Laws for Accountants

How will a state and /or federally mandated requirement for late payments not to be considered late impact the bankruptcy laws? What about the many businesses that have been required to close-should there be some consideration given to that fact when many of these business file for bankruptcy? What about those who lose their jobs because their businesses are required to close? What does this do to their lenders and their banks?

List the benefits of budgeting in a business. Also list and describe the components of a Master Budget.

1. What is Financial Statement Analysis (FSA)?
2. How is FSA related to AND different from financial accounting and auditing?
3. What is a typical day in the life of a financial analyst?
4. How do you become a financial analyst? What professional licenses or education do you need or can you get?

Marte Company manufactures bicycles and tricycles. For both products, materials are added at the beginning of the production process, and conversion costs are incurred uniformly. Production and cost data for the month of May are as follows.

Instructions

(a) Calculate the following.

(1) The equivalent units of production for materials and conversion.

(2) The unit costs of production for materials and conversion costs.

(3) The assignment of costs to units transferred out and in process at the end of the accounting period.

(b) Prepare a production cost report for the month of May for the bicycles.

Additional Information:

During the year, Johnston paid dividend of $130,000; sold equipment with an original cost of $153,000 and accumulated depreciation of $119,000; and purchased new equipment for $272,000.

Instruction

1. Prepare a Comparative Income statement for years ending December 31, 2016 and 2017.
2. Prepare a statement of Retained Earnings for the year ending December 31, 2017.
3. Prepare a Comparative Balance Sheet for years ending December 31, 2016 and 2017.
4. Prepare a statement of cash flows for the year ending December 31, 2017.

Problem 24-1: Compute gross pay.

Using the information given for Archway Company, compute the employees' gross pay for the payroll week ending July 14 and the year-to-date gross pay as of July 14. Employees receive time-and-a-half for overtime hours (fill in the shaded areas).

Jordan Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Jordan’s policy is to maintain an ending inventory balance equal to 15 percent of the following month’s cost of goods sold. April’s budgeted cost of goods sold is $76,000. Complete the inventory purchases budget by filling in the missing amounts.

Complete the inventory purchases budget by filling in the missing amounts.

b. Cost of goods sold

c. Ending inventory

Describe common situations a company will use to choose between using the current rate method and the temporal method of foreign currency translation/remeasurement for foreign subsidiaries.

CHAPTER 15(13.)

On January 1, 2018, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $15,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $101,000 and were expected to have a useful life of Five years with no residual value. Both firms record amortization and depreciation semi-annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required:
Prepare the appropriate entries for both the lessee and the lessor from the beginning of the lease through the end of 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations to the nearest whole dollar amount.)

• Record the lease revenue received by ComputerWorld Leasing.
• Record the Depreciation expense for ComputerWorld Leasing.
• Record the lease revenue received by ComputerWorld Leasing.
• Record the Depreciation expense for ComputerWorld Leasing.

Cassi Cronin is the Women’s head varsity hockey coach at USGB University. She has enjoyed considerable success over the years and is considering starting a summer hockey camp. USGB University would charge Coach for rooms, meals and ice-rink time for participants, plus a 10% commission based upon the price charged to campers. Coach Cassi has heard of the CVP experts in Acct 2220 and is asking for your help (and she is willing to pay!). You state that some of the important factors in analyzing such an opportunity involve setting fees, predicting enrollments and estimating the behavior of costs. Accordingly, planning ahead involves estimates and assumptions. Coach has provided estimates as follows:

Coach Cassi states that other camps have typically employed one assistant coach for each 15 campers, excluding the director (Cassi in this case). One problem is that you need to hire the coaches before you know the enrollments, although it is usually possible to find one or two at the last minute. It is, however, important to hire most of the assistant coaches early so you can use their names in the marketing brochures. Further, while the enrollment and prices given are averages, variations exist, with enrollments generally ranging from 60 to 110 and weekly camper fees ranging from $160 to $330. As might be expected, the better-known camps have higher enrollments at higher prices, but they also pay more for more well-known coaches. Coach Cassi will keep any profits (or suffer any losses), so she wants to be fairly confident before proceeding with this venture.

Required: Use the CVP Equation Method (& template) to Analyze:

1. If Coach hires the needed number of assistant coaches, incurs the commission and realizes all of the averages above, what would be her weekly pre-tax profit? To determine this, identify whether each cost is variable or fixed and setup a CM Template (as shown in class) to confirm all data relationships. Next use the equation method (i.e. S – VC – FC = “something”) to notate your analysis. Third, return to the CM template and confirm your work and “prove” your answer.

2. Assuming Coach hires the required number of coaches to support her planned enrollments, what would be her break-even point in the number of campers and in sales dollars?   Again, use the equation approach to develop (notate) an equation to address this question. Once determined, prepare a new CM template to prove your answer.

3. Assuming Coach hires the required number of coaches to support her planned enrollments, what weekly per-camper fee would enable coach to earn an after-tax weekly profit of $2,400 assuming the expected number of campers is realized? Assume a 40% income tax rate. Hint: Make sure to consider how you will “notate” the commission (which will be a function of weekly fee charged). In other words, keep the commission separate from the other variable costs as you prepare your equation. When completed, return to your CM Template to confirm your answer.

4. List two qualitative (i.e. subjective) considerations that, in your opinion, may affect this decision. In essence, what else should Coach consider before committing to this venture?  

5. Marketing Dept Question: Based upon your answer in PART C, what camper fee would you recommend Coach Cassi actually charge (and include in her marketing brochures)? Why?

6. As consultant, what would you charge (invoice) Coach for your analysis and professional services?

1. Equity Method for Stock Investment

   On January 4, Year 1, Ferguson Company purchased 160,000 shares of Silva Company directly from one of the founders for a price of $44 per share. Silva has 400,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $432,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $1,494,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva.

   a. Provide the Ferguson Company journal entries for the transactions involving its investment in Silva Company during Year 1.

   Year 1, Jan. 4	Investment in Silva Company Stock
   	Cash
   Year 1, July 2	Cash
   	Investment in Silva Company Stock
   Year 1, Dec. 31	Investment in Silva Company Stock
   	Investment in Silva Company Stock

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   a.

   Jan 4: Record the investment at cost.

   July 2: Calculate the ownership percentage. Under the equity method of accounting for investments, the dividends earned affect the investment account.

   Dec. 31: Calculate the ownership percentage. Under the equity method of accounting for investments, the share of income affects the investment account.

   b. Determine the December 31, Year 1, balance of Investment in Silva Company Stock.
   $

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   b. Set up a T account for the Investment account and calculate the ending investment using your answers from requirement (a).

   Feedback

   Partially correct

Check My Work1 more Check My Work uses remaining.

What is Cost-Volume-Profit analysis and how might it be used?

Explain Margin of Safety and how it is calculated.

Compute the Contribution Margin and describe what it reveals about a company’s cost structure.

What is Operating Leverage and how is it used to analyze changes in sales and profitability?

Schedule of Cash Collections on Accounts Receivable and Cash Budget

Bennett Inc. found that about 45% of its sales during the month were for cash. Bennett has the following accounts receivable payment experience:

Bennett's anticipated sales for the next few months are as follows:

Required:

1. Calculate credit sales for May.
$

Calculate credit sales for June.
$

Calculate credit sales for July.
$

Calculate credit sales for August.
$

Feedback

1. Calculate credit sales for each month.

2. Prepare a schedule of cash receipts for July and August. Round your answers to the nearest whole dollar, if necessary. If an amount box does not require an entry, leave it blank or enter "0". Be sure to enter percentages as whole numbers.

[Taxation]Historically, taxpayers have implemented strategies to mitigate or eliminate the effects of double taxation. Why might taxpayers think twice before implementing such strategies today? Explain.