Why might some organizations push employees to behave in a dishonest or corrupt manner? Are there personal benefits to corruption that organizational culture can counteract?

Drs. Glenn Feltham and David Ambrose began operations of their physical therapy clinic, called Northland Physical Therapy, on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, was as follows (the amounts are rounded to thousands of dollars to simplify):

Account Titles	Debit			Credit
Cash	$	8
Accounts Receivable		4
Supplies		4
Equipment		8
Accumulated Depreciation				$	1
Software		4
Accumulated Amortization					1
Accounts Payable					4
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Taxes Payable					0
Deferred Revenue					0
Common Stock					14
Retained Earnings					8
Service Revenue					0
Depreciation Expense		0
Amortization Expense		0
Salaries and Wages Expense		0
Supplies Expense		0
Interest Expense		0
Income Tax Expense		0
Totals	$	28		$	28

Transactions during 2018 (summarized in thousands of dollars) follow:

1. Borrowed $27 cash on July 1, 2018, signing a six-month note payable.
2. Purchased equipment for $30 cash on July 2, 2018.
3. Issued additional shares of common stock for $4 on July 3.
4. Purchased software on July 4, $4 cash.
5. Purchased supplies on July 5 on account for future use, $6.
6. Recorded revenues on December 6 of $62, including $10 on credit and $52 received in cash.
7. Recognized salaries and wages expense on December 7 of $35; paid in cash.
8. Collected accounts receivable on December 8, $7.
9. Paid accounts payable on December 9, $8.
10. Received a $4 cash deposit on December 10 from a hospital for a contract to start January 5, 2019.

Data for adjusting journal entries on December 31:

11. Amortization for 2018, $1.
12. Supplies of $4 were counted on December 31, 2018.
13. Depreciation for 2018, $2.
14. Accrued interest of $1 on notes payable.
15. Salaries and wages incurred but not yet paid or recorded, $2.
16. Income tax expense for 2018 was $5 and will be paid in 2019.

8. Post the closing entry from requirement 7 and prepare a post-closing trial balance.

Single Plantwide Factory Overhead Rate

Salty Sensations Snacks Company manufactures three types of snack foods: tortilla chips, potato chips, and pretzels. The company has budgeted the following costs for the upcoming period:

Factory depreciation		$24,331
Indirect labor		60,298
Factory electricity		6,876
Indirect materials		14,281
Selling expenses		33,852
Administrative expenses		19,041
	Total costs	$158,679

Factory overhead is allocated to the three products on the basis of processing hours. The products had the following production budget and processing hours per case:

		Budgeted Volume (Cases)				Processing Hours Per Case
Tortilla chips			6,000			0.10
Potato chips			6,900			0.15
Pretzels			2,700			0.12
	Total		15,600

If required, round all per-case answers to the nearest cent.

a. Determine the single plantwide factory overhead rate.
$ per processing hour

b. Use the factory overhead rate in (a) to determine the amount of total and per-case factory overhead allocated to each of the three products under generally accepted accounting principles.

	Total Factory Overhead	Per-Case Factory Overhead
Tortilla chips	$	$
Potato chips
Pretzels
Total	$

It is preferable for shareholders to own preference shares instead of ordinary shares.

On February 1, 2018, Strauss-Lombardi issued 8% bonds, dated February 1, with a face amount of $630,000. The bonds sold for $572,036 and mature on January 31, 2038 (20 years). The market yield for bonds of similar risk and maturity was 9%. Interest is paid semiannually on July 31 and January 31. Strauss-Lombardi’s fiscal year ends December 31.

Required:
1. to 4. Prepare the journal entry to record their issuance by Strauss-Lombardi on February 1, 2018, interest on July 31, 2018 (at the effective rate), adjusting entry to accrue interest on December 31, 2018 and interest on January 31, 2019. (Do not round your intermediate calculations and round your final answers to nearest whole dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $540,000 cost with an expected four-year life and a $26,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round PV factor value to 4 decimal places.)

Expected annual sales of new product	$	1,990,000
Expected annual costs of new product
Direct materials		486,000
Direct labor		678,000
Overhead (excluding straight-line depreciation on new machine)		396,000
Selling and administrative expenses		166,000
Income taxes		30	%

Required:
1. Compute straight-line depreciation for each year of this new machine’s life.
2. Determine expected net income and net cash flow for each year of this machine’s life.
3. Compute this machine’s payback period, assuming that cash flows occur evenly throughout each year.
4. Compute this machine’s accounting rate of return, assuming that income is earned evenly throughout each year.
5. Compute the net present value for this machine using a discount rate of 6% and assuming that cash flows occur at each year-end. (Hint: Salvage value is a cash inflow at the end of the asset’s life.)

1. Aquella Company produces towels for hotels. The following standards to produce a large towel have been established:

Direct materials (2.2 kilograms @ $6.30)	$13.86
Direct labour (1.5 hour @ $16.60)	$24.90
Standard prime cost for each large towel	$38.76

During the year, 72 000 kilograms of material were purchased and used for manufacturing 30 000 large towels, with the following actual prime costs:

Direct materials	$436 000
Direct labour	$775 770 (for 44 900 hours)

Required:

i. Compute the material and labor price and efficiency variances. Indicate if the variance is favorable (F) or unfavorable (U).

2. Prepare the journal entry for the purchase of raw materials.
3. Prepare the journal entry for the issuance of raw materials.
4. Prepare the journal entry for the closing of material variances to Cost of Goods Sold.

Is the issue of airbus discovering discrepancies in its disclosures about middlemen used to win commercial export deals, have to do with accounting? If so can someone please explain how?

ABC Company manufactures and sells a single product. The following information is available concerning the operations for 1999.

a. The company's single product sells for $60 per unit. Budgeted sales in units for the next four quarters are:

1999   Quarter 1       3,000 Budgeted sales in units

1999   Quarter 2       3,500 Budgeted sales in units

1999   Quarter 3       4,000 Budgeted sales in units

1999   Quarter 4       4,500 Budgeted sales in units

2000   Quarter 1       5,000 Budgeted sales in units

b. Sales are collected in the following pattern: 80% in the quarter in which the sale is made, 19% in the following quarter. On January 1, 1999, the company's balance sheet showed $60,000 in account receivables, all of which will be collected in the first quarter of the year 1999. Bad debts are projected at 1% of quarterly sales. There is a -0- balance in the AFDA account.

c. The company requires an ending inventory of finished units on hand at the end of each quarter equal to 20% of the budgeted sales for the next quarter. This requirement was met on December 31, 19x8.  (The company had 600 units on hand to start the new-year).

d. Two pounds (2lbs) of raw materials are required to complete one unit of product. The company requires an ending inventory of raw materials on hand at the end of each quarter equal to 10% of the production needs of the following quarter. This requirement was met on December 31, 19x8.  (The company had 620 lbs of raw materials on hand to start the new-year). Quarter 1 of the next year (year 2000) is estimated at 10,200 lbs needed for production.

e. The raw material costs $4.00 per pound. Purchases of raw material are paid for in the following pattern: 50% paid in the quarter in which the purchase was made, and the remaining 50% is paid in the following quarter. On January 1, 1999, the company's balance sheet showed $10,600 in accounts payable for raw material purchases.  All of which will be paid for in the first quarter of the year 1999.

f. Manufacturing overhead and selling & administrative expenses are paid in the quarter incurred.  The only exception is depreciation.

g. The manufacturing overhead budget distinguishes between variable and fixed overhead costs. Variable costs fluctuate with production volume on the basis of the following rates per direct labor hour: indirect materials $1.00, indirect labor $1.40, utilities $0.40, and maintenance $0.20. Fixed costs per quarter are: Supervisory Salaries $20,000, Depreciation $3,800, Property Taxes & Insurance $9,000 and Maintenance $5,700. Overhead is applied to production on the basis of direct labor hours. The annual rate is $8 per hour. (Hint: Total Manufacturing Overhead for 1999 $246,400 / Direct Labor hours 30,800 hours = $8/direct labor hour).

h. Selling & administrative expense budget distinguishes between variable and fixed overhead costs.  Variable costs are Sales Commissions of $3.00 and Freight-Out $1.00. Variable expenses per quarter are based on the unit sales projected in the sales budget. Fixed costs, per quarter, are:  Advertising $5,000, Sales Salaries $15,000, Office Salaries $7,500 Depreciation $1,000 and Property Taxes & Insurance $1,500.

i. January 1, 1999, cash balance is expected to be $38,000.

j. Marketable securities are expected to be sold for $2,000 cash in the first quarter.

k. 2 hours of direct labor are required to produce each unit of finished goods and the anticipated hourly wage rate is $10. Direct Labor is paid 100% in the quarter incurred.

l. Management plans to purchase new factory equipment in the second quarter for $50,000.

m. Management plans to purchase new office computers in the third quarter for $12,000.

n. Assume depreciation on new purchases is accounted for quarterly budgeted depreciation amounts.

o. Management plans to sell old equipment at the end of the fourth quarter for $3,000. Purchase price is $20,000, on January 1, 1996. Depreciation is calculated using the straight-line method, useful life estimated at five years, with no residual value.

p. The company makes equal quarterly payments of its estimated annual income taxes in the amount of $3,000 per quarter.

q. Loans are repaid in the first subsequent quarter in which there is sufficient cash (incurring 8% interest if funds are borrowed.)

r. A minimum cash balance of $20,000 is maintained per quarter.

s. Budgeted balance sheet information as of December 31, 1998 were: Building & Equipment $ 182,000, Common Stock $ 225,000, Accumulated Depreciation$ 28,800 and Retained Earnings of $ 46,480.

Requirements:

You must follow the posted lecture on Budgets that I authored.

UsingExceland the information above, prepare the following budgets and schedules for the year 1999, showing both quarterly and the year total figures:
1. Sales budget & schedule of cash collections from customers
2. Production budget
3. Direct materials budget & schedule of expected payments for direct materials
4. Direct labor budget
5. Manufacturing overhead budget
6. Selling & administrative expense budget
7. Cash budget
In addition, complete the following:

A. Finished goods inventory budget (Schedule)
B. Budgeted income statement (Budgeted financial statement)
C. Budgeted balance sheet (Budgeted financial statement)

The Little Theatre is a nonprofit organization devoted to staging plays for children. The theatre has a very small full-time professional administrative staff. Through a special arrangement with the actors’ union, actors and directors rehearse without pay and are paid only for actual performances.

The costs from the current year’s planning budget appear below. The Little Theatre had tentatively planned to put on five different productions with a total of 60 performances. For example, one of the productions was Peter Rabbit, which had a six-week run with three performances on each weekend.

The Little Theatre Costs from the Planning Budget For the Year Ended December 31
Budgeted number of productions		5
Budgeted number of performances		60
Actors’ and directors’ wages	$	168,000
Stagehands’ wages		28,800
Ticket booth personnel and ushers’ wages		11,400
Scenery, costumes, and props		44,000
Theatre hall rent		46,800
Printed programs		12,300
Publicity		14,500
Administrative expenses		48,000
Total	$	373,800

Some of the costs vary with the number of productions, some with the number of performances, and some are fixed and depend on neither the number of productions nor the number of performances. The costs of scenery, costumes, props, and publicity vary with the number of productions. It doesn’t make any difference how many times Peter Rabbit is performed, the cost of the scenery is the same. Likewise, the cost of publicizing a play with posters and radio commercials is the same whether there are 10, 20, or 30 performances of the play. On the other hand, the wages of the actors, directors, stagehands, ticket booth personnel, and ushers vary with the number of performances. The greater the number of performances, the higher the wage costs will be. Similarly, the costs of renting the hall and printing the programs will vary with the number of performances. Administrative expenses are more difficult to pin down, but the best estimate is that approximately 75% of the budgeted costs are fixed, 15% depend on the number of productions staged, and the remaining 10% depend on the number of performances.

After the beginning of the year, the board of directors of the theatre authorized expanding the theatre’s program to four productions and a total of 64 performances. Not surprisingly, actual costs were considerably higher than the costs from the planning budget. (Grants from donors and ticket sales were also correspondingly higher, but are not shown here.) Data concerning the actual costs appear below:

The Little Theatre Actual Costs For the Year Ended December 31
Actual number of productions		4
Actual number of performances		64
Actors’ and directors’ wages	$	174,000
Stagehands’ wages		30,400
Ticket booth personnel and ushers’ wages		12,900
Scenery, costumes, and props		40,300
Theatre hall rent		51,400
Printed programs		12,750
Publicity		13,500
Administrative expenses		46,450
Total	$	381,700

  

Required:

1. Complete the flexible budget for The Little Theatre based on the actual activity of the year.

	The Little Theatre Flexible Budget For the Year Ended December 31 Actors’ and directors’ wages Stagehands’ wages Ticket booth personnel and ushers’ wages Scenery, costumes, and props Theatre hall rent Printed programs Publicity Administrative expenses Total $

2. Complete the flexible budget performance report for the year that shows both activity variances and spending variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

The Little Theatre Flexible Budget Performance Report For the Year Ended December 31 Actual Results Spending Variances Flexible Budget Activity Variances Planning Budget Actors' and directors' wages $174,000 $168,000 Stagehands' wages 30,400 28,800 Ticket booth personnel and ushers' wages 12,900 11,400 Scenery, costumes, and props 40,300 44,000 Theatre hall rent 51,400 46,800 Printed programs 12,750 12,300 Publicity 13,500 14,500 Administrative expenses 46,450 48,000 Total $381,700

New revenue accounting standard impact: • What is the potential impact (old vs new) on their revenue recognition of the new standard on the company. It would be better if you provide the resources, websites are enough

Scenario:
* 300-word minimum*

The Chief Financial Officer (CFO), Karl Richland of Semtell Company in Cincinnati, Ohio is asking for your advice. The CFO explains sales are increasing but there is a constant matter of not having enough cash to meet payroll or pay vendors within 30 days.
Checklist: Prepare a business letter (see the rubric) to the CFO to explain:

1. Explain why cash can go down even when sales are up; refer to “receivables.”
2. Analyze the scenario and explain three accounts the CFO should review each day and explain why. Focus on short-term balance sheet accounts, i.e., “receivables and payables.”
3. Your business letter should:
•   Use the accepted business letter format and example as provided above.
•   Utilize Standard English and use correct spelling and grammar.
•   Provide a clearly established and sustained viewpoint and purpose.
•   The writing should be well ordered, logical and unified, as well as original and insightful.

Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow.

		2016			2017
Sales ($46 per unit)	$	1,012,000		$	1,932,000
Cost of goods sold ($31 per unit)		682,000			1,302,000
Gross margin		330,000			630,000
Selling and administrative expenses		289,000			329,000
Net income	$	41,000		$	301,000

Additional Information

1. Sales and production data for these first two years follow.

	2016		2017
Units produced	32,000		32,000
Units sold	22,000		42,000

2. Variable cost per unit and total fixed costs are unchanged during 2016 and 2017. The company's $31 per unit product cost consists of the following.

Direct materials	$	5
Direct labor		9
Variable overhead		7
Fixed overhead ($320,000/32,000 units)		10
Total product cost per unit	$	31

3. Selling and administrative expenses consist of the following.

		2016			2017
Variable selling and administrative expenses ($2 per unit)	$	44,000		$	84,000
Fixed selling and administrative expenses		245,000			245,000
Total selling and administrative expenses	$	289,000		$	329,000

1. Complete income statements for the company for each of its first two years under variable costing. (Loss amounts should be entered with a minus sign.)

	DOWELL Company Variable Costing Income Statements 2016 2017 Sales Less: Variable costs Net income (loss)

2. What are the differences between the absorption costing income and the variable costing income for these two years? (Loss amounts should be entered with a minus sign.)

	DOWELL COMPANY Reconciliation of Variable Costing Income to Absorption Costing Income 2016 2017 Variable costing income (loss) Absorption costing income (loss)

The following are several transactions of Ardery Company that occurred during the current year and were recorded in permanent (that is, balance sheet) accounts unless indicated otherwise:

Date	Transaction
Apr. 1	Purchased a delivery van for $16,000, paying $1,000 down, and issuing a 1-year, 6% note payable for the $15,000 balance. It is estimated that the van has a 4-year life and an $800 residual value; the company uses straight-line depreciation. The interest on the note will be paid on the maturity date.
May 15	Purchased $800 of office supplies.
June 2	Purchased a 2-year comprehensive insurance policy for $1,200.
Aug. 1	Received 6 months' rent in advance at $300 per month and recorded the $1,800 receipt as Rent Revenue.
Sept. 15	Advanced $600 to sales personnel to cover their future travel costs.
Nov. 1	Accepted a $6,000, 6-month, 10% (annual rate) note receivable from a customer, the interest to be collected when the note is collected.

The following information also is available:

1.	On January 1, the Office Supplies account had a $250 balance. On December 31, an inventory count showed $180 of office supplies on hand.
2.	The weekly (5-day) payroll of Ardery Company amounts to $2,000. All employees are paid at the close of business each Wednesday. A 2-day accrual is required for the current year.
3.	Sales personnel travel cost reports indicate that $500 of advances had been used to pay travel expenses.
4.	The income tax rate is 30% on current income and is payable in the first quarter of next year. The pretax income before the adjusting entries is $8,655.

Required:

On the basis of the above information, prepare journal entries to record whatever adjustments are necessary to bring the accounts up to date on December 31.

Answer the following 1-10 questions for intermediate accounting:

1. Companies value and report short-term receivables at net realizable value, the net amount they expect to receive in cash

True

False

2. When should the loss on an uncollectible account receivable be recorded as an expense for accrual accounting purposes?

A. At any day there is an indication that certain customer will not pay

B. At the beginning of accounting period

C. The day the credit sale is recorded

D. At the end of accounting period

E. Never

3. Which of the following is NOT an accurate description of the Allowance for Doubtful Accounts?

A. an income statement account

B. a balance sheet account

C. an estimate of the amount of accounts receivable that will not be collected

D. a contra asset account

4. The following accounts were taken from Starr Co.'s unadjusted trial balance at December 31, 2017:

Accounts receivable, DR $880,000
Allowance for uncollectible accounts, DR 27,000
Net credit sales, CR $2,000,000
Starr estimates that 8% of the gross accounts receivable will become uncollectible. After adjustment at December 31, 2017, the allowance for uncollectible accounts should have a credit balance of

A. 160,000

B. 70,400

C. 27,000

D. 43,400

E. 97,400

5. The following accounts were abstracted from Starr Co.'s unadjusted trial balance at December 31, 2017:

Accounts receivable DR $880,000
Allowance for uncollectible accounts DR 27,000
Net credit sales CR $2,000,000
Starr estimates that 8% of the gross accounts receivable will become uncollectible. What is a bad debt expense for the year?

A. 97,400

B. 70,400

C. 43,400

D. 27,000

E. 160,000

6. Why would a company sell receivables to another company?

A. To limit its legal liability

B. To improve the quality of its credit granting process

C. To comply with customer agreements

D. To accelerate access to amounts collected

7. BobCat Co. uses the GROSS method to record sales made on credit. On Mar 1, 2017, it made sales of $80,000 with terms 3/10 n/30. On Mar 9, 2017, BobCat received full payment for the March 1 sale. The required journal entries for BobCat Inc. on Mar 9 is

A. DR Accounts Receivable 80,000
CR Sales Revenue 80,000

B. DR Accounts Receivable 77,600
CR Sales Revenue 77,600

C. DR Cash….. 77,600
DR Sales Discount 2,400
CR Accounts Receivable 80,000

D. DR Cash….. 77,600
CR Accounts Receivable 77,600

E. DR Cash 80,000
CR Accounts Receivable 80,000

8. The following information relates to Jay Co.’s accounts receivable for the year just ended:

Accounts receivable, 1/1 $ 650,000
Credit sales for the year 2,700,000
Sales returns for the year 75,000
Accounts written off during the year 40,000
Collections from customers during the year 2,150,000
Estimated uncollectible accounts at 12/31 СR 110,000

What amount should Jay report on the Balance Sheet for net realizable value of accounts receivable at December 31?

A. 1,085,000

B. 540,000

C. 2,700,000

D. 975,000

E. 650,000

9. The following are held by BobCat Inc.:
Cash in checking account $6,000
Cash in savings account $12,000
Postdated check from customer dated one month from balance sheet date 2,500
Petty cash 300
Commercial paper (matures in a month, original maturity 3 months) 9,000
Certificate of deposit (matures in six months) 5,000
What amount should be reported as cash and cash equivalents on Smite’s balance sheet?

A. 27,300

B. 18,000

C. 18,300

D. 27,000

10. Hilltop Co.’s monthly bank statement shows a balance of $52,200.
Reconciliation of the statement with company books reveals the following information:
Bank service charge $ 10
   Insufficient funds check 650
Checks outstanding 1,500
Deposits in transit 1300
Check deposited by Hilltop and cleared by the bank for $125, but improperly recorded by Hilltop as $152.

What is the TRUE cash balance after the reconciliation?_______________

A. 54,200

B. 52,000

C. 52,027

D. 51,973