Identify the basic assumption or broad accounting principle that
was violated in each of the following situations.
1. Pastel Paint Company purchased land two years ago at a price
of $250,000 Because the value of the land has appreciated to
$400,000 the company has valued the land at$400,000 in it's most
recent balance sheet.
2. Atwell Corp has not prepared financial statements for
external users for over three years
3. The Klingon Company sells farm machinery Revenue from a large...
ALABAMA CORPORATION
Goals and Objectives
Review of basic terminology
Review basic accounting and journal entries to reflect the flow
of costs
Review preparation of income statement and supporting schedules
for manufacturer given end-of-year
information
The company manufactures a single product, cleverly named
Product X. The following information is available for the calendar
year 2018 just completed, during which they produced and sold
200,000 units. Sales for the year was $2,400,000. During the year,
the company paid a sales commission of...
Going concern is a basic underlying assumption in accounting.
Explain why the going concern basis is important in understanding
financial statement; Support your answer with evidences
12. 3: Basic Stock Valuation: Free Cash Flow Valuation Model
Basic Stock Valuation: Free Cash Flow Valuation Model The
recognition that dividends are dependent on earnings, so a reliable
dividend forecast is based on an underlying forecast of the firm's
future sales, costs and capital requirements, has led to an
alternative stock valuation approach, known as the free cash flow
valuation model. The market value of a firm is equal to the present
value of its expected future free cash...
Will specific accounting methods affect our valuation using the
RIM? For example, would a GAAP change requiring companies to
capitalize R&D affect our valuations? Assume no change in
R&D productivity.
Indicate how the following transactions will affect the basic
Accounting Equation:
Purchased equipment for cash
Purchased Supplies on account
Paid Cash for janitorial services
Paid Accounts payable in full
Invested cash in the business.
(1) Basic EOQ:
You need to briefly describe the basic EOQ model with modeling
assumption, the economic order quantity formula and the feature
(insight).
(2) EOQ extensions:
Considering relaxing the assumptions in basic EOQ, you may get
various EOQ model extensions. What’s the possible extension will
be? For each extension, briefly describe the assumption, formula
and feature as well.
(3) Considering the following situations. Classify them as
either A for appropriate or L for less appropriate for application
of the...