Title: Serial Problem SP 1
QA_Ori:
Assets = Liabiliti
es
+ Equity
Date Cash + Accounts
Receivab
le
+ Comput
er
Supplies
+ Comput
er
System
+ Office
Equipme
nt
= Accoun
ts
Payabl
e
+ A.
Lopez,
Capital
– A. Lopez,
Withdraw
als
+ Revenu
es
– Expens
es
Oct
.
1+
$55,000
$20,000 + $8,000 + $83,000
3 + $1,420 +
$1,420
Bal. 55,000 + 1,420 + 20,000 + 8,000 = 1,420 + 83,000
6 + $4,800 + $ 4,800
Bal. 57,575 + 1,400 + 1,420 + 20,000 + 8,000 = 0 + 83,000 + 6,200 – 805
2
0–
1,940
– 1,940
Bal. 55,635 + 1,400 + 1,420 + 20,000 + 8,000 = 0 + 83,000 + 6,200 – 2,745
2
2+
1,400
– 1,400
Title: Reporting in Action 1
QA_Ori:
An organization’s total assets are equal to its total liabilities plus total equity.
Title: Reporting in Action 2
QA_Ori:
Return on assets is net income divided by the average total assets invested.
Title: Reporting in Action 3
QA_Ori:
We know that net income equals total revenues less total expenses. For Polaris,
Title: Reporting in Action 4
QA_Ori:
Title: Reporting in Action 5
QA_Ori:
Title: Comparative Analysis
QA_Ori:
($ thousands) Polaris Arctic Cat
1. Total assets =
Liabilities + Equity $1,228,024 $272,906
2. Return on assets $227,575 $13,007
[($1,061,647 +
$1,228,024)/2]
[($246,084 + $272,906)/2]
19.9% 5.0%
3.
Revenues-Expense
s
= Net income
4. Analysis of return on assets: Polaris’s 19.9% return is good given the moderate risk Polaris confronts
5. Analysis conclusions:
Arctic Cat’s return is undesirable (poor when compared to the industry norm);
Title: Ethics Challenge 1
QA_Ori:
There are several parties affected. They include the users of financial
Title: Ethics Challenge 2
QA_Ori:
A major factor in the value of an auditor’s report is the auditor’s independence.
Title: Ethics Challenge
QA_Ori:
Thorne should not accept this fee arrangement. To avoid compromising the
auditor’s independence, Thorne should reject it. (Further, the AICPA Code of
Title: Ethics Challenge
QA_Ori:
Ethical considerations guiding this decision include the potential harm to
affected parties by allowing such a fee arrangement to exist. The
unacceptable nature of such a fee arrangement guards the profession against
unethical actions that could undermine its real and perceived value to society.
Title: Communicating in Practice 1
QA_Ori:
Deciding whether Twitter is a good loan risk can be difficult because the
planned expansion is risky if customer demand does not meet expectations.
Title: Communicating in Practice 2
QA_Ori:
How the company is organized is important to a loan officer. If it is a
pro-proprietorship (and not LLC), the personal assets of the owners are
Title: Taking It to the Net
QA_Ori:
1.
(in thousands) 2011 2010 2009 2008 2007
Revenues…………. $31,128 $28,437 $28,539 $31,878 $31,573
through 2008, declined in the recessionary period of 2008 through 2010, and
began to increase from 2010 to 2011. Management must work to continue a
trend of increasing revenues.
QA_Edit:
(in thousands) 2011 2010 2009 2008 2007
QA_Ori:
2.
(in thousands) 2011 2010 2009 2008 2007
Net income performance for RMCF improved from 2007 to 2008 and from 2010
to 2011. Its net income grew nearly 5% and 9.5%, respectively. However, 2009
and 2010 net income declined 25% and 4%, respectively.. Although 2009 and
2010 were recessionary times, management must continue to work to sustain
and increase profitability levels.
QA_Edit:
(in thousands) 2011 2010 2009 2008 2007
Title: Entrepreneurial Decision 1
QA_Ori:
(a) AccounTwit’s total amount of liabilities and equity consists of the bank
loan and the owner investments. Specifically:
Total assets =
Bank
Loan +
Owner investment
=
Liabilities +
Equity
(b) AccounTwit’s total amount of assets equals its total amount of liabilities
plus equity, which is $750,000.
Total assets =
Bank
Loan +
Owner investment
=
Liabilities +
Equity
Title: Entrepreneurial Decision 3
QA_Ori:
AccounTwit’s 10.7% return slightly exceeds its competitors’ average return of
Title: Global Decision 1
QA_Ori:
KTM’s net income and revenues figures are computed using Euros, which is
Moreover, KTM’s figures are computed according to International Financial
Reporting Standards (IFRS) following pronouncements of the IASB, while
Title: Global Decision 1
QA_Ori:
KTM’s return on assets ratio eliminates differences in monetary units (between
However, any comparisons using the return on assets ratio are still impacted