Recent content by Dave In Capital

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    USA What made you become an accountant? Interview for University

    What sparked your interest in this career field? I was lucky to have a 101 professor who was personable and generally had a positive attitude. He did not fit the mold of an introverted "bean counter." He was an encouraging primer for my absorption of the field and outlook on it as a career...
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    USA Career Switch

    A strong interview will prevail over experience if you're looking for an entry level position. If you're applying for a position that requires experience then a strong interview might still help but not as much. I recommend watching vids and relying on whatever other reference materials are out...
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    USA Contract Manufacturing Accounting Questions

    Again Kirby is correct about the transaction with CM not constituting a sale in conventional terms. Also, I want to point out that revenue does not carry a debit balance. So, the second JE in Option 2 would be lopsided.
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    USA Intercompany and GST

    If your organization actively manages the subsidiary, it might be able to claim the GST itself. But then that would preclude the subsidiary from claiming it. Forbes on holding / parent companies claiming VAT Also, the ATO discusses how the non-resident business can charge GST to the resident...
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    USA Intercompany and GST

    Yes you're correct it isn't functionally an export. But, to give myself a little bit of credit, I did address that in my post. My concern is how the ATO auditors will interpret it when / if they audit the GST claims for this supplier. They will see that the entity is billing GST to an...
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    USA Intercompany and GST

    There are two issues that I see here. The first is that the Australian Tax Authority (ATO) does not require GST on exports in most cases. Even though it's not necessarily an export, it might appear as one if payment is remitted by a foreign entity. So, to an ATO auditor, it might be an issue to...
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    USA Equity VS High Interest Rate

    Something to consider is that the 14% interest expense on borrowed funds will reduce taxable gains. So, the effective interest rate is (14% * (1-tax%)). For example, if the tax rate is 25%, then the effective interest rate is 10.5%.
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    USA Accounting for used spare parts

    A company this size will usually have audited financial statements even if it isn't a public company. It might be a closely held corporation not subject to public company disclosure provisions. Or other investors / creditors might be interested in audited financials. In which case the auditors...
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    USA Correct Classification

    The contributions that were earmarked for improvements shouldn't have an impact on the P&L until the improvements are made. Once they're made, you then want to determine if they should be considered repairs & maintenance or capital improvements. Improvements that increase the asset's value...
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    Australia Cash Flow Statement vs Income Statement

    It appears your question is effectively how to prepare a statement of cash flows. You state that you want to be able to tie to the income statement. This implies that you have already deduced net income. In which case you would start with that amount and make additions and subtractions where...
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    USA Booking ghost assets

    Any expense recognized by the entity will reduce taxable gains. So, if the asset is going to be recognized as an expense then the entity will need to show exactly how the purchase was made. Since there are no f/s consequences, a restatement of prior period financials ie pro forma income...
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    USA Inventory in Accrual based accounting

    Accrual basis accounting in summary is when the revenues are matched with related expenses. So, an accrual basis accounting system wouldn't be mutually exclusive with JIT. That is, there is nothing about JIT that makes it impractical for accruals. You mention you're not an accountant. But I'm...
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    USA Recognition of payout business contract

    Is it possible to match revenues and expenses with recognition of either? Financial reporting is designed to serve the priorities of the users' reasonable judgement. That is why where possible I try to provide guidance in place of finite instructions. As you stated, we could use more...
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    USA Customer Profitability Analysis

    This starts off as a marketing analysis then shifts to a discussion of cost reduction. I think the first step is to distinguish between the two. Customer behaviors contributing to segment profitability relates to marketing. Marketing is of course a vastly complex subject matter. But I'll at...
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    USA Accounting for inventory trade-ins that have become obsolete

    Per FASB Original Pronouncement 153, the obsolete machinery is "a nonmonetary asset with no commercial substance." FASB Pronouncement 153 Therefore, it must be recorded at its fair market value. If on the other hand it met the definition of having commercial substance by providing a future...