Ifrs Accounting Solution

Solutions to Problems and Exercises TABLE OF CONTENTS * Chapter 11 Concepts for Analysis 1-51 Concepts for Analysis 1-62 Concepts for Analysis 1-103 Concepts for Analysis 1-113 * Chapter 24 Brief Exercise 2-34 Brief Exercise 2-44 Brief Exercise 2-54 Exercise 2-35 * Chapter 36 Exercise 3-66 Exercise 3-96 Exercise 3-118 Exercise 3-1410 Exercise 3-1510 Exercise 3-1610 * chapter 412 Exercise 4-212 Exercise 4-413 Exercise 4-516 Exercise 4-1217 Exercise 4-1318 Exercise 4-1519 Problem 4-119 Problem 4-721 * Chapter 523 Exercise 5-223 Exercise 5-423 Exercise 5-1325Exercise 5-1525 Problem 5-227 * Chapter 729 Exercise 7-529 Exercise 7-730 Exercise 7-1330 Exercise 7-1531 Exercise 7-1631 Exercise 7-2432 Problem 7-834 Problem 7-1135 Problem 7-1536 * Chapter 838 Exercise 8-138 Exercise 8-1538 Exercise 8-2539 Exercise 8-2640 * chapter 942 Brief Exercise 9-242 Brief Exercise 9-442 Brief Exercise 9-742 Brief Exercise 9-843 Exercise 9-243 Exercise 9-744 Exercise 9-1245 Exercise 9-1446 Exercise 9-1947 P roblem 9-447 * Chapter 1849 Exercise 18-249 Exercise 18-450 Exercise 18-751 Exercise 18-1152 Exercise 18-1553 Exercise 18-1954Problem 18-755 Problem 18-857 * Chapter 2359 Exercise 23-159 Exercise 23-559 Exercise 23-660 Exercise 23-1160 CHAPTER 1 CA 1-5 (a)One of the committees that the AICPA established prior to the establishment of the FASB was the Committee on Accounting Procedures (CAP). The CAP, during its existence from 1939 to 1959, issued 51 Accounting Research Bulletins (ARB). In 1959, the AICPA created the Accounting Prin-ciples Board (APB) to replace the CAP. Before being replaced by the FASB, the APB released 31 official pronouncements, called APB Opinions. b)Although the ARBs issued by the CAP helped to narrow the range of alternative practices to some extent, the CAP’s problem-by-problem approach failed to provide the well-defined, structured body of accounting principles that was both needed and desired. As a result, the CAP was replaced by the APB. The APB had more authority and responsibility than did the CAP. Unfortunately, the APB was beleaguered throughout its 14-year existence. It came under fire early, charged with lack of productivity and failing to act promptly to correct alleged accounting abuses.The APB also met a lot of industry and CPA firm opposition and occasional governmental interference when tackling numerous thorny accounting issues. In fear of governmental rule making, the accounting profession investigated the ineffectiveness of the APB and replaced it with the FASB. Learning from prior experiences, the FASB has several significant differences from the APB. The FASB has: (1) smaller membership, (2) full-time, compensated membership, (3) greater autonomy, (4) increased independence, and (5) broader representation. In addition, the FASB has its own research taff and relies on the expertise of various task force groups formed for various projects. These features form the bases for the expectations of success and support f rom the public. In addition, the due process taken by the FASB in establishing financial accounting standards gives interested persons ample opportunity to make their views known. Thus, the FASB is responsive to the needs and viewpoints of the entire economic community, not just the public accounting profession. (c)The AICPA has supplemented the FASB’s efforts in the present standard-setting environment.The issue papers, which are prepared by the Accounting Standards Executive Committee (AcSEC), identify current financial reporting problems for specific industries and present alternative treat-ments of the issue. These papers provide the FASB with an early warning device to insure timely issuance of FASB standards, Interpretations, and Staff Positions. In situations where the FASB avoids the subject of an issue paper, AcSEC may issue a Statement of Position to provide guidance for the reporting issue. AcSEC also issues Practice Bulletins which indicate how the AICPA believes a given transaction should be reported.Recently, the role of the AICPA in standard-setting has diminished. The FASB and the AICPA agreed, that after a transition period, the AICPA and AcSEC no longer will issue authoritative accounting guidance for public companies. CA 1-6 (a)The Financial Accounting Foundation (FAF) is the sponsoring organization of the FASB. The FAF selects the members of the FASB and its Advisory Council, funds their activities, and generally oversees the FASB’s activities. The FASB follows a due process in establishing a typical FASB Statement of Financial Accounting Standards.The following steps are usually taken: (1) A topic or project is identified and placed on the Board’s agenda. (2) A task force of experts from various sectors is assembled to define problems, issues, and alternatives related to the topic. (3) Research and analysis are conducted by the FASB technical staff. (4) A preliminary views document is drafted and released. (5) A public hearing is often held, usually 60 days after the release of the preliminary views. (6) The Board analyzes and evaluates the public response. (7) The Board deliberates on the issues and prepares an exposure draft for release. 8) After a 30-day (minimum) exposure period for public comment, the Board evaluates all of the responses received. (9) A committee studies the exposure draft in relation to the public responses, reevaluates its position, and revises the draft if necessary. (10) The full Board gives the revised draft final consideration and votes on issuance of a Standards Statement. The passage of a new accounting standard in the form of an FASB Statement requires the support of five of the seven Board members. (b)The FASB issues three major types of pronouncements: Standards and Interpretations, Financial Accounting Concepts, and Technical Bulletins.Financial accounting standards issued by the FASB are considered GAAP. In addition, the FASB also issues interpretations that rep resent modifications or extensions of existing standards and APB Opinions. These interpretations have the same authority as standards and APB Opinions in guiding current accounting practices. The Statements of Financial Accounting Concepts (SFAC) help the FASB to avoid the â€Å"problem-by-problem approach. † These statements set forth fundamental objectives and concepts that the Board will use in developing future standards of financial accounting and reporting.They are intended to form a cohesive set of interrelated concepts, a body of theory or a conceptual framework, that will serve as tools for solving existing and emerging problems in a consistent, sound manner. The FASB may issue a technical bulletin when there is a need for guidelines on implementing or applying FASB Standards or Interpretations, APB Opinions, Accounting Research Bulletins, or emerging issues. A technical bulletin is issued only when (1) it is not expected to cause a major change in accounting practic e for a number of enterprises, (2) its cost of implementation is low, and (3) the guidance provided by the bulletin does ot conflict with any broad fundamental accounting principle. In addition, the FASB’s Emerging Issues Task Force (EITF) issues statements to provide guidance on how to account for new and unusual financial transactions that have the potential for creating diversity in reporting practices. The EITF identifies controversial accounting problems as they arise and determines whether they can be quickly resolved or whether the FASB should become involved in solving them. In essence, it becomes a â€Å"problem filter† for the FASB.Thus, it is hoped that the FASB will be able to work on more pervasive long-term problems, while the EITF deals with short-term emerging issues. CA 1-10 1. (b), (e) 2. (a) 3. (c) 4. (d) CA 1-11 1. (d) 2. (f) 3. (c) 4. (e) 5. (a) 6. (b) CHAPTER 2 BRIEF EXERCISE 2-3 (a)Equity (b)Revenues (c)Equity (d)Assets (e)Expenses (f)Losses (g)L iabilities (h)Distributions to owners (i)Gains (j)Investments by owners BRIEF EXERCISE 2-4 (a)Periodicity (b)Monetary unit (c)Going concern (d)Economic entity BRIEF EXERCISE 2-5 (a)Revenue recognition (b)Expense recognition (c)Full disclosure (d)Historical cost EXERCISE 2-3 (15–20 minutes) a)Gains, losses. (b)Liabilities. (c)Investments by owners, comprehensive income. (also possible would be revenues and gains). (d)Distributions to owners. (Note to instructor: net effect is to reduce equity and assets). (e)Comprehensive income. (also possible would be revenues and gains). (f)Assets. (g)Comprehensive income. (h)Revenues, expenses. (i)Equity. (j)Revenues. (k)Distributions to owners. (l)Comprehensive income. CHAPTER 3 EXERCISE 3-6 (10–15 minutes) 1. | Accounts Receivable| 750| | | Service Revenue| | 750| | | | | 2. | Utilities Expense| 520| | | Utilities Payable| | 520| | | | | 3. | Depreciation Expense| 400| | Accumulated Depreciation—Dental Equipment| | 400| | | | | | Interest Expense| 500| | | Interest Payable| | 500| | | | | 4. | Insurance Expense ($15,000 X 1/12)| 1,250| | | Prepaid Insurance| | 1,250| | | | | 5. | Supplies Expense ($1,600 – $400)| 1,200| | | Supplies| | 1,200| EXERCISE 3-9 (15–20 minutes) (a)| 10/15| Salaries Expense| 800| | | | Cash| | 800| | | (To record payment of October 15 payroll)| | | | | | | | | 10/17| Accounts Receivable| 2,100| | | | Service Revenue| | 2,100| | | (To record revenue for services performed for which payment has not yet been received)| | | | | | | | | 10/20| Cash| 650| | | Unearned Service Revenue| | 650| | | (To record receipt of cash for services not yet performed)| | | | | | | | (b)| 10/31| Supplies Expense| 470| | | | Supplies| | 470| | | (To record the use of supplies during October)| | | | | | | | | 10/31| Accounts Receivable| 1,650| | | | Service Revenue| | 1,650| | | (To record revenue for services performed for which payment has not yet been received)| | | | | | | | | 10/3 1| Salaries Expense| 600| | | | Salaries Payable| | 600| | | (To record liability for accrued payroll)| | | | | | | | | 10/31| Unearned Service Revenue| 400| | | | Service Revenue| | 400| | (To reduce the Unearned Service Revenue account for service that has been performed)| | | EXERCISE 3-11 (20–25 Minutes) (a)CAVAMANLIS CO. | Income Statement| For the Year Ended December 31, 2010| Revenues| | | Service revenue| | $12,590| Expenses| | | Salaries expense| $6,840| | Rent expense| 2,760| | Depreciation expense| 145| | Interest expense| 83| 9,828| Net Income| | $ 2,762| (b)CAVAMANLIS CO. | Statement of Retained Earnings| For the Year Ended December 31, 2010| Retained earnings, January 1| $11,310| Add: Net income| 2,762| Less: Dividends| 3,000| Retained earnings, December 31| $11,072| c)CAVAMANLIS CO. | Balance Sheet| December 31, 2010| Assets| | | Current Assets| | | Cash| $18,972| | Accounts receivable| 6,920| | Prepaid rent| 2,280| | Total current assets| | $28,172| Property, plant, and equipment| | | Equipment| 18,050| | Less: Accumulated depreciation| (4,895)| 13,155| Total assets| | $41,327| | | | Liabilities and Stockholders’ Equity| | | Current liabilities| | | Notes payable| | $ 5,700| Accounts payable| | 4,472| Interest payable| |   Ã‚  Ã‚  Ã‚  Ã‚   83| Total current liabilities| | 10,255| Stockholders’ equity| | | Common Stock| $20,000| | Retained Earnings| 11,072*| 31,072|Total liabilities and stockholders’ equity| | $41,327| *Beg. Balance + Net Income – Dividends = Ending Balance $11,310 + $2,762 – $3,000 = $11,072 EXERCISE 3-14 (10–15 minutes) Sales| 340,000| | Sales Returns and Allowances| | 13,000| Sales Discounts| | 8,000| Income Summary| | 319,000| | | | Income Summary| 302,000| | Cost of Goods Sold| | 202,000| Freight-out| | 7,000| Insurance Expense| | 12,000| Rent Expense| | 20,000| Salary Expense| | 61,000| | | | Income Summary| 17,000| | Retained Earnings| | 17,000| EXERCISE 3-15 (10–1 5 minutes) (a) $5,000 ($90,000 – $85,000)(d) $95,000 ($5,000 + $90,000) b) $29,000 ($85,000 – $56,000)(e) $52,000 ($90,000 – $38,000) (c) $14,000 ($29,000 – $15,000) EXERCISE 3-16 (10–15 minutes) Sales| 390,000| | Cost of Goods Sold| | 235,700| Sales Returns and Allowances| | 12,000| Sales Discounts| | 15,000| Selling Expenses| | 16,000| Administrative Expenses| | 38,000| Income Tax Expense| | 30,000| Income Summary| | 43,300| | | | (or)| | | | | | Sales| 390,000| | Income Summary| | 390,000| | | | Income Summary| 346,700| | Cost of Goods Sold| | 235,700| Sales Returns and Allowances| | 12,000| Sales Discounts| | 15,000| Selling Expenses| | 16,000| Administrative Expenses| | 38,000|Income Tax Expense| | 30,000| | | | Income Summary| 43,300| | Retained Earnings| | 43,300| | | | Retained Earnings| 18,000| | Dividends| | 18,000| CHAPTER 4 EXERCISE 4-2 (25–35 minutes) (a)| Total net revenue:| | | | | Sales| | | $400,000| | Less: Sales discounts| | $ 7,800| | | Sales returns| | 12,400| 20,200| | Net sales| | | 379,800| | Dividend revenue| | | 71,000| | Rental revenue| | | 6,500| | Total net revenue| | | $457,300| | | | | | (b)| Net income:| | | | | Total net revenue (from a)| | | $457,300| | Expenses:| | | | | Cost of goods sold| | $184,400| | | Selling expenses| | 99,400| | Administrative expenses| | 82,500| | | Interest expense| | 12,700| | | Total expenses| | | 379,000| | Income before income tax| | | 78,300| | Income tax| | | 26,600| | Net income| | | $ 51,700| (c)| Dividends declared:| | | | | Ending retained earnings| | | $134,000| | Beginning retained earnings| | | 114,400| | Net increase| | | 19,600| | Less: Net income (from (b))| | | 51,700| | Dividends declared| | | $ 32,100| ALTERNATE SOLUTION (for (c)) | Beginning retained earnings| | | $114,400| | Add: Net income| | | 51,700| | | | | 166,100| Less: Dividends declared| | | ? | | Ending retained earnings| | | $134,000| | | | | | | Dividends declared must be $32,1 00| | | | ($166,100 – $134,000)| | | | EXERCISE 4-4 (30–35 minutes) (a)Multiple-Step Form| WEBSTER COMPANY| Income Statement| For the Year Ended December 31, 2010| (In thousands, except earnings per share)| Sales| | | $96,500| Cost of goods sold| | | 63,570| Gross profit| | | 32,930| | | | | Operating Expenses| | | | Selling expenses| | | | Sales commissions| $7,980| | | Depr. of sales equipment| 6,480| | | Transportation-out| 2,690| $17,150| | Administrative expenses| | | |Officers’ salaries| 4,900| | | Depr. of office furn. and equip. | 3,960| 8,860| 26,010| Income from operations| | | 6,920| | | | | Other Revenues and Gains| | | | Rental revenue| | | 17,230| | | | 24,150| Other Expenses and Losses| | | | Interest expense| | | 1,860| | | | | Income before income tax| | | 22,290| Income tax| | | 7,580| Net income| | | $14,710| | | | | Earnings per share ($14,710 ? 40,550)| | | $. 36| (b)Single-Step Form| WEBSTER COMPANY| Income Statement| For the Year Ended Dec ember 31, 2010| (In thousands, except earnings per share)| Revenues| | | | Sales| | | $ 96,500|Rental revenue| | | 17,230| Total revenues| | | 113,730| | | | | Expenses| | | | Cost of goods sold| | | 63,570| Selling expenses| | | 17,150| Administrative expenses| | | 8,860| Interest expense| | | 1,860| Total expenses| | | 91,440| | | | | Income before income tax| | | 22,290| Income tax| | | 7,580| Net income| | | $ 14,710| | | | | Earnings per share| | | $0. 36| Note: An alternative income statement format for the single-step form is to show income tax as part of expenses, and not as a separate item. (c)Single-step: 1. Simplicity and conciseness. 2. Probably better understood by users. . Emphasis on total costs and expenses and net income. 4. Does not imply priority of one revenue or expense over another. Multiple-step: 1. Provides more information through segregation of operating and nonoperating items. 2. Expenses are matched with related revenue. Note to instructor: Studentsâ€⠄¢ answers will vary due to the nature of the question; i. e. , it asks for an opinion. However, the discussion supporting the answer should include the above points. EXERCISE 4-5 (30–35 minutes) PARNEVIK CORP. | Income Statement| For the Year Ended December 31, 2010| Sales Revenue| | | Sales| | $1,280,000|Less: Sales returns and allowances| $150,000| | Sales discounts| 45,000| 195,000| Net sales revenue| | 1,085,000| Cost of goods sold| | 621,000| Gross profit| | 464,000| | | | Operating Expenses| | | Selling expenses| 194,000| | Admin. and general expenses| 97,000| 291,000| Income from operations| | 173,000| Other Revenues and Gains| | | Interest revenue| | 86,000| | | 259,000| Other Expenses and Losses| | | Interest expense| | 60,000| | | | Income before tax and extraordinary item| | 199,000| Income tax ($199,000 X . 34)| | 67,660| Income before extraordinary item| | 131,340|Extraordinary item—loss from earthquake damage| 120,000| | Less: Applicable tax reduction ($ 120,000 X . 34)| 40,800| 79,200| Net income| | $ 52,140| Per share of common stock:| | | Income before extraordinary item ? ($131,340 ? 100,000)| | $1. 31*| Extraordinary item (net of tax)| | (0. 79)| Net income ($52,140 ? 100,000)| | $0. 52| *Rounded EXERCISE 4-12 (15–20 minutes) Net income:| | | Income from continuing operations before income tax| | $21,650,000| Income tax (35% X $21,650,000)| | 7,577,500| Income from continuing operations| | 14,072,500| Discontinued operations| | |Loss before income tax| $3,225,000| | Less: Applicable income tax (35%)| 1,128,750| 2,096,250| Net income| | $11,976,250| | | | Preferred dividends declared:| | $ 860,000| | | | Weighted average common shares outstanding| | 4,000,000| | | | Earnings per share| | | Income from continuing operations| | $3. 30*| Discontinued operations, net of tax| | (0. 52)**| Net income| | $2. 78***| *($14,072,500 – $860,000) ? 4,000,000. (Rounded) **$2,096,250 ? 4,000,000. (Rounded) ***($11,976,250  œ $860,000) ? 4,000,000. EXERCISE 4-13 (15–20 minutes) (a) 2010 Income before income tax$460,000Income tax (35%) 161,000 Net Income$299,000 (b)Cumulative effect for years prior to 2010: Year| Weighted Average  | FIFO| Difference| Tax Rate (35%)   | Net Effect| 2008| $370,000| $395,000| $25,000| | | 2009| 390,000| 420,000| 30,000| | | | | Total| $55,000| $19,250| $35,750| (c)| |   Ã‚  Ã‚   2010  Ã‚     |   Ã‚  Ã‚   2009  Ã‚     |   Ã‚     2008  Ã‚     | | Income before income tax| $460,000| $420,000| $395,000| | Income tax (35%)| 161,000| 147,000| 138,250| | Net income| $299,000| $273,000| $256,750| EXERCISE 4-15 (15–20 minutes) BRYANT CO. | Statement of Stockholders’ Equity| For the Year Ended December 31, 2010| | Total| |Compre-hensive Income| | Retained Earnings| | Accumulated Other Comprehensive Income| | Common Stock| Beginning balance| $520,000| | | | $ 90,000| | $80,000| | $350,000| Comprehensive income| | | | | | | | | | Net income *| 170,000| | $170,000| | 170,000| | | | | Other comprehensive income| | | | | | | | | | Unrealized holding loss| (50,000)| | (50,000)| | | | (50,000)| | | Comprehensive income| | | $120,000| | | | | | | Dividends| (10,000)| | | | (10,000)| |   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  | |   Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  | Ending balance| $630,000| | | | $250,000| | $30,000| | $350,000| *($750,000 – $500,000 – $80,000).SOLUTIONS TO PROBLEMS | PROBLEM 4-1| | DICKINSON COMPANY| Income Statement| For the Year Ended December 31, 2010| Sales| | $25,000,000| Cost of goods sold| | 16,000,000| Gross profit| | 9,000,000| Selling and administrative expenses| | 4,700,000| Income from operations| | 4,300,000| Other revenues and gains| | | Interest revenue| $ 70,000| | Gain on the sale of investments| 110,000| 180,000| Other expenses and losses| | | Write-off of goodwill| | 820,000| Income from continuing operations before income tax| | 3,660,000| Income ta x| | 1,244,000| Income from continuing operations| | 2,416,000|Discontinued operations| | | Loss on operations, net of tax| 90,000| | Loss on disposal, net of tax| 440,000| 530,000| Income before extraordinary item| | 1,886,000| Extraordinary item—loss from flood damage, net of tax| | 390,000| Net income| | $ 1,496,000| Earnings per share:| | | | Income from continuing operations| | $ 4. 67a| Discontinued operations| | | Loss on operations, net of tax| $(0. 18)| | Loss on disposal, net of tax| (0. 88)| (1. 06)| Income before extraordinary item| | 3. 61b| Extraordinary loss, net of tax| | | (0. 78)| Net income| | | $ 2. 83c| DICKINSON COMPANY|Retained Earnings Statement| For the Year Ended December 31, 2010| Retained earnings, January 1| | $ 980,000| Add: Net income| | 1,496,000| | | 2,476,000| Less: Dividends| | | Preferred stock| $ 80,000| | Common stock| 250,000| 330,000| Retained earnings, December 31| | $ 2,146,000| a$2,416,000 – $80,000| =| $4. 67| 500,000 shares| | | | | | b$1,886,000 – $80,000| =| $3. 61| 500,000 shares| | | | | | c$1,496,000 – $80,000| =| $2. 83| 500,000 shares| | | | PROBLEM 4-7| | WADE CORP. | Income Statement (Partial)| For the Year Ended December 31, 2010| Income from continuing operations before income tax| | $1,200,000*| Income tax| | | 456,000**| Income from continuing operations| | | 744,000| Discontinued operations| | | | Loss from operations of discontinued subsidiary| $ 90,000| | | Less: Applicable income tax reduction| 34,200| $ 55,800| | Loss from disposal of subsidiary| 100,000| | | Less: Applicable income tax reduction| 38,000| 62,000| 117,800| Income before extraordinary item| | | 626,200| Extraordinary item:| | | | Gain on condemnation| | 125,000| | Less: Applicable income tax| | 50,000| 75,000| Net income| | | $ 701,200| | | | | Per share of common stock:| | | |Income from continuing operations| | | $4. 96| Discontinued operations, net of tax| | | (0. 79)| Income before extraordinary item| | | 4. 17| Extraordinary item, net of tax| | | 0. 50| Net income ($701,200 ? 150,000)| | | $4. 67| *Computation of income from continuing operations before income tax:| | As previously stated| | | $1,210,000| Loss on sale of equipment [$40,000 – ($80,000 – $30,000)]| (10,000)| Restated| | | $1,200,000| | | | | **Computation of income tax expense:| | | $1,200,000 X . 38 = $456,000| | | | Note: The error related to the intangible asset was correctly charged to retained earnings.CHAPTER 5 EXERCISE 5-2 (15–20 minutes) 1. | h. | 11. | b. | 2. | d. | 12. | f. | 3. | f. | 13. | a. | 4. | f. | 14. | h. | 5| c. | 15. | c. | 6. | a. | 16. | b. | 7. | f. | 17. | a. | 8. | g. | 18. | a. | 9. | a. | 19. | g. | 10. | a. | 20. | f. | EXERCISE 5-4 (30–35 minutes) GULISTAN INC. | Balance Sheet| December 31, 2010| Assets| Current assets| | | | Cash| $XXX| | | Less: Cash restricted for plant expansion| XXX| $XXX| | Accounts receivable| XXX| | | Less: Allowance for doubtful accounts| XXX| XXX| | Notes receivable| | XXX| | Receivables—officers| | XXX| | Inventories| | | | Finished goods| XXX| | |Work in process| XXX| | | Raw materials| XXX| XXX| | Total current assets| | | $XXX| | | | | Long-term investments| | | | Preferred stock investments| | XXX| | Land held for future plant site| | XXX| | Cash restricted for plant expansion| | XXX| | Total long-term investments| | | XXX| | | | | Property, plant, and equipment| | | | Buildings| | XXX| | Less: Accum. depreciation— buildings| | XXX| XXX| | | | | Intangible assets| | | | Copyrights| | | XXX| Total assets| | | $XXX| Liabilities and Stockholders’ Equity| Current liabilities| | | | | Accrued salaries payable| | $XXX| | |Notes payable, short-term| | XXX| | | Unearned subscriptions revenue| | XXX| | | Unearned rent revenue| | XXX| | | Total current liabilities| | | | $XXX| | | | | | Long-term debt| | | | | Bonds payable, due in four years| | | $XXX| | Less: Discount on bonds payable| | | (XXX)| XXX| Total liabilities| | | | XXX| | | | | | Stockholders’ equity| | | | | Capital stock:| | | | | Common stock| | XXX| | | Additional paid-in capital:| | | | | Paid in capital in excess of par—common stock| | XXX| | | Total paid-in capital| | | XXX| | Retained earnings| | | XXX| |Total paid-in capital and retained earnings| | | XXX| | Less: Treasury stock, at cost| | | (XXX)| | Total stockholders’ equity| | | | XXX| Total liabilities and stock- holders’ equity| | | | $XXX| Note to instructor: An assumption made here is that cash included the cash restricted for plant expansion. If it did not, then a subtraction from cash would not be necessary or the cash balance would be â€Å"grossed up† and then the cash restricted for plant expansion deducted. EXERCISE 5-13 (15–20 minutes) (a)| 4. | (f)| 1. | (k)| 1. | (b)| 3. | (g)| 5. | (l)| 2. | (c)| 4. | (h)| 4. (m)| 2. | (d)| 3. | (i)| 5. | | | (e)| 1. | (j)| 4. | | | EXERCISE 5-15 (25â₠¬â€œ35 minutes) (a)SONDERGAARD CORPORATION| Statement of Cash Flows| For the Year Ended December 31, 2010| Cash flows from operating activities| | | Net income| | $160,000| Adjustments to reconcile net income| | | to net cash provided by operating | | | activities:| | | Depreciation expense| $17,000| | Loss on sale of investments| 7,000| | Decrease in accounts receivable| 5,000| | Decrease in current liabilities| (17,000)| 12,000| Net cash provided by operating activities| | 172,000| Cash flows from investing activities| | |Sale of investments| | | [($74,000 – $52,000) – $7,000]| 15,000| | Purchase of equipment| (58,000)| | Net cash used by investing activities| | (43,000)| Cash flows from financing activities| | | Payment of cash dividends| | (50,000)| Net increase in cash| | 79,000| Cash at beginning of year| | 78,000| Cash at end of year| | $157,000| (b)Free Cash Flow Analysis| Net cash provided by operating activities| | $172,000| Less: Purchase of equipment| | (58 ,000)| Dividends| | (50,000)| Free cash flow| | $ 64,000| | PROBLEM 5-2| | MONTOYA, INC. | Balance Sheet| December 31, 2010|Assets| Current assets| | | | Cash| | $ 360,000| | Trading securities| | 121,000| | Notes receivable| | 445,700| | Income taxes receivable| | 97,630| | Inventories| | 239,800| | Prepaid expenses| | 87,920| | Total current assets| | | $1,352,050| | | | | Property, plant, and equipment| | | | Land| | $ 480,000| | Building| $1,640,000| | | Less: Accum. depreciation— building| 270,200| 1,369,800| | Equipment| 1,470,000| | | Less: Accum. depreciation— equipment| 292,000| 1,178,000| 3,027,800| | | | | Intangible assets| | | | Goodwill| | | 125,000| Total assets| | | $4,504,850|Liabilities and Stockholders’ Equity| Current liabilities| | | | Accounts payable| | $ 490,000| | Notes payable to banks| | 265,000| | Payroll taxes payable| | 177,591| | Taxes payable| | 98,362| | Rent payable| | 45,000| | Total current liabilities| | | $1,075,953| | | | | Long-term liabilities| | | | Unsecured notes payable| | | | (long-term)| | $1,600,000| | Bonds payable| $300,000| | | Less:Discount on bonds payable| 15,000| 285,000| | Long-term rental obligations| | 480,000| 2,365,000| Total liabilities| | | 3,440,953| | | | | Stockholders’ equity| | | | Capital stock| | | |Preferred stock, $10 par; 20,000 shares authorized, 15,000 shares issued| $150,000| | | Common stock, $1 par; 400,000 shares authorized, 200,000 issued| 200,000| $350,000| | Retained earnings ($1,063,897 – $350,000)| | 713,897| | Total stockholders’ equity ($4,504,850 – $3,440,953)| | | 1,063,897| Total liabilities and stockholders’ equity| | | $4,504,850| CHAPTER 7 EXERCISE 7-5 (15–20 minutes) (a)| 1. | June 3| Accounts Receivable—Arquette| 2,000| | | | | Sales| | 2,000| | | | | | | | | June 12| Cash| 1,960| | | | | Sales Discounts ($2,000 X 2%)| 40| | | | | Accounts Receivable—Arquette| | 2,000| | | | | | | 2. | June 3| Accounts Receivable—Arquette| 1,960| | | | | Sales ($2,000 X 98%)| | 1,960| | | | | | | | | June 12| Cash| 1,960| | | | | Accounts Receivable—Arquette| | 1,960| (b)| July 29| Cash| 2,000| | | | Accounts Receivable—Arquette| | 1,960| | | Sales Discounts Forfeited| | 40| | | | | | | (Note to instructor: Sales discounts forfeited could have been recog-nized at the time the discount period lapsed. The company, however, would probably not record this forfeiture until final cash settlement. )| EXERCISE 7-7 (10–15 minutes) (a)| Bad Debt Expense| 7,500| | | Allowance for Doubtful Accounts| | 7,500*| | | | | . 01 X ($800,000 – $50,000) = $7,500| | | | | | | (b)| Bad Debt Expense| 6,000| | | Allowance for Doubtful Accounts| | 6,000*| | | | | *Step 1:. 05 X $160,000 = $8,000 (desired credit balance in Allowance account) Step 2:$8,000 – $2,000 = $6,000 (required credit entry to bring allowance account to $8,000 credit balance) EXERCISE 7-13 (10– 15 minutes) (a)| Cash| 290,000| | | Finance Charge| 10,000*| | | Notes Payable| | 300,000| | | | | *2% X $500,000 = $10,000| | | | | | | (b)| Cash| 350,000| | | Accounts Receivable| | 350,000| EXERCISE 7-13 (Continued) (c)| Notes Payable| 300,000| | | Interest Expense| 7,500*| | Cash| | 307,500| | | | | *10% X $300,000 X 3/12 = $7,500| | | EXERCISE 7-15 (10–15 minutes) Computation of net proceeds:| Cash received| | $190,000| Less: Recourse liability| | 2,000| Net proceeds| | $188,000| Computation of gain or loss:| Carrying value| | $200,000| Net proceeds| | 188,000| Loss on sale of receivables| | $ 12,000| The following journal entry would be made:| Cash| $190,000| | Loss on Sale of Receivables| 12,000| | Recourse Liability| | 2,000| Accounts Receivable| | 200,000| EXERCISE 7-16 (15–20 minutes) (a)| To be recorded as a sale, all of the following conditions would be met:| | | | 1. The transferred asset has been isolated from the transferor (put beyond reach of the trans feror and its creditors). | | | | | 2. | The transferees have obtained the right to pledge or to exchange either the transferred assets or beneficial interests in the trans-ferred assets. | | | | | 3. | The transferor does not maintain effective control over the trans-ferred assets through an agreement to repurchase or redeem them before their maturity. | (b)| Computation of net proceeds:| | Cash received ($250,000 X 94%)| $235,000| | | Due from factor ($250,000 X 4%)| 10,000| $245,000| | Less: Recourse obligation| | 3,000| Net proceeds| | $242,000| | Computation of gain or loss:| | Carrying value| | $250,000| | Net proceeds| | 242,000| | Loss on sale of receivables| | $ 8,000| | The following journal entry would be made:| | Cash| $235,000| | | Due from Factor| 10,000| | | Loss on Sale of Receivables| 8,000| | | Recourse Liability| | 3,000| | Accounts Receivable| | 250,000| *EXERCISE 7-24 (15–20 minutes) (a)KIPLING COMPANY| Bank Reconciliation | July 31| Balance per bank stat ement, July 31| | $ 8,650| Add: Deposits in transit| | 2,850a| Deduct: Outstanding checks| | (1,100)b| Correct cash balance, July 31| | $10,400| | | Balance per books, July 31| | $ 9,250| Add: Collection of note| | 1,500| Less: Bank service charge| $ 15| | NSF check| 335| (350)| Corrected cash balance, July 31| | $10,400| aComputation of deposits in transit| | | Deposits per books| | $5,810| Deposits per bank in July| $ 4,500| | Less deposits in transit (June)|   (1,540)| | Deposits mailed and received in July| | (2,960)| Deposits in transit, July 31| | $2,850| bComputation of outstanding checks| | | Checks written per books| | $3,100| Checks cleared by bank in July| $ 4,000| | Less outstanding checks (June)*| (2,000)| |Checks written and cleared in July| | (2,000)| Outstanding checks, July 31| | $1,100| *Assumed to clear bank in July (b)| Cash| 1,150| | | Office Expenses—Bank Charges| 15| | | Accounts Receivable| 335| | | Notes Receivable| | 1,500| | PROBLEM 7-8| | 10/1/10 | Notes Receivable| 120,000| | | Sales| | 120,000| | | | | 12/31/10| Interest Receivable| 2,400*| | | Interest Revenue| | 2,400| | | | | *$120,000 X . 08 X 3/12 = $2,400| | | | | | 10/1/11| Cash| 9,600*| | | Interest Receivable| | 2,400| | Interest Revenue| | 7,200**| | | | | *$120,000 X . 08 = $9,600**$120,000 X . 08 X 9/12 = $7,200| | | | | | 2/31/11| Interest Receivable| 2,400| | | Interest Revenue| | 2,400| | | | | 10/1/12| Cash| 9,600| | | Interest Receivable| | 2,400| | Interest Revenue| | 7,200| | | | | | Cash| 120,000| | | Notes Receivable| | 120,000| Note: Entries at 10/1/11 and 10/1/12 assumes reversing entries were not made on January 1, 2011 and January 1, 2012. | PROBLEM 7-11| | SANDBURG COMPANY| Income Statement Effects| For the Year Ended December 31, 2010| Expenses resulting from accounts receivable| | | | | assigned (Schedule 1)| | | | $22,320| Loss resulting from accounts receivable| | | | | sold ($300,000 – $270,000)| | | | 30,000|Total expenses| | | | $52, 320| Schedule 1 Computation of Expense| for Accounts Receivable Assigned| Assignment expense:| | | | | Accounts receivable assigned| | $400,000| | | | | X 80%| | | Advance by Keller Finance Company| | 320,000| | | | | X 3%| | $ 9,600| Interest expense| | | | 12,720| Total expenses| | | | $22,320| | *PROBLEM 7-15| | (a)The entries for the issuance of the note on January 1, 2010: The present value of the note is: $1,200,000 X . 68058 = $816,700 (Rounded by $4). | Botosan Company (Debtor):| | | | Cash| 816,700| | | Discount on Notes Payable| 383,300| | | Note Payable| | 1,200,000| | | | | National Organization Bank (Creditor):| | | | Notes Receivable| 1,200,000| | | Discount on Notes Receivable| | 383,300| | Cash| | 816,700| (b)The amortization schedule for this note is: SCHEDULE FOR INTEREST AND DISCOUNT AMORTIZATION— EFFECTIVE-INTEREST METHOD $1,200,000 Note Issued to Yield 8% Date| | Cash Paid| | Interest Expense| | Discount Amortized| | Carrying Amount of Note| 1/1/10| | | | | | | | $ 816,700| 12/31/10| | $0| | $ 65,336*| | $ 65,336| | 882,036**| 12/31/11| | 0| | 70,563| | 70,563| | 952,599| 12/31/12| | 0| | 76,208| | 76,208| | 1,028,807| 12/31/13| | 0| | 82,305| | 82,305| | 1,111,112| 2/31/14| | 0| | 88,888| | 88,888| | 1,200,000| Total| | $0| | $383,300| | $383,300| | | *$816,700 X 8% = $65,336. **$816,700 + $65,336 = $882,036. (c)The note can be considered to be impaired only when it is probable that, based on current information and events, National Organization Bank will be unable to collect all amounts due (both principal and interest) according to the contractual terms of the loan. (d)| The loss is computed as follows:| | | | Carrying amount of loan (12/31/11)| | $952,599a| | Less: Present value of $800,000 due in 3 years at 8%| |   (635,064)b| | Loss due to impairment| | $317,535| | | | | aSee amortization schedule from answer (b) on page 7-66. | | | b$800,000 X . 79383 = $635,064. | | | | December 31, 2011| | National Organization Bank (Cred itor):| | | | Bad Debt Expense| 317,535| | | Allowance for Doubtful Accounts| | 317,535| Note: Botosan Company (Debtor) has no entry. CHAPTER 8 EXERCISE 8-1 (15–20 minutes) Items 2, 3, 5, 8, 10, 13, 14, 16, and 17 would be reported as inventory in the financial statements. The following items would not be reported as inventory: 1. Cost of goods sold in the income statement. 4. Not reported in the financial statements. 6. Cost of goods sold in the income statement. . Cost of goods sold in the income statement. 9. Interest expense in the income statement. 11. Advertising expense in the income statement. 12. Office supplies in the current assets section of the balance sheet. 15. Not reported in the financial statements. 18. Short-term investments in the current asset section of the balance sheet. EXERCISE 8-15 (15–20 minutes) (a)ESPLANADE COMPANY| Computation of Inventory for Product| BAP Under FIFO Inventory Method| March 31, 2010| | Units| | Unit Cost| | Total Cost| Mar ch 26, 2010| 600| | $12. 00| | $ 7,200| February 16, 2010| 800| | 11. 00| | 8,800|January 25, 2010 (portion)| 100| | 10. 00| | 1,000| March 31, 2010, inventory | 1,500| | | | $17,000| (b)ESPLANADE COMPANY| Computation of Inventory for Product| BAP Under LIFO Inventory Method| March 31, 2010| | Units| | Unit Cost| | Total Cost| Beginning inventory| 600| | $8. 00| | $ 4,800| January 5, 2010 (portion)| 900| | 9. 00| | 8,100| March 31, 2010, inventory| 1,500| | | | $12,900| (c)ESPLANADE COMPANY| Computation of Inventory for Product| BAP Under Weighted Average Inventory Method| March 31, 2010| | Units| | Unit Cost| | Total Cost| Beginning inventory| 600| | $ 8. 0| | $ 4,800| January 5, 2010| 1,100| | 9. 00| | 9,900| January 25, 2010| 1,300| | 10. 00| | 13,000| February 16, 2010| 800| | 11. 00| | 8,800| March 26, 2010| 600| | 12. 00| | 7,200| | 4,400| | | | $43,700| | | | | | | Weighted average cost| | | | | | ($43,700 ? 4,400)| | | $ 9. 93*| | | | | | | | | March 31, 2010, inventory| 1,5 00| | $ 9. 93| | $14,895| *Rounded off. EXERCISE 8-25 (20–25 minutes) | Current $| | Price Index| | Base Year $| | Change from Prior Year| 2007| $ 80,000| | 1. 00| | $ 80,000| | —| 2008| 111,300| | 1. 05| | 106,000| | +$26,000| 2009| 108,000| | 1. 0| | 90,000| | (16,000)| 2010| 122,200| | 1. 30| | 94,000| | +4,000| 2011| 147,000| | 1. 40| | 105,000| | +11,000| 2012| 176,900| | 1. 45| | 122,000| | +17,000| Ending Inventory—Dollar-value LIFO: 2007| $80,000| | | 2011| $80,000 @ 1. 00 =| $ 80,000| | | | | | 10,000 @ 1. 05 = | 10,500| 2008| $80,000 @ 1. 00 =| $ 80,000| | | 4,000 @ 1. 30 =| 5,200| | 26,000 @ 1. 05 =| 27,300| | | 11,000 @ 1. 40 = | 15,400| | | $107,300| | | | $111,100| | | | | | | | 2009| $80,000 @ 1. 00 =| $ 80,000| | 2012| $80,000 @ 1. 00 =| $ 80,000| | 10,000 @ 1. 05 =| 10,500| | | 10,000 @ 1. 5 =| 10,500| | | $ 90,500| | | 4,000 @ 1. 30 =| 5,200| | | | | | 11,000 @ 1. 40 =| 15,400| 2010| $80,000 @ 1. 00 =| $ 80,000| | | 17,000 @ 1. 45 =| 24,650| | 10,000 @ 1. 05 =| 10,500| | | | $135,750| | 4,000 @ 1. 30 =| 5,200| | | | | | | $ 95,700| | | | | EXERCISE 8-26 (15–20 minutes) Date| | Current $| | Price Index| | Base-Year $| | Change from Prior Year| Dec. 31, 2007| | $ 70,000| | 1. 00| | $70,000| | —| Dec. 31, 2008| | 88,200| | 1. 05| | 84,000| | +$14,000| Dec. 31, 2009| | 95,120| | 1. 16| | 82,000| | (2,000)| Dec. 31, 2010| | 108,000| | 1. 0| | 90,000| | +8,000| Dec. 31, 2011| | 100,000| | 1. 25| | 80,000| | (10,000)| Ending Inventory—Dollar-value LIFO: Dec. 31, 2007| $70,000| | | | | Dec. 31, 2008| $70,000 @ 1. 00 =| $70,000| | 14,000 @ 1. 05 =| 14,700| | | $84,700| | | | Dec. 31, 2009| $70,000 @ 1. 00 =| $70,000| | 12,000 @ 1. 05 =| 12,600| | | $82,600| | | | Dec. 31, 2010| $70,000 @ 1. 00 =| $70,000| | 12,000 @ 1. 05 =| 12,600| | 8,000 @ 1. 20 =| 9,600| | | $92,200| | | | Dec. 31, 2011| $70,000 @ 1. 00 =| $70,000| | 10,000 @ 1. 05 =| 10,500| | | $80,500| CHAPTER 9 BRIEF EXERCISE 9-2 Item| | Cost| | Design ated Market| |LCM| Jokers| | $2,000| | $2,050| | $2,000| Penguins| | 5,000| | 4,950| | 4,950| Riddlers| | 4,400| | 4,550| | 4,400| Scarecrows| | 3,200| | 3,070| | 3,070| BRIEF EXERCISE 9-4 Group| | Number of CDs| | Sales Price per CD| | Total Sales Price| | Relative Sales Price| | Total Cost| | Cost Allocated to CDs| | Cost per CD| 1| | 100| | $ 5| | $ 500| | 5/100*| X| $8,000| =| $ 400| | $ 4**| 2| | 800| | $10| | 8,000| | 80/100| X| $8,000| =| 6,400| | $ 8| 3| | 100| | $15| | 1,500| | 15/100| X| $8,000| =| 1,200| | $12| | | | | | | $10,000| | | | | | $8,000| | | $500/$10,000 = 5/100**$400/100 = $4 BRIEF EXERCISE 9-7 Beginning inventory| | $150,000| Purchases| | 500,000| Cost of goods available| | 650,000| Sales| $700,000| | Less gross profit (35% X 700,000)| 245,000| | Estimated cost of goods sold| | 455,000| Estimated ending inventory destroyed in fire| | $195,000| BRIEF EXERCISE 9-8 | Cost| | Retail| Beginning inventory| $ 12,000| | $ 20,000| Net purchases| 120,000| | 170,000| N et markups|   | | 10,000| Totals| $132,000| | 200,000| Deduct:| | | | Net markdowns| | | 7,000| Sales| | | 147,000| Ending inventory at retail| | | $ 46,000| | | | |Cost-to-retail ratio: $132,000 ? $200,000 = 66%| | | | Ending inventory at lower-of cost-or-market (66% X $46,000) = $30,360 EXERCISE 9-2 (10–15 minutes) Item| | Net Realizable Value (Ceiling)| | Net Realizable Value Less Normal Profit (Floor)| | Replacement Cost| | Designated Market| | Cost| | LCM| D| | $90*| | $70**| | $120| | $90| | $75| | $75| E| | 80| | 60| | 72| | 72| | 80| | 72| F| | 60| | 40| | 70| | 60| | 80| | 60| G| | 55| | 35| | 30| | 35| | 80| | 35| H| | 80| | 60| | 70| | 70| | 50| | 50| I| | 60| | 40| | 30| | 40| | 36| | 36| | | | | | | | | | | | | | Estimated selling price – Estimated selling expense = $120 – $30 = $90. **Net realizable value – Normal profit margin = $90 – $20 = $70. EXERCISE 9-7 (15–20 minutes) Cost Per Lot (Cost Allocated/ No. of Lots)| $2,040| 2,720| 1,360| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cost Allocated to Lots| $18,360| 40,800| 25,840| $85,000| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total Cost| $85,000| 85,000| 85,000| | | | | | | | | | | | | | | | | | | | X| X| X| | | | | | | | | | | | | | | | | | |Relative Sales Price| $27,000/$125,000| $60,000/$125,000| $38,000/$125,000| | | $78,000| 53,040| 24,960| 18,200| $ 6,760| | | Gross Profit| $ 3,840| 10,240| 10,880| $24,960| | | | | | | | | | | | | | | | | | | | | | | | | | | Total Sales Price| $ 27,000| 60,000| 38,000| $125,000| | Sales (see schedule)| Cost of goods sold (see schedule)| Gross profit| Operating expenses| Net income| | | Sales| $12,000| 32,000| 34,000| $78,000| | | | | | | | | | | | | | | | | | | | | | | | | | | SalesPrice Per Lot| $3,000| 4,000| 2,000| | | | | | | | | | Cost Cost of Per Lots Lot Sold| $2,040 $ 8,160| 2,720 21,760| 1,360 23,120| $53,040| | | | | | | | | | | | | | | | | | | | | | | | | | | No. of Lots| 9| 15| 19| | | | | | | | | | Number of Lots Sold*| 4| 8| 17| 29| | * 9 – 5 = 4| 15 – 7 = 8| 19 – 2 = 17| | | | | | | | | | | | | | | | | | | | | | | | Group 1| Group 2| Group 3| | | | | | | | | | | Group 1| Group 2| Group 3| Total| | | | | EXERCISE 9-12 (10–15 minutes) a)| Inventory, May 1 (at cost)| | $160,000| | Purchases (at cost)| | 640,000| | Purchase discounts| | (12,000)| | Freight-in| | 30,000| | Goods available (at cost)| | 818,000| | Sales (at selling price)| $1,000,000| | | Sales returns (at selling price)| (70,000)| | | Net sales (at selling price)| 930,000| | | Less: Gross profit (25% of $930,000)| 232,500| | | Sales (at cost)| | 697,500| | Approximate inventory, May 31 (at cost)| | $120,500| (b)Gross profit as a percent of sales must be computed: | 25%| = 20% of sales. | | 100% + 25%| | | Inventory, May 1 (at cost)| | $160,000| Purchases (at cost)| | 640,000| | Purchase discounts| | (12,000)| | F reight-in| | 30,000| | Goods available (at cost)| | 818,000| | Sales (at selling price)| $1,000,000| | | Sales returns (at selling price)| (70,000)| | | Net sales (at selling price)| 930,000| | | Less: Gross profit (20% of $930,000)| 186,000| | | Sales (at cost)| | 744,000| | Approximate inventory, May 31 (at cost)| | $ 74,000| | | | | EXERCISE 9-14 Beginning inventory| | $170,000| Purchases| | 450,000| | | 620,000| Purchase returns| | (30,000)| Goods available (at cost)| | 590,000|Sales| $650,000| | Sales returns| (24,000)| | Net sales| 626,000| | Less: Gross profit (30% X $626,000)| (187,800)| 438,200| Estimated ending inventory (unadjusted for damage)| | 151,800| Less: Goods on hand—undamaged (at cost) $21,000 X (1 – 30%)| | (14,700)| Less: Goods on hand—damaged (at net realizable value)| | (5,300)| Fire loss on inventory| | $131,800| EXERCISE 9-19 (12–17 minutes) | Cost| | Retail| Beginning inventory| $ 200,000| | $ 280,000| Purchases| 1,425,000| | 2, 140,000| Totals| 1,625,000| | 2,420,000| Add: Net markups| | | |Markups| | $95,000| | Markup cancellations| _________| (15,000)| 80,000| Totals| $1,625,000| | 2,500,000| | | | | Deduct: Net markdowns| | | | Markdowns| | 35,000| | Markdown cancellations| | (5,000)| 30,000| Sales price of goods available| | | 2,470,000| Deduct: Sales| | | 2,250,000| Ending inventory at retail| | | $ 220,000| Cost-to-retail ratio =| $1,625,000| = 65%| | $2,500,000| | Ending inventory at cost = 65% X $220,000 = $143,000 | PROBLEM 9-4| | Beginning inventory| | $ 80,000| Purchases| | 290,000| | | 370,000| Purchase returns| | (28,000)|Total goods available| | 342,000| Sales| $415,000| | Sales returns| (21,000)| | | 394,000| | Less: Gross profit (35% of $394,000)| 137,900|   (256,100)| Ending inventory (unadjusted for damage)| | 85,900| Less: Goods on hand—undamaged| | | ($30,000 X [1 – 35%])| | 19,500| Inventory damaged| | 66,400| Less: Salvage value of damaged inventory| | 8,150| Fire loss on inventory| | $ 58,250| CHAPTER 18 EXERCISE 18-2 (15–20 minutes) (a)1. 6/3Accounts Receivable—Ann Mount8,000 Sales8,000 6/5Sales Returns and Allowances600 Accounts Receivable—Ann Mount600 6/7Transportation-Out24Cash24 6/12Cash7,252 Sales Discounts (2% X $7,400)148 Accounts Receivable—Ann Mount7,400 2. 6/3Accounts Receivable—Ann Mount7,840 Sales [$8,000 – (2% X $8,000)]7,840 6/5Sales Returns and Allowances588 Accounts Receivable—Ann Mount [$600 – (2% x $600)]588 6/7Transportation-Out24 Cash24 6/12Cash7,252 Accounts Receivable—Ann Mount7,252 (b)8/5Cash7,400 Accounts Receivable—Ann Mount7,252 Sales Discounts Forfeited (2% X $7,400)148 EXERCISE 18-4 (20–25 minutes) (a)Gross profit recognized in: | 2010| 2011| 2012| Contract price| | $1,600,000| | $1,600,000| | $1,600,000| Costs:| | | | | | |Costs to date| $400,000| | $825,000| | $1,070,000| | Estimated costs to complete| 600,000| 1,000,000| 275,000| 1,100,00 0| 0| 1,070,000| Total estimated profit| | 600,000| | 500,000| | 530,000| Percentage completed to date| | 40%*| | 75%**| | 100%| Total gross profit recognized| | 240,000| | 375,000| | 530,000| Less: Gross profit recognized in previous years| | 0| | 240,000| | 375,000| Gross profit recognized in current year| | $ 240,000| | $ 135,000| | $ 155,000| **$400,000 ? $1,000,000**$825,000 ? 1,100,000 (b)Construction in Process ($825,000 – $400,000)425,000Materials, Cash, Payables, etc. 425,000Accounts Receivable ($900,000 – $300,000)600,000 Billings on Construction in Process600,000 Cash ($810,000 – $270,000)540,000 Accounts Receivable540,000 Construction Expenses425,000 Construction in Process135,000 Revenue from Long-Term Contracts560,000* *$1,600,000 X (75% – 40%) (c)Gross profit recognized in: | 2010| 2011| 2012| Gross profit| $–0–| $–0–| $530,000*| *$1,600,000 – $1,070,000 EXERCISE 18-7 (25–30 minutes) (a)1. Gross pro fit recognized in 2010: Contract price$1,200,000 Costs: Costs to date$280,000Estimated additional costs 520,000 800,000 Total estimated profit400,000 Percentage completion to date ($280,000/$800,000) 35% Gross profit recognized in 2010$ 140,000 Gross profit recognized in 2011: Contract price$1,200,000 Costs: Costs to date$600,000 Estimated additional costs 200,000 800,000 Total estimated profit400,000 Percentage completion to date ($600,000/$800,000) 75% Total gross profit recognized300,000 Less: Gross profit recognized in 2010 140,000 Gross profit recognized in 2011$ 160,000 2. Construction in Process ($600,000 – $280,000)320,000 Materials, Cash, Payables, etc. 20,000 Accounts Receivable ($500,000 – $150,000)350,000 Billings on Construction in Process350,000 Cash ($320,000 – $120,000)200,000 Accounts Receivable200,000 Construction in Process160,000 Construction Expenses320,000 Revenues from Long-Term Contracts480,000* *$1,200,000 X [($600,000 – $280,000) ? $800,000] (b)Income Statement (2011)— Gross profit on long-term construction contract$160,000 Balance Sheet (12/31/11)— Current assets: Receivables—construction in process$180,000* Inventories—construction in process totaling $900,000** less billings of $500,000$400,000 **$180,000 = $500,000 – $320,000 **Total cost to date$600,000 010 Gross profit140,000 2011 Gross profit 160,000 $900,000 EXERCISE 18-11 (15–20 minutes) (a)Computation of gross profit recognized: | 2010| 2011| $370,000 X 34%*| $125,800| | $350,000 X 34%*| | $119,000| $450,000 X 32%**|   Ã‚     | 144,000| | $125,800| $263,000| *($900,000 – $594,000) ? $900,000 **($1,000,000 – $680,000) ? $1,000,000(b)Installment Accounts Receivable—20111,000,000 Installment Sales1,000,000 Cost of Installment Sales680,000 Inventory680,000 Cash800,000 Installment Accounts Receivable, 2010350,000 Installment Accounts Receivable, 2011450,000 Installment Sales1,000,000 Co st of Installment Sales680,000Deferred Gross Profit on Installment Sales, 2011320,000 Deferred Gross Profit on Installment Sales, 2010119,000 Deferred Gross Profit on Installment Sales, 2011144,000 Realized Gross Profit on Installment Sales263,000 Realized Gross Profit on Installment Sales263,000 Income Summary263,000 EXERCISE 18-15 (10–15 minutes) (a)Realized gross profit recognized in 2011 under the installment-sales method of accounting is $83,000. When gross profit is expressed as a percentage of cost, it must be converted to percentage of sales to compute the realized gross profit under the installment-sales method of accounting.Thus, 2010 and 2011 gross profits as a percentage of sales are 20% and 21. 875% respectively. Sale Year|   Ã‚  Gross Profit Percentage  Ã‚  | 2011 Collections| 2011 Realized Profit| 2010| . 25/(1. 00 + . 25) = 20%  | $240,000| $48,000| 2011| . 28/(1. 00 + . 28) = 21. 875%| 160,000| 35,000| | | TOTAL| $83,000| (Note to instructor: The proble m provides gross profit as a percent of cost. ) (b)The balance of â€Å"Deferred Gross Profit† could be reported on the balance sheet for 2011: 1. As a current liability on the theory that it is related to Installment Accounts Receivables that are normally treated as current assets; . As a deferred credit between liabilities and stockholders’ equity. This treatment is criticized because there is no obligation to outsiders; or 3. As an adjustment or offset to the related Installment Accounts Receivable. This is because the deferred gross profit is a part of revenue from installment sales not yet realized. The related receivable will be overstated unless the deferred gross profit is deducted. On the other hand, the amount of deferred gross profit has no direct relationship with the estimated collectibility of the accounts receivable.It is not a settled matter as to the proper classification of â€Å"deferred gross profit† on the balance sheet when the installment- sales method of accounting is used to measure income. As indicated in the text, the FASB in Statement of Financial Accounting Concepts No. 6 indicates that it conceptually is an asset valuation. We support the FASB position. (c)Gross profit as a percent of sales in 2010 is 20% (as computed in (a) above); gross profit therefore is $96,000 ($480,000 X . 20) and the cost of 2010 sales is $384,000 ($480,000 – $96,000). Because the amounts collected in 2010 ($130,000) and 2011 ($240,000) do not exceed the total cost of

Culture and workplace ethics Essay

Culture in the workplace has very little to do with the well known culture of literature, music and art. In the workplace, culture actually refers to the shared work environment, belief systems, behavior expectations and expected efforts, all of which usually characterize a certain organization or business enterprise. The work setting culture mainly includes things like, socialization expectations, dress code, how different groups within the organization perceive issues relating to attendance, problem solving and quality of work output. Finding the appropriate culture to fit an organization is a vital element in ensuring that a particular field or job is successful. Corporate culture has a lot of influence on ethics of an organization. It is through it that right or wrong decisions are made. They determine whether to adopt strategies that will benefit majority of the people in the workplace positively or adopting ones with an impact of affecting most workers in a negative manner (Russell, Para 3). Effect of culture on workplace ethics The organization’s culture is quite important perhaps more than most people appreciate. It holds various categories of people within an organization together and thus it has a lot of impact on what people within the organization perceive to be right or wrong. Even though certain conducts like corruption might be considered to be vice and thus culturally immoral in some organizations, there are other workplaces where the behavior is considered to be appropriate. Culture is usually deep rooted in an organization since although it is manmade; it takes several decades to grow. New employees in each and every work place are first introduced to the operating culture in the workplace and thus it is usually in each and every person working in the workplace. Ethics comes after culture and it therefore has to sing to the tune of culture (Lagan, & Moran, pp 46). The depth of culture within an organization is usually realized when someone attempts to alter an organization’s culture in a manner that is not consistent with the shared believes and norms of the organization. Such a person usually meets a lot resistance regardless of whether the intended cultural change is ethical or not. Culture within an organization is usually not stagnant but it is rather dynamical so as to take into account the changing business and workplace environment. Due to the fact that the workplace ethics are tied to culture, they also have to keep on changing so as to be consistent with the workplace culture (Russell, Para 4). Workplace ethics is highly influenced by the leadership of the entire organization. These are the people who are charged with the mandate of running the business and making decisions for the entire organization. The organizational culture determines the type of people to take managerial decisions. Therefore, if the culture of an organization is to be led by men and women of high integrity, then the workplace in such an organization is likely to be ethical. This is due to the fact that when an organization is led by such people, they will always make decisions with each and everyone within and without the organization in their mind. Their decisions will in most cases affect majority of the people in a positive manner. In this case, culture is very important on business ethics since it determines in an indirect manner the type of decisions to be made by the managers leading the organization (Hopkins, pp 78). On the other hand, if the organizational culture of a particular enterprise is one that allows men and women of less integrity to lead it, people who enter these offices via unethical channels where merit is not a priority, then such managers will in most cases be unethical. They will in almost all cases make unethical decisions which are likely to only benefit very few individuals within the organization while exposing the majority, mainly the junior members of staff to unfair treatment. Workplaces operating from such environments are mostly unethical and clearly this is as a result of the organizational culture. Most of the decisions adopted in such organizations are usually only aimed at maximizing the profits of the organization without putting into consideration other parties who are likely to suffer as a result of such decisions. These types of managements are mainly self centered and are only worried about their business organizations with little or no concern at all for other people. They are not worried of whether their actions are ethical or not, as long as business is running and making profits nothing else worry them. This attitude is usually enhanced by the organizational culture which in turn affects the workplace ethics significantly (Russell, Para 7). The corporate culture of an enterprise determines the criteria of promotion. If the culture of an organization enhances promotion based on merit, then the workplace will be more ethical as compared to instances where promotion is not based on merit. Since employees seek for promotion every now and then, they have to look for the criterion that is used for promotion so that they can be well equipped to qualify for promotion. Such a culture of promotion will take decades to develop and will thus be very much deep rooted to eliminate within the workplace (Lagan, & Moran, pp 69). The culture of an organization determines the values that are to be held in high regard within the organization. If a culture holds unethical behaviors in high esteem, then such conducts will be dominant in the organization. Rewards will be awarded to those people who excel in such conducts. In this case, the organizational culture is mainly concerned with appreciating the efforts of its employees who have excelled in certain field regardless of whether their actions were ethical or not. Such a culture therefore, promotes unethical behaviors among its employees (Brooks, & Dunn, pp 120). In other organizations, the culture is very clear and is tailored towards promoting ethical behaviors among its employees. In fact, the employees who excel in ethical conducts in various fields in the course of their work are identified in a fair manner and rewarded so as to encourage them to continue in the same spirit and be even more ethical in future. The other employees are also challenged to act ethically and at the same time they are made to desire to act ethically so as to be rewarded like their counterparts who were more ethical than then in a certain period. This form of culture thus acts as a tool for enhancing ethical behaviors within an organization to develop (Bassman, pp 55s). Culture within an organization determines how the organization as whole perceives the outsiders, more so its competitors. There are cultures which are tailored towards viewing the competitors as enemies and thus it promotes actions which will deal with such enterprises as enemies. Such a culture will promote unethical behaviors to its competitors and enmity arises between the two organizations. Culture is responsible for various unethical actions that might be penetrated to the other organization since it has made everyone within the workplace of the organization to develop a negative attitude towards its competitors (Russell, Para 9). At the same time, culture can act as a catalyst for enhancing ethical behaviors among the various employees of the organization especially in their actions towards the competitors. Culture will in this case promote good relations among the two organizations and it will make the employees to perceive the other organization as a competitor and not an enemy. This form of culture will promote actions that will enhance positive competition between the two sides and thus ethical behaviors will be enhanced greatly (Lagan, & Moran, pp 89). While there are employment regulations and laws governing the manner in which employees are to be treated, the ethics of an organization are more tailored by the organizational culture and not such laws and regulations. The ethics therefore goes beyond the regulations and the laws connecting the business practices of an organization to the workers’ personal beliefs. Culture in this case plays a leading role in ensuring that the actions adopted by the organization are in line with it. In this case, the organizational culture ensures that various employees in the workplace within the enterprise work together for a common objective as well as having the intention of doing the right thing in a world that is quite diverse and complex (Bassman, pp 126). The culture in operation within an enterprise determines how an organization treats its outsiders and whether or not it does anything that is likely to affect them negatively. For culture to be able to promote ethical actions among its employees towards the outsiders, then it must be one that encourages decisions that will affect these people in a positive manner. Among the current issues that has brought a lot of criticism in the entire world is that of pollution. An organization is considered to be ethical if it emits fewer pollutants to the environment. This means that it is concerned about the environment and the consequences of disposing untreated chemicals to the environment. On the other hand, there are organizations that are completely unethical. They pollute the environment without really caring how many people will be affected by the same. This affects the workplace environment indirectly since the employees will face hostility from members of public and will in several occasions be referred to as unethical people who do not care about tomorrow. This might make the organization to loose several employees to other companies which are more ethical as employees will like to be associated with organizations with good reputation (Brooks, & Dunn, pp 258). Conclusion Culture is a very important element in every organization. It is responsible in shaping the ethical behavior of the employees and also the workplace ethics. This is due to the fact that ethics within an organization is driven by the culture that is in operation within an organization. Culture is therefore a very important force in driving ethical practices of an enterprise. This is mainly because the organizational culture takes time to grow and mature and that it is taught to all new employees which make it to be deeply rooted within all employees. Culture has the ability of making an organization to act either ethically or unethically. Work cited: Bassman, Emily S. ; Abuse in the workplace: management remedies and bottom line impact; ISBN 089930673X, Quorum, 1992. Brooks, Leonard J. & Dunn, Paul; Business & Professional Ethics for Directors, Executives & Accountants; ISBN 0324594550, Cengage Learning, 2009. Hopkins, Willie Edward. Ethical dimensions of diversity; ISBN 080397289X, SAGE, 1997. Lagan, Attracta & Moran, Brian; Three Dimensional Ethics: Implementing Workplace Values; ISBN 097574223X, eContent Management, 2005. Russell, Mike; Workplace Ethics & Business for Social Responsibility: Initiatives for corporate culture’s committed to ethical business practices, concern for the environment and global humanitarian causes (2008): Retrieved on 5th August 2009 from http://sandiego. jobing. com/blog_post. asp? post=8929.

Counselling Model

â€Å"Evaluate the claim that Person Centred Therapy offers the therapist all that he/she will need to treat clients†. Word Count 2,508 During this essay I will present my findings as I view them. I am relatively new to counselling, this hinders my current experience and limits my opinions about therapy and what methodologies are more or less effective when offering therapy to clients.So, based on text book theories (only at this stage), I will present my findings about client centered therapy and incorporate a number of different methodologies that have assisted me to decipher the answer to this core question, and understanding how affective client centered therapy is as an approach. The research is informative and thought provoking. It certainly raises questions of how clients were viewed and treated in the past, right into the here and now. My task is to explore the above title, possibly uncovering a rather more complex theory than one may first assume.Initially I explored the world of psychotherapy to provide me with an insight and greater understanding on this subject, also identify the influences and changes that has occurred in a relatively short space of time in this developing area of psychology. As stated by Saunders (2002: pg 14). â€Å"From centuries-old ancient philosophies and cultures, through to current ideas in our own white European culture. A summary of the more recent landmarks would go back around 100 years to the work of Sigmund Freud†.Freud was a physician and the creator of many theories, primarily focussed on psychoanalysis. His work was from clinically derived experiences that were based on feedback from his patients during therapy. This gave birth to the ‘psychodynamic approach’ which stemmed from Freud’s collection of theories. Freud and his colleagues were psychologists who were treating their patients for depression or anxiety related disorders. Although shunned by the medical profession until late r in his career, Freud continued to shape and mould psychology as it is recognised today.Highly influential and extremely passionate professional men introduced their approaches into delivering the different theories/techniques, all of which have influenced and set the tone for the philosophy of psychology today. Definition of psychology, this was derived from the Latin it’s described in two parts, 1. â€Å"Psyche† meaning: Breathe, Sprit, Soul. 2. â€Å"Ology† meaning: Study of the mind. (Modern Latin, (Oxford dictionary 2000: pg, 652). Psychology emerged from Biology and philosophy, today it is closely linked with other disciplines including sociology, medicine, linguistics and anthropology.My main focus for study is Carl Rogers’s 1902-1987 (Rogerian approach). Counselling has emerged into a sophisticated therapy, thanks to Rogers’s intention to move towards supporting the client with a non-judgemental, kind and empathetic approach. Rogers develo ped his theories and debated about the vital skills required when a therapist engages with the client. Rogers not only theorised on mental illness he was also highly influential when developing other areas of therapies which I will explain further on.Rogers was resolute in his beliefs that the client’s success was based purely on his six core elements all blended together for an effective outcome. As the founder of client centered therapy Rogers was passionate about his ideas. The methodology he used was from a humanistic view and his techniques have made a huge impact into a world of psychology and psychotherapy. In 1942 the term ‘Non-Directive Therapy’ was born but changed nine years later by Rogers who preferred to use the term Client Centered Therapy.Other leading psychotherapy approaches were introduced from Albert Ellis (1913-2007), an American psychologist who instigated the ‘Cognitive approach’ known as Rational Emotional Behaviour Therapy (R EBT) that theorised that as people our thoughts control and depict our feelings it’s a directive therapy that is solution based. Whereas, Gerard Egan, founder of the ‘Integrative approaches’, claims to use whatever technique is appropriate according to the clients issues and is described as ‘middle of the road’ school of thought.From the beginning it was Rogers’s intention to provide a radical alternative to the then current â€Å"psychodynamic and behavioural† approaches. Psychotherapy was a vast unexplored area that was waiting for a new and different alternative which Rogers’s brought about. Psychiatrists are first and foremost medical practitioners who work from an established ‘Medical Model of Mental Illness’ Used by psychiatrists and mental health professionals to describe the full range of human psychological distress and disturbances. and according to Saunders ‘no more than a system of naming things (e. g. the term ‘neurosis’, [Literally meaning an infection of the nerves] is just a list of symptoms it actually explains nothing)†pg106. This was a long established method used when applying a treatment plan in which there was limited flexibility and had deep rooted entrenched guidelines. During the 1960’s Rogers began to use the principles of his approach into other areas such as education, management, group work and resolving conflict.Many years ago all treatments/ therapies were all encased under one label ‘medical treatment’ and in the early years psychotherapy would only be carried out in a ‘clinical environment’ where people were classified as ‘patients’ that need treatment to cure their illness. Counselling on the other hand can be viewed as both medical and educational. Rogers had to use the term ‘counselling’ as a requirement enforced by the American medical profession. The term counselling is deem ed suitable to use ‘if not causing medical disturbances but only deep issues in the mind’ (Saunders, (2002) pg107).Rogers conscientiously and gradually over time merged counselling/psychotherapy cohesively together. It is now virtually impossible to distinguish the differences between the two. The purpose of client centered therapy is to encourage the client to bring about their own self-awareness of their feelings. It is a nurturing process that functions without the counsellor/therapist suggesting or advising how to bring about change. It is not a solution based therapy. The therapist’s role when delivering this approach is to offer a safe and relaxed environment, where the atmosphere creates an aura of empathy, acceptance and no judgements.As stated by (Saunders 2006) â€Å"The unconditional positive regard element of this condition is not the same as ‘liking’ or ‘being nice to’ the client† pg 60. UPR is practised in client cen tered therapy no matter what the client chooses to disclose. This is achieved by the therapist reflecting and paraphrasing back to the client their inner feelings. The process will encourage positive feelings to facilitate in lifting the clients inner-self in this safe non-threatening environment. The aim is to encourage negativity to rise and bring about self-awareness for the client to explore their reasons for being in treatment.Carl Rogers assumed that all human beings, if given the right opportunity, are basically good and will strive towards goodness as their main goal. Secondly that the client’s experiences are unique only to themselves, and finally he felt that the client’s internal instincts would guide them into reaching their full potential resulting in self-actualization thus, creating self-healing as a ‘fully functioning individual’. Rogers states in his actualizing theory that â€Å"all human beings are drawn towards their natural tendencyâ €™, as we are more than just growth and survival†.Individuals need to understand their value and growth. All humanistic psychologists are focused on the person as a whole, where as the cognitive approach identifies ‘parts of the being’. Cognitive and behavioural approaches focus on irrational beliefs, effect feelings and are responsible for creating the behaviour. Rogers specified that we are instinctive ‘organismic’ individuals with the capacity of self-healing that involves psychological healing. Due to one’s self-doubt and an ingrained belief system (an instilled program since childhood) instils these self-defeating ideas into our psyche.Thus, creating a belief system of feeling scrutinized and judged. Person centered psychology is more interested in the clients own perception of their distress. We feel as individuals that our own beliefs are accurate and fail to recognize that these thought processes were planted by others (our primary carers and peers), through incidents and learnt behaviour. Client centered therapy is collaborative, it’s a guide to facilitate the client to seek out their own self-realization, which for some will be viewed as an advantage, it offers a free range approach to explore inner feelings, for both therapist and client.Client centered therapy encourages growth and its aim is in convert immaturity into maturity, this is vital for progress and healing. Rogers approach when implemented correctly should bring about activating the self-healing process he believes is found in each one of us as. Another well-known figure is Maslow who designed ‘A model’ shaped as a pyramid called the ‘Hierarchy of needs’ ‘Humanistic approach’ this is used in many areas of therapy including education and training in the work place.When Maslow’s basic core conditions are applied in a respectful, non-threatening manner they enable the client to direct the process of their phronesis (through their wisdom). Maslow’s theory consists of a five-step process, starting from the bottom and only raising to the next level by attaining that level of needs. Starting from a person’s basic physiological human need of survival require water, food and shelter. Stepping up again to the next level will accommodate the person’s requirement of personal safety and protection from danger and the emotional need for security.Raising again up to the third level it covers a person’s social needs that involve the need for acceptance by peers and friendship. Level four covers the need for self-respect and self-esteem. A person requires the emotional need for status and self-confidence, finally reaching the tip of the pyramid, is the need to reach and realise one’s own potential of self-actualisation. As stated in the chrysalis work book (module one: pg9), â€Å"Maslow believed that everyone is born with the potential to self-actuali se and that, given a good environment, this can be achieved†.He classified this as reaching a ‘peak experience’ which can be experiencing joy and unimaginable happiness. Rogers stressed the importance of his â€Å"six key conditions being both â€Å"Necessary and Sufficient† for therapeutic change to take place† as quoted by Saunders, P. (2006:9). The therapist and client have to have a genuine relationship based on a two way psychological connection. Rogers felt that if the client felt the slightest hint that this was not the case the counselling would be flawed from the onset. The client feels vulnerable and anxious and views themselves as needing assistance.The therapist needs to be balanced and healthy minded about their own residing issues and have dealt with their own issues during their training. As Rogers’s states, it is vital that the therapist â€Å"can accurately be himself in the relationship†. A fundamental requirement of C lient centered therapy specifies that the therapist actually feels a genuine regard towards the client. Rogers terms this as an ‘unconditional positive regard’ (UPR) an empathetic approach. The therapist needs to be authentic, transparent and a willingness to be open with self-disclosure.Rogers specifies that the client must be completely listened to without any interruption from the therapist, who should demonstrate that they have fully understood with a genuine regard to support the client. To support the number of approaches, Chrysalis designed ‘A Model’ (TIME) an acronym Temporal, Interventional, Multi- model, Empathy. This effective tool offers guidance when selecting an appropriate approach to be practiced accordingly with the formatted structure as a set of rules in which to be guided by. This is a profoundly simple tool that has been designed as a multi-model (it fits all).The TIME model’s function is to mix and match the client’s issu e/s, personality and suitability by selecting the appropriate treatment plan. Temporal meaning time, Interventional involves using other holistic therapies to run alongside these approached , which may assist with the cognitive side of the person for example using hypnotherapy by communicating with the subconscious, where positive suggestions and affirmations may be placed to replace the negative beliefs that are blocking/hindering progress. The client may relax enough to allow their own phronesis (practical instinctive wisdom) to appear.Multi Model is combining or selecting the different approaches from a variety of therapeutic sources. Chrysalis encourages the therapist to explore all approaches and form a comprehensive treatment plan that is tailored to an individual. The last area to discuss is empathy, all therapy is empathetic, and it would be impossible to implement without it. As suggested in Saunders primer (2006) â€Å"†¦ being empathetic is to perceive the internal frame of reference of another with accuracy, and with the emotional components and meanings†¦Ã¢â‚¬ pg 66.Empathy and communication is therefore essential. Disadvantages for some clients, if offering client centered therapy could be bring about discontentment, as it involves a long duration of time, (from the client’s perspective) they may not wish to attend numerous sessions, they may be unable to remain focused, affecting their motivation and stop attending. Client centered therapy may place too much pressure on the client if they themselves require direction and solutions to their predicament. Results are hard to gage thus, questioning its impact as a structured ystem. Client centered therapy may be seen as far too simple and the whole approach could be misunderstood thus, affecting its effectiveness. I like the feel of client centred therapy, for me it offers a kind, gentle and dignified treatment. The client may develop from this approach, however I can only surmise that as client centered therapy permits self-exploration, holistically healing the individual; it will not be suitable for all clients, as the question suggests but it is certainly suitable for dealing with the here and now and promotes self development.These modern times have seen a shift in emphasis with the medical approaches. The public are open to embrace different holistic therapies. Today the opportunities for people to try out new ideas and concepts are more readily available than ever before. Psychotherapy and counselling has flourished into a general acceptance. Some General practitioners promote counselling as a way forward rather than the patients only being offered powerful invasive drugs viewed with caution and some considered as highly addictive and not addressing the root of the client’s issue/s.I am in no doubt that through time and as this course progresses my perspective will change for the better. I have already started to question how I converse with peo ple on a one to one level. Questioning my ability to actually actively listen and observe my approach towards empathy & being non-judgemental. Feedback in class and group work will further contribute to these interpersonal skills in order to become a competent therapist.How I can/will deal with total honesty towards a client, under whatever circumstances, regardless of the client’s issue/s are certainly challenging tasks ahead of me. I am looking forward to practising the models and theories available. I understand that not every model or approach is suitable to every client and experience will help in my development for the good of the client. I am appreciative and thrilled to be living in today’s times, where opportunity and options are the norm for the majority of people.Today as a culture we not only require change but we encourage progress in the holistic world of therapies. REFERENCES: Rogers, C. (1951). Client Centered Therapy. UK: Constable & Robinson Ltd publi sher. Sanders, P. (2002). First Steps in Counselling. A Students’ companion for basic introductory courses Third edition, UK: Ross-on-Wye, Saunders, P. Franklin, A. Wilkins, P. (2009). Next Steps in Counselling Practise. Second edition, UK: Ross-on-Wye, PCCS Books. Saunders, P (2006). The Person-Centered Counselling Primer. UK: Ross-on-Wye, PCCS Books. Counselling Model â€Å"Evaluate the claim that Person Centred Therapy offers the therapist all that he/she will need to treat clients†. Word Count 2,508 During this essay I will present my findings as I view them. I am relatively new to counselling, this hinders my current experience and limits my opinions about therapy and what methodologies are more or less effective when offering therapy to clients.So, based on text book theories (only at this stage), I will present my findings about client centered therapy and incorporate a number of different methodologies that have assisted me to decipher the answer to this core question, and understanding how affective client centered therapy is as an approach. The research is informative and thought provoking. It certainly raises questions of how clients were viewed and treated in the past, right into the here and now. My task is to explore the above title, possibly uncovering a rather more complex theory than one may first assume.Initially I explored the world of psychotherapy to provide me with an insight and greater understanding on this subject, also identify the influences and changes that has occurred in a relatively short space of time in this developing area of psychology. As stated by Saunders (2002: pg 14). â€Å"From centuries-old ancient philosophies and cultures, through to current ideas in our own white European culture. A summary of the more recent landmarks would go back around 100 years to the work of Sigmund Freud†.Freud was a physician and the creator of many theories, primarily focussed on psychoanalysis. His work was from clinically derived experiences that were based on feedback from his patients during therapy. This gave birth to the ‘psychodynamic approach’ which stemmed from Freud’s collection of theories. Freud and his colleagues were psychologists who were treating their patients for depression or anxiety related disorders. Although shunned by the medical profession until late r in his career, Freud continued to shape and mould psychology as it is recognised today.Highly influential and extremely passionate professional men introduced their approaches into delivering the different theories/techniques, all of which have influenced and set the tone for the philosophy of psychology today. Definition of psychology, this was derived from the Latin it’s described in two parts, 1. â€Å"Psyche† meaning: Breathe, Sprit, Soul. 2. â€Å"Ology† meaning: Study of the mind. (Modern Latin, (Oxford dictionary 2000: pg, 652). Psychology emerged from Biology and philosophy, today it is closely linked with other disciplines including sociology, medicine, linguistics and anthropology.My main focus for study is Carl Rogers’s 1902-1987 (Rogerian approach). Counselling has emerged into a sophisticated therapy, thanks to Rogers’s intention to move towards supporting the client with a non-judgemental, kind and empathetic approach. Rogers develo ped his theories and debated about the vital skills required when a therapist engages with the client. Rogers not only theorised on mental illness he was also highly influential when developing other areas of therapies which I will explain further on.Rogers was resolute in his beliefs that the client’s success was based purely on his six core elements all blended together for an effective outcome. As the founder of client centered therapy Rogers was passionate about his ideas. The methodology he used was from a humanistic view and his techniques have made a huge impact into a world of psychology and psychotherapy. In 1942 the term ‘Non-Directive Therapy’ was born but changed nine years later by Rogers who preferred to use the term Client Centered Therapy.Other leading psychotherapy approaches were introduced from Albert Ellis (1913-2007), an American psychologist who instigated the ‘Cognitive approach’ known as Rational Emotional Behaviour Therapy (R EBT) that theorised that as people our thoughts control and depict our feelings it’s a directive therapy that is solution based. Whereas, Gerard Egan, founder of the ‘Integrative approaches’, claims to use whatever technique is appropriate according to the clients issues and is described as ‘middle of the road’ school of thought.From the beginning it was Rogers’s intention to provide a radical alternative to the then current â€Å"psychodynamic and behavioural† approaches. Psychotherapy was a vast unexplored area that was waiting for a new and different alternative which Rogers’s brought about. Psychiatrists are first and foremost medical practitioners who work from an established ‘Medical Model of Mental Illness’ Used by psychiatrists and mental health professionals to describe the full range of human psychological distress and disturbances. and according to Saunders ‘no more than a system of naming things (e. g. the term ‘neurosis’, [Literally meaning an infection of the nerves] is just a list of symptoms it actually explains nothing)†pg106. This was a long established method used when applying a treatment plan in which there was limited flexibility and had deep rooted entrenched guidelines. During the 1960’s Rogers began to use the principles of his approach into other areas such as education, management, group work and resolving conflict.Many years ago all treatments/ therapies were all encased under one label ‘medical treatment’ and in the early years psychotherapy would only be carried out in a ‘clinical environment’ where people were classified as ‘patients’ that need treatment to cure their illness. Counselling on the other hand can be viewed as both medical and educational. Rogers had to use the term ‘counselling’ as a requirement enforced by the American medical profession. The term counselling is deem ed suitable to use ‘if not causing medical disturbances but only deep issues in the mind’ (Saunders, (2002) pg107).Rogers conscientiously and gradually over time merged counselling/psychotherapy cohesively together. It is now virtually impossible to distinguish the differences between the two. The purpose of client centered therapy is to encourage the client to bring about their own self-awareness of their feelings. It is a nurturing process that functions without the counsellor/therapist suggesting or advising how to bring about change. It is not a solution based therapy. The therapist’s role when delivering this approach is to offer a safe and relaxed environment, where the atmosphere creates an aura of empathy, acceptance and no judgements.As stated by (Saunders 2006) â€Å"The unconditional positive regard element of this condition is not the same as ‘liking’ or ‘being nice to’ the client† pg 60. UPR is practised in client cen tered therapy no matter what the client chooses to disclose. This is achieved by the therapist reflecting and paraphrasing back to the client their inner feelings. The process will encourage positive feelings to facilitate in lifting the clients inner-self in this safe non-threatening environment. The aim is to encourage negativity to rise and bring about self-awareness for the client to explore their reasons for being in treatment.Carl Rogers assumed that all human beings, if given the right opportunity, are basically good and will strive towards goodness as their main goal. Secondly that the client’s experiences are unique only to themselves, and finally he felt that the client’s internal instincts would guide them into reaching their full potential resulting in self-actualization thus, creating self-healing as a ‘fully functioning individual’. Rogers states in his actualizing theory that â€Å"all human beings are drawn towards their natural tendencyâ €™, as we are more than just growth and survival†.Individuals need to understand their value and growth. All humanistic psychologists are focused on the person as a whole, where as the cognitive approach identifies ‘parts of the being’. Cognitive and behavioural approaches focus on irrational beliefs, effect feelings and are responsible for creating the behaviour. Rogers specified that we are instinctive ‘organismic’ individuals with the capacity of self-healing that involves psychological healing. Due to one’s self-doubt and an ingrained belief system (an instilled program since childhood) instils these self-defeating ideas into our psyche.Thus, creating a belief system of feeling scrutinized and judged. Person centered psychology is more interested in the clients own perception of their distress. We feel as individuals that our own beliefs are accurate and fail to recognize that these thought processes were planted by others (our primary carers and peers), through incidents and learnt behaviour. Client centered therapy is collaborative, it’s a guide to facilitate the client to seek out their own self-realization, which for some will be viewed as an advantage, it offers a free range approach to explore inner feelings, for both therapist and client.Client centered therapy encourages growth and its aim is in convert immaturity into maturity, this is vital for progress and healing. Rogers approach when implemented correctly should bring about activating the self-healing process he believes is found in each one of us as. Another well-known figure is Maslow who designed ‘A model’ shaped as a pyramid called the ‘Hierarchy of needs’ ‘Humanistic approach’ this is used in many areas of therapy including education and training in the work place.When Maslow’s basic core conditions are applied in a respectful, non-threatening manner they enable the client to direct the process of their phronesis (through their wisdom). Maslow’s theory consists of a five-step process, starting from the bottom and only raising to the next level by attaining that level of needs. Starting from a person’s basic physiological human need of survival require water, food and shelter. Stepping up again to the next level will accommodate the person’s requirement of personal safety and protection from danger and the emotional need for security.Raising again up to the third level it covers a person’s social needs that involve the need for acceptance by peers and friendship. Level four covers the need for self-respect and self-esteem. A person requires the emotional need for status and self-confidence, finally reaching the tip of the pyramid, is the need to reach and realise one’s own potential of self-actualisation. As stated in the chrysalis work book (module one: pg9), â€Å"Maslow believed that everyone is born with the potential to self-actuali se and that, given a good environment, this can be achieved†.He classified this as reaching a ‘peak experience’ which can be experiencing joy and unimaginable happiness. Rogers stressed the importance of his â€Å"six key conditions being both â€Å"Necessary and Sufficient† for therapeutic change to take place† as quoted by Saunders, P. (2006:9). The therapist and client have to have a genuine relationship based on a two way psychological connection. Rogers felt that if the client felt the slightest hint that this was not the case the counselling would be flawed from the onset. The client feels vulnerable and anxious and views themselves as needing assistance.The therapist needs to be balanced and healthy minded about their own residing issues and have dealt with their own issues during their training. As Rogers’s states, it is vital that the therapist â€Å"can accurately be himself in the relationship†. A fundamental requirement of C lient centered therapy specifies that the therapist actually feels a genuine regard towards the client. Rogers terms this as an ‘unconditional positive regard’ (UPR) an empathetic approach. The therapist needs to be authentic, transparent and a willingness to be open with self-disclosure.Rogers specifies that the client must be completely listened to without any interruption from the therapist, who should demonstrate that they have fully understood with a genuine regard to support the client. To support the number of approaches, Chrysalis designed ‘A Model’ (TIME) an acronym Temporal, Interventional, Multi- model, Empathy. This effective tool offers guidance when selecting an appropriate approach to be practiced accordingly with the formatted structure as a set of rules in which to be guided by. This is a profoundly simple tool that has been designed as a multi-model (it fits all).The TIME model’s function is to mix and match the client’s issu e/s, personality and suitability by selecting the appropriate treatment plan. Temporal meaning time, Interventional involves using other holistic therapies to run alongside these approached , which may assist with the cognitive side of the person for example using hypnotherapy by communicating with the subconscious, where positive suggestions and affirmations may be placed to replace the negative beliefs that are blocking/hindering progress. The client may relax enough to allow their own phronesis (practical instinctive wisdom) to appear.Multi Model is combining or selecting the different approaches from a variety of therapeutic sources. Chrysalis encourages the therapist to explore all approaches and form a comprehensive treatment plan that is tailored to an individual. The last area to discuss is empathy, all therapy is empathetic, and it would be impossible to implement without it. As suggested in Saunders primer (2006) â€Å"†¦ being empathetic is to perceive the internal frame of reference of another with accuracy, and with the emotional components and meanings†¦Ã¢â‚¬ pg 66.Empathy and communication is therefore essential. Disadvantages for some clients, if offering client centered therapy could be bring about discontentment, as it involves a long duration of time, (from the client’s perspective) they may not wish to attend numerous sessions, they may be unable to remain focused, affecting their motivation and stop attending. Client centered therapy may place too much pressure on the client if they themselves require direction and solutions to their predicament. Results are hard to gage thus, questioning its impact as a structured ystem. Client centered therapy may be seen as far too simple and the whole approach could be misunderstood thus, affecting its effectiveness. I like the feel of client centred therapy, for me it offers a kind, gentle and dignified treatment. The client may develop from this approach, however I can only surmise that as client centered therapy permits self-exploration, holistically healing the individual; it will not be suitable for all clients, as the question suggests but it is certainly suitable for dealing with the here and now and promotes self development.These modern times have seen a shift in emphasis with the medical approaches. The public are open to embrace different holistic therapies. Today the opportunities for people to try out new ideas and concepts are more readily available than ever before. Psychotherapy and counselling has flourished into a general acceptance. Some General practitioners promote counselling as a way forward rather than the patients only being offered powerful invasive drugs viewed with caution and some considered as highly addictive and not addressing the root of the client’s issue/s.I am in no doubt that through time and as this course progresses my perspective will change for the better. I have already started to question how I converse with peo ple on a one to one level. Questioning my ability to actually actively listen and observe my approach towards empathy & being non-judgemental. Feedback in class and group work will further contribute to these interpersonal skills in order to become a competent therapist.How I can/will deal with total honesty towards a client, under whatever circumstances, regardless of the client’s issue/s are certainly challenging tasks ahead of me. I am looking forward to practising the models and theories available. I understand that not every model or approach is suitable to every client and experience will help in my development for the good of the client. I am appreciative and thrilled to be living in today’s times, where opportunity and options are the norm for the majority of people.Today as a culture we not only require change but we encourage progress in the holistic world of therapies. REFERENCES: Rogers, C. (1951). Client Centered Therapy. UK: Constable & Robinson Ltd publi sher. Sanders, P. (2002). First Steps in Counselling. A Students’ companion for basic introductory courses Third edition, UK: Ross-on-Wye, Saunders, P. Franklin, A. Wilkins, P. (2009). Next Steps in Counselling Practise. Second edition, UK: Ross-on-Wye, PCCS Books. Saunders, P (2006). The Person-Centered Counselling Primer. UK: Ross-on-Wye, PCCS Books.

Political compass Essay Example | Topics and Well Written Essays - 500 words

Political compass - Essay Example It generally emphasizes two aspects which constitute economy i.e. right and left to the horizontal and political ideology i.e. Authoritarian and Libertarian to the vertical. Political compass determine the prosperity of a country and in this era of globalization it has become the defining factor in wealth differences among states. Cultural orientation of different countries forms integral part of the chosen political compass. My political compass is Libertarian right. This political compass means that the country should be governed on the basis of human rights and freedom maximization in respect of political opinion and allowing forces of demand and supply to regulate the economy. In this wake of globalization, there is increased cultural convergence due to the sophisticated and efficient information and communication technology. In that regard, accommodation of diverse cultural backgrounds in the country means embracing libertarian political ideology. On the other hand, restriction on production by the government kills efficiency and suppresses creativity hence the need to adopt free market economy. A combined political freedom, free and open market economy therefore constitute Libertarian-right which has seen United States Prosper. The socializing agents that influence my political compass point of view include family, school and mass media. I like a society where from childhood, personal dreams are nurtured in a free social environment where parents only encourage.This boost one’s interest and perception on the society towards personal growth.

The Software Requirement Specification Case Study

The Software Requirement Specification - Case Study Example Creation of Invoice: - The Salesman creates a Sales Invoice after every purchase. The invoice summarizes the booked room, including full customer information, and information of the booked room. The invoice may contain details of the Options selected by the customer or no options. The Options have a code. The customer choices are being put on the invoice after the Salesman fills the digital form with the code of the selected option. No selection of Code means no option has been chosen by the Customer. Creation of Customer ID: - If the customer books room in Charlton Lodge for the first time, his details are being recorded for future use for promoting sales. The customer is given an ID and so that the same can be used for data storage and retrieval. It's the Salesman who has interacted with the Customer will to fill in all details. Creation of list of Options with each option being given a Code: - The Charlton Lodge provides lots of options to its Customers and these can be identified through the list of features and Option Code. Each Option has been pre stored in the database. The Option contains the details of features associated and the related Option Code. The Operator of the system has to store the list along with its code. Activity diagrams contain activities, transitions between the activities, decision points, and synchronization bars. The activity diagram in this case shows the different phases of creation of the invoice which is actually the most dynamic work in the whole list of system functions. System begins login process. The access right is verified and depending on the result of this decision making process, the system moves on. If verification process gives positive result, room