You are working as a CEO of petro chemical company. You want to understand and review the profitability position, financial position and cash flow situation of your firm. How can you do this. Illustrate your answer by assuming the data with adjustments. Do you believe Accounting standards and Accounting principles are really helpful for preparation of Balance sheet? If, yes assuming the related numerical data and illustrate your answer relating to infrastructure company which accounting standards and principles are relating to balance sheet. Assume you are an owner of a chain of restaurants in Guntur. you want to know the profit of your restaurants for last six months. How do you know your profitability position? Derive your answer with suitable numerical example. Some items of value to technology companies such as Intel or IBM are the value of research and development (new products that are being developed but which are not yet marketable), the value of the "intellectual capital" of its workforce (the ability of the companies' employees to come up with new ideas and products in the fast changing technology industry), and the value of the company reputation or name brand (e.g., the "Intel Inside" logo). In most cases, the reasons why the value of these items are not recorded in the balance sheet concern the lack of reliability of the estimates of the future cash flows that will be generated by these assets (for all three types) and the ability to control the use of the asset (in the case of employees). Being able to reliably measure the expected future benefits and to control the use of an item are essential elements of the definition of an asset, according to the Conceptual Framework. you are a FMCG distributor, assume 25 critical transactions of your business and record those transactions in Accounting Equation? Prove that the Accounting Equation is satisfied in all business transactions of you as an owner of a solar power company? You are a CEO of an MNC company. You have a dilemma about which depreciation method is suitable and gives most benefit to your firm. Illustrate your answer by assuming the required data and make comparative statement. 9. Case - Music Mart, Inc.* On a sheet of paper, set up in pencil the balance sheet of Music Mart, Inc., as it appears after the last transaction described in the text (January 4), leaving considerable space between each item. Record the effect, if any, of the following events on the balance sheet, either by revising existing figures (cross out, rather than erase) or by adding new items as necessary. At least one of these events does not affect the balance sheet. The basic equation, Assets Liabilities + Owners' equity, must be preserved at all times. Errors will be minimized if you make a separate list of the balance sheet items affected by each transaction and the amount (or) by which each is to be changed. After you have recorded these events, prepare a balance sheet in proper form. Assume that all these transactions occurred in January and that there were no other transactions in January. 1. The store purchased and received merchandise for inventory for $5,000, agreeing to pay within 30 days. 2. Merchandise costing $1,500 was sold for $2,300, which was received in cash. 3. Merchandise costing $1,700 was sold for $2,620, the customers agreeing to pay $2,620 within 30 days. 4. The store purchased a three-year fire insurance policy for $1,224, paying cash. 5. The store purchased two lots of land of equal size for a total of $24,000. It paid $6,000 in cash and gave a 10-year mortgage for $18,000. 6. The store sold one of the two lots of land for $12,000. It received $3,000 cash, and in addition, the buyer assumed $9,000 of the mortgage; that is, Music Mart, Inc., became no longer responsible for this half. 7. Smith received a bona fide offer of $33,000 for the business; although his equity was then only $26,970, he rejected the offer. It was evident that the store had already acquired goodwill of $6,030. 8. Smith withdrew $1,000 cash from the store's bank account for his personal use. 9. Smith took merchandise costing $750 from the store's inventory for his personal use. 10. Smith learned that the individual who purchased the land (No. 6 above) subsequently sold it for $14,000. The lor still owned by Music Mart, Inc., was identical in value with this other plot. 11. The store paid off $6,000 of its note payable (disregard interest). 12. Smith sold one-third of the stock he owned in Music Mart, Inc., for $11,000 cash. 13. Merchandise costing $850 was sold for $1,310, which was received in cash