CASH FLOW POLUUTER CORP

Retail Segment Retail Segment Results (millions) Sales Cost of sales Gross margin SG&A expenses (a) EBITDA

Polluter Corp. is a company that operates three manufacturing facilities and produces household cleaning products in the United States. The U.S. government grants this company with emission allowances (EAs) that can be used during 2010 to 2030. According to The Federal Energy Regulatory Commissions (FERC), Polluter Corporation records emission allowances as elusive assets with a cost basis of zero. The fiscal year is December 31.

Polluter Corp, has recently spent $3 million to purchase emission allowances, with a vintage year of 2012, in order to meet the need for additional EAs in the fiscal years 2010-2014. They will also need to sell EAs, with a vintage year of 2016, in order to offset the costs of the purchase. It is to my understanding that the need for EAs arose because of the significant amount of greenhouse gases emitted by the Company 's antiquated manufacturing facilities. In order to remedy this situation, plans were made to upgrade the facilities in 2014. The reduced gas emissions that the upgraded facilities are expected to provide will render EAs with vintage

are costs that have already been incurred and cannot be changed by any decision made

In accordance with IFRS, presentation of financial information in the statement of profit or loss requires that expenses be classified based on either their nature or function within the operation. IAS 1.99 states that “an entity shall present an analysis of expenses recognized in profit or loss using a classification based on either their nature or their function within the entity, whichever provides information that is reliable and more relevant.” IAS 1.101 further explains, “expenses are sub classified to highlight components of financial

[LO 1] Is cost of goods sold deductible as a business expense for a business

| (TCO E) In an income statement prepared using the variable costing method, variable selling and administrative expenses would:

Inventory at beginning of year . . . . . . . . . . . . . . . . Purchases less cost of items withdrawn for personal use . . . . . . . Cost of labor . . . . . . . . . . . . . . . . . . . . . Additional section 263A costs (attach statement) . . . . . . . . . . Other costs (attach statement) . . . . . . . . . . . . . . . Total. Add lines 1 through 5 . . . . . . . . . . . . . . . . Inventory at end of year . . . . . . . . . . . . . . . . . Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 Check all methods used for valuing closing inventory: (i) Cost as described in Regulations section 1.471-3 (ii) Lower of cost or market as described in Regulations section 1.471-4 Other (specify method used and attach explanation) (iii)

2. Calculate the company 's cost of goods sold. Cost of goods sold represents the cost of raw materials and production of the finished good. Cost of goods sold is the largest cost component the income statement of many companies. The formula for cost of goods sold is beginning merchandise inventory plus purchases of merchandise

* Costs or revenue involved with buying or selling, respectively, the sulfur dioxide emission allowances.

2. Magnetronics had $7,380 invested in accounts receivables at year-end 1999. Its average sales per day were $133,614 during 1999 and its average collection period was 55.23 days. This represented an improvement from the average collection period of 58.68 days in 1995.

Meanwhile, there will be big polluters such as long suffered manufactory may suffer from possible breaks. Although there will be big polluters that can become candidates of breakers, the government will seek to protect them from the full cost from this policy by giving industries up to 100 percent of their allocations for free for the first four years of this program. However, the researchers are debating on the number of free allocations as they think 100

Cost of Goods Sold: Cost of Goods Sold is inextricably linked to sales, and so the most effective way to project it is to use an average from years past. For the past five years,

Secondly, the cost of goods sold and the cost driver rates for each activity will have to be totaled and then subtracted from the net sales:

net sales: $1,000,000 cost of goods sold: $700,000 rent: $20,000 wages: $100,000 other operating expenses: $50,000 net sales – all operating expenses = 530,000