This thesis is dedicated to all the people who made my time at Ole Miss truly memorable. Each case is different in its own right and contains important applications related to real world scenarios. From analyzing business activities to calculating inventory, each case provides the opportunity to learn what real world scenarios are like.
Each case presents its own outcome and findings due to the fact that each case is unique. With a collection of all twelve cases, the thesis presents a brief insight into the understanding of a broader overview of accounting.
Inventories
World Com, Inc
Assets are elements of a company that want to provide future income or benefits to the company. Expenses are anything that is used or incurred in the normal operation of the company. A company that capitalizes costs will have a higher profit than it would if it expensed them.
Years later, the company that expensed the cost will most likely have a higher profitability than it would have if it capitalized it.
Targa Co
A description of the exit or removal activity, including the facts and circumstances leading to the anticipated activity and the expected completion date. For each major type of cost associated with the activity (for example, one-off employee severance payments, contract termination costs and other related costs), both. Reconciliation of opening and closing liability balances showing separately changes during the period attributable to incurred costs and charged to expenses, costs paid or otherwise settled, and any adjustments to liabilities with an.
Under 720-45-55 of the FASB Codification, training costs of a business redevelopment plan will be recorded as an expense. The plan shall establish the terms of the benefit arrangement, including the benefits that employees will receive upon termination of employment (including but not limited to cash payments), in sufficient detail to enable employees to determine the type and amount of determine the compensation they will receive if they are involuntarily dismissed. ended. Also, “the liability may not be recognized before it is incurred, even if the expense is in addition to other operating expenses and will be incurred as a direct result of a plan.
A liability for other costs associated with an exit or divestiture activity should be recognized in the period in which the liability is incurred (usually when goods or services related to the activity are received).' It would be in the best interest of the company to gain more knowledge of this process using the FASB codification.
Equity
Companies pay dividends to shareholders because they own a percentage of the company; therefore, they are paid a percentage of the company's profit each year. If a company is paying dividends, they are usually profitable and may have stagnated growth.
Xilinix Inc
If stock options were granted before April 1, 2007, the shares generally expire within ten years of the grant date; However, shares granted to existing and newly hired employees vest for a period of four years from the date of grant. RSUs are grants valued in terms of Xilinx shares, but Xilinx does not issue the shares at the time of grant. Granted Option: A grant stock option gives the employee the right to purchase a certain number of shares of the company at a predetermined price.
However, there is a limit of only 15% of the annual amount of employees; the maximum is 21 thousand dollars in a calendar year. Initially, the share purchase price is 85% below fair market value at the start of the 24-month offering period. Under the stock option plan, common stock is granted at 100% of the fair market value of the stock on the date of grant.
The fair values of the RSU award are calculated based on the market price of Xilinx common stock on the date of the grant, less the present value of dividends expected to be paid on Xilinx common stock prior to vesting. e. The expense is added back to the operating section of the statement of cash flows.
Revenue Recognition
The first part is recognized that day for the beer and the rest of the performance obligation is fulfilled when the coupons are exchanged for pretzels.
Zagg Inc
Two examples are: “(1) calculating depreciation expense using the straight-line method for books and using the accelerated method for taxes, and (2) calculating bad debt expense using the impairment method. for the books and using the direct write-off method for taxes” (Investopedia.com). The Company reports deferred tax as part of income tax expense because it is a liability. A valuation allowance is a balance sheet item that offsets all or part of the value of a company's deferred tax assets because the company does not expect to be able to realize that value (wikiinvest.com).
Therefore, it would only be recorded if the company believes it is likely that the value will not be realized in whole or in part. Capital Lease: “A capital lease is a lease in which the lessor only finances the lease and all other ownership rights pass to the lessee, resulting in the asset being recorded as the lessee's property in its ledger.” There are two: one to record the interest expense and the lease payment and one to record the depreciation of the leased asset.
Totz stores also house Doodlez, which is an art studio that was introduced in the third quarter of fiscal 2015. Growth was aided by the addition of Doodlez services that it had. According to ASC 225-10-S99-2 in the FASB codification, net sales are presented in the operating section of the multi-step income statement. a) The purpose of this rule is to show the various line items which, if applicable, and unless otherwise permitted by the Commission, must appear in the income statements presented for the persons to whom this article applies (see a) ).
This was mainly due to the increase in the cost of Doodlez's services. The gross profit of the company is presented in the operating section of the multi-step income statement. This profit will be presented in the non-operating section of the multi-step income statement.
The company should use this section of the codification as a reference because of the criteria its sales meet. The gain from this settlement will be included in the non-operating portion of the multi-step income statement. The nature and financial consequences of each event or transaction should be disclosed in the income statement or, alternatively, in the notes to the financial statements.
Such items will not be reported in the statement of income net of income taxes or in any other way that might imply that they are extraordinary items. Similarly, the EPS effects of these items will not be presented in the income statement. Profit from the event must be "disclosed on the income statement page" or in a note.
With such a disparity in income, it is natural to be skeptical about the decision to choose Glenwood over Eads; however, in the following pages I will convey more information that influenced this decision.
