While most of the answers are correct, some may just be opinion based on research I've done with coding and outside knowledge from the classroom. Dickinson in these case studies, and I feel like this job enhanced my experience and knowledge gained with the Patterson School of Accounting.
Glenwood Heating and Eads Heaters Inc
A particular example that represents the better company to invest in is the net income and earnings per share results. stock. I specifically believe that Glenwood would be more profitable in the long run than Eads Heaters, Inc.
Income Statement Presentation
With respect to your net sales presentations, you will need to separate your income when you prepare your income statement. If you follow FASB Code 225-10-S99-2, you will see how net sales and income must be separated according to the codification. Regulation S-X Rule 5-03 of the Codification states that net sales of tangible products (gross sales minus discounts, returns and allowances) and income from services must be reported separately.
Your presentation of your gross profit on your income statement can be found in a similar place in the code as your net sales. In accordance with SEC and FASB 225-10-S99, you must also present cost of tangible goods sold and cost of services as separate line items. You stated in the information you provided me that your cost of sales included product costs, shipping and import costs, and direct labor costs for Doodlez employees.
This final part of the analysis to be determined involves a class action.
Rocky Mountain Chocolate Factory
Fraud
Physical Audit: A physical count of inventory should be done periodically to ensure that sales and ending inventory match the total inventory. Segregation of duties: There should be only one employee authorized to return during the shift. Physical Audit: There should be a physical count of cash at the end of an employee's shift.
Division of duties: There should be more than one person handling complaints and customer service. Access Controls: Each employee's code on the register should be changed periodically to ensure that they are kept unique and secret. Approval Authority: Large dollar transactions or transactions requiring a large amount of change in cash to be returned to the customer must be required to have manager approval before they occur.
Segregation of duties: Reporting and filing work should be separated to reduce the possibility of fraud.
Inventories
The stock of raw materials consists of all the materials necessary for the production of goods in a manufacturing company. Work-in-progress inventory consists of costs associated with raw materials for work-in-progress or partially finished units, direct labor costs applied to materials, and a proportion of manufacturing overhead. Finished goods inventory consists of costs associated with units that are still available at the end of the period.
The inventory balance is recorded net of an estimated amount for obsolete or unmarketable inventory. I believe that the raw materials inventory and the finished goods inventory will hold the larger portions of the reserve for obsolete inventory. I believe that the inventory within the work-in-process inventory will be less likely.
In terms of percentage, I suspect that the raw material inventory would consist of 45% of the obsolete inventory reserve, the finished goods inventory would also consist of 45%, and the work-in-process inventory would consist of about 10%.
World Com, Inc
Assets are defined as items owned by an organization that will benefit the organization in the future. Expenses are characterized as the use of assets and negative financial impacts of the organization's activities. ii. To be capitalized, the useful life of the asset must be increased, the amount of service produced from the asset must be increased, or the quality of units produced must be improved.
This is represented by a depreciation expense on the income statement, and a contra asset account on the balance sheet titled “Accumulated Depreciation”. These costs do not meet my definition of assets because they are not items that will benefit the company in the future; they are simply expenses. e) EAT (Asset. This cost appears under the Property, Plant and Equipment assets section on the balance sheet.
Targa Co
There is a scheme for one-off severance payments for employees on the date on which the dismissal plan meets and has met all the following criteria. The plan identifies the number of employees to be laid off, their job classification or position and their location, and the expected completion date. The plan sets out the terms of the benefit arrangement, including the benefits that employees will receive upon termination of the agreement (including but not limited to cash payments), in sufficient detail to enable employees to do so.
This part of the codification states that companies owe employee benefits on the termination plan date and lists the requirements for lump sum benefits to be recognized by a company. Current state assessment—the process of documenting the entity's current business process, except as it relates to the current software structure. Process reengineering—attempting to reengineer the entity's business process to increase efficiency and effectiveness.
Workforce restructuring - attempting to determine the composition of employees needed to operate the reengineered business processes.
Equity
The transaction price was $7 for the large beer in the thermos for the performance obligation. This is based on the sum of the standalone price and the fractions of each item assigned to that price. However, to pay for this, the coupon was used, so decommissioning the coupon is the form of payment.
This can be calculated by taking all of the company's revenue and deducting the expenses (in addition to the income tax expense). It represents the increase in taxes saved in the future due to temporary tax differences remaining at the end of the year. A lessor should record as a capital lease if it covers at least 75% of the asset's useful life.
Finance lease - a direct finance lease is a lease where the asset is removed from the lessor's books and recorded as immediately receivable. Lease type - a sale type lease is a lease where the fair value of the leased property is recorded for the lessor and ownership changes to the lessee by the end of the lease term. This lease would be classified as an operating lease because the lease term does not form a significant part of the useful life of the asset(s). ii.
Xilinix Inc
Revenue Recognition
The performance obligation is for the bartender to serve the customer a large beer in an Ole Miss thermal glass. The standalone price for the thermal mug is $3, and the standalone price for the beer is. The performance obligation requires the Bier Haus to serve the student the beer and give him or her the coupon redeemable later for two pretzels.
The transaction price was $7 for the beer and coupon exchanged and it was taken immediately. The standalone price for the beer is $5, and the standalone price for the coupon is $3.50. Revenue should be recognized now because the performance obligation for the beer and coupon insurance has been satisfied.
The obligation of the performance was that the waiter served the student two pretzels in exchange for the coupon he had issued to the student some time ago.
Zagg Inc
Taxable income differs from a company's book income because a taxable income is the amount after income tax expense. Capital expenditures receive no tax deduction, so the company's book income and taxable income will have a permanent tax difference of $10,000. ii. temporary tax difference - income recognized on a cash basis of . accounting, but has not yet been earned on the basis of accrual accounting. The purpose of this is to depreciate the cost of an asset faster than it is expensed for tax purposes. iii. statutory tax rate - the tax rate established according to legal standards. iv. Effective tax rate - the average rate at which an individual or corporation is taxed.
This involves a reduction in the future taxes to be paid, because the company has already paid the taxes to be represented on the book income. A deferred tax liability represents a future tax payment that a company expects to make in the future. If there is a greater than 50% chance that the deferred tax asset will not be recognized, a deferred tax valuation account is used instead to balance the entry. f) i.
Build-A-Bear
A company would rather lease assets than buy them because there is a lower upfront cost associated with the asset. For tax purposes, the company can deduct the leasing costs from the company's taxable income. The point of these is that the company can keep the asset off its accounts.
Capital lease - a capital lease is a lease in which the lessor finances only the leased asset, and all other ownership rights pass to the lessee. Rent expense costs are in the Selling, General and Administrative Expenses line on the income statement. f) i. ii.. g) When Build-A-Bear structures its lease as an operating lease, it ultimately saves because these expenses will be removed from pre-tax income. It appears that capitalizing leases will result in poorer liquidity and solvency ratios based on the calculations presented in the table above.
