• April 15th, 2016


Paper, Order, or Assignment Requirements
You are the staff accountant on the 2015 audit team of Madison’s Cakery. You
have been asked by the audit partner to write a memo on the new accounting
treatment for leases requested by the client. Your analysis should include (1) a summary
of how accounting for the truck lease will be different under the new
(including any relevant journal entries), (2) a summary of the effect of the new principles
on the balance sheet and income statement as compared to the current principles, and (3)
a discussion on when the new principles will become effective for Madison’s. When
discussing any of the accounting treatments, you should reference the appropriate FASB
guidance which dictates the treatment.

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