Essay about Case 12-05

Sparkle Company is a Nigerian diamond mining company. Sparkle is a joint venture, 50 percent owned by Shine and 50 percent owned by Brighten. Both Shine and Brighten are U.S.-based companies with their functional currency being the American dollar. Sparkle Companies functional currency is that of Nigeria, being the Naira. During 2009, Sparkle had several transactions with its joint venture owners and outside parties. The details of Sparkle’s transactions are three loans, three expenditures, and one revenue stream. The loans the company took out were $1 million from Brighten, $1 million from Shine, and 300 million Naira from a local Nigerian bank. The expenditures

This case is talking about an executive retreat. It was introduced by John Matthews who was a executive had been selected to attend the two-and-a-half-week retreat. The retreat was more like a competition about academic and athletic. The team members should not only get know each other and cooperate with teammates but also need to compete with others. The whole participants were broken into five groups and their aim was to win the competition. There are several sessions about academic and athletic that the participants should complete. After the introduction part the case showed the experience of John. Before the group meeting John was wondering and worried about this retreat. When he was taking the first group meeting, he tried to learn

to FAC to cover 75% of operating costs and 90% of the capital costs for any projects

The court deciphering between criminal negligence and recklessness. Criminal negligence being a person failing to perceive a substantial and unjustifiable risk that the result will occur or that the circumstance exists. The risk must be of such nature and degree that the failure to perceive it constitutes a gross deviation from the standard of care that a reasonable person would observe in the situation.

Shakespeare Inc., a private publishing company issued its F/S on March 20, 2012. There were several accruals and events that the management of Shakespeare is considering to determine if they should be recognized or disclosed in Dec 31, 2011 F/S. In my opinion, the important things to focus on subsequent events are the period they effect and if their influence is material or not, so that in conclusion, the F/S are fairly presented.

On a snowy January evening, the Midwestern Medical Group (MMG) management team held a retirement party for Judith Olsen, MMG president. During the evening, Olsen reflected back on the years she had worked for MMG with mixed feelings about her experience. Over the course of their eight-year integration

The contractor, upon the breach of his obligations, he caused some damages to the owner and he should be exposed to forfeiture.

1. Describe the impact the three proposed accounting methods (full revenue recognition, deferral of revenue, and partial revenue recognition) would have on the company’s financial statements: 1) at the time of the sale, and 2) in future periods.

Question 2: Should LabCo change its method of accounting for the Halibut contract from the percentage of completion method to the completed contract method?

The following information is provided for adjustments prior to closing the books. Lopez and Knepp ask you to enter the adjustments into the spreadsheet, in the two columns to the right of the unadjusted trial balance. (CM2 uses a perpetual inventory system.)

b. What medium would you use to reach each of these parties and what would your relative resource allocation be to each?

I think it is appropriate for LabCo to change its method of accounting for the Halibut contract from the percentage-of-completion method to the completed-contract method. Because, as it mentioned in the case, LabCo has experienced some significant problems in the design and manufacture of the product, such as “initial designs had to be redone”, “certain engineering costs had to be outsourced” and the cost of raw materials had risen unexpected. Moreover, the product did not pass the final test environment production simulation at Halibut’s facilities after a six-month delay in the design and construction.

Build the management-research question hierarchy, through the investigative questions stage. Then compare your list with the measurement questions asked.

Fill in the correct amounts on the following schedule. For percentage-of-completion accounting and for completed-contract accounting, show the gross profit that should be recorded for 2010, 2011, and 2012. Show your calculations.

According to the International Accounting Standard Board, IAS 11 provides for accounting of revenues and costs pertaining to a construction contract. Revenues from a construction contract are only recognized when the contract is complete. However, there is another possibility whereby a proportion of net income is recognized over the period of the contract which is also known as the percentage of completion method. Contract revenues usually comprise of the initial revenue as agreed in the contract and variations in contract work, claims and incentive payments. In addition, IAS 11 consists of two types of contracts which are fixed price and cost plus contracts. Fixed price contracts are contracts whereby a fixed contract price is accepted by