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1 Altsol 6e
1 Altsol 6e
Exercise 1-1Requirement 1
Haskins and Price Operating Cash Flow Cash collected Cash disbursements: Payment of rent Salaries Travel Utilities Net operating cash flow Requirement 2 Haskins and Price Income Statements Revenues Expenses: Salaries Utilities Travel Rent Net Income Year 1 $380,000 (200,000) (40,000) (50,000) (30,000) $ 60,000 Year 2 $440,000 (210,000) (40,000) (60,000) (30,000) $100,000 Year 1 $330,000 (60,000) (200,000) (50,000) (30,000) $(10,000) Year 2 $450,000 -0(210,000) (60,000) (50,000 $130,000
Requirement 3 Year 1: Amounts billed to customers Less: Cash collected Ending accounts receivable
Year 2: Beginning accounts receivable Plus: Amounts billed to customers Less: Cash collected Ending accounts receivable
Exercise 1-2
List A
g 1.
List B
predictive value a. applying the same
accounting practices h _2. relevance e j c 3. Faithful representation 4. comprehensive income 5. materiality over time b. record expenses in the period the related revenue is recognized c. concerns the relative size of an item and its effect on decisions d. concerns the recognition of revenue e. along with relevance, a primary decisionspecific quality f. the original transaction value upon acquisition g. information is useful in predicting the future h. pertinent to the decision at hand i. implies consensus among different measurers j. the change in equity from nonowner transactions
1. The periodicity assumption Exercise 1-3 2. The matching principle 3. The historical cost (original transaction value) principle 4. The full disclosure principle 5. The realization (revenue recognition) principle 6. The economic entity assumption 1. The periodicity assumption Exercise 1-4 2. The historical cost (original transaction value) principle 3. The matching principle 4. The full disclosure principle 5. The economic entity assumption 6. The realization (revenue recognition) principle