Intermediate Accounting Volume 1 8E Thomas H. Beechy, Joan E.
#z #z #z #z #z #z #z #z #z
#zConrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee
#z #z #z #z #z #z #z
Sevel
#z
All #zChapters #z1-11 # z # z [With #zAppendix]
Chapter 1: The Framework for Financial Reporting
#z #z #z #z #z #z
Case # z 1-1 Mulla #zand #zYang
1-2 Richard #zWright
1-3 Taylor #zJay
Suggested
#zTime #zTechnical 1-1 Chapter
#zoverview, #ztrue-false#z.............................. 10
1-2 Chapter #zoverview, #ztrue-false#z.............................. 10
1-3 Acronyms……………………………………… 10
1-4 IFRS #zor #zASPE…………………………………. 10
1-5 IFRS #zor #zASPE…………………………………. 10
1-6 Disclosed #zbasis #zof #zaccounting………………… 10
1-7 GAAP #zand #zreporting #zcurrency#z........................... 10
1-8 GAAP #zand #zreporting #zcurrency#z........................... 10
1-9 Users #zand #zobjectives………………………….. 10
1-10 Required #zfinancial #zstatements#z............................ 10
Assignment #z1-1 IASB #zstandard-setting...................................... 10
1-2 International #zcomparisons................................ 10
1-3 Accounting #zchoices#z.......................................... 10
1-4 Effect #zof #zaccounting #zpolicies # z .......................... 15
1-5 Reporting #zalternatives#z...................................... 10
1-6 Non-IFRS #zsituations #z........................................ 15
1-7 Reporting #zsituations #z......................................... 20
1-8 Reporting #zsituations#z......................................... 15
1-9 Objectives #zof #zfinancial #zreporting #z..................... 20
1-10 Impact #zof #zdiffering #zobjectives # z ......................... 20
1-11 Accounting #zpolicy #zdisagreement...................... 15
1-12 Accounting #zpolicies #zand #zreporting #zobjectives.. 10
1-13 Policy #zchoice#z.................................................... 20
© #z2022 #zMcGraw #zHill. #zAll #zrights
Solutions #zManual #zto #zaccompany #zIntermediate #zAccounting, #zVolume #z1, #zreserved
#z8th # z edition 2-1
,Cases
Case #z1-1 #z(LO1.2, #zLO1.3, #zLO1.4, #zLO1.5)
Notes #zfor #zDiscussion #zWith #zElicia:
There #zis #za #zconflict #zof #zinterest #zbetween #zthe #zobjectives #zof #zElicia #zand #zDabika #zdue #zto
#zthe #zbuyout #zclause #zin #zthe #zshareholder #zagreement. #zElicia #zwill #zhave #za #zmotivation #zto
#zdecrease #zshareholders‘ #zequity #zsince #zthis #zwill #zreduce #zthe #zamount #zthat #zshe #zwill #zbe
#zrequired #zto #zpay #zto #zbuy #zout #zDabika. #zDabika #zwill #zbe #zinterested #zin #zincreasing
#zshareholders‘ #zequity #zto #zincrease #zthe #zamount #zshe #zwill #zreceive. #z It #zmust #zbe #zclarified
#zwho #z I #zam #zworking #zfor #zsince #zI #zmay #zhave #za #zconflict #zof #zinterest #zsince #z I #zknow #zboth
#zparties.
It # z is # z important # z that # z all # z accounting # z policies # z are # z ‗fair‘ # z to # z both # z sides. # z What # z is # z considered
‗fair‘? #zFrom #zDabika‘s #zperspective, #zfair #zcould #zbe #zaccounting #zpolicies #zconsistent
#zwith #zprior #z years. #zFrom #zElicia‘s #zperspective, #zfair #zcould #zbe #zif #zthe #zeconomic #zevents
#zchange #zthe #zaccounting #zpolicy #zwould #zchange. #zFair #zcould #zbe #zboth #zsides #zsplit #zthe
#zdifference #zwhere #zDabika #zand #zElicia #zdisagree #zon #zvalue. #zIn #zthe #zfuture #zit #zis
#zimportant #zthat #zthe #zshareholders #zagreement #zis #zmore #zspecific.
Due #zto #zthe #zchoices #zallowed #zwithin #zGAAP #za #zpolicy #zcould #zbe #zselected #zthat #zwould
#zbe #zmore #zbeneficial #zto #zone #zof #zthe #zparties. #zIt #zis #zassumed #zsince #zthis #zis #za #zsmall
#zprivate #zcompany #zthat #zthey #zare #zusing #zASPE. #zThere #zis #zno #zindication #zthat #zneither
#zElicia #zor #zDabika #zwould #zbe #zusing #z IFRS #znor #zthat #zthe #zbank #zrequires #zit.
Inventory
Elicia #zwants #zto #zwrite #zoff #zthe #zinventory #zvalue #zfor #zthe #zgarden #zgnomes #zand #zstatues
#zand #zthis #zwill #zdecrease #zthe #zamount #zof #zthe #zpayment #zto #zDabika. #zAccording #zto #zASPE,
#zinventory #zwould #zbe #zvalued #zat #zthe #zlower #zof #zcost #zand #znet #zrealizable #zvalue. #zEven
#zthough #zthis #zinventory #z has #zbeen #zsitting #zin #zthe #zgardening #zcentre #zthere #zis #zstill #za #zfew
#zbeing #zsold #zeach #z year. #zThis #zindicates #zthere #zis #zstill #zsome #zvalue #zassociated #zwith #zthe
#zinventory #zand #ztherefore #zit #zshould #znot #zbe #zwritten #zdown #zto #zzero. #z It #zshould #zbe
#zdetermined #zwhat #zthe #znet #zrealizable #zvalue #zof #zthis #zinventory #zis #zto #zdetermine #zthe
#zamount #zof #zthe #zwrite #zoff. #z If #zit #zis #zall #zwritten #zoff #zand #zthen #zsold #zat #za #zlater #zdate #zthis
#zwould #znot #zbe #zfair #zto #zDabika #zsince #zElicia #zwould #zget #zthe #zbenefit #zof #za #zreduced
#zshareholders‘ #zequity #zand #zthus #za #zlower #zpayment #zrequired #zto #zDabika. #zThe #zpurchase
#zof #zthis #zinventory #zwould #zhave #zbeen #za #zdecision #zmade #zby #zboth #zDabika #zand #zElicia #zso
#zif #zthe #zinventory #zis #zunsellable #zthey #zshould #zboth #zbear #zthe #zimpact #zof #zthis #zdecision.
Warranty
According #zto #zASPE #zthe #zaccounting #zpolicy #zis #zappropriate #zand #za #zwarranty #zexpense
#zshould #zbe #zincluded #zfor #zthe #zguarantee. #zThe #zimpact #zis #zthat #zthis #zwould #zdecrease
#zshareholders‘ #zequity #zand #zthe #zamount #zof #zthe #zpayment #zto #zDabika. #zThis #zis #za #znew
#zpolicy #zthat #zdid #znot #zexist #zuntil #zthis #z year. #zThe #zestimate #zof #z5% #zwas #zonly #zbased #zon
#zsales #zfrom #zthe #zfall. #zSince #zit #zis #za #znew #zpolicy #zthat #zwas #zmade #zby #zElicia #zon #zher
#zown #zit #zmay #zbe #zappropriate #zthat #zthe #zimpact #zof #zthis #zis #zexcluded #z from #z the
#z©2022 #zMcGraw #zHill. #zAll #zrights #zreserved
2-2 Solutions #zManual #zto #zaccompany #zIntermediate #zAccounting, #zVolume #z1,
#z8 th # z edition
,#zcalculation #z of #zshareholders‘ #zequity. #zAt #z a #z minimum #zthe #zestimate #z should
be #zreviewed #zto #zdetermine #zif #zit #zis #zreasonable. #zFurthermore, #zthe #zestimate, #zif #zincluded
#zin #zthe #zshareholders‘ #zequity #zcalculation, #zshould #zbe #zagreed #zupon #zby #zboth #zElicia #zand
#zDabika.
Computer #zEquipment
ASPE #zis #zflexible #zin #zthe #zmethod #zused #zto #zdepreciate #zassets. #zThe #zdeclining #zbalance
#zmethod #zusing #z40% #zwould #zwrite #zoff #zthe #zvalue #zof #zthe #zcomputers #zin #zapproximately
#ztwo #z years. #zThis #zis #zvery #zfast #zespecially #zfor #za #zsmall #zcompany #zthat #zis #zlikely #zto #zuse
#za #zcomputer #zfor #za #zlonger #zperiod #zof #ztime #zdue #zto #zlimited #zresources #zas #zcompared #zto #za
#zlarger #zcompany. #zJust #zbecause #zthe #zcomputer #zmay #zbecome #zobsolete #zquickly #zdoes #znot
#zmean #zthe #zbusiness #zwill #znot #zcontinue #zto #zderive #zbenefit #zfrom #zthe #zcontinued #zuse #zof
#zthe #zcomputer. #zThe #zimpact #zof #zhigher #zdepreciation #zis #za #zreduction #zin #zthe #zpayment #zto
#zDabika. #zIf #zwe #zlook #zat #zconsistency #zwith #zother #zassets #zit #zwould #zbe #zappropriate #zto
#zuse #zthe #zstraight #zline #zmethod. #zWe #zshould #zinquire #zwith #zElicia #zas #zto #zher #zrationale
#zfor #zchoosing #zdeclining #zbalance #zinstead #zof #zthe #zstraight-line #zdepreciatoin #zmethod
#zused #zfor #zall #zother #zassets #zand #zdetermine #zthe #zdeclining #zmethod #zreflects #zthe #zactual
#zusage #zof #zthe #zasset #z(i.e. #zmore #zof #zthe #zasset #zused #zearlier #zon). #zSince #zagain #zsince #zthis
#zwas #za #zdecision #zmade #zonly #zbe #zElicia #zmaybe #zit #zshould #zbe #zexcluded #zfrom #zthe
#zcalculation #zor #zmaybe #zthe #zpolicy #zshould #zbe #zconsistent #zwith #ztheir #zother #zassets #zbut
#zfurther #zinformation #zis #zrequired.
Case #z1-2 #z(LO1.2, #zLO1.3, #zLO1.4, #zLO1.5)
Dear #zRichard #zWright:
I #zam #zhappy #zto #zrespond #zto #zyour #zquestions #zregarding #zthe #zaccounting #zchanges #zthat
#zthe #znew #zbanker #zhas #zrequested. #z It #zis #zimportant #zthat #z you #zrealize #zthat #zthe #zneeds #zof
#zthe #zbanker #zare #zdifferent #zthan #z your #zneeds. #zThe #zbank #zis #zinterested #zin #z your #zability
#zto #zmake #zloan #zpayments; #ztherefore, #zthe #zbanker #zwants #zto #zassess #zfuture #zcash #zflows,
#zcollateral #zand #z your #zability #zto #zpay #zback #zthe #zloan.
First, #zthere #zis #zthe #zissue #zof #zmoving #zto #zthe #zaccrual #zbasis. #zWhile #zit‘s #ztrue #zthat,
#zultimately, #zwhat #z you #zearn #zis #zthe #znet #zcash #zin #z your #zpocket, #zthe #zcash #zbasis #zof
#zaccounting #zdoesn‘t #zwholly #zcapture #zall #zof #zthe #zcash #zflows #zthat #zwill #zhappen #zin #zthe
#zfuture. #zYour #zbanker #zwants #zto #zknow #zwhat #zliabilities #z you‘ll #zhave #zto #zpay #zin #zthe
#zcoming #zmonths #z(and #zyears), #zand #zwhat #zamounts #z you #zcurrently #zare #zowed #zthat #zwill
#zbe #zcollected #zin #zthe #zfuture #zweeks #zor #zmonths. #zThe #zaccrual #zmethod #zreally #zgives #za
#zclear #zpicture #zof #zfuture #z―cash #zflow‖.
It‘s #zfor #zmuch #zthe #zsame #zreason #zthat #zhe #zwishes #zyou #zto #zshow #zyour #zcattle #zat #zmarket
#zvalue. #zI‘m #zsure #zhe #zrecognizes #zthat #zboth #z your #zdairy #zcattle #zand #z your #zbreeders #zare
#zintended #zfor # z continued #zuse #zand #zare #znot #zfor #zsale #zin #zthe #znormal #zcourse #zof
#zbusiness.As #zsaleable #zstock, #zthe #zcattle #zrepresent #za #zpotential #zcash #zresource #zin #zthe
#zevent #zof #zbankruptcy #zor #zdefault. #zAfter #zall, #z you #zprobably #zuse #zthe #zcattle #zas #zcollateral
#zfor #zloans, #zand #zhe #zneeds #zto #zknow #zthe #zvalue #zof #zthat #zcollateral.
You #zshould #znot #ztry #zto #zestimate #zthe #zvalue #zof #zyour #zstock #zby #zyourself. #zFor
© #z2022 #zMcGraw #zHill. #zAll #zrights
Solutions #zManual #zto #zaccompany #zIntermediate #zAccounting, #zVolume #z1, #zreserved
#z8th # z edition 2-3
, #zcredibility, #zyou #zshould #zobtain #zan #zindependent #zestimate. #zThe #zvaluation #zwill #zrequire
#za #zprofessional #zevaluation #z(and #zthe #zcost #zthereof), #zbut #zwill #zbe #znecessary #zin #zorder #zto
#zsatisfy #zthe #zbank.
Sincerely,
#zAndriana
Case #z1-3 #z(LO1.1, #zLO1.2, #zLO1.3, #zLO1.4, #zLO1.5)
Overview
This #zcase #zis #zintended #zto #zget #zstudents #zto #zfocus #zon #zthe #zdifferences #zbetween
#zcompanies #zand #zthe #zvarious #zfactors #zthat #zhave #za #zbearing #zon #ztheir #zfinancial #zreporting
#zobjectives. #zStudents #zare #zasked #zto # z prioritize #zthe #zfactors #zor #zcharacteristics #zthat #zare
#zmost #zlikely #zto #zaffect #zeach #zcompany‘s #zfinancial #zreporting.
Company #zCharacterics
All #zthree #zcompanies #zare #zprivate #zenterprises. #zSignificant #zcharacteristics #zof #zeach #zare
#zas #zfollows:
Breeze #zInc. Saturn #zSoftware Intern’l #zAuto #zParts
Business New #zmobile #zphone #znetwork Custom #zsoftware Auto #zparts #zfor #zinternational
development auto #zmakers
Owners Private #zinvestors #zand Two #zentrepreneurs, #znot Wealthy #zfamily
#zventure wealthy
capitalists
Other Egyptian #zfund Pension #zfund—pref. #zshares Debt #zthrough #zinvestment
# z capital #zBank #zline #zof #zcredit #zfunds #zand #zby #zU.S. #zand
#zsources #zCdn.
banks
Capital Capital #zintensive #zstart-up Salary-based Established
#zrequirements #zoperation; #zworking #zmanufacturer;
#zcapital #zneeded #zexpanding #zto #zgain
#zforeign
customers
Constraints Egypt #zfund #zhas #z3 #zboard Bank #zcovenants: Probable #zdebt #zcovenants
#zseats – restrictions #zon
#zdividend/salary
#zpayouts
– new #zdebt
Preferred #zdividend #zrequired
Reporting CRTC Pension #zfund Investment #zfunds #zand #zbanks
requirements Egypt #zfund; #zJapan #zpartner Bank Potential #znew #zcustomers
IPO Not #zin #zthe #zforeseeable Unlikely Yes, #zanticipated #zin #z2-3
probable? #zfuture #zyears
©2022 #zMcGraw #zHill. #zAll #zrights #zreserved
#z
2-4 Solutions #zManual #zto #zaccompany #zIntermediate #zAccounting, #zVolume #z1,
#z8 th # z edition