Problem
I. The process of accurate inventory valuation is vital to an organization, because the reported value of a firm's inventory will affect the cost of goods sold, gross profit, and net income on the income statement. In addition, the value of current assets, working capital, total assets, and stockholder's or owner's equity reported on the balance sheet will be impacted. Furthermore, an incorrect inventory valuation will cause 2 income statements to be recorded incorrectly, because the ending inventory of 1 accounting period becomes the beginning inventory in the ensuing accounting period.
Respond to the following in a minimum of 175 words:
i. What are 4 factors that must be considered for accurate inventory valuation? Discuss your answer.
ii. Which of the 4 factors do you believe is most important? Why?
II. There are 3 contingent liability categories specified in generally acceptable accounting principles (GAAP): probable, possible, and remote. In general, probable contingencies are more likely to occur and can be reasonably appraised. Possible contingencies are less likely to occur, but could still occur. Remote contingencies are not likely to occur.
Respond to the following in a minimum of 175 words:
i. Discuss the 2 primary differences between assets on the balance sheet.
ii. Discuss reporting requirements for contingencies.
iii. Explain 2 contingent liability examples.
III. A lease is an arrangement under which a lessor agrees to allow a lessee to control the use of identified property, plant, or equipment for a stated time period in exchange for 1 or more payments. There are several types of lease designations, and they differ if an entity is the lessee or the lessor. For a lessee, a lease can be designated as either a finance lease or an operating lease.
Respond to the following in a minimum of 175 words:
i. Discuss 3 different types of business leases and their merit.
IV. In general, Social Security benefits and employee pension plan benefits do not cover enough of a typical retiree's expenses, and many firms are discontinuing generous employee pension plans. 2 major types of employee retirement plans are defined benefit plans and defined contribution plans.
Respond to the following in a minimum of 175 words:
i. What are the advantages of a defined benefit plan and defined contribution plan?
ii. What are the disadvantages of a defined benefit plan and defined contribution plan?
iii. If you could only select either a defined benefit plan or a defined contribution plan, which would you choose? Why?
V. Cash flow analysis is 1 of the most important processes that firms can conduct to keep the company running smoothly. For small businesses that may not be equipped to easily obtain short-term financing, cash flow analysis becomes an essential component for financial success.
Respond to the following in a minimum of 175 words:
i. Discuss the primary problem with cash flow analysis.
ii. Discuss 2 additional issues that makes cash flow analysis difficult.
The response should include a reference list. One-inch margins, Using Times New Roman 12 pnt font, double-space and APA style of writing and citations.