Alpha-Tech, a rapidly growing distributor of electronic components, is formulating its plans for 20x5. Carol Jones, the firm’s marketing director, has completed the following sales forecast.

Phillip Smith, an accountant in the Planning and Budgeting Department, is responsible for preparing the cash flow projection. The following information will be used in preparing the cash flow projection.

• Alpha-Tech’s excellent record in accounts receivable collection is expected to continue. Seventy percent of billings are collected the month after the sale, and the remaining 30 percent two months after.
• The purchase of electronic components is Alpha-Tech’s largest expenditure, and each month’s cost of goods sold is estimated to be 30 percent of sales. Seventy percent of the parts are received by Alpha-Tech one month prior to sale, and 30 percent are received during the month of sale.
• Historically, 70 percent of accounts payable has been paid one month after receipt of the purchased components, and the remaining 30 percent has been paid two months after receipt.
• Hourly wages and fringe benefits, estimated to be 30 percent of the current month’s sales, are paid in the month incurred.
• General and administrative expenses are projected to be $15,670,000 for the year. The breakdown of these expenses is presented in the following schedule. All cash expenditures are paid uniformly throughout the year, except the property taxes, which are paid in four equal installments at the end of each quarter.

  20x5 Forecasted General and Administrative Costs
  (in thousands)
  Salaries and fringe benefits	$	3,000
  Promotion		3,500
  Property taxes		1,330
  Insurance		2,830
  Utilities		1,500
  Depreciation		3,510
  Total	$	15,670

• Income-tax payments are made at the beginning of each calendar quarter based on the income of the prior quarter. Alpha-Tech is subject to an income-tax rate of 40 percent. Alpha-Tech’s operating income for the first quarter of 20x5 is projected to be $3,000,000. The company pays 100 percent of the estimated tax payment.
• Alpha-Tech maintains a minimum cash balance of $510,000. If the cash balance is less than $510,000 at the end of each month, the company borrows amounts necessary to maintain this balance. All amounts borrowed are repaid out of the subsequent positive cash flow. The projected April 1, 20x5, opening balance is $510,000.
• Alpha-Tech has no short-term debt as of April 1, 20x5.
• Alpha-Tech uses a calendar year for both financial reporting and tax purposes.

Required:

1. Prepare a cash budget for Alpha-Tech by month for the second quarter of 20x5. For simplicity, ignore any interest expense associated with borrowing. (Negative amounts should be indicated by a minus sign.)

On June 2, 2018, Lokar Corporation purchases a patent for $68,000 from the inventor of a new extrusion process. The patent has 12 years remaining on its legal life. Also, Lokar purchases substantially all the assets of the Barrios Corporation for $750,000 on September 8, 2018. The values of the assets listed in the purchase agreement are as follows:

Refer to the MACRS Depreciation Table to answer the following question.

Note: In your calculations, round amortization percentages to two decimal places, and dollar amounts to the nearest whole dollar. Assume the equipment has a MACRS recovery period of 7 years and that the full election expense is taken in the year of acquisition.

The maximum 2018 cost-recovery deductions for the tangible and intangible assets purchased is $

What the main purpose of the consolidation entries for intercompany sale of inventory and long term asset transactions. I hope you can clearly clarify this for me.

Selected balance sheet and income statement information from CVS Health Corp. for 2014 through 2016 follows ($ millions).

a. Compute times interest earned ratio for each year and discuss any trends for each. Round answers to one decimal place.

Based on your computations above, select the most appropriate answer.

Times interest earned has steadily increased since 2014.

Times interest earned has steadily decreased since 2014.

Times interest earned has remained the same since 2014.

Times interest earned increased in 2015 but then decreased in 2016.

b. Compute the current ratio for each year and discuss any trend in liquidity. Round answers to one decimal place.

Do you believe the company is sufficiently liquid? Explain.

CVS’s current ratio has increased over the past three years and is greater than 1, indicating CVS is liquid.

CVS’s current ratio has decreased over the past three years and it is currently less than 1 indicating CVS is not liquid.

CVS’s current ratio has increased over the past three years, however, it remains less than 1 indicating CVS is not liquid.

CVS’s current ratio has decreased over the past three years, however, it is greater than 1 indicating CVS is liquid.

c. Compute the total liabilities-to-equity ratio for each year and discuss any trends for each.

Round answers to one decimal place.

Based on your computations above, select the most appropriate answer.

CVS's liabilities to equity ratio has increased since 2014, however, the ratio is relatively low, concluding CVS is solvent.

CVS's liabilities to equity ratio has decreased since 2014, remaining relatively low, concluding CVS is solvent.

CVS's liabilities to equity ratio has increased since 2014, and is relatively high, concluding CVS is insolvent.

CVS's liabilities to equity ratio has decreased since 2014, remaining relatively low, concluding CVS is insolvent.

d. What is your overall assessment of the company’s credit risk from the analyses in (a), (b), and (c)?

CVS is a low credit risk as it has a low level of debt, is liquid and can easily meet its interest expenses.

CVS is a low credit risk as its liabilities to equity ratio, current ratio, and times interest earned ratio have all decreased since 2014.

CVS is a medium to high credit risk as its level of debt has increased and its current ratio and times interest ratio have decreased.

CVS is a medium to high credit risk as its liabilities to equity ratio, current ratio, and times interest earned ratio have all increased since 2014.

Badlands, Inc. manufactures a household fan that sells for $40 per unit. All sales are on account, with 30 percent of sales collected in the month of sale and 70 percent collected in the following month. The data that follow were extracted from the company’s accounting records.

• Badlands maintains a minimum cash balance of $14,000. Total payments in January 20x1 are budgeted at $220,000.
• A schedule of cash collections for January and February of 20x1 revealed the following receipts for the period:

  	Cash Receipts
  	January			February
  From December 31 accounts receivable	$	112,000
  From January sales		94,000		$	150,000
  From February sales					65,400

• March 20x1 sales are expected to total 5,000 units.
• Finished-goods inventories are maintained at 30 percent of the following month’s sales.
• The December 31, 20x0, balance sheet revealed the following selected figures: cash, $24,300; accounts receivable, $112,000; and finished goods, $25,050.

1. Determine the number of units that Badlands sold in December 20x0.

2. Compute the sales revenue for March 20x1.

3. Compute the total sales revenue to be reported on Badlands’ budgeted income statement for the first quarter of 20x1.

4. Determine the accounts receivable balance to be reported on the March 31, 20x1, budgeted balance sheet.

5. Calculate the number of units in the December 31, 20x0, finished-goods inventory.

6. Calculate the number of units of finished goods to be manufactured in January 20x1.

7. Calculate the financing required in January, if any, to maintain the firm’s minimum cash balance.

Mary and Kay, Inc., a distributor of cosmetics throughout Florida, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the company’s accounting records:

• All sales are on account. Sixty percent of customer accounts are collected in the month of sale; 30 percent are collected in the following month. Uncollectibles amounting to 10 percent of sales are anticipated, and management believes that only 20 percent of the accounts outstanding on December 31, 20x0, will be recovered and that the recovery will be in January 20x1.

• Sixty percent of the merchandise purchases are paid for in the month of purchase; the remaining 40 percent are paid for in the month after acquisition.

• The December 31, 20x0, balance sheet disclosed the following selected figures: cash, $55,000; accounts receivable, $220,000; and accounts payable, $77,000.

• Mary and Kay, Inc. maintains a $55,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 9 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid at that time.

• Additional data:

1.Prepare a schedule that discloses the firm’s total cash collections for January through March.

2. Prepare a schedule that discloses the firm’s total cash disbursements for January through March.

3. Prepare a schedule that summarizes the firm’s financing cash flows for January through March.

1-. Write the General Ledger and Reporting General Controls used in companies to overcome the threats.

2- Identify the three basic rules that apply to the REA model pattern

Accounting Information System

The following transaction refers to one of the Districts a. The District issues general obligation bonds in the amount of $900,000, receiving cash for the full-face amount of the bonds. The cash will be used to buy capital assets. b. The District buys a prefabricated building for $750, 000, using part of the bond proceeds. The building is delivered and the invoice for the building is approved. c. The invoice approved in b. is paid. d. The General Fund transfers cash of $55,000 to another fund in anticipation of the payment of the first installment of interest ($30,000) and principal ($25,000) on the debt. e. The first installment of debt service on bonds issued in ‘a’ becomes due and payable. f. Debt service on the bonds issued in a. is paid

Required

Prepare entries to record the above transactions related to acquisition of capital assets by a district. Identify the fund(s) used. The District uses encumbrance accounting

Western State University (WSU) is preparing its master budget for the upcoming academic year. Currently, 16,500 students are enrolled on campus; however, the admissions office is forecasting a 8 percent growth in the student body despite a tuition hike to $85 per credit hour. The following additional information has been gathered from an examination of university records and conversations with university officials:

• WSU is planning to award 200 tuition-free scholarships.
• The average class has 20 students, and the typical student takes 15 credit hours each semester. Each class is three credit hours.
• WSU’s faculty members are evaluated on the basis of teaching, research, and university and community service. Each faculty member teaches five classes during the academic year.

1.Prepare a tuition revenue budget for the upcoming academic year.

2.Determine the number of faculty members needed to cover classes.

3. Assume there is a shortage of full-time faculty members. Select at least five actions that WSU might take to accommodate the growing student body by selecting an "X" next to the action.

4.You have been requested by the university’s administrative vice president (AVP) to construct budgets for other areas of operation (e.g., the library, grounds, dormitories, and maintenance). The AVP noted: “The most important resource of the university is its faculty. Now that you know the number of faculty needed, you can prepare the other budgets. Faculty members are indeed the key driver—without them we don’t operate.” Are faculty members a key driver in preparing budgets? Yes or No?

Mary and Kay, Inc., a distributor of cosmetics throughout Florida, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the company’s accounting records:

• All sales are on account. Sixty percent of customer accounts are collected in the month of sale; 35 percent are collected in the following month. Uncollectibles amounting to 5 percent of sales are anticipated, and management believes that only 20 percent of the accounts outstanding on December 31, 20x0, will be recovered and that the recovery will be in January 20x1.

• Seventy percent of the merchandise purchases are paid for in the month of purchase; the remaining 30 percent are paid for in the month after acquisition.

• The December 31, 20x0, balance sheet disclosed the following selected figures: cash, $75,000; accounts receivable, $195,000; and accounts payable, $72,000.

• Mary and Kay, Inc. maintains a $75,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 8 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid at that time.

• Additional data:

Mary and Kay, Inc., a distributor of cosmetics throughout Florida, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the company’s accounting records:

• All sales are on account. Sixty percent of customer accounts are collected in the month of sale; 35 percent are collected in the following month. Uncollectibles amounting to 5 percent of sales are anticipated, and management believes that only 20 percent of the accounts outstanding on December 31, 20x0, will be recovered and that the recovery will be in January 20x1.

• Seventy percent of the merchandise purchases are paid for in the month of purchase; the remaining 30 percent are paid for in the month after acquisition.

• The December 31, 20x0, balance sheet disclosed the following selected figures: cash, $75,000; accounts receivable, $195,000; and accounts payable, $72,000.

• Mary and Kay, Inc. maintains a $75,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 8 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid at that time.

• Additional data:

1. Prepare a schedule that discloses the firm’s total cash collections for January through March.

2. Prepare a schedule that discloses the firm’s total cash disbursements for January through March.

3.Prepare a schedule that summarizes the firm’s financing cash flows for January through March.

Mary and Kay, Inc., a distributor of cosmetics throughout Florida, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the company’s accounting records:

• All sales are on account. Sixty percent of customer accounts are collected in the month of sale; 35 percent are collected in the following month. Uncollectibles amounting to 5 percent of sales are anticipated, and management believes that only 20 percent of the accounts outstanding on December 31, 20x0, will be recovered and that the recovery will be in January 20x1.

• Sixty percent of the merchandise purchases are paid for in the month of purchase; the remaining 40 percent are paid for in the month after acquisition.

• The December 31, 20x0, balance sheet disclosed the following selected figures: cash, $80,000; accounts receivable, $260,000; and accounts payable, $85,000.

• Mary and Kay, Inc. maintains a $80,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 9 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid at that time.

• Additional data:

1. Prepare a schedule that discloses the firm’s total cash collections for January through March.

2. Prepare a schedule that discloses the firm’s total cash disbursements for January through March.

3. Prepare a schedule that summarizes the firm’s financing cash flows for January through March.

Learning Outcome:

• identify and illustrate how the principles of internal control are used to manage and control a firm's resources and minimize risk.

Ebeneezer Company  

Edward Ebeneezer founded Ebeneezer Company, a rapidly growing start-up business, in 2018. Edward hired a record keeper seven months ago.   The record keeper, Wanda Wonderful, left town after the company’s manager discovered that $65,000 had disappeared over the past five months. An audit disclosed that Wanda had written and signed several checks made payable to her husband, Robbing Ron. Wanda recorded the checks as salaries expense.   Robbing, who cashed the checks but never worked for the company, left town with Wanda. As a result, the Ebeneezer Company incurred an uninsured loss of $65,000.

1. Evaluate Ebeneezer Company’s internal control system by listing one principle of internal control that appears to have been ignored.
2. Recommend to Edward how to avoid such a loss in the future with an explanation of the process to mitigate the internal control that was ignored.
3. This first post must include a minimum of 100 words.

Lasko Trial Balance as of 12/31/17 each account has a normal balance.

Use this financial information to answer the questions below.

1) What is the gross profit for Lasko for the year ended 12/31/17?

• $67,600

• $72,400

• $92,600

• $140,000

• 2) Using the Lasko Trial Balance as given above, then the most likely total for owner equity at 12/31/2017?

• $151,500

• $126,500

• $121,500

• $80,000

• 3) Using the Lasko Trial Balance as given above and that Lasko had a gross profit ratio (gross margin ratio) for 2016 of 50%, you can determine that for Lasko which of the following is true?

• Their ability to generate profit from sales is worse than for the year 2016.

• Their ability to generate profit from sales is better than for the year 2016.

• Their ability to generate profit from sales is unchanged compared to the year 2016.

• Can’t determine the gross profit ratio (gross margin ratio)in 2017 – not enough information.

• 4) Using the Lasko Trial Balance as given above and that Lasko had a current ratio for 2016 of 1.5:1; you can determine that for Lasko which of the following is true?

• Their ability to pay short term obligations is worse than at the end of 2016.

• Their ability to pay short term obligations is better than at the end of 2016.

• Their ability to pay short term obligations is unchanged compared to the end of 2016.

• 5) Assuming that the only depreciable asset is the office equipment, the information shown in the trial balance indicates that the office equipment has been used by Lasko for how many years?

• 5 Years

• 4 Years

• 3 Years

• 2 Years

• 6) Looking at the Lasko Trial Balance for accuracy and based on what accounts are already listed, which of the following accounts should be included but are not?

• Supplies expense

• Interest expense

• Allowance for Doubtful Accounts

• All of the above accounts would be expected.

Isabella traveled to a neighboring state to investigate the purchase of an interior design firm. Her expenses included travel, legal, accounting, and miscellaneous expenses. The total was $51,000. She incurred the expenses in January and February of 2018. In each of the following scenarios, what can Isabella deduct in 2018?

In your computations, round the per-month amount to the nearest dollar. If an amount is zero, enter "0".

a. Isabella was in the interior design business and did not acquire the interior design firm.
$

b. Isabella was in the interior design business. She acquired the interior design firm and began operating it on August 1, 2018.
$

c. Isabella did not acquire the interior design firm and was not in the interior design business.
$

d. Isabella acquired the interior design firm but was not in the interior design business when she acquired it. Operations began on May 1, 2018.
$

11. What do you need to ensure when preparing and distributing reports that document accounts receivable, debt recovery type and cause, and debt recovery plans?

12. What types of accounting documentation will need to be filed, according to the organisational policies and procedures? List 4 examples

13. What documentation would you require to identify, investigate and rectify creditor invoice discrepancies?