QUESTION Define the functional currency concept and briefly describe how a foreign entitys functional currency is determined. Why is this definition critical from a financial reporting perspective? 1. A functional currency concept of the company is the primary economic environments currency in which it functions. It is usually the currency in which the company accepts […]
QUESTION olunteer Fabricators, Inc. (VF) currently has zero debt. It is a zero growth company, and it has the data shown below. Now the company is considering using some debt, moving to the market value capital structure indicated below. The money raised would be used to repurchase stock. It is estimated that the increase in […]
QUESTION Comparative statement data for Douglas Company and Maulder Company, two competitors, appear below. All balance sheet data are as of December 31, 2011, and December 31, 2010.Instructions(a) Prepare a vertical analysis of the 2011 income statement data for Douglas Company and Maulder Company in columnar form.(b) Comment on the relative profitability of the companies […]
QUESTION You are given the following situations:1. Thomas Petry owes a debt of $7,000 from the purchase of a boat. The debt bears interest of 12% payable annually. Petry will pay the debt and interest in five annual installments beginning in one year. Calculate the equal annual installments that will pay off the debt and […]
QUESTION 1.Lifehouse Software has 8.4 percent coupon bonds on the market with 10 years to maturity. The bonds make semiannual payments an currently sell for 104 percent of par. What is the current yield on Lifehouses bonds?The yield to maturity?the effective annual yield? 2.BDJ Co. wants to issue new 30 years bonds for some much […]
QUESTION Which is not a required part of an annual report of a publicly traded company?(a) Statement of cash flows.(b) Notes to the financial statements.(c) Management discussion and analysis.(d) All of these are required. Solution: Answerc) Management discussion and analysis. Reason : Annual reportsare used by businesses to record their financial activities that are concerned […]
QUESTION Below are the accounts of Giordanos Pizza. The company has just completed its first year of operations ended September 30, 2010.Accounts Payable .$10,500Accounts Receivable 13,200Cash .. 2,600Delivery Truck Rent Expense .. 7,200Equipment . $6,300Equipment Rental Expense 2,900Marketing Expense 1,500Owners Capital 2,000Pizza Revenue 82,000Salaries Expense 56,000Salaries Payable . 700Supplies . 400Supplies Expense .. 4,100Withdrawals . […]
QUESTION What is a permanent account? On which financial statement are permanent accounts reported? Answer: Accounts are classified into two categories astemporary accounts and permanent accounts. Temporary accounts are periodic accounts and close by transferring to income statement at the end of period while permanent accounts are not closed by transfer to income statement rather […]
QUESTION At the beginning of the current fiscal year, the balance sheet for Davis Co. showed liabilities of $320,000. During the year liabilities decreased by $18,000, assets increased by $65,000, and paid in capital increased from $30,000 to $192,000. Dividends declared and paid during the year were $25,000. At the end of the year, owners […]
QUESTION What accounting policies are disclosed in the notes accompanying a companys financial statements? Why is this disclosure important? The accounting policies that are disclosed in the notes accompanying a companys financial statements includes: General Information The first thing that company usually want people to know is what they do or what they make. If […]
