Answers To Assignment 2 1

The depreciation policy and residual values were changed as well of machinery, plants, and equipment, which caused and increase in net income by $3.2 million or $.27 per share.

I believe that this item was a "secondary effect" of the restatement. Had the management not tried to defer expenses into 2002 to make 2001 EPS meet analysts expectations and their own predictions and gotten caught, then there would have been no litigation. The litigation was the "direct effect" of the restatement and the pre-tax charge was a result of the litigation and thus a "secondary effect".

The largest percentage increase on Lockheed Martin’s income statement is ‘Unusual Expense’, or the ‘Severance Charges’ account. Severance actions undertook in 2015 was to reduce the production cost of two product segments: the MST (Mission Systems and Trainings) and the IS&GS (Information System & Global

Total shareholders’ equity increased $21,735,000 or 3.9% YoY. Capital stock and contributed surplus increases were quite insignificant, but accumulated other comprehensive income increased 114.4% YoY, and the accumulated deficit decreased $77,104,000 or 54.2% YoY. Other equity is now at zero from ($154,239,000) last year (refer to financial liability) due to the final payment made for the remaining 45% stake in Honsel

In 1994’s financial statements, this new expense would show up on the income statements as a decrease of EBT by $75 million, leading to a decline in net income. We would probably include this inside of 1994’s cost of sales as a non-recurring item (with an appropriate note disclosure alerting investors to this treatment).

3) Acquisitions made in the year; and an adverse impact arising on the translation of foreign currency denominated debt...”

Under the revaluation model of IAS 16, depreciation expense on equipment in 2013 was $100,000, making the book value at the end of 2013 of $2,650,000. At the beginning of 2014 the equipment would be revalued upward to its fair value of $3,250,000.

What is the amount of uncollectible accounts expense recognized in VIP's income statement for January?

Question 1 1. The maintenance of capital doctrine is developed to prohibit a company from reducing its share capital because a reduction in capital would reduce the pool of funds available to the company to pay its creditors. Section 254T provides that dividends are only payable out of profits. This provision ensures that capital is not return to shareholders in the form of dividend. The term “profit” is not defined in the Corporation Act. In Re Spanish Prospecting Co Ltd (1911), it was stated “profits” implies a comparison between the states of a business at 2 specific dates usually by an interval of a year which means the gain made by the business during the year. Section 259A prohibits a company directly acquiring its own

ABSTRACT This paper reviews fair value accounting method relative to historical cost accounting. Although both methods are widely used by entities in computing their income and financial positions, there is controversy over superiority. Historical cost accounting reports assets and liabilities at the initial price they were exchanged for at the time of the transaction. Conversely, fair value accounting quotes the prevailing price in the market. Nevertheless, while both methods of accounting affect financial statements, the

As long-distance rates and revenue declined, the debt and expenses piled up and put pressure on WorldCom’s ability to meet key-performance indicators and earnings forecasts (J. Randel Kuhn & Sutton, 2006). The line cost was the biggest expense for WorldCom and half of its total expenses. Management committed to achieve a low line cost to revenue ratio because lower ratio meant better performance and higher ratio meant poorer performance. Management focused on lowering the line cost level expense (J. Randel Kuhn & Sutton, 2006). It carried out two improper accounting methods to reduce the amount of line costs (Beresford, Katzenbach, & C.B. Rogers, 2003). First, it released the accruals, the amounts kept aside on WorldCom’s financial statements to pay expected bills which is also called “cookie jar reserve” from 1999-2000 (Beresford, Katzenbach, & C.B. Rogers, 2003). These accruals were supposed to reflect the estimate line costs and other expenses that WorldCom had not yet paid (Beresford, Katzenbach, & C.B. Rogers, 2003). Releasing the accrual is appropriate when it turns out that less is needed to pay the bills than has been expected to pay. Instead, WorldCom provided offset against reported line costs when the accrual was released which reduced reported expenses and increased pre-tax income (Beresford, Katzenbach, & C.B. Rogers, 2003).

The company has excluded debt and expenses in the balance sheets that would increase debt by $1,000,000 and expenses of $1,000,000 that would decrease retained earnings by $1,000,000 and net income by $1,000,000 as of December 31, XXXX.

This disguised the firm’s actual net losses for the five quarters because capital expenditures can be deducted over a longer period of time, whereas expenses must be subtracted from revenue immediately. WorldCom also spread out expenses by reducing the book value of assets from acquired companies and simultaneously increasing the value of goodwill. The company also ignored or undervalued accounts receivable owed to the acquired

I Other revenues , totalling 79 million euros (72 million euros in 2005), principally refer to the change in contract work in progress

TS Non-current assets Property, plant and equipment 16,924,076 Prepaid land lease payment 1,200,547 Investment in an associate company 1,756,406 19,881,029 Current assets Inventories 5,172,887 Trade and other receivables 25,679,086 Prepayments 278,949 Tax recoverable 186,601 Cash and bank balances 3,255,291 34,572,814 TOTAL ASSETS 54,453,843 EQUITY AND LIABILITIES Equity attributable to owners of the Company Share capital 40,042,400 Capital reserve - Accumulated losses -25,366,940 14,675,460 Non-controlling interests - Total Equity 14,675,460 Non-current liabilities Loans and borrowings 1,108,652 Deferred tax liabilities - Current Liabilities Trade and other payables 18,546,046 Loans and borrowings 19,967,621 Tax Payable 156,064 Total liabilities 39,778,383 TOTAL EQUITY AND LIABILITIES 54,453,843 Table 1.3: Hwa Tai Industries Berhad’s Financial Position 2012   (RM) Revenue 66,446,623 Cost of sales -49,501,691 Gross Profit 16,944,932