepared on the assumption that users have a reasonable understanding of accounting and general business and economic conditions. Accounting information provides a basis to evaluate a previously made decision. Accounting information includes everything it needs to and nothing important is omitted. This is an important component of faithful representation. Accounting information helps users make predictions about the outcome of past, present, and future events. Accounting information about one company can be evaluated against the accounting information from another company. e E Se § @ 3 @ @ @ Accounting information is included if its omission or misstatement could influence the economic decisions of users. This is an important component of relevance. All the accounting information that is necessary to faithfully represent economic reality is included. Accounting information can be determined to be free of material error. Accounting information is included if it will make a difference in users’ decisions. Accounting information about a company can be confirmed by two or more users to be a faithful representation.

EXPERT ANSWER A) Neutrality B) Timeliness                 C)  Understandability D) Confirmatory Value E) Completeness F) Predictive Value G) Comparability H) Materiality I) Faithful Representation J) Freedom from error K) Relevance L) Verifiability

Problem 2 The carrying amount of Building C on December 31, 2020 is P8,000,000 and had remaining useful life of 25 years. It is the company’s policy to depreciate all its buildings using the straight-line method. On January 2, 2021, Chamber Company committed a plan to sell Building C and classified this asset as held for sale. Building C was priced at P8,500,000, which is equal to its fair market value. During 2021, the market conditions that existed at the date the building was classified initially as held for sale deteriorated because of the prevailing worldwide pandemic and as a result, the asset is not sold at the end of 2021. During 2021, the company actively solicited but did not receive any reasonable offers to purchase the building and, in response, reduced the price to P8,400,000. The building continues to be actively marketed at a price that is reasonable given the change in market conditions. In 2022, the market conditions deteriorated further, and the building is yet to be sold by the end of 2022. Chamber Company believes that the market conditions will improve and has not further reduced the price of the building. The building continues to be held for sale at a price in excess of its current fair value. Because of the optimistic forecast in market conditions, the firm ceased to actively market the building to potential buyers. The recoverable amount at this time is estimated to be P8,350,000. In Chamber Company’s December 31, 2022 Statement of Financial Position, at what amount should Building C be reported as property, plant and equipment?

EXPERT ANSWER