Discuss why it is necessary for accountants to assume
Discuss why it is necessary for accountants to assume that an economic entity will remain a going concern. If an entity was perceived to be short term, what effect would that have on the accounting system?
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Guenther Firmin, both of whom are CPA's, form a partnership, with Guenther investing $100,000 and Firmin, $80,000. They agree to share net income as follows:
Container Shipping, Inc. is contemplating the use of process costing to track the cost of its operations. The operation consists of three segments: receiving, shipping, and delivery.
Should ROI be the only gauge a company uses to evaluate investments? Also, is it wise for a company to lose money on one product if that product is vital to the sale of another extremely profitable product?
E-Z Manufacturing Company is a partnership is a partnership among Yolando Gonzales, Willie Todd, and Linda Yeager. The partnership contract states that partnership profits will be split equally among the three partners.
Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $37,500. In addition, Jose incurred the following expenses before using the van:
An outside supplier has offered to produce this part and sell it to the company for $32.10 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided.
This is a bargain purchase. The sales price is less than the appraised value. This solution uses the relative appraised values of the land and the warehouse to allocate the purchase price between these two assets.
Wenig Inc. has some material that originally cost $73,500. The material has a scrap value of $45,600 as is, but if reworked at a cost of $6,600, it could be sold for $58,100.
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