E11-14. Suppose Company A is quite similar to Company B in most respectssame size, same industrybut Company A uses the allowance method for bad debt and Company B does not. Which company do you believe has the higher quality of earnings and why?

E11-15. Loder Company had a good year, and recorded a larger gain on the same of a discontinued business segment. Bates Company, on the other hand, had no discontinued business segments on its income statement. Otherwise, both income statements were very similar.Lodger Company announced earnings of $1.25 per share and Bates announced earnings of $1.20 per share.Your friend Bob tells you that you should invest in Loder because it has higher quality earnings because it is larger.What is your response?

E11-16. Mismatch Company has a terrible year and will definitely have a net loss for the year.Give two examples of some accounting adjustments in which estimate could be changed so that Mismatch could make the loss even larger this year to make the subsequent years more positive.