Which format do you prefer, direct or indirect?  Why?  What advantages & disadvantages are there for the method you prefer?

Presented below is selected information from the Larry Company’s current period accounting records:

Required:

1. Prepare statement of cost of goods manufactured in good form.
2. Prepare income statement in good form (ignore income tax expense).

Questions

This questions are multiple choice:

1. The lower of cost or market rules apply when:
   1. The market value of the inventory is higher than the cost in the books
   2. The market value of the inventory is lower than the cost in the books
   3. The market value of the inventory is higher than the cost to the consumer
   4. The market value of the inventory is lower than the cost to the consumer
2. Special Journals are used to:
   1. Increase efficiency
   2. Reduce costs
   3. Reduce the number of similar journal entries prepared
   4. All of the above
   5. None of the above
3. Segregation of duties is one example of:
   1. Generally Accepted Accounting Principles
   2. FASB
   3. Internal Controls
   4. Accounting Cycle
4. Which of the following is NOT a generally accepted accounting principle:
   1. Balance Principle
   2. Matching Principle
   3. Revenue recognition principle
   4. Consistency principle
5. When preparing bank reconciliation, you notice that a $500 check for rent cleared the bank correctly but was only listed on the books as $50. Which of the following is needed?
   1. Add to the bank balance
   2. Subtract from the bank balance
   3. Add to the book balance
   4. Subtract from the book balance

1-Search the EDGAR database to find a 10-K that reports a contingent liability. Write a paragraph summarizing one of the liabilities found in the financial statements. Did the company disclose the liability in the footnotes only, or did it recognize the liability in the financial statements?

2-What procedures might the auditors use to search for the contingent liabilities listed in part (1)? Explain the steps in the procedure in detail, as well as how they would provide the outcome desired.

What additional procedure could be performed? List the procedure, explain how it is performed, and discuss why it would be appropriate.

You work for a manufacturing company and have just completed the budget process for the upcoming business year. At the end of the first quarter you take the actuals and compare them to the budget. You notice there are differences which need explanation and create the static and flexible budget variances. You present this to management and they request you to explain the variances in more detail.

You go and create the Flexible Budget Performance Report and present this. You also need to explain the reasons for the variances and who is responsible. Explain the calculations used to create this report.

Explain why the variances using standard costs better reflect the actual variance and how to determine who is responsible for each variance

You are an Audit Senior currently planning the 30 June 20X8 audit of Almond Limited, an Australian-owned company that produces and exports Almond milk to China. The milk is subjected to ultra-high temperature (UHT) pasteurization processing before being packaged in cartons so that it can last six months at ambient temperatures if unopened. At a recent planning meeting with Almond Limited’s senior staff, you obtained the following overview of this year’s operations: Tight checks by Australian custom officials have delayed several shipments of Almond milk. These delays have angered Chinese customers who are threatening to deduct 20% from the amounts owing as compensation for lost production time. Almond Limited’s main competitor, Tasty Milk has taken advantage of this and started supplying to the Chinese market from its New Zealand branch for quicker deliveries and at prices lower than those offered by Almond Limited. One of Almond Limited’s customers, Super Dairy Limited (SDL), is claiming that the latest batch of milk it received was found to have very high levels of carrageenan, a seaweed derivative commonly used as a stabilizer in beverages. The presence of carrageenan has been widely associated with gastrointestinal inflammation. SDL is refusing to pay its account, which is allegedly six months overdue. Almond Limited has claimed to have launched an investigation into the allegations, but as yet not been able to substantiate them. 60% of the suppliers from which Almond Limited sources it’s almonds are owned by US firms, which demand payment in $US prior to the almonds being supplied. In January, Almond Limited upgraded its accounts payable system to a fully integrated package that automatically updates the general ledger when creditor entries are made. Some problems have been experienced with the creditors ledger, which is split into $US and $AUD amounts. In some cases, $US amounts have been recorded as $AUD, resulting in inaccurate creditor balances. Month-end rollovers have also proved problematic, with creditor balances being incorrectly reset to zero at the first of every month. This has required each creditor’s history to be re-entered manually each month, a time-consuming process that is taking accounting staff away from their normal duties. During the period, the Australian dollar has remained steady against the Chinese Yuan, although it fell by about 3% against the US dollar. Debtors are invoiced in $US at the time of shipment, and payment is received in $US one month after the shipment is delivered. It takes around four weeks for the charter vessels to travel from Almond Limited’s shipyard at Dockland Bay to China. A recent downturn in the Chinese economy is affecting forward orders, which have fallen by 15%. A team of internal auditors was hired 10 months ago by Almond Limited to improve on its existing internal control. The process of revamping the internal control has been dragging because the CEO has kept on declining the internal auditors’ suggestions for improvement. The accountant of Almond Limited has been notorious for finding gaps in the legislations in order to make its clients’ financial statements look presentable as desired by the clients themselves. In the past few years, Almond Limited has always been required by the Australian Tax Office to provide additional supporting information after the lodgement of its tax returns.

Required: Prepare a memorandum to the audit manager, outlining your risk assessment relating to Almond Limited. When making your risk assessment:

(a) Identify three (3) key account balances from the information provided that are subjected to an increase in audit risk. Briefly explain what factors increase the audit risk associated with the three (3) accounts identified. In your explanation, please mention the key assertion(s) at risk of material misstatement and the components of the audit risk model affected for each account identified.

(b) Identify how the audit plan will be affected and recommend specific audit procedures to address the risks associated with each account identified.

Your company has a travel policy that reimburses employees for the “ordinary and necessary” costs of business travel. Employees often mix a business trip with pleasure by either extending the time at the destination or traveling from the business destination to a nearby resort or other personal destination. When this happens, an allocation must be made between the business and personal portions of the trip. However, the travel policy is unclear on the allocation method to follow.

Consider this example. An employee obtained a business-class ticket for $9,558 and traveled the following itinerary:

On the date of the flights between Chicago and Paris (and return), a restricted round-trip fare of $4,980 was available.

Required:

a. Compute the business portion of the airfare and state the basis for the indicated allocation that is appropriate according to each of the following independent scenarios:

1. Based on the maximum reimbursement for the employee.

2. Based on the minimum cost to the company.

Direct material purchases and budgeted payments
Campbell Manufacturing intends to start business on January 1. Production plans for the first four months of operations are as follows:

Each unit requires two pounds of material. The firm would like to end each month with enough raw material to cover 25 percent of the following month’s production needs. Raw material costs $7 per pound. Management pays for 40 percent of purchases in the month of purchase and receives a 10 percent discount for these payments. The remaining purchases are paid in the following month, with no discount available.
a. Prepare a purchases budget for the first quarter of the year in units, in total, and in dollars.
Note: Do not use a negative sign with your answers.

b. Determine the budgeted payments for purchases of raw material for each of the first three months of operations and for the quarter in total.

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Specialty Auto Racing Inc. retails racing products for BMWs, Porsches, and Ferraris. The following accounts and their balances appear in the ledger of Specialty Auto Racing on July 31, the end of the current year:

Question not attempted.

Fifty thousand shares of preferred

A class of stock with preferential rights over common stock.

and 300,000 shares of common stock

The stock outstanding when a corporation has issued only one class of stock.

are authorized. There are 22,600 shares of common stock held as treasury stock

Stock that a corporation has once issued and then reacquires.

. Prepare the Stockholders’ Equity section of the balance sheet as of July 31, the end of the current year, using Method 1

Each class of stock is reported, followed by its related paid-in capital accounts. Retained earnings is then reported followed by a deduction for treasury stock.

of

Exhibit 9

. Refer to the lists of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow:

Additional information about the company follows:

a. Hubs require $34 in direct materials per unit, and Sprockets require $18.

b. The direct labor wage rate is $17 per hour.

c. Hubs are more complex to manufacture than Sprockets and they require special equipment.

d. The ABC system has the following activity cost pools:

Required

2. Determine the unit product cost of each product according to the ABC system. (Round intermediate calculations and final answers to 2 decimal places.)

For hubs and sprockets

Direct materials:

Direct Labor:

Overhead:

GL1501 - Based on Problem 15-1A Marcelino Company LO C2, P1, P2, P3, P4

Marcelino Co.’s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $500,000, and factory payroll cost in April is $363,000. Overhead costs incurred in April are: indirect materials, $50,000; indirect labor, $23,000; factory rent, $32,000; factory utilities, $19,000; and factory equipment depreciation, $51,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $635,000 cash in April. Costs of the three jobs worked on in April follow.

General Journal tab - Prepare journal entries to record the transactions of Marcelino Company during the month of April.

Job Costs tab - Calculate the total cost, and account classification for each job worked on during April.

Cost of Goods Manufactured tab - Prepare a schedule of cost of goods manufactured for Marcelino Company during the month of April.

Gross Profit tab - Calculate the gross profit on the sale of job(s) during April

REQUIREMENTS

• General Journal
• General Ledger
• Trial Balance
• Job Costs
• Cost of Goods Mfg
• Gross Profit

BuyCo, Inc. holds 22 percent of the outstanding shares of Marqueen company and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with this investment amounts to $11,700 per year. For 2017, Marqueen reported earnings of $116,000 and declares cash dividends of $34,000. During that year, Marqueen acquired inventory for $45,000, which it then sold to BuyCo for $90,000. At the end of 2017, BuyCo continued to hold merchandise with a transfer price of $26,000.

1. What Equity in Investee Income should BuyCo report for 2017?

2. How will the intra-entity transfer affect BuyCo's reporting in 2018?

3. If BuyCo had sold the inventory to Marqueen, how would the answers to (a) and (b) have changed?

4. 	a. Equity in investee income b. Equity accrual for 2018 will be Yes or No    c. If the inventory was sold, would your answers above change? Yes or No

Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 20% each of the last three years. He has computed the cost and revenue estimates for each product as follows:

The company’s discount rate is 18%.

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor using tables.

Required:

1. Calculate the payback period for each product.

2. Calculate the net present value for each product.

3. Calculate the internal rate of return for each product.

4. Calculate the project profitability index for each product.

5. Calculate the simple rate of return for each product.

6a. For each measure, identify whether Product A or Product B is preferred.

6b. Based on the simple rate of return, Lou Barlow would likely:

During the most recent year, Boston (PTY) Ltd has produced the following data:

Required:

1. How many units are in ending inventory

2. Using absorption costing, calculate the per unit -product cost. What is the value of ending inventory?

3. Using variable costing, calculate the per unit -product cost. What is the value of ending inventory?

4. Prepare an income statement using variable costing.

5. Prepare an income statement using absorption costing.

Income recognition for a contractor. On October 15, 2010, Flanikin Construction Company contracted to build a shopping center at a contract price of $180 million. The schedule of expected and actual cash collections and contract costs is as follows:

Year Cash collections from Customers Estimated and Actual Cost Incurred

2010 $36,000,000 $12,000,000

2011 45,000,000 36,000,000

2012 45,000,000 48,000,000

2013 54,000,000 24,000,000

   $180,000,000 $120,000,000

A) Calculate the amount of revenue, expense, and net income for each of the four years under the following revenue recognition methods:

(1)    Percentage-of-completion method.

(2)    Completed contract method.

B) Show the journal entries Flanikin will make in 2010, 2011, 2012, and 2013 for this contract. Flanikin accumulates contract costs in a Contract in Process account. Although the costs involve a mixture of cash payments, credits to assets, and credits to liability accounts, assume for purposes of this problem that all costs are recorded as credits to Accounts Payable.

C) Which method do you believe provides the better measure of Flanikin Construction Company’s performance under the contract? Why?

Can somebody please show me how to calculate this in EXCEL. Step by step excel calculations need to be shown with screenshots. Thank you.