Retained earnings

is to lower the estimate of doubtful accounts. By lowering the estimated doubtful account would cause the expenses to be lower than normal, and increase the net income. That would cause an increase in the income statement, and increase the retained earnings, and the company would have inaccurate financial statements. Blair actions violate the financial morals because he is recommending it to make his bonus higher rather than helping the company. He isn’t in the right position to be recommending…

A. Assume that you are a banker and that each company has applied to you for a 90-day loan of $12,000. Which would you consider to be the more favorable prospect? At glance I would consider Moon Corporation as the most favorable prospect due to the amount of cash on hand, compared to Star Corporation this is a good sign of stronger company performance and more opportunities for future investments. Also, Moon’s total liabilities is significantly lower than Star and more manageable. B. Assume…

Question 1: Presentation of Financial Statements A. Income statement and Cash flow statement Accounting profit: The process of accrual accounting recognises earned revenue and incurred expenses (Deegan & Samkin, 2013). It is the difference between the revenue earned by a company and its costs. There are certain adjustments in consideration like depreciation, interest and tax. It consists of non-cash items as well. It is also called the net income of the company. It considers both cash…

Introduction Success of a business organization largely depends on its choice of financial sources. Right choice of financial sources will lead the business to a healthy and profitable position. A business might need finance at any stage of its development. We will now identify and analyze some available sources of finance for Rachel plc which needs money for its expansion purposes. Issue of New Shares Issuing new shares of the company is one good way of raising long-term finance for the…

Introduction The purpose of this research paper is to consider the ethical issues related to the business operations of Agape World, Inc. and its founder Nicholas Cosmo. Nowadays, it seems the story of the failed “Ponzi” scheme seems to be the inescapable in the national news. From Bernie Madoff, Kenneth Starr to Nicholas Cosmo, we are inundated with stories of the collapsed financial scheme. Unfortunately, the stories worthy of broadcast news represents a fraction of the actual convictions…

is not clear if the BK’s per share earnings will increase because of the leveraged recapitalization. The net income is calculated by first restating the revised earnings before interest and taxes (EBIT) for the loss of interest on cash investments. Then, the EBIT is adjusted for the interest on debt and taxes to calculate the net income. The resulting net income is significantly less than the net income, before the share repurchase decision. However, the earnings per share have increased from…

250-10-50-7 (Correction of an Error in Previously Issued Financial Statements) Refer to ASC 250-10-50-8 (Disclosing the annual report for the adjustments year) Refer to ASC 250-10-50-9 (Indicating the effects of restatement on the balance of retained earnings) Refer to ASC 250-10-50-11 (Error Corrections Related to Prior Interim Periods of the Current Fiscal Year) Refer to ASC 606-10-55-49 Superseded ASC 605-45-50-03 Refer to ASC 740-10-35-2 (New Information Affecting Measurement of TAX…

Listed below are several information, characteristics, and accounting principles and assumptions. Match the letter of each with the appropriate phrase that states its application. | | | Student Answer: | | : Historical cost principle | | 1 : Earnings process completed and realized or realizable | | | | : Going concern principle | | 2 : Cost of providing financial information versus the benefits derived from its use | | | | : Matching principle | | 3 : Accruals and deferrals…

everything on your tax return. The IRC provided subsections K, S, and C to govern the tax consequence of distributions as applied to partnership, S corporation and C corporation. A Partnership distribution is not taxed as distributions of earnings because partnership earnings are immediately taxed…

Financial statements are indispensable analytical tools for any business regardless of size. There are four primary statements (balance sheet, cash flow statement, retained earnings, and income statement) that are reviewed and analyzed on a regular basis that display an organization economic wealth and health. • Balance Sheet – will permit the viewer to determine the net worth of an organization via seeing: o Total assets, debt, and owner/stockholder’s equity • Income Statement – one will…