Question

Oakland Limited owns a chain of golf courses. Members sign multiyear membership packages, with increasing payments in later years of the contract. Revenue is recognized evenly over the membership term, regardless of the cash flow pattern. The operating activities section of the SCF for the past two years is as follows:



Required:
1. Does the above analysis suggest high quality of earnings? Explain.
2. Suggest two accounting policies that would contribute to lower quality of earnings, based on the adjustmentsabove.


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  • CreatedFebruary 17, 2015
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