A patient is admitted to the intensive care unit (ICU) for o…
A patient is admitted to the intensive care unit (ICU) for observation of his grade II splenic laceration. Which signs and symptoms suggest that the patient has had a delayed rupture of his splenic capsule and is now in hemorrhagic shock?
Read DetailsAccrual accounting defines something called “net income” whi…
Accrual accounting defines something called “net income” which is intended to measure changes in the economic value of the firm and is different from cash flows. Imagine that you were trying to adjust a Monopoly company’s net income to find its cash flows from operating activities at the end of 2021 (as you would if you were preparing the operating section of the cash flow statement using the indirect method). The company’s balance sheet shows that it had an inventory balance of $500 at the end of 2020 and an inventory balance of $200 at the end of 2021. How would you use this information to adjust net income, bringing it closer to cash flows from operating activities?
Read DetailsImagine a Monopoly company called Hat Co. was managed by you…
Imagine a Monopoly company called Hat Co. was managed by your friend Steve. Hat Co. had income tax expenses of $10 in year 1, $50 in year 2, and $140 in year 3. Remember that Monopoly companies pay 10% in income taxes on their first $1,000 of income and 20% in income taxes on income between $1,001 and $2,000. During year 2, Hat Co. traded away one railroad and received New York Avenue (with a value on the board of $200) in exchange. Hat Co. estimated that New York Avenue had a “fair value” of $200. Steve finishes ACG 5005 and becomes an Accounting God in October. One night in November, Steve is visited by the ghost of income taxes, who tells him that Hat Co. could have reduced its total income tax expenses over the course of the three years of the game by having a higher “fair value” estimate for New York Avenue when it was acquired in year 2, and then by “writing down” its value to $200 in year 3 (this write down to a book value of $200 would be required because of the “mandatory write down” rule). The ghost sends Steve back in time to play Monopoly again and commands him to change New York Avenue’s “fair value” estimate when it is acquired in year 2 to minimize Hat Co.’s total income tax expenses. What “fair value” for New York Avenue should Steve choose in year 2 (when it was acquired) to minimized the total income taxes Hat Co. pays over the course of the three years of the game?
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