Smith Electronics Reported the Following Figures in Its 2017 and 2016

question 79

Essay

Smith Electronics reported the following figures in its 2017 and 2016 financial statements.

Compute the cash ratio for 2017 and 2016.What does the cash ratio measure? Use this information to discuss the business performance of Smith Electronics.

Apply the concept of constructive capitalization to operating leases for financial analysis purposes.

Determine the income recognition method for lessors under different types of leases.

Calculate lease liabilities and assets and understand how changes in lease terms affect these calculations.

Understand the criteria for lease capitalization and the reasons behind the movement toward a new lease accounting standard.

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Definitions:

Time Poverty

A situation where an individual feels they do not have enough time to fulfill their duties and personal interests.

Polychronic Activity

The preference for doing multiple tasks or activities at the same time.

Product Misuse

Using a product for an unintended purpose or without regard to instructions or usage suggestions.

Subjective Norms

Beliefs about what others think one should do, which can influence an individual's behavior.