Case Analysis 10-3 Kansas City Zephyrs Baseball Club, Inc. Essay

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I.Issues Why does net income not equal cash flows? Why do we need accrual accounting? (Why do not we fire all accountants and just publish summary bank statements) Why do the differences between owners’, players’, GAAP and truth number exist?(Can accounting numbers be neutral representations of what happened? What happens if a retired non-roster player (e.g. Joe Portocararo) returns to the active roster while continuing to earn the same money promised him in his guaranteed contract? Of what importance are the periodic net income numbers if the clubs can always be sold for huge profits? How should Bill Ahern resolve the accounting conflict between the owners and players? How much did the Kansas City Zephyrs Baseball Club earn in…show more content…
We need accountants because they are trained to handle tough financial situations. They know what investments are wise, what we can afford, and how we can increase our wealth. Why do the differences between owners’, players’, GAAP and truth number exist?(Can accounting numbers be neutral representations of what happened?) The differences between the owners, players, exist because they are both calculate the in various ways at a time under the rules by GAAP. The owner’s financials are also accounted because it is a corporation as well. Depreciation, amortization of players might be an issue if the players are in the non-roster list or call off injury. However, whatever ever happens, has to be followed the GAAP rules. What happens if a retired non-roster player (e.g. Joe Portocararo) returns to the active roster while continuing to earn the same money promised him in his guaranteed contract? In total they owed $1,050.0 to Joe Portocararo by the end of 1986. However, they already expensed the whole amount to Joe. If he gets back to the team, there will be no longer need to owe money to Joe, and paying another pitcher at the same time. Of what importance are the periodic net income numbers if the clubs can

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