Listed below are five items that mayor may notrequire disclosure in the notes that accompany financial statements. a. Mandella Construction
Listed below are five items that may—or may not—require disclosure in the notes that accompany financial statements.
a. Mandella Construction Co. uses the percentage-of-completion method to recognize revenue on long-term construction contracts. This is one of two acceptable methods of accounting for such projects. Over the life of the project, both methods produce the same overall results, but the annual results may differ substantially.
b. One of the most popular artists at Spectacular Comics is leaving the company and going to work for a competitor.
c. Shortly after the balance sheet date, but before the financial statements are issued, one of Coast Foods’s two processing plants was damaged by a tornado. The plant will be out of service for at least three months.
d. The management of Soft Systems believes that the company has developed systems software that will make Windows ® virtually obsolete. If they are correct, the company’s profits could increase by 10-fold or more.
e. College Property Management (CPM) withheld a $500 security deposit from students who, in violation of their lease, kept a dog in their apartment. The students have sued CPM for this amount in small claims court.
For each case, explain what, if any, disclosure is required under generally accepted accounting principles. Explain your reasoning.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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