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pshichka [43]
4 years ago
9

West Ltd has always marketed itself as operating in an environmentally responsible manner, and is an advocate of sustainable fis

hing. The public regards it as a dolphin-friendly company as a result of its previous campaigns to ensure dolphins are not affected by tuna fishing. The marketing manager of West Ltd has noted the efforts of the ship, the Steve Irwin, to disrupt and hopefully stop the efforts of whalers in the southern oceans and the publicity that this has received. He has recommended to the board of directors that West Ltd strengthen its environmentally responsible image by guaranteeing to repair any damage caused to the Steve Irwin as a result of attempts to disrupt the whalers. He believes that this action will increase West Ltd.'s environmental reputation, adding to the company's goodwill. He has told the board that such a guarantee will have no effect on West Ltd.'s reported profitability. He has explained that, if any damage to the Steve Irwin occurs, West Ltd can capitalise the resulting repair costs to the carrying amounts of its brands, as such costs will have been incurred basically for marketing purposes. Accordingly, as the company's net asset position will increase, and there will be no effect on the statement of profit or loss and other comprehensive income, this will be a win-win situation for everyone.
Required:
The chairman of the board knows that the marketing manager is very effective at selling ideas but knows very little about accounting. The chairman has, therefore, asked me to provide him with a summary advising the board on how the proposal should be accounted for under the Financial Reporting Standards and how such a proposal would affect Dixon Ltd.’s financial statements
Business
1 answer:
jeka944 years ago
7 0

Answer:

According to IFRS any cost that is associated with bringing the asset into use is capitalized. If the management intend is to use the island and then restore it to the current state and repair any damages costs it can be capitalized. This is only possible if the expense can be reliably measured before the asset use and it is only for the purpose of asset usage. If the company intends to consider it as a social responsibility activity then it must expense it out instead of capitalizing it. In IAS 16 of IFRS it only gives options to capitalize the dismantling cost when the cost is associated with the use of asset. For marketing and social responsibility purposes if the repair is undertaken then the cost cannot be capitalized.

Explanation:

West Ltd has planned to increase its business by fishing of tuna near the Steve Irwin which is an island in the Australia. The extended fishing could cause damage to the island as it will disrupt whalers but the company plans to repair any damages caused by its activities. The cost cannot be capitalized as it is for marketing purposes.

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Mustard's Inc. sold the rights to use one of its patented processes that will result in cash receipts of $3,600 at the end of ea
Korolek [52]

Answer:

Total present value of the payments=$11,263.96

Explanation:

<em>Step 1: Determine the total future value of all the payments</em>

For the next 3 year;

Total future value=3,600×3=$10,800

For the fourth year;

Total future value=$5,100

At the end of 4 years, Mustard's Inc will have a future value of;

5,100+10,800=$15,900

<em>Step 2: Determine the present value of all the payments</em>

Using the formula;

F.V=P.V(1+r)^n

where;

F.V=future value

P.V=present value

r=interest rate

n=number of years

In our case;

F.V=$15,900

P.V=unknown

r=9%=9/100=0.09

n=4 years

replacing;

15,900=P.V(1+0.09)^4

15,900=1.4116 P.V

P.V=15,900/1.4116

P.V=11,263.96

Total present value of the payments=$11,263.96

8 0
3 years ago
Alfonso began the year with a tax basis in his partnership interest of $29,000. His share of partnership debt at the beginning a
PtichkaEL [24]

Answer: The correct answer would be B

Explanation:

8 0
3 years ago
Sales revenue equals $367,810, sales returns &amp; allowances are $10,000, and sales discounts total $14,180. The cost of goods
Sliva [168]

Answer:

The correct option is C,net sales equal $343,630 and gross profit is $127,140

Explanation:

The net sales is the sales revenue minus sales returns and allowances as well as sales discount,hence net sales is computed thus:

Sales revenue                                              $367,810

Sales returns and allowances                     ($10,000)

Sales discounts                                            ($14,180)

Net sales                                                       $343,630

The gross profit is net sales of $343,630 less costs of goods sold of $216,490

Net sales                                $343.630

Cost of goods sold               ($216,490)

Gross profit                            $127,140

Hence option C is the correct answer

3 0
3 years ago
Dan kim does a lot of customer research on his ideas for new products before actually making a prototype. in the new-product dev
GarryVolchara [31]
<span>the part of the development process where Dan Kim does his research on his ideas is called innovation which is where new ideas are transformed into new products</span>
7 0
3 years ago
To introduce Halo 7, a new video game, the director of marketing for Microsoft Game Studios created a complex marketing scheme t
strojnjashka [21]

Answer: E- viral marketing

Explanation: Viral marketing is a business technique that utilizes a public system at the current time to improve a commodity. It means the way customers disperse news and data about a commodity with other individuals.

In this case, Microsoft Game Studios built a complicated marketing strategy that started on the internet with the hope that individuals who went to the website would send other people to the website so as to make the business go viral.

Viral marketing may be done in the aspect of a short portion of media that uses electronics to access the content which comes in audio or video clip, pictures or websites.

6 0
4 years ago
Read 2 more answers
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