hmwk+04 - Young Suk Choi (24808709) MGMT 30A HW #4 D7...

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Young – Suk Choi (24808709) MGMT 30A HW #4 D7 Chapter 2 Question 10. Holding all other factors constant, indicate whether each of the following signals generally good or bad news about a company. a. Increase in earnings per share. - Good b. Increase in the current ratio. - Good c. Increase in the debt to total assets ratio. - Bad d. Decrease in free cash flow. - Bad 12. a. What are generally accepted accounting principles (GAAP)? - A set of rules and practices, having substantial authoritative support, that the accounting profession recognizes as a general guide for financial reporting purposes b What body provides authoritative support for GAAP? - SEC, FASB, IASB 13. a. What is the basic objective of financial reporting? - To know the financial information about the sources and uses of a company’s cash. b. Identify the characteristics of useful accounting information. - income statement o it reports how successful it is at generating a profit from its sales - balance sheet o Through balance sheet, we can learn a lot about a company’s financial health by also evaluating the relationship between its various assets and liabilities Brief question BE2-1. The following are the major balance sheet classifications: Current assets (CA) Current liabilities (CL) Long-term investments (LTI) Long-term liabilities (LTL) Property, plant, and equipment (PPE) Common stock (CS) Intangible assets (IA) Retained earnings (RE) Match each of the following accounts to its proper balance sheet classification. ___CL _ Accounts payable ___CL ___ Income tax payable ___CA____ Accounts receivable ___LTI__ Investment in long-term bonds ___CA___ Accumulated depreciation ___PPE____ Land __PPE____ Building ___CA____ Merchandise inventory _CA______ Cash ___LA____ Patent ____CA___ Goodwill ___PPE____ Supplies BE2-10. Here are some qualitative characteristics of accounting information: 1
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1. Predictive value 2. Neutral 3. Verifiable 4. Timely Match each qualitative characteristic to one of the following statements. ___4_____ (a) Accounting information should help users make predictions about the outcome of past, present, and future events. ____2____ (b) Accounting information cannot be selected, prepared, or presented to favor one set of interested users over another. ___3_____ (c) Accounting information must be proved to be free of error. ___1_____ (d) Accounting information must be available to decision makers before it loses its capacity to influence their decisions. Exercises E2-7. These financial statement items are for Snyder Corporation at year-end, July 31, 2007. Salaries payable $ 2,080 Salaries expense 51,700 Utilities expense 22,600 Equipment 18,500 Accounts payable 4,100 Commission revenue 61,100 Rent revenue 8,500 Long-term note payable 1,800 Common stock 16,000 Cash 24,200 Accounts receivable 9,780 Accumulated depreciation 6,000 Dividends 4,000 Depreciation expense 4,000 Retained earnings (beginning of the year) 35,200 2
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Instructions a. Prepare an income statement and a retained earnings statement for the year. Snyder
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This note was uploaded on 04/22/2008 for the course MGMT 30B taught by Professor Tian during the Winter '08 term at UC Irvine.

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hmwk+04 - Young Suk Choi (24808709) MGMT 30A HW #4 D7...

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