$12 million of that is being amortized over a six-year period.
Players: Depreciation expense arises only when a team is sold.
Players actually improve their skills with experience.
Owners: Amortization of 50% of purchase price is allowed by Internal Revenue Code... Showed first 250 characters
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In the books, 100% of the salary is expensed each year.
Players: Only the 80% portion of the salary should be expensed in that accounting year because the remaining 20% is not set aside. (Cash Basis for Accounting)
Owners: 100% of each salary should be expensed each year according to the matching concept... Showed next 250 characters
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accounting made easy
Unearned revenue is a revenue account. TRUE or FALSE
2. Which of the following is an expense that has not yet been paid in cash, but has been incurred or used...
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Delta - Singapore
1. Depreciation expense that Delta and Singapore would record for each $100 groxx value of aircaraft.
Delta: Prior to July 1, 1986 depreciated straight line to residual values 10% cost residual over 10 years...
3 / 632
(a) For DELTA (per $100 of gross aircraft value)
Prior to July 1, 1986: (100-10)/10 = $9/ year
From July 1, 1986 through March 31, 1993: (100-10)/15 = $6/year
From April 1, 1993 on: (100-5)/20 = $4, 75/year
(b) For SINGAPORE (per $100 of gross aircraft value)
Prior to April 1, 1989: (100-10)/8 = $11, 25/year
From April 1, 1989 on: (100-20)/10 = $8/ year
2) The method for accounting depreciation expense in both airline companies is same that they are both using the straight-line basis...
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Kansas City Zephars
This case is used to illustrate some basic accounting issues in a controversial setting. The controversy arose because the baseball team owners and the players association were engaged in collective bargaining negotiations and the outcome of those negotiations depended on the parties’ agreeing on the true profitability of the baseball business...
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Kansas City Zephyrs Baseball Club, Inc
Players; Professional Baseball Players Association (PBPA)
Owners; Owner-Player Committee (OPC)
Bill Ahern; Arbitrator
feel that they should share in the teams’ profits
will be biased towards accounting that yields higher net profits so that they may argue for a stake in the profits
feel that the owners are hiding their profits through accounting tricks
contend that the teams are actually losing money each year
will be biased towards accounting that yields lower net profits (if any) so that the players will not have a substantial claim for more pay
Made up of 26 Teams
14 American League, 12 National League
Many teams do not own their own stadium or minor league teams
Each team has 24 players on the active roster, 16 minor league players “on option”
Each team plays 162 games (81 Home, 81 Away)
There are 150 Minor League teams that are only partially funded by their affiliated Major League Team
Team Owners established the Major League Agreement
Major League Rules including signing, trading and dealing with players
Elects a Commissioner to a seven-year term
Protects the best interests of the game
Administers the Major Leagues Central Fund
Case Study: Kansas City Zephyrs
Selected by both PBPA and OPC
Chosen for representative nature
Clean and simple financial example
-not owned by a corporation (publicly owned)
-does not own its stadium
-private financial data will not be needed
Points of Disagreement:
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Wal-mart financial analysis
Cost of Goods Sold:
Over the period of 2002-2005, Cost of Goods Sold (COGS) as a percentage of sales
decreased from 78% to 76%. The constant COGS explains that Wal-Mart has settled
with the over 4 million deliveries to each store they make each year...
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KC Zephryhills Baseball Team
Bill Ahern had a difficult judgment he had to make being an arbitrator in a dispute between the Owner-Player Committee and the Professional Baseball Players Association...