Widget Inc. is just starting operations. Following are the first week’s financial transactions. Set up the ending B/S and the period I/S for Widget Inc.

1. Sell $10,000 worth of common stock
2. Buy 10 widgets for $100
3. Purchase $1,500 worth of equipment
4. Sell 5 widgets at $150 each to Smith on credit
5. Buy $10 widgets on credit from Jones Supply for $100 each
6. Borrow $500 from National Bank and Trust
7. Pay wages of $100
8. Pay federal tax of $20
1. Pay rent of $50
10. Pay dividends of $30
11. End of month

On 1 July 2018, River Ltd acquired 90% of the share capital to gain control of Creek Ltd. The following intra-group transactions occurred during the year ending 30 June 2019.

1. During the 2018 - 2019 period, River Ltd sold inventory to Creek Ltd for      $2,000,000. River Ltd purchased this inventory for $1,700,000. By 30 June 2019, Creek Ltd has 30% of that inventory still on hand as unsold.
2. Creek Ltd declared a final dividend of $1,500,000 from current year’s profits.                                                                                     
3. Creek Ltd paid Water River Ltd, a consultancy fee of $70,000 during the year.                                                                                   
4. River Ltd provided a loan of $10,000,000 to Creek Ltd. The loan charges 5% interest
   annually. One half of the interest for the current year remains unpaid as at
   30 June 2019.   
5. Creek Ltd sold land to River Ltd for $1,350,000. The land was purchased by Creek Ltd for $600,000.   

Prepare the journal entries required to eliminate the intra-group transactions noted above.

one homework question, split into two parts.

part 1:

A machine can be purchased for $253,000 and used for five years, yielding the following net incomes. In projecting net incomes, double-declining depreciation is applied using a five-year life and a zero salvage value.

Compute the machine’s payback period (ignore taxes). (Round payback period answer to 3 decimal places.)

part 2:

1. A new operating system for an existing machine is expected to cost $770,000 and have a useful life of six years. The system yields an incremental after-tax income of $195,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $29,000.
2. A machine costs $540,000, has a $32,000 salvage value, is expected to last eight years, and will generate an after-tax income of $78,000 per year after straight-line depreciation.

Assume the company requires a 12% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

A new business client comes to your office. There are three owners of the business. The three individuals, Alan, Bob, and Carol, are thinking about forming a partnership. Alan is only investing $1 million in cash. He will not have anything to do with the daily activities of the business. Bob has had some experience in the business and will be responsible for the day-to-day operations of the business. Carol has a great deal of experience and many contacts within the business. She will be responsible for attracting new clients. Neither Bob nor Carol are investing cash into the partnership. During the first year of operation, the partnership generated a profit of $150,000. None of the partners received distributions during the year.

Specifically, the following critical elements must be addressed:

I. Allocation of Profits

     A. Explain how allocating the profits evenly between the partners would work. Consider the fairness to each of the partners in your response.
     B. What would be the value of each partner's capital account at the end of the year, given that the profits were allocated evenly among the three? Support your answer with quantitative data and an explanation of how you came to this conclusion.
     C. Explain an alternative method of allocating the profits if 80% of the profits was given to the cash investor and the remaining amount was split evenly between the other two partners.
     D. What would be the value of each partner's capital account at the end of the year, given this alternative allocation method? Support your answer with quantitative data and an explanation of how you came to this conclusion.

II. Payment of Salary

     A. Should the two partners who are working in the business receive a salary? Why or why not? Be sure to support your decision with research and quantitative data.
     B. If the two non-investors did receive a salary, how would their capital account be affected? How would this impact a potential future liquidation or buyout? Be sure to thoroughly explain and support your answer.
     C. Should the cash investor receive a higher share of the profits or other sharing options? Why or why not? Support your opinions with research and quantitative data.
     D. If the cash investor did receive a salary, how would his capital account be affected? How would this impact a potential future liquidation or buyout? Be sure to thoroughly explain and support your answer.
     E. How do the payment of salary and the allocation of profit affect entries and the financial bottom line? Be sure to support your explanation with concrete examples.
     F. How could the payment of salary and allocation of profit be a more effective method of splitting the company's profits for the three partners? Explain a scenario in which the three partners would all be compensated fairly, and support your answer with logical reasoning.
     G. What would be the value of each partner's capital account at the end of the year, given your proposed fair allocation method? Support your answer with quantitative data and an explanation of how you came to this conclusion.

The comparative balance sheet of Cookie & Coffee Creations Inc. at October 31, 2020 for the years 2020 and 2019, and the income statements for the years ended October 31, 2019 and 2020, are presented below.

COOKIE & COFFEE CREATIONS INC.

Balance Sheet

October 31

COOKIE & COFFEE CREATIONS INC.

Income Statement

Year Ended October 31

Additional information:

Natalie and Curtis are thinking about borrowing an additional $20,000 to buy more kitchen equipment. The loan would be repaid over a 4-year period. The terms of the loan provide for equal semi-annual payments of $2,500 on May 1 and November 1 of each year, plus interest of 5% on the outstanding balance.

1. Prepare a horizontal analysis of the income statement for Cookie & Coffee Creations Inc. using 2019 as a base year. Also, prepare a vertical analysis of the income statement for Cookie & Coffee Creations Inc. for 2020 and 2019.

2. Comment your findings.

3. What would justify a decision by Cookie & Coffee Creations Inc. to buy the additional equipment? What alternatives are there instead of bank financing?

You run a plumbing company. You are experiencing a growth in your business, and find you don't have enough trucks and plumbers to meet the demand. You are considering buying a new truck and then hiring an additional plumber to handle some of the work you have had to turn away.   Based on the assumptions below, prepare a Capital Budgeting Analysis using the template provided. Assume you will sell the truck at the end of year 3.

What is the Capital Investment / Depreciable Basis?

What is the Book Value at the end of Year 2?

What is the Operating Cash Flow for Year 1?

What is the Salvage Value?

What is the Net Present Value (NPV)?

It is spring of 2020, you have not been able to find work As a clever forward-looking business student, you have decided to get experience by starting and operating your own business, a lemonade stand you have named “spring cookie”. In your planning you have identified that there is potential to build a sustaining company, and as such you set up an accounting system and formal business structure and you have no business partners.

Set up all the required Financial Statements, with proper formatting

show the equation structure for each, and give examples of all accounting items that will likely be included in each statement

also, Pick an option for your business for "spring cookie" and support your reasoning for why it is most appropriate?

you will have to follow IFRS or ASPE and why?

On July 1, 2018, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $772,275 in cash and equity securities. The remaining 30 percent of Atlanta’s shares traded closely near an average price that totaled $330,975 both before and after Truman’s acquisition.

In reviewing its acquisition, Truman assigned a $132,000 fair value to a patent recently developed by Atlanta, even though it was not recorded within the financial records of the subsidiary. This patent is anticipated to have a remaining life of five years.

The following financial information is available for these two companies for 2018. In addition, the subsidiary’s income was earned uniformly throughout the year. The subsidiary declared dividends quarterly.

1. How did Truman allocate Atlanta’s acquisition-date fair value to the various assets acquired and liabilities assumed in the combination?

2. How did Truman allocate the goodwill from the acquisition across the controlling and noncontrolling interests?

3. How did Truman derive the Investment in Atlanta account balance at the end of 2018?

4. Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2018. At year-end, there were no intra-entity receivables or payables.

Padre, Inc., buys 80 percent of the outstanding common stock of Sierra Corporation on January 1, 2018, for $706,560 cash. At the acquisition date, Sierra’s total fair value, including the noncontrolling interest, was assessed at $883,200 although Sierra’s book value was only $608,000. Also, several individual items on Sierra’s financial records had fair values that differed from their book values as follows:

For internal reporting purposes, Padre, Inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2018, for both companies.

At year-end, there were no intra-entity receivables or payables.

Using the acquisition method, prepare the worksheet to consolidate these two companies. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Amounts in the Debit and Credit columns should be entered as positive. Negative amounts for the Noncontrolling Interest and Consolidated Totals columns should be entered with a minus sign.)

The Holtz Corporation acquired 80 percent of the 100,000 outstanding voting shares of Devine, Inc., for $6.70 per share on January 1, 2017. The remaining 20 percent of Devine’s shares also traded actively at $6.70 per share before and after Holtz’s acquisition. An appraisal made on that date determined that all book values appropriately reflected the fair values of Devine’s underlying accounts except that a building with a 5-year future life was undervalued by $57,000 and a fully amortized trademark with an estimated 10-year remaining life had a $69,000 fair value. At the acquisition date, Devine reported common stock of $100,000 and a retained earnings balance of $224,000.

Following are the separate financial statements for the year ending December 31, 2018:

At year-end, there were no intra-entity receivables or payables.

1. Prepare a worksheet to consolidate these two companies as of December 31, 2018.

2. Prepare a 2018 consolidated income statement for Holtz and Devine.

3. If instead the noncontrolling interest shares of Devine had traded for $4.50 surrounding Holtz’s acquisition date, what is the impact on goodwill?

On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company for $1,274,000 in cash. The price paid was proportionate to Sellinger’s total fair value, although at the acquisition date, Sellinger had a total book value of $1,540,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger’s accounting records by $270,000. On January 1, 2018, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $512,500 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger.

During the two years following the acquisition, Sellinger reported the following net income and dividends:

1. Show Palka’s journal entry to record its January 1, 2018, acquisition of an additional 25 percent ownership of Sellinger Company shares.

2. Prepare a schedule showing Palka’s December 31, 2018, equity method balance for its Investment in Sellinger account.

Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $39 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally:

*One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value).

Required:

1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier?

2. Should the outside supplier’s offer be accepted?

3. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be $210,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier?

4. Given the new assumption in requirement 3, should the outside supplier’s offer be accepted?

Destin Company recently acquired several businesses and recognized goodwill in each acquisition. Destin has allocated the resulting goodwill to its three reporting units: Sand Dollar, Salty Dog, and Baytowne. Destin opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually.

In its current year assessment of goodwill, Destin provides the following individual asset and liability values for each reporting unit:

The fair values for each reporting unit (including goodwill) are $708,700 for Sand Dollar, $699,650 for Salty Dog, and $716,800 for Baytowne. To date, Destin has reported no goodwill impairments.

1. Determine which of Destin’s reporting units require both steps to test for goodwill impairment.

2. How much goodwill impairment should Destin report this year?

Question: Based upon the financial ratio analysis you will have performed on Milan Fashions, would do you recommend that there should be an approval of the loan request? I want you to state your analysis in a detailed memorandum to me by Monday of next week. I would like to discuss your analysis and hear your ideas on Milan Fashions in a meeting on Tuesday. The clients will be in our offices next Friday to discuss their loan request. Please feel free to contact me if there are any questions on this matter.

Industry Financial Radio Standards

What are some benchmarks that can be used in determining program effectiveness in the case of a high school? Please be specific.

Please help me out with this question. I need assistance on this. See what is written below in order to answer the question.

Gathering Evidential Data

Performance auditors can gather evidential data in a variety of ways, enabling them to assess whether the control system is working effectively (causing the entity to achieve its goals and objectives), to operate efficiently, and to comply with applicable laws and regulations. These are the more significant techniques used by performance auditors:

● Interviewing

● Analyzing records

● Analyzing routine operating reports

● Analyzing performance measurement reports

● Making physical observations

● Role-playing

● Making comparative analyses within the entity and with other entities

● Sampling

The nature of the audit situation dictates the particular technique that an auditor will use, and more than one technique may be applied to reach a conclusion about a particular activity. Some audit techniques are more reliable than others, and some are more time-consuming than others. Using the computer to analyze data is cost-effective because it allows you to examine a mass a data and quickly to isolate deviations from the norm for more detailed review. Making physical observations and role-playing are very reliable methods of gathering evidence because records can be altered, whereas physical observations and role-playing allow auditors to see for themselves what is actually happening at the audited activity. Comparative analysis is useful because it may provide objective criteria and evidence of "best practices" for assessment purposes.