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Accounting Problem, Balance sheet items
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I am having trouble in figuring out the following problem from an accounting textbook (as some of you can guess, yes this IS a HW problem):
You have just started as a staff auditor for a small CPA firm. How would each of these items be reflected in the year-end balance sheet, including notes?:
a. During the year, the firm declared and paid $10,000 in dividends.
b. Your client has been named defendant in a legal suit involving a material amount. You have received from the client's counsel a statement indicating little likelihood of loss.
c. Because of cost control actions and general employee dissatisfaction, it is likely that the client will suffer a costly strike in the near future.
d. Twenty days after closing, the client suffered a major fire in one of its plants.
e. The cash account includes a substantial amount set aside for payment of pension obligations.
f. Marketable securities include a large quantity of shares of stock purchased for control purposes.
g. Land is listed on the balance sheet at its market value of $1,000,000. It cost $670,000 to purchase 12 years ago.
h. During the year, the government of Uganda expropriated a plant located in that country. There was substantial loss.
Am I supposed to indicate debts and credits for each one of these & amounts? For an example, part a:
Credit cash, debt retained earnings.
You have just started as a staff auditor for a small CPA firm. How would each of these items be reflected in the year-end balance sheet, including notes?:
a. During the year, the firm declared and paid $10,000 in dividends.
b. Your client has been named defendant in a legal suit involving a material amount. You have received from the client's counsel a statement indicating little likelihood of loss.
c. Because of cost control actions and general employee dissatisfaction, it is likely that the client will suffer a costly strike in the near future.
d. Twenty days after closing, the client suffered a major fire in one of its plants.
e. The cash account includes a substantial amount set aside for payment of pension obligations.
f. Marketable securities include a large quantity of shares of stock purchased for control purposes.
g. Land is listed on the balance sheet at its market value of $1,000,000. It cost $670,000 to purchase 12 years ago.
h. During the year, the government of Uganda expropriated a plant located in that country. There was substantial loss.
Am I supposed to indicate debts and credits for each one of these & amounts? For an example, part a:
Credit cash, debt retained earnings.
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