Accounting Issues Analysis

Accounting Issues Analysis

OTE operates in a stable industry and the results for the company were relatively consistent over the past five years. The December 31 year-end statements are provided in Appendix I. There are a few outstanding accounting issues that may impact them, which I have included in Appendix II. I also put together a memo for you with some information on non-recurring or unusual items incurred by OTE. I will email it to you . Our weighted average capitalization rate is 12%. I want you to assume that the present value of the tax shield associated with capital reinvestment is about 10% of the amount spent, which is projected to be $100,000 per year. As FCI is public, it would not be able to claim a small business deduction for OTE. I would say that FCI could expect to pay corporate tax at the rate of 30%.

Appendix I

Appendix II
Information on business proposal

• Lilly did some research and believes that businesses such as NHH usually sell for three times normalized net income. Net income should be determined in accordance with the relevant accounting standards. NHH uses accounting standards for private enterprises (ASPE). Lilly’s research is based on similar businesses in the very health-conscious cities of Vancouver, Los Angeles, and Denver. The populations of these cities are significantly larger than Saskatoon.

• Consulting fees are estimated to bring in an additional $130,000 per year.

• The consulting service will generate additional sales because people will be in the store and in a health mindset. Kareem believes that this and other factors will increase product sales by 15% per year. Margins are expected to be approximately 42% of sales.

• Operating expenses will increase by about $35,000 per year. These increases will cover any additional consulting services and health store expenses.
Lilly earns $75,000 as an on-staff naturopathic doctor at the local hospital. Lilly’s husband stays at home with their three young children and will continue to do so. Therefore, she must maintain a reasonable salary to support her family. She enjoys working her standard hours of 8:30 a.m. to 4:30 p.m. and spending weekends and evenings with her family.

• Lilly is excited about the opportunity presented by Kareem, as she studied business during her undergraduate degree. She has always wondered what it would be like to own a small business. She likes the idea of being her own boss.

• Kareem has told her that it has been fun so far. He has been able to figure out all aspects of the business including the marketing and accounting for NHH. He is quite proud that he could prepare the draft financial statements entirely on his own.

Analyze the accounting issues described in Appendix II. OTE reports its financial statements in accordance with IFRS.n 

Are you overwhelmed by your class schedule and need help completing this assignment? You deserve the best professional and plagiarism-free writing services. Allow us to take the weight off your shoulders by clicking this button.

Get help

Who Will Write your Paper

Writer avatar

Rating: 4.9/5    Reviews 377

Success rate 99%

Completed projects: 545

I am an experienced writer offering professional services across diverse fields. I provide quality work with strict adherence to the deadline.

Writer avatar
Tutor_Dr. Edith

Rating: 4.8/5    Reviews 381

Success rate 98%

Completed projects: 490

I am an experienced writer with great research and analytical skills. Original quality paper and on-time delivery are guaranteed. Let's do this!

Writer avatar

Rating: 4.7/5    Reviews 316

Success rate 96%

Completed projects: 398

I am a professional writer with more than 8 years of experience. My mission is to provide you with high-quality paper in a timely fashion.

Writer avatar

Rating: 4.8/5    Reviews 371

Success rate 97%

Completed projects: 432

Hi, I deliver quality papers on time following all the instructions provided. Client's satisfaction is my priority. Welcome for plagiarism-free papers.

Writer avatar
Tutor_Prof. Allan

Rating: 4.8/5    Reviews 400

Success rate 96%

Completed projects: 487

With over half a decade of academic experience, I'm committed both to efficiency and punctuality. If it's quality you're looking for, then I'm here to provide!

Writer avatar
Tutor_Prof. Gabie

Rating: 4.9/5    Reviews 447

Success rate 99%

Completed projects: 546

A quality-driven, skilled writer with over 5 years of experience in various disciplines. I deliver plagiarism-free papers and content of impeccable quality, always original and always before the deadline!

Writer avatar

Rating: 4.9/5    Reviews 427

Success rate 96%

Completed projects: 567

I have been a full-time freelance researcher and writer for a period of over 6 years. I have successfully completed over 1000 projects and assignments. I have had a good professional relationship with my clients. Try me today!

Writer avatar

Rating: 4.9/5    Reviews 305

Success rate 100%

Completed projects: 404

I am a proficient writer with knowledge across a wide range of academic disciplines. I guarantee quality, timely and original content.

Writer avatar

Rating: /5    Reviews 419

Success rate 98%

Completed projects: 506

Hi, count on me to deliver quality and exemplary papers. I will pay attention to all your instructions, and meet all your expectations.