Depreciation: Airplanes & Garbage Trucks Essay

The company’s revenues were not growing fast enough to meet these targets, so defendants instead resorted to improperly eliminating and deferring current period expenses to inflate earnings. They employed a multitude of imp roper accounting practices to achieve this objective. Among other things; the complaint charges that defendants:

By manipulating the financial statements, the company gave a false impression on its future prospects of the company, allowing them to more freely raise capital through the issuance of common stock, and inadvertently inflating stock prices.

In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.

4)      What different factors does Printup use to identify an appropriate price for a package of Metabical?  What

b. At sales price less estimated costs of disposal, if all the following conditions exist:

”Was written by Michael Rapoport on September 29, 2016, in the Wall Street Journal. Recently, Wells Fargo had an accounting scandal with CFO John Stumpf around the problem now is deciding what is ‘material’ and must be disclosed.

So when using the Averaging Method below is an example of you calculate the cost of items sold:

Model 1: the criterion is no additional products are dropped. So, we can assume no additional products will be dropped in 1991 from 1990. The change in overhead allocation rate from 1990 to 1991 will be similar to the change from 1987 to 1988. The differences in 1987 to 1988 are fairly not important. If we assume that change in overhead from 1990 to 1991 will also be omitted because the product line has not changed; therefore, the 1991 overhead allocation rate will be the same as the 1990 overhead allocation rate of 563%.

In recent year we have seen numerous companies fail as a result of these bad and/or fraudulent practices. In 1998 the publicly traded Waste Management Company falsely reported 1.7 billion in earnings. They got caught when the new CEO and management team went through the books.

4Cessna 172 Depreciation Currently, your company’s biggest and most important asset is your Cessna 172. We have reviewed your the current and previous years financial statements regarding the service life change of the Cessna. As of the time of this report, we do recommend that the service life of the Cessna should be reassessed to 30 years or more. This recommendation has been based on the proven reliabilitytrend of the aircraft and we strongly feel that this adjustment can preserve the asset’s value and reduce depreciation. The current 15-year aircraft life depreciates at a rate of $9,000 per year withno residual value. Changing the aircraft lifespan to 30-years will only result in depreciation of only $4,500 per year. Adjusting the asset

• Pressures to overstate revenues in order to report achieving announced revenue or profitability targets or industry norms that were not achieved in reality owing to such factors as global, national, or regional economic conditions, the impact of technological developments on the entity 's

The audit team documented its observations and quantified the resulting misstatements. Their audit paperwork classified Waste Management, Inc. as a “high risk client” partially due to the misstatements on its books, but also because of Buntrock and his team making “geographic” adjustments in the last quarter of the year to force the financial statements to meet previously stated profit expectations. Each year the auditing team presented Waste Management with “Proposed Adjusting Journal Entries” to bring the statements into compliance with GAAP. Waste Management refused to make the adjustments, yet Arthur Andersen still issued the statements with an unqualified opinion.

We evaluated our three options by considering depreciation over 20 years, taxable income, income taxes, and after tax cash flow. Determining a before tax cash flow was incredibly difficult, therefore we used the cost of each option for 42 homes.

Background: Auditors have historically been more concerned with overstatements than understatements of earnings. However, recent SEC rulings suggest that auditors need to also be concerned about understatements of earnings, particularly when they are used to manipulate earnings in future periods. Actors: Oak Industries CEO, CFO, and controller (Group 4 – Trine Juliussen, Sang Uk Jung, Laura Platler)

The final project for this course is the creation of a Case Analysis. In 2006, the Securities and Exchange Commission (SEC) brought charges against Waste Management and some of its executives. You must research these charges and answer the questions below. Review the SEC Release 1532 here. In a well-structured analysis, you will answer a set of questions regarding the case against Waste Management. Begin your research in Module Eight. Use any additional resources presented and the Waste Management financial statements and reports as needed. The Analytical Procedures Worksheet and the ICF-CX16 Vulnerability Worksheet are located in the Assignment Guidelines and