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dem82 [27]
2 years ago
12

Mars, Inc. follows IFRS for its external financial reporting, while Jerome Company uses GAAP for its external financial reportin

g. During the year ended December 31, 2021, both companies changed from using the completed-contract method of revenue recognition for long-term construction contracts to the percentage-of-completion method. Both companies experienced an indirect effect, related to increased profit-sharing payments in 2021, of $30,000. As a result of this change, how much expense related to the profit-sharing payment must be recognized by each company on the income statement for the year ended December 31, 2021
Business
1 answer:
Nadya [2.5K]2 years ago
6 0

Answer:

Mars, Inc (IFRS) and Jerome Company (GAAP) for External Reporting

Change from completed-contract method of revenue recognition for long-term construction contracts to the percentage-of-completion method.

                                               Mars, Inc    Jerome Company

Expenses to be recognized        $0                $30,000

Explanation:

GAAP and IFRS previously recognized two methods for accounting for long-term construction contracts: the completed contract method and the percentage of completion method.  GAAP allowed for an adjustment to be made to the income as a result of a change in method for unrecognized expenses in the previous period, whereas IFRS did not allow such an adjustment.  However, the harmonized revenue standards under GAAP ASC 606 and IFRS 15 now stress the performance obligations that have been met under any contract as the standard criteria to measure revenue recognition.

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Proceeds from the sale of bonds represent a.the amount of the debit to Cash in the journal entry recording the sale. b.the face
insens350 [35]

Answer:

d.All of these choices are correct.

Explanation:

a) when we sale the bonds cash will be debited for the journal entry.

b) the value will be the face value times quoted value

face value of $1,000,000 quoted at 98

example $1,000,000 x 98/100 = $980,000

c) we compare the face value against the proceeds to determinate the gain or loss

4 0
3 years ago
Emerson Inc. would like to undertake a policy of paying out 45% of its income. Its latest net income was $1,250,000, and it had
worty [1.4K]

Answer:

Emerson Inc. should declare $2.5 per share.

Explanation:

Dividend Payout ratio is the ratio of distribution of net income earned during the period among the stockholders.

As per given data

Net Income = $1,250,000

Payout ratio = 45%

Dividend payment = 1,250,000 x 45% = $562,500

Dividend per share = $562,500 / 225,000 = $2.5 per share

6 0
3 years ago
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devlian [24]
The answer is true I believe love
4 0
2 years ago
Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in uni
Soloha48 [4]

Answer:

Option (a) : 505,400 units

Explanation:

As per the data given in the question,

Budget sale units = 531,000

Ending inventory of finished goods = 66,200

Beginning inventory of finished goods = 91,800

Budgeted production unit = 531,000 + 66200 - 91,800

=  505,400

So, The number of units it would have to manufacture during the year is 505,400 units.

Hence, option (a) is correct answer.

3 0
3 years ago
At December 31, Year 1, Kale Co. had the following balances in the accounts it maintains at First State Bank:
nignag [31]

Answer:

$240,000

Explanation:

The computation of the amount of cash and cash equivalent is as follows;

Amount of cash and cash equivalents is

= Money market account + 90-day certificate of deposit + Checking account for 101 - Checking account for  

= $25,000 + $50,000 + ($175,000 - $10,000)

= $25,000 + $50,000 + $165,000

= $240,000

7 0
2 years ago
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