Waterway Company is a multiproduct firm. Presented below is information concerning one of its products, the Hawkeye.

Date		Transaction		Quantity		Price/Cost
1/1		Beginning inventory		2,900		$18
2/4		Purchase		3,900		26
2/20		Sale		4,400		44
4/2		Purchase		4,900		34
11/4		Sale		4,100		48

(a)

Calculate average-cost per unit. (Round answer to 4 decimal places, e.g. 2.7613.)

Average-cost per unit

$

(b)

Compute cost of goods sold, assuming Waterway uses: (Round average cost per unit to 4 decimal places, e.g. 2.7631 and final answers to 0 decimal places, e.g. 6,548.)

				Cost of goods sold
(a)		Periodic system, FIFO cost flow		$
(b)		Perpetual system, FIFO cost flow		$
(c)		Periodic system, LIFO cost flow		$
(d)		Perpetual system, LIFO cost flow		$
(e)		Periodic system, weighted-average cost flow		$
(f)		Perpetual system, moving-average cost flow		$

Question 3

Identify and describe a minimum of four internal controls in a computer lab classroom.

Required

1. Classify each control as being preventive, corrective and/or detective. If the control is an information technology control, also classify the control as a general or application control.
2. Describe the risk(s) each control is intended to address.
3. Describe the operation of each control.
4. Identify and discuss a potential deficiency in at least one of the controls you have identified.

PLEASE MAKE SURE ALL NUMBERS MATCH UP AND ARE CORRECTLY CALCULATED

The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company.  

NELSON COMPANY Unadjusted Trial Balance January 31, 2018
	Debit			Credit
Cash	$	1,000
Merchandise inventory		12,500
Store supplies		5,800
Prepaid insurance		2,400
Store equipment		42,900
Accumulated depreciation—Store equipment				$	15,250
Accounts payable					10,000
Common stock					5,000
Retained earnings					27,000
Dividends		2,200
Sales					111,950
Sales discounts		2,000
Sales returns and allowances		2,200
Cost of goods sold		38,400
Depreciation expense—Store equipment		0
Salaries expense		35,000
Insurance expense		0
Rent expense		15,000
Store supplies expense		0
Advertising expense		9,800
Totals	$	169,200		$	169,200

  
Rent expense and salaries expense are equally divided between selling activities and general and administrative activities. Nelson Company uses a perpetual inventory system.
  
Additional Information:

1. Store supplies still available at fiscal year-end amount to $1,750.
2. Expired insurance, an administrative expense, for the fiscal year is $1,400.
3. Depreciation expense on store equipment, a selling expense, is $1,525 for the fiscal year.
4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 of inventory is still available at fiscal year-end.

Required:
1. Using the above information prepare adjusting journal entries:
2. Prepare a multiple-step income statement for fiscal year 2018.
3. Prepare a single-step income statement for fiscal year 2018.

Total			Per Unit
Sales	$	318,000		$	20
Variable expenses		222,600			14
Contribution margin		95,400		$	6
Fixed expenses		72,600
Net operating income	$	22,800

Required:

1. What is the monthly break-even point in unit sales and in dollar sales?

2. Without resorting to computations, what is the total contribution margin at the break-even point?

3-a. How many units would have to be sold each month to attain a target profit of $39,600?

3-b. Verify your answer by preparing a contribution format income statement at the target sales level. (confused on this)

4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms.

5. What is the company’s CM ratio? If sales increase by $99,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2018. International Machines manufactured the equipment at a cost of $104,000. Manufacturers Southern's fiscal year ends December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Related Information:

Lease term2 years (8 quarterly periods)

Quarterly rental payments$18,200 at the beginning of each period

Economic life of asset2 years

Fair value of asset$135,990

Implicit interest rate8%

Required:
1. Show how International Machines determined the $18,200 quarterly lease payments.
2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2018, and the second lease payment on April 1, 2018.

Problem 5-25 Prepare and Interpret Income Statements; Changes in Both Sales and Production; Lean Production [LO5-1, LO5-2, LO5-3]

Starfax, Inc., manufactures a small part that is widely used in various electronic products such as home computers. Operating results for the first three years of activity were as follows (absorption costing basis):

	Year 1		Year 2		Year 3
Sales	$	1,000,000	$	800,000	$	1,000,000
Cost of goods sold		740,000		520,000		785,000
Gross margin		260,000		280,000		215,000
Selling and administrative expenses		220,000		190,000		220,000
Net operating income (loss)	$	40,000	$	90,000	$	(5,000)

In the latter part of Year 2, a competitor went out of business and in the process dumped a large number of units on the market. As a result, Starfax’s Sales dropped by 20% during Year 2 even though production increased during the year. Management had expected sales to remain constant at 50,000 units; the increased production was designed to provide the company with a buffer of protection against unexpected spurts in demand. By the start of Year 3, management could see that inventory was excessive and that spurts in demand were unlikely. To reduce the excessive inventories, Starfax cut back production during Year 3, as shown below:

	Year 1				Year 2				Year 3
Production in units	$	50,000			$	60,000				40,000
Sales in units		50,000				40,000				50,000

Additional information about the company follows:

1. The company’s plant is highly automated. Variable manufacturing expenses (direct materials, direct labor, and variable manufacturing overhead) total only $4.00 per unit, and fixed manufacturing overhead expenses total $540,000 per year.  
2. Fixed manufacturing overhead costs are applied to units of product on the basis of each year’s production. That is, a new fixed manufacturing overhead rate is computed each year.
3. Variable selling and administrative expenses were $3 per unit sold in each year. Fixed selling and administrative expenses totaled $70,000 per year.
4. The company uses a FIFO inventory flow assumption.

     

Starfax’s management can’t understand why profits more than doubled during Year 2 when sales dropped by 20%, and why a loss was incurred during Year 3 when sales recovered to previous levels.

Required:

1. Prepare a contribution format variable costing income statement for each year.

2a. Compute the unit product cost in each year under absorption costing. (Round your answers to 2 decimal places.)

2b. Reconcile the variable costing and absorption costing net operating income (loss) figures for each year.

5b. If Lean Production had been used during Year 2 and Year 3 and the predetermined overhead rate is based on 50,000 units per year, what would the company's net operating income (loss) have been in each year under absorption costing? (Losses should be indicated by a minus sign.)

1. Would you be comfortable in Higgins’s job? Does the job of ethics officer appeal to you? Why, or why not?
2. Research a company that hires Ethics Officers? What did you find? (Use the Internet to do your research. Click on the website you found) What company did you research? Please include the link.
3. What qualities is the company that you researched looking for in an Ethics/Corporate Social Relations Officer?

Pacific Ink had beginning work-in-process inventory of $387,380 on October 1. Of this amount, $158,120 was the cost of direct materials and $229,260 was the cost of conversion. The 22,000 units in the beginning inventory were 30 percent complete with respect to both direct materials and conversion costs.

  

During October, 51,000 units were transferred out and 16,000 remained in ending inventory. The units in ending inventory were 80 percent complete with respect to direct materials and 30 percent complete with respect to conversion costs. Costs incurred during the period amounted to $1,181,700 for direct materials and $1,523,320 for conversion

Required:

Compute the cost per equivalent unit for direct materials and for conversion costs using the weighted-average method. (Round your answers to 2 decimal places.)

1- The Statute of Limitations discharges a debt by operation of law unless the debtor reinstates the debt.

Select one:

True

False

2- When an anticipatory repudiation occurs, it is treated as a material breach of a contract.

Select one:

True

False

3-

If Party A substantially performs but not to Party B's satisfaction, Party B can demand full performance, regardless of the expense.

Select one:

True

False

4- Anything less than complete performance is a material breach of contract.

Select one:

True

False

5- Any breach entitles the non-breaching party to sue for damages.

Select one:

True

False

EcoPak Ltd is a small private company, specialising in the manufacture of takeaway packaging, which offers an environmentally friendly alternative to disposable food containers. The business’s accountant Kate has prepared a draft version of EcoPak’s Balance Sheet and Income Statement for the financial year ended 30 June 2020. Kate knows she has made several mistakes in classifying the elements of the Balance Sheet and Income Statement because the income statement shows EcoPak has made a loss and the Balance Sheet doesn’t balance! Kate’s statements are shown below.

EcoPak Ltd - Draft Income Statement for the year ended 30 June 2020
Cash at Bank	255,000
Accrued Wages	22,000
Gross profit	277,000
Expenses
Bank Loan	320,000
Interest expense	27,000
Prepaid Rent	3,600
Depreciation Expense	43,000
Donations Expense	12,000
Accounts Receivable	14,000
Other expenses	32,000
Earnings before interest and tax	-174,600
Accounts Payable	22,000
Profit before tax	-196,600
Income tax expense	125,000
Profit for the period from continuing operations	-321,600

EcoPak Ltd – Draft Balance Sheet AS AT 30 June 2020
Assets		Liabilities
Current Assets		Current Liabilities
Wages Expense	78,000	Drawings	-25,000
Cost of Sales	376,000	Inventory	108,000
Rent Expense	31,200	Electricity expense	18,000
Sales revenue	1,244,000	Non-current liabilities
Prepaid Utilities	2,100	Trucks	90,000
Property Plant and Equipment	578,000	Advertising Expense	45,000
Non-current Assets		Total Liabilities	236,000
Retained Profits	468,700	Owner’s Equity
Mortgage	63,000	Insurance Expense	72,000
		Contributions	198,000
		Intangibles	18,000
		Total Owner’s Equity	288,000
Total Assets	2,841,000	Total Liabilities and Owner’s Equity	524,000

EcoPak Ltd – CORRECTED Draft Income Statement for the year ended 30 June 2020
Gross profit
Expenses
Earnings before interest and tax
Profit before tax
Profit for the period from continuing operations

EcoPak Ltd – Draft Balance Sheet AS AT 30 June 2020
Assets		Liabilities
Current Assets		Current Liabilities
		Non-current liabilities
Non-current Assets		Total Liabilities
		Owner’s Equity
		Total Owner’s Equity
Total Assets		Total Liabilities and Owner’s Equity

You are planning to acquire an asset for use in your business. Should you lease or purchase the asset? What do you feel the differences are between the two options. You may find it helpful to look outside the textbook for information on this. Try to keep it simple but try to describe some advantages and disadvantages to both options.

P13-12A The income statement and unclassified statement of financial position for E-Perform, Inc. follow:

E-PERFORM, INC. Statement of Financial Position December 31
	2018	2017
Assets
Cash	$   97,800	$  48,400
Held for trading investments	128,000	114,000
Accounts receivable	75,800	43,000
Inventory	122,500	92,850
Prepaid expenses	18,400	26,000
Equipment	270,000	242,500
Accumulated depreciation	(50,000)	(52,000)
Total assets	$662,500	$514,750
Liabilities and Shareholders' Equity
Accounts payable	$ 93,000	$ 77,300
Accrued liabilities	11,500	7,000
Bank loan payable	110,000	150,000
Common shares	200,000	175,000
Retained earnings	248,000	105,450
Total liabilities and shareholders' equity	$662,500	$514,750

E-PERFORM, INC. Income Statement Year Ended December 31, 2018
Sales		$492,780
Cost of goods sold		185,460
Gross profit		307,320
Operating expenses		116,410
Income from operations		190,910
Other revenues and expenses
Unrealized gain on held for trading investments	$14,000
Interest expense	(4,730)	9,270
Income before income tax		200,180
Income tax expense		45,000
Net income		$155,180

Additional information:

1. Prepaid expenses and accrued liabilities relate to operating expenses.
2. An unrealized gain on held for trading investments of $14,000 was recorded.
3. New equipment costing $85,000 was purchased for $25,000 cash and a $60,000 long-term bank loan payable.
4. Old equipment having an original cost of $57,500 was sold for $1,500.
5. Accounts payable relate to merchandise creditors.
6. Some of the bank loan was repaid during the year.
7. A dividend was paid during the year.
8. Operating expenses include $46,500 of depreciation expense and a $7,500 loss on disposal of equipment.

Instructions

(a) Prepare the statement of cash flows, using the direct method.

(b) E-Perform's cash position more than doubled between 2017 and 2018. Identify the primary reason(s) for this significant increase.

I am having difficulty figuring out the rest of this problem, primarily with regards to calculating APIC and Retained earnings for Stock Dividends. Also, I need assistance with the fourth problem, how to calculate the total value of shareholders' equity.

Could you please help show me how to solve?

Accounting for Share Transactions
The shareholders' equity section of the consolidated balance sheet of Wilson Industries appeared as follows at the beginning of the year:

Shareholders' Equity
Class A common stock, $0.04 par value; 20,000,000 shares authorized;
6,100,000 shares issued	$244,000
Additional paid-in-capital	472,508,000
Retained earnings	57,080,000
Currency translation adjustment	(9,648,000)
Total equity	$520,184,000

The following events occurred sequentially during the year:

1. A 2-for-1 forward stock split was executed.
2. A ten percent stock dividend was distributed when the Wilson share price was $80 per share.
3. Treasury stock valued at $12,000,000 was repurchased when the Wilson share price was $75 per share.

Required

1. How many Class A common shares are outstanding following the above events?

13260000

2. What is the par value per share of the Class A common stock following the above events? Round to the nearest three decimal places.

$0.02

3. Prepare a spreadsheet to illustrate the financial effects associated with the above three share transactions.

Use a negative sign with answers to indicate a reduction in an account balance and with treasury stock repurchase and balance.

Wilson Industries
Transaction	Stock Split	Stock Dividend	Share Repurchase	Balance Sheet Totals
Assets
Cash	$0	$0	$ -12000000	$ -12000000
Shareholders' Equity
Common stock	0	24400	0	24400
APIC	0	????	0	????
Retained earnings	0	????	0	????
Treasury stock	0	0	-12000000	-12000000
Total Shareholders' Equity				$ ????

4. Calculate the total value of shareholders' equity following the above events.

$????

Explain how internal control work done by auditors impacts the audit risk equation. Does control risk change if the auditors are providing an opinion over internal controls? How is detection risk impacted?

P9-6A Altona Limited purchased delivery equipment on March 1, 2016, for $130,000 cash. At that time, the equipment was estimated to have a useful life of five years and a residual value of $10,000. The equipment was disposed of on November 30, 2018. Altona uses the diminishing-balance method at one time the straight-line depreciation rate, has an August 31 year end, and makes adjusting entries annually. Please show steps.

Instructions

(a) Record the acquisition of equipment on March 1, 2016.

(b) Record depreciation at August 31, 2016, 2017, and 2018.

(c) Record the disposal of the equipment on November 30, 2018, under each of the following independent assumptions:

1. It was sold for $60,000.
2. It was sold for $80,000.
3. It was retired for no proceeds.