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Discuss why you feel that GAAP allows so many alternative methods for valuing inventories and computing depreciation.

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1. Discuss why you feel that GAAP allows so many alternative methods for valuing inventories and computing depreciation.

2. Identify the factors that you, as a manager, would consider in chosing among the alternative inventory and depreciation methods allowed by GAAP.

3. Discuss what you feel might happen if all the firme were forced to use the same method. For eg. assume that instead of allowing for several alternative inventory and depreciation methods, GAAP simply required all the firms to use the straight line depreciation method and FIFO inventory method. Do you think that by requiring all the firms to use the same methods, the usefulness of financial statements would be increased or decreased? Explain.

Identify and discuss why accounting rules require mark to market accounting for certain financial instruments, but continue to require the use of historical cost for other assets such as land, building, equipment etc.

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1. Identify and discuss why accounting rules require mark to market accounting for certain financial instruments, but continue to require the use of historical cost for other assets such as land, building, equipment etc.

2. What makes mark to market accounting so controversial? Explain whether you support or oppose the use of mark to market accounting as opposed to the use of historical cost for valuing assets. Your explanation should address whether you think mark to market or historical cost based models more useful.

3. Find an article discussing the impact of mark to market accounting rules on the financial statements of an affected company. Provide a summary of the article and attach a link the article. Identify the impact on the financial statement that the article refers to. Does your article support or oppose the use of mark to market accounting? Explain.

What are total current assets?

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1 What are total current assets?

2 What are total assets?

3 What is total shareholders equity?

4 What is the amount of working capital?

Identify a product or service in Army Emergency Relief that could use ABC. Then identify at least two activities for ABC and the appropriate cost drivers for those activities. Estimate the application rates for each cost driver.

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Identify a product or service in Army Emergency Relief that could use ABC. Then identify at least two activities for ABC and the appropriate cost drivers for those activities. Estimate the application rates for each cost driver.

Walter Industries has $5 billion in sales and $1.7 billion in fixed assets. Currently, the company s fixed assets are operating at 90% of capacity.

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Walter Industries has $5 billion in sales and $1.7 billion in fixed assets. Currently, the company s fixed assets are operating at 90% of capacity.

a. What level of sales could Walter Industries have obtained if it had been operating as full capacity?
b. What is Walter s Target fixed assets/Sales ratio?
c. If Walter s sales increase 12%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio?

Francis Corporation purchased an asset at a cost of $50,000 on March 1, 2010. The asset has a useful life of 8 years and a salvage value of $4,000. For tax purposes, the MACRS class life is 5 years. Compute tax depreciation for each year 2010 2011.

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Francis Corporation purchased an asset at a cost of $50,000 on March 1, 2010. The asset has a useful life of 8 years and a salvage value of $4,000. For tax purposes, the MACRS class life is 5 years. Compute tax depreciation for each year 2010 2011.

Haley Paper Company operate a 300 ton per day Kraft pulp mill and four sawmills in Wisconsin. The company is in the process of expanding its pulp mill facilities to a capacity of 1,000 tons per day and plans to replace three of its older, less efficient sawmills with an expanded facility. One of the mills to be replaced did not operate for most of 2010 (current year), and there are no plans to reopen it before the new sawmill facility becomes operational.

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Comments Off on Haley Paper Company operate a 300 ton per day Kraft pulp mill and four sawmills in Wisconsin. The company is in the process of expanding its pulp mill facilities to a capacity of 1,000 tons per day and plans to replace three of its older, less efficient sawmills with an expanded facility. One of the mills to be replaced did not operate for most of 2010 (current year), and there are no plans to reopen it before the new sawmill facility becomes operational.

Haley Paper Company operate a 300 ton per day Kraft pulp mill and four sawmills in Wisconsin. The company is in the process of expanding its pulp mill facilities to a capacity of 1,000 tons per day and plans to replace three of its older, less efficient sawmills with an expanded facility. One of the mills to be replaced did not operate for most of 2010 (current year), and there are no plans to reopen it before the new sawmill facility becomes operational.

In reviewing the depreciation rates and in discussing the residual values of the sawmills that were to be replaced, it was noted that if present depreciation rates were not adjusted, substantial amounts of plant costs on these three mills would not be depreciated by the time the new mill came on stream.

What is the proper accounting for the four sawmills at the end of 2010?