Financial Reporting & Transaction Analysis

This section presents accounting scenarios focusing on financial statement impact and transaction analysis for various companies.

Problem AP8-8A: Whiskey Industries & Holding Ltd.

Whiskey Industries Ltd. Financial Transactions

Whiskey Industries Ltd., a Nanaimo, British Columbia–based company, has a December 31 year-end. The company's comparative statement of financial position and its statement of income for the most recent fiscal year are presented here, along with some additional information:

• During the year, Whiskey Industries sold, for $500 cash, equipment that had an original cost of $1,000 and a net carrying amount of $200.
• Whiskey Industries borrowed an additional $8,000 by issuing notes

Grammar and Vocabulary

1. I have lost my pen. Can I borrow yours?
2. As soon as I have more information, I will call you.
3. Did you know she was pregnant?
4. We have had this can since last summer.
5. When I lived in Hungary, I had to take a bus to go to work.
6. Would you mind answering my questions?
7. 80% of our electronic components are produced in the Far East.
8. The manager and his staff usually meet once a week.
9. What are you responsible for?
10. When did you arrive at the hostel?
11. The way of managing companies in this country is very different from ours.
12. Has she answered your email yet?
13. You will have to work hard if you really want to pass the exam.
14. He never drinks any alcohol when he goes to parties.
15. Have you got something to declare?
16. The plane was four hours late.
17. Driving too

Relatively Prime

When the greatest common factor of two numbers is 1

Rational Number

Any number that can be expressed as a ratio of two integers

Reciprocal

One of two numbers whose product is 1, also called multiplicative inverse

Relation

A set of ordered pairs

X Coordinate

The first number in an ordered pair; it tells the distance to move right or left from the origin (0,0)

Y Coordinate

The second number in an ordered pair; it tells the distance to move up or down from the origin (0,0)

X Axis

The horizontal axis on a coordinate plane

Y Axis

The vertical axis on a coordinate plane

Coordinate Plane

A plane formed by the intersection of a horizontal line (the x-axis) and a vertical line (the y-axis)

Vertical Line Test

A method for seeing if a graph represents a... Continue reading "Math Terminology: Definitions and Examples" »

Analytics and Statistics: Key Concepts

Analytics: the scientific process of transforming data into insight for making better decisions. Population: the set of all elements of interest in a particular study. Sample: a subset of the population. Data: the facts and figures collected, analyzed, and summarized for presentation and interpretation. Cross-sectional data: data collected at the same or approximately the same point in time. Statistics: the art and science of collecting, analyzing, presenting and interpreting data. Variable: a characteristic of interest for the elements. Data set: all the data collected in a particular study. Elements: the entities on which data are collected.

Data Summary

1. Cumulative Frequency Distribution: a tabular summary... Continue reading "Understanding Analytics and Statistics: Key Concepts and Definitions" »

Contradiction

The reading and the lecture are both about ______. Whereas the author of the reading states that _______, the lecturer suggests that ________. The lecturer casts doubt on the main points made in the reading by providing two/three reasons.

First of all, according to the reading, _____________ .However, the lecturer disputes this point. He/She says that _________. Furthermore, he/she mentions that __________

Secondly, the reading states that _______. Nevertheless, the lecturer refutes this argument. He/She argues that __________. In addition, he/she points out ________.

Finally, the reading claims that _________. On the other hand, the lecturer believe that _____. He/She thinks that _______. Moreover, he/she feels that ________

In conclusion,... Continue reading "Contradiction Between Reading and Lecture on ________" »

Process vs. Job Order Costing

Hybrid Costing Systems

A costing system that combines features of both process and job order operations is called a hybrid costing system.

Process Costing

True or False: Process costing systems use separate Work in Process Inventory accounts for each process.

True

Materials Requisition

True or False: A materials requisition is a document that production managers use to request materials for production and shows the job number, the types of materials, and the quantities needed.

True

Calculating Predetermined Overhead Rate

The Work in Process Inventory account of a manufacturing company has a $4,809 debit balance. The company applies overhead using direct labor cost. The cost sheet of the only job still in process shows a... Continue reading "Process vs. Job Order Costing: A Comprehensive Guide" »

Rob Greenfield: The Mountain-Cleaning Mountaineer

Why Does Rob Collect Rubbish?

1. Personal Benefits: Rob benefits from collecting rubbish in several ways. It's a healthy hobby that keeps him active and provides a sense of purpose. The act of cleaning up his environment brings him satisfaction.

2. Everest Expedition: Rob's dedication to cleaning up mountains garnered significant publicity, which ultimately enabled him to embark on an expedition to Mount Everest in 2006.

Fact or Fiction: Analyzing Rob's Actions

Let's examine some statements about Rob and determine their validity based on the provided text:

Statements and Justification:

1. Statement: Rob climbs mountains because it's challenging.
   Answer: False. The text states that Rob climbs mountains

Parameter vs. Statistic

Parameter: Population (μ, σ)

Statistic: Sample (x̄, s)

Rules of Probability

1. 0 ≤ P(x) ≤ 1
2. Σ P(x) = 1
3. P(not x) = 1 - P(x)

Central Limit Theorem

As n (sample size) gets bigger, the sample distance will become approximately normal (shape).

Law of Large Numbers

As n gets bigger, the sample mean (x̄) will get closer to the population mean (μ) (number).

68-95-99.7 Rule

• 68% of data will lie within 1 standard deviation of the mean (σ + μ)
• 95% of data will lie within 2 standard deviations of the mean (2σ + μ)
• 99.7% of data will lie within 3 standard deviations of the mean (3σ + μ)

Sampling Types

Simple Random Sampling (SRS): Normal, random picking.

Systematic Sampling: Every kth sample.

Stratified Sampling: Groups are put together... Continue reading "Statistical Concepts: Sampling and Probability" »

Adjusting Events

The following events require adjustments in financial statements:

• Settlement of a court case
• Asset impairments (asset not well accounted for)
• Determination of costs of assets purchased or sold before the reporting period
• Determination of profit or bonus payment
• Fraud or errors

Non-Adjusting Events

The following events do not require adjustments in financial statements:

• Major business combinations or disposal of a subsidiary (sell of a subsidiary)
• Plan to discontinue operations
• Purchases of assets or expropriation by government
• Destruction of a plant (by a fire, earthquake…)
• Restructuring
• Ordinary shares transactions
• Changes in asset prices or foreign exchange rates after reporting period
• Changes in tax rates or tax law
• New commitments or