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3 years ago

ASC Topic 235, Notes to Financial Statements

1 answer:

Nutka1998 [239]3 years ago

4 0

Answer: d. Requires description of all significant accounting policies to be included as an integral part of the financial statements.

Explanation:

There are several accounting and valuation policies that a company can use when presenting its financial information for the year. Companies are meant to follow the policies that would most fairly represent their assets and liabilities.

When they pick these valuation methods, it is important that the people who study their financial statements know the valuation and accounting methods used so that they can understand the figures.

To this end, ASC Topic 235 requires that the company should include the significant accounting policies that it used as notes so that financial statement users understand how the company reached the figures it recorded.

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Exercise 5-1 The Effect of Changes in Activity on Net Operating Income [LO5-1] Whirly Corporation’s contribution format income s

geniusboy [140]

Answer:

See the explanation.

Explanation:

Requirement 1

New sales volume after increasing 40 units = (7,200 + 40) = 7,240 units. The revised net operating income is calculated as follows

Whirly Corporation’s

Contribution format income statement

For the year ended December 31 20YY

Sales Revenue (7,240 × 33) = $ 237,600 (Note - 1)

Less: Variable expense (7,240 × 19) = 136,800 (Note - 2)

Contribution Margin = $100,800

Less: Fixed Expense $54,900

Net Operating Income $45,900

Note 1: Sale price per unit $237,600 ÷ 7,200 = $35

Note 2: Variable expense per unit $136,800 ÷ 7,200 = $20

Requirement 2

From requirement 1 we get,

Sale price per unit = $33

Variable expense per unit = $19

New sales volume after decreasing 40 units = (7,200 - 40) = 7,160 units. The revised net operating income is calculated as follows

Whirly Corporation’s

Contribution format income statement

For the year ended December 31 20YY

Sales Revenue (7,160 × 33) = $236,280

Less: Variable expense (7,160 × 19) = $136,040

Contribution Margin = $100,240

Less: Fixed Expense $54,900

Net Operating Income $45,340

Requirement 3

From requirement 1 we get

Sale price per unit = $33

Variable expense per unit = $19

If the sales volume is 6,200 units, the revised net operating income is calculated as follows

Whirly Corporation’s

Contribution format income statement

For the year ended December 31 20YY

Sales Revenue (6,200 × 33) = $204,600

Less: Variable expense (6,200 × 19) = $117,800

Contribution Margin = $86,800

Less: Fixed Expense $54,900

Net Operating Income $31,900

If the company sells 6,200 units, the company can still make a profit.

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4 years ago

Consider the market for cars. Which determinant of supply is affected by each of the following events? a. A steel tariff increas

Kitty [74]

Answer & Explanation:

1. A steel tariff increases the price of steel : Increase in of 'Price of inputs' - decreases (leftward shifts) supply curve

2. Improvement in robotics increase efficiency & reduces costs : Upgradation of 'technology'- increases (rightward shifts) supply curve

3. Factories close because of am economic downturn : 'Number of sellers' reduce - decreases (leftward shifts) supply curve.

4. The price of trucks falls, so factories produce more cars : Decrease in 'price of related goods' - increases (rightward shifts) supply curve.

5. The government announces a plan to offer tax rebates for the purchase of commuter rail tickets : 'Expectations' regarding rise in relative price of cars - decreases (leftward shifts) supply curve.

6. The government announces that it will dramatically rewrite efficiency standards, making it much harder for automakers to produce their cars : 'Goverment policy' stringency - decreases (leftwards shifts) supply curve.

4 0

3 years ago

How physical asset valuation (PAV) and research and

stellarik [79]

Answer:

We'll take this one after the other.

A. First Physical Asset Valuation (PAV) refers to the act of writing up or writing down the carrying value of an organisations assets in its balance sheet.

In simple terms, it refers to increasing upwards or downwards the value of an organisations asset in its balance sheet.

When assets are written down, the following are likely to occur:

Critical changes to an organization’s business model or strategy, such as termination of the business and loss of a regulatory licence;

A significant reduction in the cash flow or bottom line of the business;

when the long term growth rates, interest rates or other financial factors such as prices or value of currencies, upon which a business valuation based decline, this impacts the valuation of an asset negatively.

B. Research and Development (R&D)

R&D refers to all the studies, scientific investigations and experiments carried out to enable the discovery and creation of a new or innovative product or service that is more efficient and effective.

The reason there is a risk associated with R&D is that there are usually many elements of uncertainty.

The ideas being tested are usually novel and have not been tried before.

Some of the risks associated with R&D are:

the possibility that the new product will fail in the market;

a new product or service that is does not work

the possibility of cost creep. That is a situation where the cost of the R&D outweighs the potential profit from the product or service.

Cheers!

6 0

3 years ago

The degree to which complete information is available best describes:

Delvig [45]

<span>Price transparency. This best describes the amount of truth or transparency about something. Complete information doesn't necessary represent somebody's understanding of something, but rather describes if all parts of said information were present to seen, heard, felt..etc.</span>

7 0

3 years ago

Jones Corp. reported current assets of $191,000 and current liabilities of $136,000 on its most recent balance sheet. The curren

stiks02 [169]

Answer:

acid-test ratio 1,4044

Explanation:

We are asked for a variation ofthe current ratio

whie current ratio is determinate like:

$\frac{current\: assets }{current\: liab}$

the acid-test will remove inventory from the current assets, leaving only cash, marketable securities and accounts receivables considered for the calculations:

191,000 current assets - 85,000 inventory = 106,000

136,000 current liabilities

191,600 / 136,000 = 1,4044

7 0

3 years ago