Question 18 (1 point)

Which of the following items is excluded from an engagement letter?

Question 18 options:

Question 19 (1 point)

In which step of the audit do auditors conduct tests of controls?

Question 19 options:

Question 20 (1 point)

How long do auditors have after the report release date to complete the audit file by assembling the final set of audit documentation?

Question 20 options:

Question 21 (1 point)

Saved

In which audit procedure to gather evidence does the auditor obtain a written representation letter?

Question 21 options:

You are an accountant of GSM company ltd., a clothing store. After you have prepared the financial statements as at December 2011, you noticed the following items occurring before accounts are approved by the directors: The sale of Tshs.1,000,000 was made during the period from 31stDecember 2011 to the date the statements are approved by the directors. The purchase of Tshs.750,800 was done during the period from 31stDecember 2011 to the date the statements are approved by the directors. Expenses amounting to Tshs.180,000 was incurred during the period from 31stDecember 2011 to the date the statements are approved by the directors. A notification is received that a customer who owes the company Tshs.3,700,000 has been declared bankrupt on 17thJanuary 2012. A fire on 4thJanuary 2012 destroys all the inventories in the warehouse. A letter is received from the insurance company stating that it is unclear whether our company was actually insured for the loss of inventories in the warehouse. Which of the above items are relevant for adjusting and non-adjusting events?

A convertible bond has the following terms:  Principal of $1000, coupon interest of 7%, maturity in 10 years, callable after five years at 1070.  The conversion price is $40 (25 shares).  The current price of the common stock is $41.  Similar risk bonds have a yield to maturity of 8%.  Would it make sense to convert the bond today, not convert it, or wait a while to decide whether to convert? Why (you should use some numbers in your answer)?

I need help solving this problem.

Required information

[The following information applies to the questions displayed below.]

Comparative financial statements for Weaver Company follow:

During this year, Weaver sold some equipment for $18 that had cost $31 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $12 that had cost $7 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $37 of its own stock. This year Weaver did not retire any bonds.

2. Using the information in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts.)

Harold McWilliams owns and manages a general merchandise store in a rural area of Virginia. Harold sells appliances, clothing, auto parts, and farming equipment, among a wide variety of other types of merchandise. Because of normal seasonal and cyclical fluctuations in the local economy, he knows that his business will also have these fluctuations, and he is planning to use CVP analysis to help him understand how he can expect his profits to change with these fluctuations. Harold has the following information for his most recent year. Cost of goods sold represents the cost paid for the merchandise he sells, while operating costs represent rent, insurance, and salaries, which are entirely fixed.

Required:

1-a. What is Harold’s margin of safety (MOS) in dollars? (Do not round intermediate calculations.)

1-b. What is the margin of safety (MOS) ratio? (Input your answer as a percentage rounded to 2 decimal places (i.e., 0.1567 = 15.67%).)

3. What is Harold’s margin of safety (in dollars) and operating profit if sales should fall to $645,000? (Do not round intermediate calculations.)

For this assessment, you should assume you are on the internal audit staff of a publicly traded company. Chosen company is AMAZON. You will be required to obtain the last two years’ worth of financial statements and a recent audit report. The internal audit group at the company is tasked with preparing for an upcoming revenue audit and analyzing the business risk internally to mitigate audit findings. You will conduct an internal audit of the company using the information gathered and create a report. Then, you will prepare appropriate memos analyzing the audit report you have prepared, while offering feedback and recommendations.

A. Describe how you would conduct the audit process, incorporating the analytical procedures you would use to investigate selected business transactions.

1. What steps will you take to review the company’s business transactions?

2. What would your plan be to utilize these procedures?

B. Explain the appropriate field work needed to review high-risk business transactions for cash and revenue.

1. What would you need to do in the field to investigate these?

2. Could you convey this information through charts or other supporting documentation?

C. Create a test to assess appropriate assertions for designated high-risk business transactions.

Q#5) a) A Dollar Today Is Worth More Than A Dollar Tomorrow. Elucidate

b) Why is Present Value considered an Opportunity Cost?

c) Are these mutually exclusive or independent projects? i) Deciding between repairing a machine or replacing it and ii) Deciding which market to enter next.

You’ve developed a very popular, up-scale but reasonably priced, clothing fashion line for young people. You produce designs in a number of countries, manufacturing in low-cost locations, and with retail outlets in major U.S. and European cities. Demand is popping and you have access to plenty of production capacity and capital.

Answer the following questions:

• How should you organize the business outside of the U.S.?
• Should you set-up reasonably independent companies, subsidiaries, in each foreign market?
• What would that do and not do for you?
• Or, do you want to impose a strict brand image, procedures, and central planning from headquarters, where your offices are?
• What are the pros and cons of this approach?

Plantwide Versus Department Allocations of Overhead:

San Juan Company expects to incur $600,000 in overhead costs this coming year—$100,000 in the Cutting Department, $300,000 in the Assembly department, and $200,000 in the Finishing department. Direct labor hours worked in all departments are expected to total 40,000 (used for the plantwide rate). The Cutting department expects to use 20,000 machine hours, the Assembly department expects to use 25,000 direct labor hours, and the Finishing department expects to incur $100,000 in direct labor costs (this information will be used for department rates).

Required:

a. Assume San Juan Company uses the department approach for allocating overhead costs. Calculate the predetermined overhead rate for each department and explain how these rates will be used to allocate overhead costs.

b. Assume San Juan Company uses the plantwide approach for allocating overhead costs and direct labor hours as the allocation base. Calculate the predetermined overhead rate, and explain how this rate will be used to allocate overhead costs.

You have been asked to analyze the financial statements of the Dayton Corporation for the two years ending 2015 and 2016.

Create the following in excel.

a. Create a comparative balance sheet for the years 2016 and 2015,

b. Create a comparative income statement for the years 2016 and 2015,

c. Create a spreadsheet to calculate the listed financial ratios for both 2016 and 2015,

APC is a sales department consists of 17 full-time and part-time employees. They receive orders via traditional mail, e-mail, telephone, and the occasional walk-in. Because ABC is a wholesaler, the vast majority of its business is conducted on a credit basis. The process begins in the sales department, where the sales clerk enters the customer’s order into the centralized computer sales order system. The computer and file server are housed in APC is small data processing department. If the customer has done business with APC in the past his or her data are already on file. If the customer is a first-time buyer, however, the clerk creates a new record in the customer file. The system then creates a record of the transaction in the open sales order file. When the order is entered, an electronic copy of it is sent to the customer’s e-mail address as confirmation.

A clerk in the warehouse department periodically reviews the open sales order file from a terminal and prints two copies of a stock release document for each new sale, which he uses to pick the items sold from the shelves. The warehouse clerk sends one copy of the stock release to the sales department and the second copy, along with the goods, to the shipping department.

The warehouse clerk then updates the inventory subsidiary file to reflect the items and quantities shipped. Upon receipt of the stock release document, the sales clerk accesses the open sales order file from a terminal, closes the sales order, and files the stock release document in the sales department. The sales order system automatically posts these transactions to the sales, inventory control, and cost-of-goods sold accounts in the general ledger file.

Upon receipt of the goods and the stock release, the shipping department clerk prepares the goods for shipment to the customer. The clerk prepares three copies of the bill of lading. Two of these go with the goods to the carrier and the third, along with the stock release document, is filed in the shipping department. The billing department clerk reviews the closed sales orders from a terminal and prepares two copies of the sales invoice. One copy is mailed to the customer and the other is filed in the billing department. The clerk then creates a new record in the account receivable subsidiary file. The sales order system automatically updates the account receivable control account in the general ledger file.

QUESTION: Since inefficiencies are present in the current system, prepare a system flowchart of a redesigned computer-based system using an ERP System.

The owner of the business Nevis Stationary and Supplies, Neville Heaven, has stated that his objective is to cut back on his tax liability as much as possible and at the same time have his balance sheet looking at its best and is of the view that the LIFO method would be best to achieve both. Do you agree with Neville? Explain your answer clearly distinguishing between the first in, first out (FIFO) and last in, first out (LIFO) methods of inventory valuation, with reference to IAS 2.

Trico Company set the following standard unit costs for its single product.

The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 65,000 units per quarter. The following flexible budget information is available.

During the current quarter, the company operated at 90% of capacity and produced 58,500 units of product; actual direct labor totaled 465,000 hours. Units produced were assigned the following standard costs.

Actual costs incurred during the current quarter follow.

1.Compute the direct materials cost variance, including its price and quantity variances

2. Compute the direct labor cost variance, including its rate and efficiency variances.

3. Compute the overhead controllable and volume variances.

4. fixed overhead volume variance

Use the following information to answer question 1) A-F. Assume today is 12/27/2016. An assistant portfolio manager reviewed the prospectus of a General Electric Corporate (US) bond that will be issued on January 15 of 2017. The Offering Price is 104.50. The call schedule for this $200 million, 5.75% coupon 20-year issue specifies the following:

The Bonds will be redeemable at the option of the Company at any time in whole or in part, upon not fewer than 30 nor more than 60 days’ notice, at the following redemption prices (which are expressed in percentages of principal amount) in each case together with accrued interest to the date fixed for redemption:

If redeemed January 15,

Sinking Fund: The prospectus further specifies that:

The Company will provide for the retirement by redemption of $40 million of the principal amount of the Bonds each January 15th of the years 2032 to and including 2036 at the principal amount thereof (100%), together with accrued interest to the date of redemption.

Your comment on this statement:

Answer the following as of issue date: 1/15/2017.

1. What is the bond’s current yield?
2. What is the bond’s yield to maturity?
3. What is bond’s yield to first call?
4. What is bond’s yield to first sink?
5. What is yield to the 2031 call?

Pension accounting would be substantially easier if the components of pension expense were simply the five items, which account for most of the changes in the PBO and the market value of pension plan assets. Identify and discuss the five components of pension expense.