Questions On Accounting

Submitted By mamarvavar
Words: 1906
Pages: 8

Revenues ($340,000 + 60,000) $400,000
Expenses:
Rent ($40,000  2) (20,000) Salaries (120,000) Utilities ($50,000 + 2,000) (52,000) Net income $208,000

(1) Liabilities
(2) Assets
(3) Revenues
(4) Losses
1. The periodicity assumption
2. The economic entity assumption
3. The realization (revenue recognition) principle
4. The matching principle
1. The matching principle
2. The historical cost (original transaction value) principle
3. The economic entity assumption
1. Disagree — The full disclosure principle
2. Agree — The periodicity assumption
3. Disagree — The matching principle
4. Agree — The realization (revenue recognition) principle
1. Obtains funding for the IFRS standard setting process: International Accounting Standards Committee Foundation (IASCF)
2. Determines IFRS: International Accounting Standards Board (IASB)
3. Encourages cooperation among securities regulators to promote effective and efficient capital markets: International Organization of Securities Commissions (IOSCO)
4. Provides input about the standard setting agenda: Standards Advisory Council (SAC).
5. Provides implementation guidance about relatively narrow emerging issues International Financial Reporting Interpretations Committee (IFRIC).

Requirement 1

Pete, Pete, and Roy

Operating Cash Flow

Year 1 Year 2
Cash collected
$160,000
$190,000
Cash disbursements:

Salaries
(90,000)
(100,000) Utilities
(30,000)
(40,000) Purchase of insurance policy (60,000) - 0 - Net operating cash flow
$(20,000)
$ 50,000

Requirement 2

Pete, Pete, and Roy

Income Statements

Year 1 Year 2
Revenues
$170,000
$220,000
Expenses:

Salaries
(90,000)
(100,000) Utilities
(35,000)
(35,000) Insurance (20,000) (20,000) Net Income
$ 25,000
$ 65,000

Requirement 3
Year 1: Amount billed to customers $170,000 Less: Cash collected (160,000) Ending accounts receivable $ 10,000

Year 2: Beginning accounts receivable $ 10,000 Plus: Amounts billed to customers 220,000 $230,000 Less: Cash collected (190,000) Ending accounts receivable $ 40,000

Requirement 1

Year 2 Year 3
Revenues
$350,000
$450,000
Expenses:

Rent ($80,000  2)
(40,000)
(40,000) Salaries
(140,000)
(160,000) Travel and entertainment
(30,000)
(40,000) Advertising (25,000) (20,000)* Net Income
$115,000
$190,000

Requirement 2 Amount owed at the end of year one $ 5,000
Advertising costs incurred in year two 25,000 30,000 Amount paid in year two (15,000) Liability at the end of year two 15,000 Less cash paid in year three (35,000) Advertising expense in year three $20,000*

Requirement 1
FASB ASC 820: “Fair Value Measurements and Disclosures”
Requirement 2
The specific citation that describes the information that companies must disclose about the use of fair value to measure assets and liabilities for recurring measurements is FASB ASC 820–10–50–2: “Fair Value Measurements and Disclosures-Overall-Disclosures.”

Requirement 3
The disclosure requirements are:
a. The fair value measurements at the reporting date
b. The level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using any of the following:
1. Quoted prices in active markets for identical assets or liabilities (Level 1)
2. Significant other observable inputs (Level 2)
3. Significant unobservable inputs (Level 3).
c. For fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to any of the following:
1. Total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the