Economics and Accounting
Economics
1. “Demand and Supply” Please respond to the following
- Discuss one (1) recent price change that you have noticed while visiting your local supermarket. Speculate on whether or not the price change that you identified was a result of a change in either supply or demand. Provide a rationale for your response.
2. “Elasticity” Please respond to the following:
- Identify two (2) elastic and two (2) inelastic goods that you have purchased in the last month and explain the main reason why you identified them as such.
3. “Perfect Competition” Please respond to the following:
- Examine a perfectly competitive firm that you have recently purchased a product from, focusing specifically on how the firm operates relative to the characteristics of the market.
4. “Perfect Competition” Please respond to the following:
- Examine a perfectly competitive firm that you have recently purchased a product from, focusing specifically on how the firm operates relative to the characteristics of the market.
Accounting Question:
1. “Capital Leases and Operating Leases” Please respond to the following:
- Imagine you are the senior accountant at an organization and management is considering leasing some equipment; however, management is unsure of the impact that a capital lease would have on the company. Briefly describe the manner in which a capital lease would be accounted for by the company both at inception of the lease and during the first year of the lease, assuming that lease transfers ownership of the property to the lessee at the end of the lease.
- From the previous bulleted discussion, assume that management now has a clear understanding of capital leases, but has been informed by colleagues that an operating lease may be more beneficial than an operating lease, since the useful life for the equipment is only eight (8) years. Compare and contrast a capital lease and an operating lease, and recommend to management what type of lease would be beneficial since the equipment will become obsolete in eight (8) years. Provide a rationale for your recommendation.
2. “Changes in Accounting Principles and Changes in Accounting Estimates” Please respond to the following:
- From the e-Activity, discuss the accounting principles that the identified company changed, and explain the major reasons why the company changed accounting principles. Give your opinion on whether you believe the change in accounting principles was to benefit the corporation or investors and creditors. Provide a rationale for your response.
- Imagine you are the senior accountant at your organization, and management is not sure of the difference between a change in accounting estimate and a change in accounting principle. Briefly discuss the difference between a change in accounting estimate and a change in accounting principle, and outline the impact the changes will have on the company’s financial statements. Give your opinion on why a company should avoid reporting changes in accounting principles and changes in accounting estimates. Provide a rationale for your response.
3. “IFRS and Preparing a Statement of Cash Flows” Please respond to the following:
- Evaluate two (2) major differences between GAAP and IFRS with respect to the statement of cash flows. Give your opinion on which method you prefer. Provide a rationale for your response.
- Imagine you are the senior accountant at your organization and management is unsure of the difference between the indirect method and the direct method of preparing a statement of cash flows. Outline a brief memo to management differentiating between the direct method and indirect method. Advise management on which method the company should use to prepare the statement of cash flows. Provide at least two (2) specific examples on why the method you selected would be beneficial to the company.
Answer PreviewIn a recent visit to the supermarket, I have noticed that there has been a change in the prices of sugar. There has been a trend that has been going on for the last couple of months and the trend has been mainly the decrease in the prices of one kilogram packets of sugar. This is something that has happened over time with different suppliers reducing their prices in an effort…
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