The purpose of these case studies is to further understand the concepts found in the codification of accounting standards and see how they can be applied in the real world. Having a solid knowledge base to build upon during my internship was one of the most profitable things I learned from my time as an accounting student at the University of Mississippi.
Financial Statement Comparison
After further analysis presented in my financial recommendation, it will become more apparent that Glenwood Heating, Inc. Investing in Glenwood has supported a more financially stable organization due to the fact that they save 5.57% more of their earnings than their competitor, Eads Heaters, Inc.
Income Statement Presentation
Likewise, the EPS effects of these items should not be reflected in the income statement. Therefore, the $2.7 million lawsuit proceeds would be added to Totz's non-operating income on the income statement.
Cash Flow Classifications
Internal Control Analysis
Kayla is responsible for inventory control, restocking orders, and inventory payments. She could commit fraud by falsifying orders, paying them to an external account, and using more inventory than she actually had to make up the difference. This is a problem because Lucy and Kayla can both access the records, which could result in small changes to the sales records by Lucy without Kayla being aware of it.
Segregation of duties is important, and it is also important that information is valid and consistent. There is no way to know which employee is responsible for selling the credit card. There must be a credit card issuing facility for each register so that credit card transactions can be assigned to the correct employee.
All other employees should have limited authority that allows them to record only transactions directly related to the sales process.
Inventory Impairment
The total cost of the benefits that the laid-off employees will receive should be shown as a liability. This will occur as a result of the completion of all requirements found in the Codification under ASC by the communication date of December 27, 20X1. The company calculates the cost of stock awards for employees and gives them the opportunity to be rewarded for their services with stock options.
The amount of the expense appears on the statement of cash flows under Stock-Based Compensation as $77,862. The contract between the customer and the bartender allows the customer to receive two pretzels in exchange for redeeming the coupon. D.!A deferred income tax asset represents "increase in taxes refundable (or saved) in future years as a result of deductible temporary differences that exist at the end of the current year" (Kieso 1060).
Because of this, a deferred tax asset can be recorded at the end of the current year due to the deduction that will be made in the future when the liability is satisfied. A deferred tax liability represents "the increase in tax payable in future years as a result of taxable temporary differences that exist at the end of the current year" (Kieso 1056). The effective tax rate is the percentage of the company's income that is paid in taxes.
An operating lease is a lease that has a term that is shorter than the useful life of the asset. A direct finance lease is where the cost price of the asset corresponds to the fair value of the asset.
Accounting for PP&E
Restructuring Analysis
This report provides an analysis of the restructuring of Targa Co.'s Armor Track line in accordance with the U.S. My team and I believe that the one-time involuntary termination of employee benefits arrangement should be recognized as a liability and also as a loss on Targa's financial statements. Furthermore, we recommend that the one-off severance benefits that Targa offers its employees be booked in the accounts from and including the year ended 31 December 20X1.
An arrangement for one-time employee termination benefits exists on the date on which the plan of termination meets all of the following criteria and is communicated to employees (referred to as the communication date): The plan determines the terms of the benefit arrangement, including the benefits employees will receive upon termination. including but not limited to cash payments), in sufficient detail to enable employees to determine the type and amount of benefits they will receive if they are involuntarily terminated. My team and I recommend that the relocation costs and the staff training costs be charged as expenses on Targa's financial statements as other associated costs.
These entries do not appear on Targa's financial statements from and for the year ended December 31, 20X1, but actually appear on the statements for the subsequent year ended December 31, 20X2.
Shareholders’ Equity Report
In general, companies buy back their own shares because it reduces the chances of a hostile takeover. The company can also use the repurchased stock to increase cash flow later when they resell the stock. e). Merck does not disclose its treasury stock as an asset because treasury stock is not an asset.
Treasury shares are not classified as an asset because a company cannot earn future economic benefit with treasury shares. i). dividends!per!share! . to!stock price). The dividend payout for 2007 is slightly higher than in 2006 due to the amounts of net income and dividends paid in 2007 being closer to the 2006 amounts. The dividends to total assets and dividends to operating cash flow ratios for 2006 and 2007 remain relatively close in amounts.
Stock-Based Compensation
The vesting period is the amount of time that must pass before the employee receiving the stock options can exercise the options. If the employee does not exercise their stock options by the expiration date, the option expires and becomes worthless. When a stock option is granted to an employee, the employee has the choice to purchase shares of the company's stock at a predetermined price for a certain period of time.
When an employee exercises a stock option, they buy shares at the predetermined price or exercise price, not at the current price of the stock at the time of purchase. The purchase price of the stock is 85% of the lowest of fair market value, unlike the employee stock option and RSU plan stock prices that are 100% of fair. Finally, Xilinx uses the straight-line accrual method to record the stock-based compensation expense over the service period of the awards.
The expense for 2013 affects the statement of cash flows by increasing the amount of net cash provided by operations.
Revenue Recognition
The contract that the customer and the bartender enter into allows the customer to purchase a refillable Ole Miss thermal beer mug full of beer at a discounted price in exchange for cash. The performance obligation requires the bartender to give the customer both the Ole Miss thermal beer mug and the beer in exchange for the customer's money. Sales are recognized almost immediately when the Ole Miss thermal beer mug full of beer is given to the customer.
The contract between the customer and the bartender allows the customer to receive beer in the beer mug and a coupon for two pretzels in exchange for money. The bartender's performance obligation is to provide the customer with the beer now and two pretzels once the customer receives the coupon. The performance obligation in the contract means that the customer must sacrifice the coupon to the bartender.
This also means that the bartender must give the customer two pretzels in exchange for the coupon.
Deferred Income Taxes
The effective tax rate can be found by dividing the total income tax expense for the period by the pre-tax financial income. A company reports deferred income taxes as part of its total income tax expense because it gives investors and other viewers of the company's income statement a clearer and more accurate picture of what's happening within the company. Including the deferred taxes in total income tax expense allows others to view the increase in the balance of deferred tax liabilities during the period.
The entry made for this allowance increases income tax expense because the company believes that they will not realize a. The following information is the journal entry that ZAGG recorded for the income tax provision in fiscal year 2012. The following information is the journal entry recorded for the income tax and is broken down into the deferred tax asset and the components of deferred tax liability.
The net deferred tax asset balance as of 31 December 2012 appears on ZAGG's balance sheet under the current assets section marked as deferred income tax assets with the balance of and also under the non-current assets section marked as deferred income tax assets with the balance of.
Pensions
This can occur when the differences in the justification for leasing the asset are accounted for, taking into account the creditworthiness of the lessee, the length of the lease and the status of the residual value of the asset. GAAP because the lease term is five years which is less than the useful life of twenty five years of the asset. The lease does not follow the four criteria to be considered a capital lease.
Rent expense is shown on the company's income statement under Selling, general and administrative expenses. Mr.!If the management of Build-A-Bear Workshop, Inc. structures its leases as operating leases, then they appear as expenses on the income statement, reducing the company's net income. Below are the schedules used to calculate the values in the general and adjusting journal entries for Glenwood Heating, Inc.
Below are the schedules used to calculate the values found in the general and adjusting journal entries for Eads Heaters, Inc.
