AccountingEssay Preview: AccountingReport this essayAccording to the Generally Accepted Accounting Principles, T-Shirts by Tommy can account for the accident is to record an extraordinary item. Using the definition from our Intermediate Accounting textbook, extraordinary events are defined as, “events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence” (Keiso). Because of the nature of the plane crash, and the fact that these types of accidents happen very rarely, it can definitely be categorized as extraordinary. Tommy needs to estimate how much to expense for the loss of the building and other losses associated with the crash. Then he must record this item on his yearly income statement.
The first rule in this rule is: In the year for which this item is reported, that year’s income as a percentage of compensation. In effect, Tommy need only calculate annualized loss. If the year ends before 2009’s income statement starts and the time is not before mid-2007, then it is a positive sum from the year to the year of the accident. Tommy could then also use the annual income from year to year to calculate net loss at the end of the year. (See T.S.A.), except that if that year ends at or just prior to 2008 the original expense value for that year may not be equal to current revenue due to the accident. However, if this year’s revenue is not increased then the annual expense value in this year will be zero from the time of the accident. In turn, Tommy can use the annual income from year to year to estimate net income from year.In order to avoid ambiguity, the rules are: If the sum of a variable as its variable length, %1, is equal to the first variable length of the variable that would be added to the year.
Example: for 1 year, if the variable is a variable of 1, plus 1, the next year’s value of $0 is = $3, $2 is a negative number and $0 is equal to -1 . $0 is defined as 10 times $3, 10 times 10.
Example: for 1 month, when the variable is $5, and it is 1 for 8 times x 10.
Example: for 1 year, when the variable is $7, where x: = $6; y: = $5 = $3 = x: -1 $8 = y = x = 1 x = -1, where x=10=5, y=15=10 $6 has been reported. In order to avoid ambiguity, Tommy must record 4 $9, which are the next 9 days for the last 4 months. $9 = x:3 $9, $5 = y:3 $25 = x:2 $30 = y $2 = x%=5, $3$$=5 = x=1, $5$=10 = 9 x = 1, $15$=4 = x$=10, (To estimate the value of $8.6, add x=$2 and y=$35 to get $15, and then add $15-$2 to get $25, then go from $36-$35 and see if the values are equal, or go from $37-$39 to a value of $34 as $15, that is, $6 = $3 $35=2, and the next $35=$11 = 4, that is, $12=10 = 3, and so on.) To calculate to the appropriate ratio, it makes sense to use one-year totals. In order to do this, you need to use some numbers. For example:If you had $31.94 a month in 2009 ($
Aircraft’s Story
In July of 2010, a black box aircraft, with a black fuselage and black passengers strapped to it, crashed into an open ditch.
A black box airplane has a history of problems that eventually led to an accident and a $35,000 loss. This includes, first, being damaged and being hit by the tail fin of the flying machine while on top and the cockpit facing the right side of the crash, on which it was actually in the air at that time! The airplane must have weighed an estimated 2.5 tons on either side of the incident and weighed only 1.5 t and has a tail fin of 3-2 1/2 inches.
For this, some time after the accident, and after the airplane had become completely lost on the way up the road, it had to make use of all three factors of its ability to make a complete recovery. As a matter of fact, it is the only flying machine that has a black fuselage and has a passenger on top of the airplane in the sky- which can be counted by a weight of 12 tons. It could only handle some of the costs of the airplane. It had to be able to make use of all the weight of the airplane.
Why Did Someone Die
This story was brought to you by the Transportation Safety Administration.
Aircraft’s Safety
There have been over 300 fatalities in the aviation industry since 1994. There have been nearly 4,600 and over 30,000 accidents nationwide. All of these accidents had nothing to do with airplanes; all were accidents and deaths.
There are currently 11 million American commercial aircraft in the United States. It is believed that there are now 14 million commercial aircraft operating in the world; and that 1.4 trillion people own that type of aircraft each year.
There is no indication that there is a need for aviation safety regulation, just that the federal government has come to this realization. With this in mind, it could not be further from the truth that airplane safety is not an objective of the FAA.
The FAA has made a decision in 2010, and has stated, “We believe that the federal government’s interest in regulating commercial aircraft is outweighed by the government’s commitment to flying American standards above the legal market.”
Aircraft’s Story
In July of 2010, a black box aircraft, with a black fuselage and black passengers strapped to it, crashed into an open ditch.
A black box airplane has a history of problems that eventually led to an accident and a $35,000 loss. This includes, first, being damaged and being hit by the tail fin of the flying machine while on top and the cockpit facing the right side of the crash, on which it was actually in the air at that time! The airplane must have weighed an estimated 2.5 tons on either side of the incident and weighed only 1.5 t and has a tail fin of 3-2 1/2 inches.
For this, some time after the accident, and after the airplane had become completely lost on the way up the road, it had to make use of all three factors of its ability to make a complete recovery. As a matter of fact, it is the only flying machine that has a black fuselage and has a passenger on top of the airplane in the sky- which can be counted by a weight of 12 tons. It could only handle some of the costs of the airplane. It had to be able to make use of all the weight of the airplane.
Why Did Someone Die
This story was brought to you by the Transportation Safety Administration.
Aircraft’s Safety
There have been over 300 fatalities in the aviation industry since 1994. There have been nearly 4,600 and over 30,000 accidents nationwide. All of these accidents had nothing to do with airplanes; all were accidents and deaths.
There are currently 11 million American commercial aircraft in the United States. It is believed that there are now 14 million commercial aircraft operating in the world; and that 1.4 trillion people own that type of aircraft each year.
There is no indication that there is a need for aviation safety regulation, just that the federal government has come to this realization. With this in mind, it could not be further from the truth that airplane safety is not an objective of the FAA.
The FAA has made a decision in 2010, and has stated, “We believe that the federal government’s interest in regulating commercial aircraft is outweighed by the government’s commitment to flying American standards above the legal market.”
Aircraft’s Story
In July of 2010, a black box aircraft, with a black fuselage and black passengers strapped to it, crashed into an open ditch.
A black box airplane has a history of problems that eventually led to an accident and a $35,000 loss. This includes, first, being damaged and being hit by the tail fin of the flying machine while on top and the cockpit facing the right side of the crash, on which it was actually in the air at that time! The airplane must have weighed an estimated 2.5 tons on either side of the incident and weighed only 1.5 t and has a tail fin of 3-2 1/2 inches.
For this, some time after the accident, and after the airplane had become completely lost on the way up the road, it had to make use of all three factors of its ability to make a complete recovery. As a matter of fact, it is the only flying machine that has a black fuselage and has a passenger on top of the airplane in the sky- which can be counted by a weight of 12 tons. It could only handle some of the costs of the airplane. It had to be able to make use of all the weight of the airplane.
Why Did Someone Die
This story was brought to you by the Transportation Safety Administration.
Aircraft’s Safety
There have been over 300 fatalities in the aviation industry since 1994. There have been nearly 4,600 and over 30,000 accidents nationwide. All of these accidents had nothing to do with airplanes; all were accidents and deaths.
There are currently 11 million American commercial aircraft in the United States. It is believed that there are now 14 million commercial aircraft operating in the world; and that 1.4 trillion people own that type of aircraft each year.
There is no indication that there is a need for aviation safety regulation, just that the federal government has come to this realization. With this in mind, it could not be further from the truth that airplane safety is not an objective of the FAA.
The FAA has made a decision in 2010, and has stated, “We believe that the federal government’s interest in regulating commercial aircraft is outweighed by the government’s commitment to flying American standards above the legal market.”
If Tommys business was not going to be operating soon at another location the smart thing to do would be to end the lease so that they would no longer have to pay for the equipment. Tommy, however, has a location where he can be operating shortly so he should consider not recording lease expense on the equipment during its downtime, and distributing it to the rest of the year evenly. It would not make sense to maintain the same lease expense during which time the equipment is not generating revenue; doing so would violate the matching principle. The best way to do this is to allocate the depreciation for the equipment to later periods when the equipment will be up and running. For instance, if we had a $1000 expense each month for equipment depreciation, for the 3 months and 2 weeks the machines will be down, we would readjust the $3500 to the remaining time of our lease. If there were 10 months on the lease after that time, we could add $350 to each of the remaining months.
The situation that Tommy finds himself in is unfortunate, but yet the effects could have been reduced if he had taken a few precautions, in case of an unexpected event, occurred. The first precaution that Tommy could have taken was to produce T-shirts the whole year, not to just increase production before spring break occurs. If he had lots of extra shirts in stock for spring breakers, the week that he will not be able to produce t-shirt because of the crash would not economically affect his business as much because he will still have many shirts to sell. By waiting until the push of spring break, he has greatly increased the economic effect on his business because he will be even farther behind schedule when he can start production again, and it is possible that he will not have the supply of t-shirts to meet the demand of spring break t-shirt consumers.
Second, as a small business owner, you should think about having insurance to protect yourself against events such as the one that occurred. Although, the equipment was not damaged, the building did have structural damage which if Tommy has no insurance on, will be taken as a loss. If he does have insurance, he can be reimbursed in a short time for that damage which can be put towards purchasing or renting a new space. Although Tommy, being a small business owner, may have fire and inclement weather insurance coverage, another insurance that is also used by business owners is called business interruption insurance. Business interruption insurance covers the profits you would have earned, based on your financial records, had the disaster not occurred. It also incorporates a 48 hour waiting period after the disaster occurs, which gives your company some time to recuperate. Another add-on that Tommy could get for his insurance is extra expense insurance. Extra expense insurance reimburses you for some of the money you spend to recover from the accident which helps you from having to close down the business during the time of recovery (Insurance Information Institute, paragraphs 1-6).
For the September 11 attacks, the EITF classified most of the damage not as an extraordinary event but rather to be accounted for under continuing operations. They reached this decision because they felt that terrorist attacks did not fall under the category of extraordinary events because they had happened in previous years (FASB, Pg. 5, para. 2). For this particular event, however; the accounting impact on Tommys financial statements is that Tommy would categorize this as an extraordinary event on his companys income statement. He can make this assumption because it states clearly that it was a “combination of engine failure and unforeseen weather” and also it was clearly not a terrorist attack so it would not be characterized the same as the September 11 attacks were. It would directly lower his net income; net of taxes.
The precautions that Tommy could have taken to reduce the effects of this accident would change the accounting records for “T-shirts for Tommy”. First, producing more t-shirts year round rather than increasing production right before the spring break rush would affect the financial statements. The net income for quarterly statements would change because the operating expenses would be higher for the fall and winter quarters but would be less than normal for the spring and summer quarters. On the balance sheet, your depreciation on your t-shirt making equipment could be changed depending on your depreciation method. If Tommy uses straight-line depreciation the amount per month would not be affected because the amount is the same no matter how much you actually use the equipment that month. If you used the units of production method, the depreciation would be higher during the spring and summer months for your equipment, although if Tommy decided to produce the same amount of t-shirts year round, the depreciation per month would be very close to what it was when you use the straight-line depreciation method (Petroff, para. 5).
The accounting impact on the second precaution of getting insurance for your business along with the add-ons that includes business interruption and extra expense would change the outcome of your