a. Suppose the division provided copy services to a customer for the discounted price of $243,380. Under normal conditions, Auto's would have provided these services for $283,000. Other revenues totalled $54,000. b. Salaries cost the division $21,500 to provide these services. The division had to pay employees overtime. Ordinarily, the salary cost for these services would have been $19,350. C. Other expenses totalled $245,000. Income tax expense was 35% of income before tax. d. Auto's has two operating divisions. Each division is accounted for separately to indicate how well each is performing. At year-end, Auto's combines the statements of divisions to show results for Auto's as a whole. e. Inflation affects the amounts that Auto's must pay for copy machines. To show the effects of inflation, net income would drop by $6,000. If Auto's were to go out of business, the sale of its assets would bring in $160,000 in cash. f. Requirement 2. Ad CEO identify the accounting sumption or characteristics used in accounting for the described in a thought. Show how you have applied the stumption or characteristic in preparing the division income statement Idently the accounting assumption of characteristic that provides guidance in accounting for the item described. How have you applied the assumption or characteristics in preparing the special contracts division income statement? Begin with transaction Report revenues at the value because that amount is supported by data. What management believes the goods are worth is based on and to dispute Account for expenses Account for Each operating division of the company is Auto's as a whole for accounting purposes Accounting in Canada the effect of There is no evidence that Auto's is going out of business so it seems uncertain as to whether the division is going concem. Therefore, the potential sale value of Auto's assets is not recorded. Going concem assumption a. Suppose the division provided copy services to a customer for the discounted price of $243,380. Under normal conditions, Auto's would have provided these services for $283,000. Other revenues totalled $54,000. b. Salaries cost the division $21,500 to provide these services. The division had to pay employees overtime. Ordinarily, the salary cost for these services would have been $19,350. C. Other expenses totalled $245,000. Income tax expense was 35% of income before tax. d. Auto's has two operating divisions. Each division is accounted for separately to indicate how well each is performing. At year-end, Auto's combines the statements of divisions to show results for Auto's as a whole. e. Inflation affects the amounts that Auto's must pay for copy machines. To show the effects of inflation, net income would drop by $6,000. If Auto's were to go out of business, the sale of its assets would bring in $160,000 in cash. f. Requirement 2. Ad CEO identify the accounting sumption or characteristics used in accounting for the described in a thought. Show how you have applied the stumption or characteristic in preparing the division income statement Idently the accounting assumption of characteristic that provides guidance in accounting for the item described. How have you applied the assumption or characteristics in preparing the special contracts division income statement? Begin with transaction Report revenues at the value because that amount is supported by data. What management believes the goods are worth is based on and to dispute Account for expenses Account for Each operating division of the company is Auto's as a whole for accounting purposes Accounting in Canada the effect of There is no evidence that Auto's is going out of business so it seems uncertain as to whether the division is going concem. Therefore, the potential sale value of Auto's assets is not recorded. Going concem assumption
