E9-14 (L04) (Gross Profit Method) Mark Price Company uses the gross profit method to estimate inventory for monthly
reporting purposes. Presented below is information for the month of May.
Inventory, May 1 $ 160,000
Purchases (gross) 640,000
Freight-in 30,000
Sales revenue 1,000,000
Sales returns 70,000
Purchase discounts 12,000
Instructions
(a) Compute the estimated inventory at May 31, assuming that the gross profit is 30% of sales.
(b) Compute the estimated inventory at May 31, assuming that the gross profit is 30% of cost.

Question One (Total mark: 11 marks, word limit: 900 words)

Jordan Fit is a leading shoe retailer in the UK. During the last two years Jordan Fit has experienced considerable financial pressures: its performance has been declining, along with its share price. The accountants of the company have been ordered by their executives to review various aspects of their business and recommend some fundamental changes to improve the company’s financial performance.

One area of the business that has become very costly is holding stocks of saleable products in the stores. Storage and handling of stock is identified as an expensive operation for Jordan Fit. The accountants want this aspect of the business to be better controlled than it has been to date.

            As a new and more immediate mechanism for control within the business, the accountants decide to introduce a charge into the profit statements of individual stores. Every store has its own profit statement which broadly speaking records revenues and costs attributable to that store. These are internal management reports, compiled by the management accountants, and constituting an important part of how executive and divisional managers assess store performance over time. Importantly, the senior managers in each store, including the store manager, have a significant proportion of their salary and annual bonus based on a percentage of their store’s net profit figure. The new charge is to be based on the amount of stocks being held on average, over a year, by a particular store. The higher the average stocks held, the higher the charge in a store’s profit statement and, consequently, the lower the net profit. All other employees of a store (retail assistants, administrators and storeroom staff) also receive an annual ‘Christmas bonus’ that is calculated in relation to their store’s net profitability.

The accountants will implement the changes to stores’ reporting within two months, in time for the start of the new financial year. The changes, approved recently by majority vote at executive level, will be ‘sold’ to employees mostly via memos and email on the basis that the organization is facing a serious crisis, costs must be cut drastically, and that the introduction of a charge for holding stocks in stores was a sensible way to improve control over this particular element of business costs. No further consultation was planned, and the accountants intended to run brief training courses for their store managers, at which the technicalities of calculating the new charges for stock-holding (but not much else) would be explained.

Required:

You are a senior management accountant in Jordan Fit, although you are not actually leading this particular change programme. You have serious reservations about what is being proposed. Write a memo to the CFO of Jordan Fit explaining the reasons why you have serious reservations about the proposed changes, and describe alternative options (not just accounting related) that might be considered during this extremely testing time for the organization.

Write answers to each of the five (5) situations described below addressing the required criteria (i.e. 1 & 2) in each independent case. You may use a tabulated format if helpful having “Threats”, “Safeguards” and “Objective Assessment” as column headings.

Stephen Taylor has been appointed as a junior auditor of Simnett Chartered Accountants (SCA). One of his first tasks is to review the firm’s audit clients to ensure that independence requirements of APES 110 (Code of Ethics for Professional Accountants) are being met. His review has revealed the following:

(a) SCA has been providing its audit client Kaplan Limited (Kaplan) with non-audit services for a number of years. Andrew Ferguson is SCA’s partner in charge for providing non-audit services to Kaplan. While having a conversation with Andrew, Stephen becomes aware that Andrew’s wife Michelle Ferguson is planning to purchase a significant number of shares in Kaplan.

(b) Duxton Motels Limited (DML) is a chain of ten motels operating in Western Australia and is one of the oldest companies listed on the Australian Securities Exchange. SCA performs audit work for DML. This is the second year that SCA’s total fee from DML will comprise of around 20% of SCA’s total fee revenue from all clients.

(c) Super Tech Limited (STL), an Australian IT company, has not paid any of its audit fees for the last three years to SCA, citing cash flow problems. This has resulted in a significant amount of overdue audit fees for SCA. The audit partner in charge, Grant Richardson has been reluctant to push the issue further, as STL is a high profile client who he wishes to retain.

(d) Gregory Taylor, an audit senior with SCA is very excited to be a part of the audit team of Jumbo Metals Limited (JML). Gregory feels that he will be a valuable asset to the audit team as his wife, Christina Taylor, is JML’s financial controller who is responsible for the preparation of JML’s financial report.

(e) SCA has recently accepted an engagement to provide audit services to Yummy Donuts Limited. Robert Durand is an audit partner at SCA. Robert’s wife Rebecca Durand currently works as a financial accountant at Yummy Donuts. Robert is not on the audit team of Yummy Donuts.

Required: For each of the independent situations above, and using the conceptual framework in APES 110 (Code of Ethics for Professional Accountants), answer the following questions:

1. Identify potential threat(s) to independence & recommend safeguards (if any) to reduce the independence threat(s) identified.

2. Provide an objective assessment of whether audit independence can be achieved (Total 10 Mark)

Bradley-Link’s December 31, 2021, balance sheet included the following items:

Note 8: Bonds (in part)

The 9.6% bonds were issued in 2008 at 97.5 to yield 10%. Interest is paid semiannually on June 30 and December 31. Each $1,000 bond is convertible into 40 shares of the Company’s no par common stock.

The 10.4% bonds were issued in 2012 at 102 to yield 10%. Interest is paid semiannually on June 30 and December 31. Each $1,000 bond was issued with 40 detachable stock warrants, each of which entitles the holder to purchase one share of the Company’s no par common stock for $25, beginning 2022.

On January 3, 2022, when Bradley-Link’s common stock had a market price of $32 per share, Bradley-Link called the convertible bonds to force conversion. 90% were converted; the remainder were acquired at the call price. When the common stock price reached an all-time high of $37 in December of 2022, 40% of the warrants were exercised.

Required:

1. Prepare the journal entries that were recorded when each of the two bond issues was originally sold in 2008 and 2012.
2. Prepare the journal entry to record (book value method) the conversion of 90% of the convertible bonds in January 2022 and the retirement of the remainder.
3. Assume Bradley-Link induced conversion by offering $150 cash for each bond converted. Prepare the journal entry to record (book value method) the conversion of 90% of the convertible bonds in January 2022.
4. Assume Bradley-Link induced conversion by modifying the conversion ratio to exchange 45 shares for each bond rather than the 40 shares provided in the contract. Prepare the journal entry to record (book value method) the conversion of 90% of the convertible bonds in January 2022.
5. Prepare the journal entry to record the exercise of the warrants in December 2022.

i need help with this question. i cannot get the logic of warranty exercise. please

What are the four processes that define a closed-loop BPM cycle? Give example for each.

Review Apple’s Consolidated Balance Sheets for 2017 (which also contains the 2016 information), located here: Apple 2017 10K for W5 Discussion.pdf Calculate Apple’s current ratio for these two years. Pick any other ratio discussed in the class, and calculate and explain that. What do the ratios tell you about Apple? Explain the three factors that would influence your evaluation as to whether Apple’s current ratio is good or bad.

Exercise 15-7

Crawford Corporation incurred the following transactions.

Journalize the transactions.

Compute the additional Medicare tax for the following taxpayers. If required, round your answers to the nearest dollar.

a. Mario, who is single, earns wages of $589,200 in 2018. His total Medicare tax is $________.

b. George and Shirley are married and file a joint return in 2018. During the year, George earns wages of $205,100, and Shirley earns wages of $307,650. Their total Medicare tax is $______.

c. Simon has net investment income of $45,680 and MAGI of $228,400 and files as a single taxpayer. Simon's additional Medicare tax is $ _____.

Helix Corporation produces prefabricated flooring in a series of steps carried out in production departments. All of the material that is used in the first production department is added at the beginning of processing in that department. Data for May for the first production department follow:

Percent Complete

Units Materials Conversion

Work in process inventory, May 1 76,000 75 % 40 %

Work in process inventory, May 31 56,000 50 % 25 %

Materials cost in work in process inventory, May 1 $ 60,000

Conversion cost in work in process inventory, May 1 $ 17,800

Units started into production 258,000

Units transferred to the next production department 278,000

Materials cost added during May $ 408,180

Conversion cost added during May $ 256,680

Required: 1. Assume that the company uses the weighted-average method of accounting for units and costs. Determine the equivalent units for May for the first process.

Effect of Proposals on Divisional Performance A condensed income statement for the Electronics Division of Gihbli Industries Inc. for the year ended December 31, 20Y9, is as follows: Sales $1,575,000 Cost of goods sold 891,000 Gross profit $684,000 Operating expenses 558,000 Income from operations $126,000 Invested assets $1,050,000 Assume that the Electronics Division received no charges from service departments. The president of Gihbli Industries Inc. has indicated that the division's return on a $1,050,000 investment must be increased to at least 20% by the end of the next year if operations are to continue. The division manager is considering the following three proposals: Proposal 1: Transfer equipment with a book value of $300,000 to other divisions at no gain or loss and lease similar equipment. The annual lease payments would be less than the amount of depreciation expense on the old equipment by $31,400. This decrease in expense would be included as part of the cost of goods sold. Sales would remain unchanged. Proposal 2: Reduce invested assets by discontinuing a product line. This action would eliminate sales of $180,000, reduce cost of goods sold by $119,550, and reduce operating expenses by $60,000. Assets of $112,500 would be transferred to other divisions at no gain or loss. Proposal 3: Purchase new and more efficient machinery and thereby reduce the cost of goods sold by $189,000 after considering the effects of depreciation expense on the new equipment. Sales would remain unchanged, and the old machinery, which has no remaining book value, would be scrapped at no gain or loss. The new machinery would increase invested assets by $918,750 for the year. Required: 1. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment for the Electronics Division for the past year. If required, round your answers to one decimal place. Electronics Division Profit margin 8.00 % Investment turnover 1.50 ROI 12 % Feedback 1. Income from operations divided by sales equals profit margin. Sales divided by invested assets equals investment turnover. Multiply these two values for the rate of return on investment. Learning Objective 4. 2. Prepare condensed estimated income statements and compute the invested assets for each proposal. Gihbli Industries Inc.-Electronics Division Estimated Income Statements For the Year Ended December 31, 20Y9 Proposal 1 Proposal 2 Proposal 3 Sales $ 1,575,000 $ 1,395,000 $ 1,575,000 Cost of goods sold 859,600 771,450 702,000 Gross profit $ 715,400 $ 623,550 $ 873,000 Operating expenses 558,000 498,000 558,000 Income from operations $ 157,400 $ 125,550 $ 315,000 Invested assets $ 750,000 $ 937,500 $ 1,968,750 Feedback 2. For each proposal, subtract operating expenses from gross profit. Learning Objective 4. 3. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment for each proposal. Round investment turnover and percentages to one decimal place. Proposal Profit margin Investment turnover ROI Proposal 1 % 2.10 % Proposal 2 9.00 % % Proposal 3 20.00 % 0.80 16.00 % 4. Which of the three proposals would meet the required 20% rate of return on investment? Proposal 1 Meets Proposal 2 Does not meet Proposal 3 Does not meet 5. If the Electronics Division were in an industry where the profit margin could not be increased, how much would the investment turnover have to increase to meet the president's required 20% rate of return on investment? Enter your increase in investment turnover answer as a percentage of current investment turnover. Round interim calculations (including previously calculated) and final answer to one decimal place. 66.7 %

1. These items are taken from the financial statements of Grouper Corporation for 2022.

Prepare a classified balance sheet as of December 31, 2022. (List Current Assets in order of liquidity.)

2. You are provided with the following information for Ayayai Enterprises, effective as of its April 30, 2022, year-end.

Prepare a classified balance sheet for Ayayai Enterprises as of April 30, 2022. (List Current Assets in order of liquidity.)

3. These financial statement items are for Pharoah Corporation at year-end, July 31, 2022.

Prepare a classified balance sheet at July 31. (List Current Assets in order of liquidity.)

By now you should have started thinking about who you would like to interview for the Company Report Project. Any questions about the report or how to find the information for your company? Any advice on what questions worked well for you or might help your classmates find information that they need to complete the project? What are your thoughts about the information found in the Company Report? Any surprises?

At the end of 2016, its first year of operations, Swelland Company reported a pretax operating loss of $32,000 for both financial reporting and income tax purposes. At that time, Swelland had no positive verifiable evidence that it would earn future taxable income. However, due to successful management, the company reported pretax operating income (and taxable income) of $70,000 in 2017. During both years, the income tax rate was 30%, and no change had been enacted for future years.

Required:

Prepare Swelland’s income tax journal entries on December 31, 2016.

PAGE 1

GENERAL JOURNAL

Prepare Swelland’s income tax journal entry on December 31, 2017. Additional Instruction

PAGE 1

GENERAL JOURNAL

Prepare the lower portion of Swelland’s 2017 income statement. Additional Instructions

Use ILAC Format to answer please.

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Susan and Henry began carrying on a restaurant business in partnership in June 2016. In July 2016 they employed Isabella to manage the restaurant during the day. Susan and Henry work together in the evenings. Isabella made a great success of her part in the business and, as from September 2016, Susan and Henry decided she should be a salaried partner.

Susan and Henry went for a week’s holiday in the quiet time during January 2017 and during that time Isabella purchased an additional coffee machine for $7,000. Upon questioning, Isabella told Susan and Henry that she had ordered the coffee machine from Donald, one of their authorised suppliers, in order to keep up with customer demand when she was managing the restaurant. Susan and Henry then reminded Isabella that her authority to purchase items on behalf of the firm is limited to $1,000. Susan and Henry informed Donald that they are not responsible for the account. Donald is still disputing this, maintaining that Isabella informed him when placing the order that she was a partner in the firm and that she was purchasing the machine on behalf of the firm.

Susan resigned from the partnership in March 2018 when she discovered Henry was spending a lot of time with Isabella. Since her resignation, Susan has received a claim for payment for $12,532 from Frank. Frank is a long-term supplier of fruit and vegetables to the firm. His claim for payment relates to supplies made during the period 30 May 2018 to 31 July 2018.

YOU ARE REQUIRED to advise Susan of her legal position with respect to the issues arising from the above situation

Burberry current metrics trend analysis? current stock price per share.

compare the trends between burberry and LVMH.

look for strength and weaknesses.

dividend policy - what is the dividend in terms of dollar/ cents? if it does not issue dividend state it. and is it strength or weakness?

beta analysis - measure of volatilaty in the market.

analyze any strengths or weaknesses of Burberry beta. Good or bad for growth?