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Date Posted: 23:43:40 11/27/01 Tue
Author: sai
Subject: 請問

You are hired an appraiser to estimate the value of a small publishing company. This company recently signed a well-known athlete to write a book. The company agreed to pay the athlete$500000 to sign,plus future royalties on the book. Your analysis of the company’s financial statements find the$500000 is not reported as an expense. Instead,it is reported as part of Prepaid Expenses. A note to the statement says ”prepaid expenses include author signing fees that are matched against future expected sales. “Is this accounting for the$500000 signing bonus acceptable?How does it affect your analysis?

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