4 pt On January 1, 20x1, a company acquired a machine in exchange for 15,950 shares of their own common stock which carries a $1 par. The fair value...
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Sofea is a new accounting degree student. She has some questions regarding the Conceptual Framework. She knows that the Conceptual Framework sets forth the objective and fundamentals that will be the basis for developing financial accounting and reporting standards. Notwithstanding, Sofea wants to know more regarding the rationale for the adoption of The Conceptual Framework for Financial Reporting in Malaysia and the qualitative characteristics that underlie the preparation of general purpose financial reporting.


Required:


In relation to the above statement, and with reference to The Conceptual Framework for Financial Reporting (MASB, 2018), advise Sofea on the following issues:


a)  Explain the rationale for having a conceptual framework?


(4 marks)


b)  How does the Conceptual Framework differ from accounting standards?


(2 marks)


c)  Explain how materiality is related to the proper presentation of financial statements? What factors should be considered in assessing the materiality of misstatement in the presentation of a financial statement?


(4 marks)


d)  Outline the criteria that must be satisfied before a financial statement element can be recognized in the financial statements


(2 marks).

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4 pt On January 1, 20x1, a company acquired a machine in exchange for 15,950 shares of their own common stock which carries a $1 par. The fair value of this machine was $648,500. On the date of the acquisition, the Company's shares were trading on the NYSE for $40 per share. The company uses the sum-of- years digits method for depreciation of this class of equipment. The company estimates no salvage value and a 10-year life. On January 1, 20x3 the company paid $60,000 for a capital expenditure on the machine that will produce significant cost savings in the future. This capital expenditure did not change the remaining useful life of the equipment, however, the company felt it was necessary to change to the straight-line method of depreciation beginning January 1, 20x3. Determine the book value of the machine as of December 31, 20x3: $417,900 $365,400 $499,100 $446,600

Accounting and Financial Reporting for Not-for-Profit Organizations and the Federal Government 16-9. What is the Patient Protection Affordability Act, and what impact has it had on NFP hospitals' financial reporting and tax filing? 16-10. A board member of an NFP hospital has asked you what resources are avail- able to help him in assessing the financial and operational performance of the hospital. Where would you direct him to obtain benchmarking data to help him with his assessment? 16-11 Charity Care. The local newspaper of a large urban area printed a story titled "Charity Care by Hospitals Stirs Debate." The story quotes one legislator who wants "to ensure that the state's not-for-profit hospitals are fulfilling their obli-

Chicago, IL. atholic Hospital Association, St. Louis, MO. etworks. The journal of the American Hospital Association. 16-1. Since the FASB sets the standards for both not-for-profit health care entities and investor-owned entities, the financial reporting requirements are the same for these two entities. Do you agree with this statement? Why or why not? 16-2. What are the required financial statements for (a) a not-for-profit health care activities? entity and (b) a governmental health care entity reporting only business-type 16-3. How do the accounting treatments for charity services, patient discounts, contrac- tual adjustments, and provision for bad debts differ in terms of their effects on palient service revenues and related receivables? What, if any, differences exist in the accounting or reporting treatment under the FASB and GASB standards? 16-4. What is an example of a performance indicator and to what would it compare in investor-owned financial reporting? 16-5. Discuss some of the presentation differences between the operating statements of not-for-profit and business-type governmental health care entities. 16-6. Tupper Memorial Hospital received from a donor a $50,000 contribution and a $50,000 pledge payable in one year. The donor required that the funds be used for heart research. Explain differences in accounting for the donor's contribu- tion and pledge if Tupper is (a) a government hospital and (b) a not-for-profit hospital. 16-7. What are assets limited as to use and how do they differ from restricted assets? 16-8. What is premium revenue, and when is it recognized? Discuss the recognition of revenue relative to the revenue recognition and matching concepts in accounting.

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