Therefore, if the transaction is challenged by a stockholder in litigation, the transaction will be subject to a higher level of judicial scrutiny that is applicable to conflicted transactions. In Delaware, this higher standard is called the “entire fairness” standard of review. Under “entire fairness,” the defendants must demonstrate that the transaction is entirely fair to the common stockholders – in both process as well as price. A buyer typically will not commit to […]
Products with a cost of $35,000 are completed and transferred from the Packaging department to the finished goods warehouse. A local hospital has 60 nurses working on a part-time basis. On average, each nurse works two-thirds of a full load. For this example, that means $130,000 in completed widgets, with $10,000 in units that are not yet completed. Although we don’t track production costs for each desk individually, we do use a process costing system that assigns costs to each batch of d […]
In 1999, the FCC relaxed its ownership rules and allowed one company to own two stations in the same market starting in 2001. This development brought the Sinclair-Glencairn arrangement to light for the first time. At the time, Glencairn was getting ready to buy Sullivan-owned KOKH-TV in Oklahoma City, Oklahoma, where Sinclair already owned KOCB . When the FCC relaxed its rules, Sinclair simply replaced Glencairn as the buyer for KOKH. Glencairn then announced plans to sell (more…) […]
Producing financial statements that conform with GAAP accounting principles can help you make better financial decisions and prepare your company for long-term success. The standards are known collectively as Generally Accepted Accounting Principles—or GAAP. If a financial statement is not prepared using GAAP, investors should be cautious. Without GAAP, comparing financial statements of different companies would be extremely difficult, even within the same industry, making an apples-to-apples c […]
The statement of cash flows classifies cash receipts and disbursements as operating, investing, and financing cash flows. Look at Exhibit 2 to see how activities can be classified to prepare a statement of cash flows. Adjustments must be made to each income statement item to convert income statement information from an accrual basis to a cash basis. Review these rules carefully before working Note 12.40 “Review Problem 12.9”.Cash inflows from financing activities include cash receiv […]
At least one debit is made to one account, and at least one credit is made to another account. The financial transactions are all recorded, but they have to be summarized at the end of specific time periods.
The balance sheet provides a look at the current health of your business and whether it has the ability to expand or needs to reserve cash. With single-entry bookkeeping, you enter each transaction only once. If a customer pays you a sum, you enter that sum in your asset column only. This […]
Therefore, the amount of the gift as reported on A’s 2001 Federal gift tax return may not be redetermined for purposes of determining A’s prior taxable gifts or A’s adjusted taxable gifts . The procedure identifies when disclosure of an item or position is adequate for purposes of reducing the accuracy-related penalty under Code Sec. 6662 and to avoid the tax return preparer (more…) […]
In economic theory, a firm will continue to expand the production of a good until its marginal cost of production is equal to its marginal product . This, in turn, will tend to equal its selling price. Production costs, which are also known as product costs, are incurred by a business when it manufactures a product or provides a service. For example, manufacturers have production costs related to the raw materials and labor needed to create the product. Service industries incur production costs […]
Once any of the above methods complete the inventory valuation, it should be recorded by a proper journal entry. Once the inventory is issued to the production department, the cost of goods sold is debited while the inventory account is credited. When adding a COGS journal entry, you will debit your COGS Expense account and credit your Purchases and Inventory accounts.
The name debit card also helps to distinguish it from a credit card. The use of a credit card means that the bank is making a […]
Variances may occur for internal or external reasons and include human error, poor expectations, and changing business or economic conditions. James Chen, CMT is an expert trader, investment adviser, and global market strategist.
Jerry’s Ice Cream uses direct labor hours to allocate variable manufacturing overhead, so we apply the same standard quantity used for direct labor. A budget is an accounting or financial plan for the next period, which can be a month, quarter, (more…) […]
