BYP 4-6 COMMUNICATION ACTIVITY
MEMO
To: Accounting Instructor
From: Student
Re: Accounting Cycle
should be completed, are:
1. Analyze business transactions.
2. Journalize the transactions.
The optional steps in the accounting cycle include preparing a worksheet
and preparing reversing entries. If a worksheet is prepared, it is done after
step 3 above, and it includes steps 4 and 6. The worksheet is a form used
BYP 4-7 ETHICS CASE
(a) The stakeholders in this case are:
You, as controller.
(b) The ethical issue is the continued circulation of significantly misstated
financial statements. As controller, you have just issued misleading
(c) As controller, you should impress upon the president the consequences
of having those misleading financial statements be detected by some
BYP 4-8 ALL ABOUT YOU
The following is a personal balance sheet using the classified presentation.
Assets
Current assets
Cash ……………………………………………………….. $1,200
Money market account …………………………….. 1,800
Property, plant, and equipment
Automobile ……………………………………………… 7,000
Video and stereo equipment …………………….. 1,250
Liabilities and Owner’s Equity
Current liabilities
Current portion of automobile loan …………… $1,500
Long-term liabilities
Automobile loan ………………………………………. 4,000
Student loan ……………………………………………. 5,000
Owner’s equity
BYP 4-9 FASB CODIFICATION ACTIVITY
(1) 1. Current assets is used to designate cash and other assets or
resources commonly identified as those that are reasonably ex–
2. Current liabilities is used principally to designate obligations whose
A right of setoff exists when all of the following conditions are met:
2. The reporting party has the right to set off the amount owed with
the amount owed by the other party.
3. The reporting party intends to set off.
IFRS EXERCISES
IFRS 4-1 The statement of financial position required under IFRS and the
balance sheet prepared under GAAP usually present the same information
IFRS
GAAP
Statement of Financial
Position presentation
Balance Sheet
presentation
Noncurrent assets
Current assets
Noncurrent assets
Equity
Current liabilities
Noncurrent liabilities
Noncurrent liabilities
Current liabilities
Stockholders’ equity
Under IFRS, current assets are usually listed in the reverse order of liquidity.
IFRS 4-2 IFRS uses the term statement of financial position rather than
balance sheet.
IFRS 4-3
SUNDELL COMPANY
Partial Statement of Financial Position
Current assets
Prepaid insurance …………………………………………………………. £ 3,600
Supplies ……………………………………………………………………….. 5,200
IFRS 4-4
GLARUS COMPANY
Partial Statement of Financial Position
December 31, 2015
Property, plant and equipment
Equipment …………………………………………… CHF21,700
Less: Accumulated depreciation—
equip.………………………………………… 5,700 CHF16,000
Long-term investments
IFRS 4-5
(a) LESSILA BOWLING ALLEY
Statement of Financial Position
December 31, 2015
Assets
Property, plant, and equipment
Land ……………………………………….. $64,000
Buildings ………………………………… $128,800
Less: Acc. depr.—buildings ……… 42,600 86,200
Equipment ………………………………. 62,400
Equity and Liabilities
Equity
Share capital ($115,000 + $3,440*) …………. $118,440
Non-current liabilities
Notes payable ……………………………………… 83,880
Current liabilities
Current portion of notes payable …………… 13,900
IFRS 4-7 INTERNATIONAL COMPARATIVE ANALYSIS PROBLEM
Zetar
Apple
1.
Non-current assets listed first
Current assets listed first
2.
Goodwill listed before property,
plant and equipment
Property, plant, and equipment
listed before goodwill
3.
Current assets are shown in
reverse order of liquidity with
cash being last
Current assets are shown in
order of liquidity with cash being
first
4.
Current liabilities are subtracted
from current assets to show net
current liabilities/assets
No similar amount appears
5.
Total liabilities are subtracted
from total assets to show net
assets
No similar amount appears
6.
The equity section uses Share
capital and Share premium
The equity section uses Common
stock
7.
Reporting currency is £ (pounds)
Reporting currency is $ (dollars)