Questions from Financial Accounting

Q: Using the financial information presented in Exhibit 13.1, calculate

Using the financial information presented in Exhibit 13.1, calculate the following ratios for The Home Depot: · Net profit margin · Earnings quality · Receiva...

Q: Use the data given in Problem 5 for Prince Company.

Use the data given in Problem 5 for Prince Company. Data from Problem 5: The comparative financial statements for Prince Company are below: Required: 1. Compute component percentages for Year 2. 2....

Q: Use the data in Problem 5 for Prince Company. Assume that

Use the data in Problem 5 for Prince Company. Assume that the stock price per share is $28 and that dividends in the amount of $3.50 per share were paid during Year 2. Compute the following ratios:...

Q: Company A uses the FIFO method to account for inventory and Company

Company A uses the FIFO method to account for inventory and Company B uses the LIFO method. The two companies are exactly alike except for the difference in inventory cost flow assumptions. Costs of i...

Q: What is goodwill?

What is goodwill?

Q: Explain the difference between a short-term investment and a long

Explain the difference between a short-term investment and a long-term investment.

Q: Explain the difference in accounting methods used for passive investments, investments

Explain the difference in accounting methods used for passive investments, investments in which the investor can exert significant influence, and investments in which the investor has control over ano...

Q: Explain the application of the cost principle to the purchase of capital

Explain the application of the cost principle to the purchase of capital stock in another company.

Q: Under the equity method, why does the investor company measure revenue

Under the equity method, why does the investor company measure revenue on a proportionate basis when income is reported by the affiliate company rather than when dividends are declared?

Q: Under the equity method, dividends received from the affiliate company are

Under the equity method, dividends received from the affiliate company are not recorded as revenue. To record dividends as revenue involves double counting. Explain.