S a e 222 communication mary baroni is a friend of

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Corporate Finance: A Focused Approach
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Chapter 2 / Exercise 2-19
Corporate Finance: A Focused Approach
Brigham/Ehrhardt
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S-A E 222 (Communication) Mary Baroni is a friend of yours from high school. She decided to become a beautician after leaving high school, rather than to attend college. She recently opened her own shop, and has contracted her services to a local hospital. She is paid a monthly fee for her services, and receives a small gratuity from each of the patients. She has just received her first set of financial statements from her accountant. She is quite upset. The statements show a cash balance of $3,600 at the end of the month, but a net income of only $500. She has written you a letter, asking you whether such a situation is possible, or whether she should find another accountant. Required: Write a short letter to your friend. Use proper form. Answer her question completely, but briefly. Ans: N/A, LO: 4, Bloom: C, Difficulty: Easy, Min: 5, AACSB: Communication, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: Communications, IMA: Business Economics
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Corporate Finance: A Focused Approach
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Chapter 2 / Exercise 2-19
Corporate Finance: A Focused Approach
Brigham/Ehrhardt
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Solution 222 Answers will vary. The instructor's requirements concerning proper form should be followed. The letter may be either business or personal. At a minimum, the letter should be in a recognizable form, and proper grammar and spelling should be used. Neat erasures and corrections might be allowed. A suggested personal letter follows: 1245 Lily Lane Buena Vista, AR 77661 (Date) Dear Mary, Congratulations on opening your business! I am sure you will do well, combining your creative genius with your talent for serving others. You asked about your financial statements. Of course, you realize that I am just an accounting student, but I do know that it is possible to have a large cash balance and little net income. You may have had expenses that were not paid in cash yet. These expenses reduce your income, but not your cash. I think that you should discuss the statements with the accountant who prepared them. He or she will be in the best position to explain the results. Thanks for the question. It really made me think. Sincerely, (signature)
IFRS Questions 1. Which of the following is not a reason one set of international accounting standards are needed? a. Multinational corporation. b. Financial markets. c. Information technology. d. All of these answer choices are reasons one set of international accounting standards are needed. Ans: D, LO: 7, BT: K, Difficulty: Easy TOT: 1.0 min. AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting

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