Prepare a report on the accounting implications of the issues. When the accounting for an individual transaction has not been specified, you should indicate how it should be accounted for and the impact that the accounting would have had on the key metric(s). Please base on the CPA Guidlines. SFC started selling movie theatres a couple of years ago. Each theatre's contribution to long-run operating cash flow is assessed and, if the value of the real estate is greater than the present value of future theatre operating profits, the theatre is sold. In the past, revenue from these sales has been relatively minor, but this year 25% of net income (i.e., $6 million) came from the sale of theatres. Since these sales are considered an ongoing part of the company's operations, proceeds from the sale of theatres are recorded as revenue in the income statement.

Prepare a report on the accounting implications of the issues. When the accounting for an individual transaction has not been specified, you should indicate how it should be accounted for and the impact that the accounting would have had on the key metric(s). Please base on the CPA Guidlines. SFC started selling movie theatres a couple of years ago. Each theatre's contribution to long-run operating cash flow is assessed and, if the value of the real estate is greater than the present value of future theatre operating profits, the theatre is sold. In the past, revenue from these sales has been relatively minor, but this year 25% of net income (i.e., $6 million) came from the sale of theatres. Since these sales are considered an ongoing part of the company's operations, proceeds from the sale of theatres are recorded as revenue in the income statement.

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Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter10: Auditing Cash, Marketable Securities, And Complex Financial Instruments

Section: Chapter Questions

Problem 19CYBK

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