Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Financial Accounting
Costa Company
Income Statement
Revenue
COGS
Gross Profit
less
Depreciation Expense
Insurance
Marketing
Misc Exp
Property Taxes
Rent
Salaries
Utilities
Operating Expenses
Net Income
Balance Sheet
Assets
Cash
Accounts Receivable
Inventory
Equipment
Total Assets
Liabilities
Accounts Payable
Long-Term Debt
Total Liabilities
Shareholders' Equity
Common Stock
Paid-In Capital
Retained Earnings
Total Equity
Total L&SE
With these two statements, there are two adjustments that have been requested. The $12,000 check cannot be processed yet. The sale needs to be recorded. The problem is that the sale will include inventories that moved, but without knowing what inventories were moved and what the markup would be, this cannot be done. If we assume $12,000 in inventory (though this is unlikely), we can process this. Very little changes -- not the size of the firm nor the profits, until we can determine how much inventory we have.
Again, with the physical inventory count, this needs to be reconciled. If...
So the nature of this discrepancy must be determined. We cannot simply guess as to what happened and then make an adjustment. We actually have to investigate these things and find out, so that are adjustments are accurate. Thus we cannot at this time make changes to the financial statements.
1) The errors make a mess of the income statement and balance sheet. The revenues have been understated. To some extent, COGS has also been understated, but we do not know by how much. Thus, the net income is going to be understated as well as the result of the missing transaction. On the balance sheet, cash is understated. There is also the matter of the inventory discrepancy. I am not going to guess as to what happened, since there are many potential explanations. There could have been more inventory produced than we realized, or some inventory has not yet shipped but was recorded as having been shipped. In any event, we need more information before we can process these transactions accurately.
2) This company is profitable. Its net income was $89,100. The adjustments are not going to render the company unprofitable; if anything, they will increase its profits. To determine profitability in the short run, one would simply look at the net income. Long run profits rely more on if the marginal price is higher…
Financial Statement Review Costa Company Balance Sheet Assets Cash Accounts Receivable Equipment (net of depreciation) Inventory Total Assets Liabilities Accounts Payable Long-term Debt Total Liabilities Stockholder's Equity Common Stock Paid in Capital Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder Equity Costa Company Income Statement Revenue Cost of Goods Sold Gross Profit Expenses Depreciation Expense Insurance Marketing Misc Expense Property Taxes Salaries Utilities Rent Total Expenses Net Income Balance Sheet errors effect the presentation of assets, liabilities, and equity where the Income Statement errors effect the classification of revenues and expenses (Kieso, Weygandt, & Warfield 2008, p 1174). The physical count of inventory shows the
Financial Ratios From Income Statements: Accounting in hospitality management is carried out to identify and document financial issues and produce information regarding an organization's assets, liabilities, and investments. Through this process, the management of a hospitality establishment understands and interprets financial ratios, which are crucial for basic control of operations in the establishments. Some of the most important financial ratios in hospitality accounting include average daily rate, occupancy percentage, room sales
Because the home country is not required to reimburse foreign depositors for losses, there is no corresponding financial penalty for lax supervision; there is, though, a benefit to the country with lenient regulatory policies because of increased revenues generated and the employment opportunities these services provide (Edwards 1999). Furthermore, banks seeking to conduct multinational business are attracted to countries where incorporation laws and the regulatory framework offer less regulatory oversight
Strategic and Financial Analysis of Office Depot Company Overview Office Depot Strategic Analysis Porter 5 Analysis Office Depot Strategies Office Depot Profitability Annotated Bibliography In a contemporary business environment, a strategic planning is one of the effective tools that an organization employs to achieve competitive market advantages. This paper carries out a strategic analysis of Office Depot, and identifies Office Depot as one of the Fortune 500. While Office Depot has recorded a consistent increase in total
Robson Walton - Chairman of the Board of Directors of Wal-Mart Stores, Inc. Stephen P. Whaley - Senior Vice President and Controller Eric S. Zorn - Executive Vice President and President, Wal-Mart Realty III. INTERNAL ENVIRONMENT: STRENGHTS and WEAKNESSES A. CORPORATE STRUCTURE Wal-Mart's retail division is formed from four major subsidiaries: Wal-Mart Discount Stores, Wal-Mart Supercenters, Wal-Mart Neighborhood Markets and Sam's Clubs. (Wal-Mart Facts, 2007) Wal-Mart Discount Stores more than 1,000 in U.S. alone average
Antigua Guatemala Coffee Antigua Guatemala International (AGI) will be a manufacturer and exporter of Guatemalan coffee to Japan and the global. AGI will use a new system in the food and beverage industry to offer Antigua Guatemala coffee in a time-efficient and convenient way. AGI will provide vendors, retailers, and cafes with the ability to buy freshly brewed Antigua Guatemala coffee. It will be a high quality option to the institutional