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2009_1 T01 Q - first year with any new employer(5 A luxury...

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1 TOPIC 1: FINANCIAL REPORTING FOR BUSINESS ENTITIES TUTORIAL QUESTIONS Readings: T&G Chapter 1, 2 & Chapter 6 sections 1-4, 7-8. Discussion Questions (Chapter 1, page 31): DQ 1.15; 1.16; (Chapter 2, page 76): DQ 2.6. Additional Question: See below. Problems (Chapter 1, pp. 34-39): P 1.9; 1.20; 1.23; (Chapter 2, pp 83-85): P 2.19; 2.20; 2.22. Start your semester in a positive manner – Complete your tutorial questions and attend your tutorial. Additional Question for Tutorial 1: Source: T&G Problems 6.15 and 6.16. For each situation below, state whether an asset or a liability would be recognised in the balance sheet. Base your answer on the definition and recognition criteria of assets and liabilities. (1) Cash is received from a cash sale. (2) A yearly insurance policy is paid in advance. (3) Money is spent on research that is unlikely to lead to any new product in the near future but has the potential to lead to developments in the long term. (4) A company hires a new general manager who has the reputation of increasing profits in her
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Unformatted text preview: first year with any new employer. (5) A luxury resort paves a gravel road from the highway to the resort. The road can also be used by others to get to a number of sporting facilities in the area, including a golf course that is not owned by the resort. (6) Taxes for the year ended 30 June, which are not payable until October. (7) A construction company receives a $5 million advance in June for a contract. The work will commence in July. (8) The company has signed a contract to pay its managing director $500,000 per annum (inflation adjusted) for the next four years. (9) On 1 June the company is informed that it is being sued for damages of $1 million caused by a faulty product. The company denies liability. (10) The company will go to arbitration in July to determine the amount of payment to repair environmental damage caused by one of their factories....
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