This allowed all the information to be much more comprehensive because we gained a higher level of detail through this process. Net income is one of the most important selling points for investors, and the company with higher net income is more likely to attract investors.
Molson Coors Part A
RNOA
Golden Enterprises Part A
Below is a deeper look at the statement of cash flows and Golden Enterprises. The statement of cash flows gives an idea of the actual cash transactions taking place throughout the company. Furthermore, most companies do not record the items necessary to complete a complete straight statement of cash flows.
Indirect cash flows are the way most of the business world reports their cash flows. Reporting net income on the cash flow statement saves the company time as it goes through the reporting process. Golden Enterprises' cash flow statement can be found at the end of the document.
Depreciation expense does not generate cash for Golden Enterprises, as shown in its statement of cash flows.
Pearson Receivables Part A
Also, percentages can be used to standardize estimates, such as 5% of receivables will be uncollectible. The percentage of sales procedure for estimating receivables must have the net sales and the company-determined percentage to be used. The T-account for the total gross receivables from sales can be found at the end of the chapter.
The table of old accounts receivable is at the end of the chapter. The auditor would most likely not be satisfied with the estimate of 74.19 million euros, since the balance at the end of 2009 (76 million euros) was more than the estimate. In an ideal world, the valuation would equal the amount at the end of the year.
Additionally, reviewing legal documentation to ensure there are no gaps can also be an effective way to improve a company's credit policy.
Graphic Apparel Company Part A
Because of the new customer base that GAC has acquired, accounts receivable and bad debt expense are more important than ever. Also, how to calculate the goods returned for damage is important because of the amount that was damaged by the floods. The warehouse had a leak in the roof, staining some of the merchandise that had yet to hit the stores.
First, it recognizes receivables at their net realizable value, which is a better representation of the true value of the receivables. GAAP recommends that GAC book its sales revenue as a loss contingency at the beginning of the period using reasonable estimates based on sales. GAC also reports their inventory to LCM, but they use the weighted average cost method to determine the cost of the inventory.
The GAC will not be satisfied with the outcome of the necessary changes that have been made.
Northwest, Delta, United, and Waste Management Part A
Additionally, Selling Price II probably makes more sense for all companies because it creates more of a market for the airplane. They were accused of concealing the operating realities of the company by making or authorizing misleading statements. Waste Management's top executives did this to meet revenue goals that would allow them to keep their positions and retirement benefits.
One of the main ways Waste Management mismanaged its earnings was through the use of depreciation expense. They also avoided depreciation charges by extending the estimated useful life of the trucks, while at the same time unsupportedly increasing the departure value of the trucks. The reasons for inflating waste management's earnings are actually quite simple: executives wanted to make sure everyone in turn thought they were doing a great job in order to keep their jobs.
The evidence against Arthur Andersen was quite compelling: it appeared that they had helped produce false and misleading reports and that they did not stand up to the managers of the waste management company to tell them that their financial statements were not fair and reasonable.
Construct Part A
Construct should book this liability because it is more likely to happen than not to happen. Since the RI/FS costs can be reasonably estimated, Construct should post a liability corresponding to the estimate. Construct should have recorded a liability of $1.5 million as these were the probable outcomes estimated by RI/FS.
Does the company have to record a potential profit or contingent asset for a possible settlement in 2012. Construct should not record a profit in the financial statements as this could be misleading. Instead, Construct may make an appropriate disclosure (i.e., note) that recognizes the potential for this benefit in a lawsuit.
Rite Aid Part A
The face value of the notes is $500,000 because the face value amount has not changed from year to year on the debt statement in Note 11. This is found by dividing the total amount of interest expense by the beginning book value. of the year. As you can see in the following table, by using the effective interest method, Rite Aid can save more than $752,000 (numbers in thousands).
Because the notes had not yet reached full maturity, Rite Aid must pay only the amount that has been amortized so far, or in other words, the book value. It is beneficial for Rite Aid to issue convertible bonds because they can offer a lower interest rate due to the ease of conversion. Rite Aid is not doing well with the industry, as evidenced by the previous chart.
With the amount of debt Rite Aid has racked up, it seems like the only way for them to get out of the hole is for some financials to help them out.
Merck and GlaxoSmithKline PART A
Share capital is essentially ordinary shares on the GlaxoSmithKline balance sheet, while the Share Premium Account is the amount of money paid in excess of par value. However, when this dividend is paid, the price will usually fall by the amount of the dividend on the ex-dividend date to adjust for this payment. The difference in these numbers can be explained by the payment date for each dividend, which can be delayed until well after the declaration.
It is wrong for a company to list themselves as owners of their own company in the form of shares. This number was found by dividing the amount of cash paid for repurchases, $3.751 billion, by the amount of shares repurchased. As one can see in the following table, Merck remained fairly stable throughout the two years.
While the dividend yield fell by almost a percentage point, the dividend payout increased by .26.
State Street Corporation Part A
There is no journal entry for the company to record because the securities are held to maturity. The trading services account balance is $637 million, which is also the fair market value of these securities. The redemption value of these securities is USD 11.379 billion as shown in note 4 of the financial statements.
These types of securities are debt securities, so they are usually bought at a discount or premium. Held-to-maturity securities are reported at amortized cost, which explains why the amortized number and stated value are the same. In particular, with State Street, the market value is greater than the redemption value of the securities.
This fact suggests that the securities are worth more than their amortized cost right now.
Groupon PART A
The gross margin percentage is much lower with the gross method because of the difference in cost of sales. Because of the large difference in recognized income, the turnover for the gross method is much higher than that of the net method. Under the net method, Groupon only has to record the difference between the total money received and the money sent to the supplier, while, under the gross method, Groupon can record the total payment received.
Groupon has undoubtedly favored the gross method as it allows them to show more revenue in their financial statements. It would make sense if the goods were actually held by Groupon, but they are just a discount agent, which proves that the gross method is almost impossible to justify. This is possible because they still collected the same amount of cash under the gross method despite their large revenues.
When they used the gross method, they recognized an income that actually had to be returned to investors.
Zagg
An example of a deferred tax asset might be an expense that GAAP requires to be reported in the current period, but is not required by tax law. In this situation, the company would record a deferred tax asset to account for the taxable amount in the future period. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that part of them will not be realized.
The figures for total deferred tax assets and total gross deferred tax liabilities are shown in note 8. Furthermore, because the liabilities in this situation do the opposite of what the assets do, a decrease in total gross deferred tax liabilities will reduce the amount of the increase deferred tax liabilities. net deferred tax assets. The deferred tax liability nature of the property and inventory account in Note 8 suggests that the tax code recognized a greater amount of depreciation expense than that of the books.
Because the tax rate has decreased from 35 percent to 30 percent, ZAGG must revalue their deferred tax assets.
Johnson & Johnson
The service costs in the pension obligations are the present value of the benefits added to an employee plan during the period. Finally, benefits to retirees will reduce the amount of plan assets, as the company pays these pension obligations from the assets they contributed to the plan. Yield affects assets in the same way as any return on any asset, with gains increasing the fair value of the asset while losses reduce the fair value.
For example, with health insurance, an employee gets a certain amount of coverage each year, and most of the time, if it's not used, it goes away at the end of the year. This figure represents the deferred compensation obligations it has to its employees for their service under the terms of the pension plan. The company used 5.63 percent to calculate its interest expense, a figure found by dividing the interest of $656 million by the year-to-date liability of $11.66 billion.
In 2007, the United States pension plan was 79 percent equity and 21 percent debt, according to page 63 of the financial statements.
