Journal Entries, T-Accounts, Cost of Goods Manufactured and Sold

During May, the following transactions were completed and reported by Jerico Company:

1. Materials purchased on account, $60,200.
2. Materials issued to production to fill job-order requisitions: direct materials, $50,000; indirect materials, $8,700.
3. Payroll for the month: direct labor, $75,000; indirect labor, $35,000; administrative, $28,000; sales, $19,000.
4. Depreciation on factory plant and equipment, $10,400.
5. Property taxes on the factory accrued during the month, $1,450.
6. Insurance on the factory expired with a credit to the prepaid insurance account, $6,200.
7. Factory utilities, $5,500.
8. Advertising paid with cash, $7,900.
9. Depreciation on office equipment, $800; on sales vehicles, $1,650.
10. Legal fees incurred but not yet paid for preparation of lease agreements, $750.
11. Overhead is charged to production at a rate of $18 per direct labor hour. Records show 4,000 direct labor hours were worked during the month.
12. Cost of jobs completed during the month, $160,000.

The company also reported the following beginning balances in its inventory accounts:

Materials Inventory	$7,500
Work-in-Process Inventory	37,000
Finished Goods Inventory	50,000

Required:

1. 3. Prepare a statement of cost of goods manufactured.

   Jerico Company
   Statement of Cost of Goods Manufactured
   For the Month Ended May 31, 20XX
   		$
   Overhead:
   	$
   	$
   Manufacturing costs added		$
   Cost of goods manufactured		$

   4. If the overhead variance is all allocated to cost of goods sold, by how much will cost of goods sold decrease or increase?
       by $

Journal Entries, T-Accounts, Cost of Goods Manufactured and Sold

During May, the following transactions were completed and reported by Jerico Company:

1. Materials purchased on account, $60,200.
2. Materials issued to production to fill job-order requisitions: direct materials, $50,000; indirect materials, $8,700.
3. Payroll for the month: direct labor, $75,000; indirect labor, $35,000; administrative, $28,000; sales, $19,000.
4. Depreciation on factory plant and equipment, $10,400.
5. Property taxes on the factory accrued during the month, $1,450.
6. Insurance on the factory expired with a credit to the prepaid insurance account, $6,200.
7. Factory utilities, $5,500.
8. Advertising paid with cash, $7,900.
9. Depreciation on office equipment, $800; on sales vehicles, $1,650.
10. Legal fees incurred but not yet paid for preparation of lease agreements, $750.
11. Overhead is charged to production at a rate of $18 per direct labor hour. Records show 4,000 direct labor hours were worked during the month.
12. Cost of jobs completed during the month, $160,000.

The company also reported the following beginning balances in its inventory accounts:

Materials Inventory	$7,500
Work-in-Process Inventory	37,000
Finished Goods Inventory	50,000

Required:

1. Prepare journal entries to record the transactions occurring in May. For a compound transaction, if an amount box does not require an entry, leave it blank.

a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.

2. Prepare T-accounts for Materials Inventory, Overhead Control, Work-in-Process Inventory, and Finished Goods Inventory. Post the entries to the T-account in the same order in which they were journalized.

Materials Inventory
Balance

Work in Process Inventory
Balance

Finished Goods Inventory
Balance

Overhead Control
		Balance

Dividends on Preferred and Common Stock

Yukon Bike Corp. manufactures mountain bikes and distributes them through retail outlets in Canada, Montana, Idaho, Oregon, and Washington. Yukon Bike Corp. declared the following annual dividends over a six-year period ending December 31 of each year: Year 1, $30,000; Year 2, $37,500; Year 3, $60,000; Year 4, $165,000; Year 5, $210,000; and Year 6, $263,000. During the entire period, the outstanding stock of the company was composed of 25,000 shares of 3% preferred stock, $100 par, and 100,000 shares of common stock, $25 par.

Instructions:

1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. If required, round your answers to the nearest cent. If the amount is zero, please enter "0".

Preferred Dividends

Common Dividends

Year

Total Dividends

Total

Per Share

Total

Per Share

Year 1

$   30,000

$______

$ ___________

$_______

$__________

Year 2

37,500

$______

$____________

$_______

$__________

Year 3

60,000

$______

$____________

$_______

$___________

Year 4

165,000

$______

$____________

$_______

$___________

Year 5

210,000

$______

$____________

$_______

$___________

Year 6

263,000

$______

$____________

$_______

$___________

$____________

$___________

2. Calculate the average annual dividend per share for each class of stock for the six-year period. If required, round your answers to the nearest cent.

Average annual dividend for preferred:	$_____________ per share
Average annual dividend for common:	$_____________ per share

3. Assuming a market price per share of $118 for the preferred stock and $31 for the common stock, calculate the average annual percentage return on initial shareholders' investment, based on the average annual dividend per share for preferred stock and for common stock.

Round your answers to two decimal places.

Preferred stock:	_____%
Common stock:	_____ %

QUESTION 6
George recently paid $ 50.00 to renew his driver's license. This payment is considered a tax.
   True
   False

QUESTION 7
Because the United States District Court knows a broader set of cases, decisions of the United States District Court may be considered to have a more authoritative weight than the United States Federal Claims Court.
   True
   False

QUESTION 8
Corporations are required to file a tax return only if their taxable income is greater than:

a-$ 0

b-$ 1,000.

c-$ 600.

d-$ 750.

e-None of those.
  
QUESTION 9
The future value can be calculated as Future Value = Present Value / (1 + r) n.
   True
   False

QUESTION 10
The conversion strategy takes advantage of the fact that tax rates vary according to different activities.
   True
   False

ABC Company is authorized to issue 100,000 shares of its $10 par value common stock and as of February 1 had 25,000 shares issued and outstanding. On March 1, ABC bought 1,000 of its shares for the treasury at $25 each. Required—Prepare the journal entries that ABC should have made to record the transactions described in each of the following independent scenarios: Scenario #1 (1) On March 11, ABC issued 100 of the treasury shares at $30 each. (2) On March 21, ABC issued 100 of the treasury shares at $22 each. Scenario #2 (1) On March 11, ABC issued 100 of the treasury shares at $26 each. (2) On March 21, ABC issued 100 of the treasury shares at $22 each.

Tony’s favorite memories of his childhood were the times he spent with his dad at camp. Tony was daydreaming of those days a bit as he and Suzie jogged along a nature trail and came across a wonderful piece of property for sale. He turned to Suzie and said, “I’ve always wanted to start a camp where families could get away and spend some quality time together. If we just had the money, I know this would be the perfect place.” On November 1, 2022, Great Adventures purchased the land by issuing a $600,000, 6%, 10-year installment note to the seller. Payments of $6,661 are required at the end of each month over the life of the 10-year loan. Each monthly payment of $6,661 includes both interest expense and principal payments (i.e., reduction of the loan amount).

Late that night Tony exclaimed, “We now have land for our new camp; this has to be the best news ever!” Suzie said, “There’s something else I need to tell you. I’m expecting!” They decided right then, if it was a boy, they would name him Venture.

• Record the issuance of the long-term note payable for the purchase of land on November 1, 2022.
• Record the first monthly payment on the long-term note payable, made on November 30, 2022.
• Record the second monthly payment on the long-term note payable, made on December 31, 2022.
• The 12 monthly payments in 2023 (following year) will reduce the note's balance by an additional $45,616. Record the reclassification of this amount from long-term notes payable to current notes payable.
• Prepare the closing entry for revenue accounts.
• Prepare the closing entry for expense and loss accounts.

Prepare general journal, income statement (unadjusted), and balance sheet.

Problem 7-22A Cash Budget with Supporting Schedules [LO7-2, LO7-4, LO7-8] Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter: a. Budgeted monthly absorption costing income statements for April–July are: April May June July Sales $ 660,000 $ 780,000 $ 269,000 $ 440,000 Cost of goods sold 462,000 546,000 188,300 308,000 Gross margin 198,000 234,000 80,700 132,000 Selling and administrative expenses: Selling expense 84,000 113,000 31,500 44,000 Administrative expense* 47,000 78,200 29,800 42,000 Total selling and administrative expenses 131,000 191,200 61,300 86,000 Net operating income $ 67,000 $ 42,800 $ 19,400 $ 46,000 *Includes $18,500 of depreciation each month. b. Sales are 20% for cash and 80% on account. c. Sales on account are collected over a three-month period with 10% collected in the month of sale; 70% collected in the first month following the month of sale; and the remaining 20% collected in the second month following the month of sale. February’s sales totaled $165,000, and March’s sales totaled $265,000. d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month’s inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $120,400. e. Each month’s ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $92,400. f. Dividends of $33,000 will be declared and paid in April. g. Land costing $41,000 will be purchased for cash in May. h. The cash balance at March 31 is $55,000; the company must maintain a cash balance of atleast $40,000 at the end of each month. i. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $200,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. Required: 1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total. 2. Prepare the following for merchandise inventory: a. A merchandise purchases budget for April, May, and June. b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total. 3. Prepare a cash budget for April, May, and June as well as in total for the quarter. (Cash deficiency, repayments and interest should be indicated by a minus sign.)

CASE 3.9

Walmart de Mexico

Sam Walton was born on March 29, 1918, in Kingfisher, Oklahoma, a small town 50 miles northwest of Oklahoma City. Sam’s father, a farmer, struggled to support his family during the Great Depression. The Walton family hopscotched around the country before finally settling in Missouri where Sam graduated from high school. After obtaining a degree in economics from the University of Missouri, Sam went to work as a management trainee with J.C. Penney Company at a monthly salary of $75. Following the outbreak of World War II, Sam enlisted in the U.S. Army and served until 1945.

Upon returning to civilian life, Sam Walton borrowed money from his father-in-law to purchase a small retail store in northern Arkansas. Walton purchased additional stores in Arkansas, Kansas, and Missouri over the following years. In 1962, Walton opened the first store branded as a “Wal-Mart” in Rogers, Arkansas, 10 miles from Bentonville, which would become the company’s corporate headquarters. Walmart expanded its operations across the continental United States over the next three decades. In 1992, the year Sam Walton died, Walmart surpassed Sears to become the largest retailer in the United States.

By 2012, Walmart employed over two million people, making it the world’s largest private employer. In that same year, four members of Sam Walton’s family ranked among the top 10 of the Forbes 400, the 400 wealthiest individuals in the United States.1 Those individuals, with a collective wealth of more than $100 billion, included his three surviving children and the widow of his son, John Walton, a former Green Beret who was awarded the Silver Star for heroism during the Vietnam War.

The Lowest Prices Anytime, Anywhere!

Walmart’s incredible growth was due to the hypercompetitive business model developed by Sam Walton. The central tenet of Walton’s business plan was the motto that he adopted for his company, “The Lowest Prices Anytime, Anywhere!” Walton reasoned that if he undercut the prices charged by his competitors, his company would generate sufficient sales volume to realize significant economies of scale. The most important of those economies of scale would be purchasing merchandise in bulk quantities at discounted wholesale prices that were not available to other retailers.

Walton’s simple business plan worked to perfection as Walmart routinely dominated the geographical markets that it entered. The ultimate result of Walmart’s alleged “predatory” business model was to drive large numbers of small retailers, including pharmacies, groceries, and general merchandise stores, out of business. In an op-ed piece written for the New York Times, Robert Reich, former Secretary of the U.S. Department of Labor, observed that Walmart “Turns main streets into ghost towns by sucking business away from small retailers.”2

In the early 1990s, Walmart became an international company when it opened retail outlets in Mexico and Canada. After replicating its successful business model in those countries, Walmart extended its operations outside of North America. Within two decades, approximately one-fourth of the company’s sales were produced by its 6,000 retail stores in more than two dozen countries scattered around the globe.

To date, Mexico has easily been Walmart’s most successful international venture. Walmart quickly seized control of the retail industry in that country by taking away large chunks of a market share previously held by domestic retailers that had operated in the country for decades. By 2012, Walmart’s Mexican subsidiary, Walmart de Mexico, was Mexico’s largest retailer and that nation’s largest private employer.

Bribery Allegations

In April 2012, an article published by the New York Times, “Vast Mexico Bribery Case Hushed Up by Wal-Mart After Top-Level Struggle,” reported that Walmart had routinely bribed government officials to obtain building permits and other business licenses required by Mexican law. A former Walmart de Mexico officer testified that the bribes allowed the Mexican subsidiary “to build hundreds of new stores so fast that competitors would not have time to react.”3 The Pulitzer Prize-winning article in the New York Times, which was the culmination of an 18-month long investigation, insisted that the bribes violated the Foreign Corrupt Practices Act of 1977 (FCPA). The article also accused Walmart’s senior management of concealing those bribes from U.S. law enforcement authorities.

Walmart’s senior executives learned of the bribes being paid by their company’s Mexican subsidiary in late 2005 and immediately launched an investigation. “Wal- Mart dispatched investigators to Mexico City, and within days they unearthed evidence of widespread bribery. . . . They also found documents showing that Wal-Mart de Mexico’s top executives not only knew about the payments but had taken steps to conceal them from Wal-Mart’s headquarters in Bentonville, Ark.”4

Following the discovery of the bribes, Walmart’s senior executives disagreed on how to address the problem. The New York Times article reported that Walmart’s management ultimately decided to resolve the matter quietly and internally. That goal was achieved by placing the Walmart de Mexico executive who had allegedly authorized the bribes in charge of the ongoing investigation of them. The investigation ended shortly thereafter. The subsequent internal report noted that “There is no clear evidence or clear indication of bribes paid to Mexican government authorities with the purpose of wrongfully securing any licenses or permits.”5

The former FBI agent who served as Walmart’s director of corporate investigations found the internal report inadequate. “The report was nonetheless accepted by Wal- Mart’s leaders as the last word on the matter.”6 Walmart’s senior executives informed the U.S. Department of Justice that their company may have violated the FCPA only after they had learned of the ongoing investigation by the New York Times.

The author of the New York Times article charged that Walmart’s “relentless pursuit of growth” had compromised its commitment to the “highest moral and ethical standards.”7 A follow-up article in the New York Times in December 2012, “How Wal-Mart Used Payoffs to Get Its Way in Mexico,” described the methods used by

Walmart de Mexico to gain an unfair advantage over its competitors. That article also dismissed the suggestion that Walmart was a “victim” of a corrupt business culture in Mexico that obligated companies to bribe governmental officials.

The Times’ investigation reveals that Wal-Mart de Mexico was not the reluctant victim of a corrupt culture that insisted on bribes as the cost of doing business. Nor did it pay bribes merely to speed up routine approvals. Rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law other-wise prohibited. It used bribes to subvert democratic governance—public votes, open debates, transparent procedures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals. 8

After reporting the potential FCPA violations to the U.S. Department of Justice in December 2011, Walmart instructed its audit committee to use “all resources necessary” to “aggressively” investigate the company’s “FCPA compliance” not only in Mexico but worldwide. The audit committee hired KPMG and a major law firm to assist in the forensic investigation.10 Walmart’s board also created a network of international “FCPA compliance directors” that would report to a Bentonville-based “Global FCPA Compliance Officer.” In an April 2012 press release that addressed the bribery allegations made by the New York Times, Walmart officials declared that “We will not tolerate non-compliance with the FCPA anywhere or at any level of the company.”11

Since 2012, Walmart officials have discussed the status of the ongoing internal and external FCPA investigations in their company’s periodic registration statements filed with the SEC. Those disclosures have consistently warned the investing and lending community that it is “probable” that Walmart will eventually incur a loss stemming from the alleged FCPA violations but that the amount of the loss can- not be “reasonably estimated.” Nevertheless, company management reports that the expected loss is unlikely to have a “material adverse” effect on Walmart’s operations. The company also regularly discloses the cumulative cost that it has incurred in connection with its internal FCPA investigation. By early 2016, that figure had topped $600 million. Finally, the company’s interim reports on the FCPA matter reveal that potential FCPA violations have been uncovered within the company’s operations in countries other than Mexico, including Brazil, China, and India.

There has been widespread speculation in the business press concerning the ultimate outcome of the joint SEC and U.S. Department of Justice investigation of Walmart’s alleged FCPA violations. Much of that speculation has focused on the magnitude of the monetary fines the federal agencies might levy on Walmart. Many observers believe that those fines could surpass the $450 million in FCPA-related fines imposed on the German engineering and electronics firm Siemens AG in 2008.

The FCPA: From Watergate to Walmartgate

Walmart’s widely publicized FCPA problems refocused attention on the origins and nature of that federal statute. The FCPA was a by-product of the scandal-ridden Watergate era of the 1970s. During the Watergate investigations, the Office of the Special Prosecutor uncovered large bribes, kickbacks, and other payments made by U.S. corporations to officials of foreign governments to initiate or maintain business relationships.

Widespread public disapproval compelled Congress to pass the FCPA, which criminalizes most such payments.12 The FCPA also requires U.S. companies to maintain internal control systems that provide reasonable assurance of discovering improper foreign payments. In a 1997 Accounting and Auditing Enforcement Release, the Securities and Exchange Commission (SEC) highlighted the importance and need for the accounting and internal control requirements embedded in the FCPA.

The accounting provisions [of the FCPA] were enacted by Congress along with the anti-bribery provisions because Congress concluded that almost all bribery of foreign officials by American companies was covered up in the corporations’ books and that the requirement for accurate records and adequate internal controls would deter bribery.13

In the two decades following the passage of the FCPA, the SEC seldom charged U.S. companies with violating its provisions. In fact, in 1997 when the SEC filed FCPA- related charges against Triton Energy Ltd., an international oil and gas exploration company, more than 10 years had elapsed since the federal agency’s prior FCPA case. At the time, the SEC conceded that the filing of the FCPA charges against Triton Energy was intended to send a “message” to U.S. companies that “it’s not O.K. to pay bribes as long as you don’t get caught.”14 At the same time, an SEC spokesperson predicted that his agency would be filing considerably more FCPA charges in the future.15

The SEC was true to its word. By 2015, the SEC was investigating potential FCPA violations by 74 public companies. Those companies included such prominent firms as Bristol-Myers Squibb, Cisco Systems, Halliburton, United Technologies, and Wynn Resorts. The World Bank has reinforced the need for the SEC and other global law enforcement agencies to rein in corporate bribery since it estimates that more than $1 trillion in bribes are paid annually in the U.S. alone.16

The FCPA is not without its critics. Many corporate executives have complained that the federal statute places U.S. multinational companies at a significant competitive disadvantage to multinational firms based in countries that have do not have a comparable law. Those same executives also find the recent “overzealousness” in prosecuting alleged FCPA violators inappropriate. “We are seeing companies getting scooped up in aggressive enforcement actions and investigations. A culture of overzealousness has grabbed the Justice Department. The last time I checked, we were not living in a police state.”17 In response to that complaint, a representative of the U.S. Department of Justice observed, “This is not the time for the United States to be condoning corruption. We are a world leader and we want to do everything to make sure that business is less corrupt, not more.”18

To date, the FCPA has not had a significant impact on the auditors of SEC registrants. An audit firm has been named in only one FCPA complaint filed by the SEC. In that case, a representative of KPMG’s Indonesian affiliate was charged with paying a bribe to a governmental official to reduce the tax bill of its client. The KPMG affiliate settled the charge by agreeing to a cease and desist order but was not fined.19 As the FCPA complaint against Walmart unfolded, a reporter for the Reuters international news service noted that it was unlikely that Ernst & Young, Walmart’s longtime auditor, would become a target of that investigation.

In fact, the FCPA has created a new revenue stream for the major accounting firms that serve as the auditors of most SEC registrants. For example, Deloitte’s website lists “Foreign Corrupt Practices Act Consulting” as an ancillary service that it provides to public companies.

Our Foreign Corrupt Practices Act (FCPA) Consulting practice helps organizations navigate FCPA risk and respond to potential violations. Utilizing the network of Deloitte member firms and their affiliates including their forensic resources in the United States, Canada, Europe, Russia, Africa, Latin America, and Asia, we have worked on a variety of FCPA engagements including investigations, acquisition due diligence, and compliance program implementation and assessments in over fifty countries for some of the world's leading companies

1. Identify control activities that Walmart could have implemented for Walmart de Mexico and its other foreign subsidiaries to minimize the likelihood of illegal payments to government officials. Would these control activities have been cost-effective?

2. What responsibility, if any, does an accountant of a public company have when he or she discovers that the client has violated a law? How does the accountant’s position on the company’s employment hierarchy affect that responsibility, if at all? What responsibility does an auditor of a public company have if he or she discovers illegal acts by the client? Does the auditor’s position on his or her firm’s employment hierarchy affect this responsibility?

3. Does an audit firm of an SEC registrant have a responsibility to apply audit procedures intended to determine whether the client has complied with the FCPA? Defend your answer.

4. If the citizens of certain foreign countries believe that the payment of bribes is an acceptable business practice, is it appropriate for U.S. companies to challenge that belief when doing business in those countries? Defend your answer.

#1) The owners’ equity accounts for Trans World International are shown here: Common stock ($1 par value) $ 85,000 Capital surplus 227,000 Retained earnings 750,000 ________________________________________ ________________________________________ ________________________________________ ________________________________________ Total owners’ equity $ 1,062,000 ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________ Requirement 1: Assume Trans World stock currently sells for $28 per share and a stock dividend of 20 percent is declared. (a) How many new shares will be distributed? New shares issued (b) Show the new balance for each equity account. Common stock $ Capital surplus Retained earnings ________________________________________ ________________________________________ ________________________________________ ________________________________________ Total owners’ equity $ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________ Requirement 2: Now assume that instead Trans World declares a stock dividend of 24 percent. (a) How many new shares will be distributed? New shares issued (b) Show the new balance for each equity account. Common stock $ Capital surplus Retained earnings ________________________________________ ________________________________________ ________________________________________ ________________________________________ Total owners’ equity $ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ #2) The company with the common equity accounts shown here has declared a 13 percent stock dividend at a time when the market value of its stock is $43 per share. Common stock ($1 par value) $ 470,000 Capital surplus 1,555,000 Retained earnings 3,878,000 ________________________________________ ________________________________________ Total owners’ equity $ 5,903,000 ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________ Required: Show the new equity account balances after the stock dividend distribution. Common stock $ Capital surplus Retained earnings ________________________________________ Total owners’ equity $ ________________________________________________________________________________ ________________________________________

Q1. Accounting in the financial institutions has special characteristics compared to the non-financial institutions, discuss this statement and explain characteristics of balance sheets, income statement and cash flow statement in banks.

Q2. Regulations require banks to do detailed disclosure on the quality of assets, discuss this statement and explain the kind of disclosure on quality of loans done by banks working in Saudi Arabia.

Q3. In thrift banks in USA, the structure of income has been changed because the intermediation role is no longer the main source of income, discuss this statement and explain the structure of income of banks in Saudi Arabia.

Accounting for Financial Institution

According to the monetary approach to exchange rate determination, how would an increase in foreign real income affect the value of domestic currency? In your explanation, discuss both the quantity theory and PPP

Ayayai Company provides the following information about its defined benefit pension plan for the year 2017. Service cost $91,200 Contribution to the plan 104,700 Prior service cost amortization 9,800 Actual and expected return on plan assets 62,800 Benefits paid 40,500 Plan assets at January 1, 2017 632,600 Projected benefit obligation at January 1, 2017 686,700 Accumulated OCI (PSC) at January 1, 2017 152,100 Interest/discount (settlement) rate 9 %

Requirements: Using Excel prepare a pension worksheet inserting January 1, 2017, balances, and then showing December 31, 2017. Prepare the worksheet in good form based on examples in chapter 20 and chapter 20 exercises. Prepare the journal entry to record pension expense.

1)What is Balance scorecard (BSC)?

2)Any differences of BSC from one university to another? Discuss why or why not.

3)If our vice-chancellor wants to improve the university’s goal and performance, what are the characteristics that he has to take to achieve the goals (base on BSC). Give specific examples.

The financial statements of Morgan Ltd appear below:

Morgan LTD

Comparative Statement of Financial Position

31 December 2018

________________________________________________________________________________________

Assets                                                                                                         2018                    2017   

Cash ..................................................................................................     $ 25,000              $ 40,000

Marketable securities ...........................................................................         15,000                 60,000

Accounts receivable (net) .....................................................................         50,000                 30,000

Inventory ............................................................................................       150,000                170,000

Property, plant and equipment (net) ......................................................       160,000                200,000

      Total assets ..................................................................................     $400,000              $500,000

Liabilities and equity

Accounts payable ................................................................................     $ 20,000              $ 30,000

Short-term notes payable .....................................................................         40,000                 90,000

Bonds payable ....................................................................................         80,000                160,000

Ordinary shares ..................................................................................       170,000                145,000

Retained earnings ...............................................................................         90,000                  75,000

      Total liabilities and equity................................................................     $400,000              $500,000

Morgan LTD

Income Statement

For the Year Ended 31 December 2018

Net sales ............................................................................................                                 $360,000

Cost of sales .......................................................................................                                   184,000

Gross profit .........................................................................................                                   176,000

Expenses

      Interest expense ............................................................................        $24,000

      Selling expenses ...........................................................................         30,000

      Administrative expenses ................................................................          20,000

            Total expenses ........................................................................                                     74,000

Profit before income taxes ...................................................................                                   102,000

Income tax expense ............................................................................                                     30,000

Profit ..................................................................................................                                 $ 72,000

Additional information:

a.     Cash dividends of $57,000 were declared and paid in 2018.

b.     Weighted-average number of shares of ordinary shares outstanding during 2018 was 60,000 shares.

c.     Market value of ordinary shares on 31 December 2018 was $18 per share.

d.     Net cash provided by operating activities for 2018 was $63,000.

Required

Using the financial statements and additional information, compute the following ratios for Morgan Ltd for 2018. Show all computations.

1.     Current ratio

2.     Return on ordinary shareholders’ equity

3.     Price-earnings ratio

4.     Acid-test/Quick ratio

5.     Receivables turnover