financial accounting 136
two different documents use word from financial accounting book:
Picasso Graphics is a graphics arts design consulting firm. Pablo Taylor, its treasurer and vice president of finance, has prepared a classified balance sheet as of July 31, 2016, the end of its fiscal year. This balance sheet will be submitted with Picasso Graphics’ loan application to Paris Trust & Savings Bank.
In the Current Assets section of the balance sheet, Pablo reported a $56,000 receivable from Becky Holt, the president of Picasso Graphics, as a trade accounts receivable. Becky borrowed the money from Picasso Graphics in January 2014 for a down payment on a new home. She has orally assured Pable that she will pay off the account receivable within the next year. Pablo reported the $56,000 in the same manner on the preceding year’s balance sheet.
Required: Evaluate whether it is acceptable for Pablo to prepare the July 31, 2016 balance sheet in this manner. Describe reasons given in the textbook on how loans to corporate officers should be handled (2-3 paragraphs).
In February of 2010 the SEC announced a new time line calling for publicly traded companies to switch from GAAP to a different set of accounting standards, called IFRS, by 2015. Now that it is 2017, do some research on the impact this switch will have on US companies. Based on your research, what are the key advantages and major challenges associated with making the proposed switch?
Required: 2 paragraphs outlining the advantages and disadvantages.