16. According to the SEC, which of the following compromises independence between an auditor and his client?

A. If the auditor also prepares the tax returns for his client

B. If the relationship between the auditor and the client places the accountant in the position of auditing his own work

C. If the auditor has been on the engagement for more than four years

D. If the client pays the audit fees

17. What is one common criticism of corporate governance programs?

A. Public recognition of whistleblowers deters some people from reporting instances of fraud.

B. Whistleblower policies do not incentivize or reward employees to report instances of fraud to management or the board.

C. Punishment inflicted on fraudsters is too harsh.

D. Monetary rewards are too generous.

18. What is the best way to mitigate the risk of fraud with regard to social media?

A. Implement a social media policy.

B. Restrict access to social media sites on company computers to all employees outside of the public relations department.

C. Limit the social media presence of your organization to reputable sites such as LinkedIn and Twitter.

D. Require all employees to adjust their Facebook privacy settings in a particular way.

19. Which of the following is characteristic of an official code of ethics?

A. An official code of ethics is not a requirement for publicly traded companies.

B. An official code of ethics can eliminate any possible confusion regarding a conflict of interest.

C. An official code of ethics is an effective substitute for moral principles, culture, and character.

D. An official code of ethics is not intended to govern behavior.

Solomon Manufacturing Company was started on January 1, 2018, when it acquired $80,000 cash by issuing common stock. Solomon immediately purchased office furniture and manufacturing equipment costing $9,100 and $33,100, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,500 salvage value and an expected useful life of four years. The company paid $11,300 for salaries of administrative personnel and $15,600 for wages to production personnel. Finally, the company paid $13,000 for raw materials that were used to make inventory. All inventory was started and completed during the year. Solomon completed production on 4,800 units of product and sold 3,880 units at a price of $15 each in 2018. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.)

Required

1. Determine the total product cost and the average cost per unit of the inventory produced in 2018. (Round "Average cost per unit" to 2 decimal places.)

2. Determine the amount of cost of goods sold that would appear on the 2018 income statement. (Do not round intermediate calculations.)

3. Determine the amount of the ending inventory balance that would appear on the December 31, 2018, balance sheet. (Do not round intermediate calculations.)

4. Determine the amount of net income that would appear on the 2018 income statement. (Round your answer to the nearest dollar amount.)

5. Determine the amount of retained earnings that would appear on the December 31, 2018, balance sheet. (Round your answer to the nearest dollar amount.)

6. Determine the amount of total assets that would appear on the December 31, 2018, balance sheet. (Round your answer to the nearest dollar amount.)

Kiyara (single) is a 50 percent shareholder of Jazz Corporation (an S Corporation). Kiyara does not do any work for Jazz Corp. Jazz Corp. reported $306,000 of business income for the year (2020). Before considering her business income allocation from Jazz Corp. and the self-employment tax deduction (if any), Kiyara’s adjusted gross income was $256,000 (all employee salary). Answer the following questions for Kiyara. (Leave no answer blank. Enter zero if applicable.)

Problem 4-44 Part a (Algo)

a. Assuming the income allocated to Kiyara is qualified business income, what is Kiyara’s deduction for qualified business income?

b. What is Kiyara’s net investment income tax liability (assume no investment expenses)?

c. What is Kiyara’s self-employment tax liability?

d. What is Kiyara’s additional Medicare tax liability (include all earned income)?

Exercise 21-10 Lowell Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2017. January February March April May Estimated unit sales 10,700 11,300 8,600 8,200 8,200 Sales price per unit $50.30 $48.10 $48.10 $48.10 $48.10 Direct labor hours per unit 2.4 2.4 1.5 1.5 1.5 Wage per direct labor hour $8.00 $8.00 $8.00 $9.00 $9.00 Lowell has a labor contract that calls for a wage increase to $9.00 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1. Lowell expects to begin the year with 18,610 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following month’s sales, plus 70% of the second following month’s sales. Prepare a production budget for Lowell Company by month and for the first quarter of the year. LOWELL COMPANY Production Budget Jan Feb Mar Total : : LINK TO TEXT LINK TO TEXT Prepare a direct labor budget for Lowell Company by month and for the first quarter of the year. The direct labor budget should include direct labor hours. (Round Direct labor hours per unit answers to 1 decimal place, e.g. 52.7.) LOWELL COMPANY Direct Labor Budget Jan Feb Mar Total $ $ $ $ $ $ $

X Company purchases exploration rights for A on January 1, 2019 and has responsibility to restore the land after extraction is complete by December 31, 2026 (i.e., 8 years). There is a 40% chance restoration will cost $700,000, a 50% chance restoration will cost $900,000, and a 10% chance restoration will cost $1,500,000. All other costs associated with the A deposit total $1,750,000. The applicable interest rate is 8%.

What does company X record for cost of A?

Suppose the balance of X Company's asset retirement obligation on January 1, 2024, is $646,826. What does X record as accretion expense for the fiscal year ending December 31, 2024?

On January 1, 2019, Hopkins Corporation issued bonds with a face value

of $230,000,000 that pay interest on June 30th and December 31st.

The coupon rate of the bonds is 8% while the effective rate is 10%.

The bonds mature in 14 years. Hopkins' fiscal year ends on

December 31st. Any discount/premium is to be amortized using

the straight-line method.

Required (if necessary, round calculations to the nearest dollar):

1. Calculate the present value of the bond.

2. Journalize the issuance of the bond.

3. Journalize the first interest payment.

4. Prepare the balance sheet presentation of the bond on 12/31/2020.

5. Prepare the journal entry for the redemption of the bond for 94

on 6/30/21. Hint: Journalize the interest payment first.

Lease Classification, Considering Firm Guidance (Issues Memo)

Facts: On 1/1/20X1, Investor, Inc. ("Lessee") signed a Lease Agreement with Developer Inc. ("Landlord") to lease Landlord's newly constructed hotel located at 15 Main St. in San Francisco, CA. The lease term is 20 years, and the estimated life of the building is 40 years. Lessee will occupy all 4 floors of the building. The lease includes renewal options, exercisable at the Landlord's option, to extend the contract term for three additional five-year terms. No purchase option is present in the contract. Lessee's monthly rental payments are $40,000 per month, plus a monthly supplemental rental cost based on Lessee's sales (1% of sales). From experience, Lessee estimates that 1% of its sales should approximate an additional $10,000 per month. As of 1/1/20X1, the appraised value of the building is $15 million. For simplicity, please ignore discounting in this example (use of present value calculations, rates implicit in the lease, etc.). There are no residual value guarantees present.

Assume that this arrangement is within the scope of lease accounting guidance. As needed to clarify areas of judgment, support your response with guidance from both the Codification and from EY's most recent Lease accounting guide book.

Case Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2017, the general ledger for Case Inc. contains the following data.

Subsidiary data for Work in Process Inventory on June 1 are as follows.

During June, raw materials purchased on account were $ 5,880 , and all wages were paid. Additional overhead costs consisted of depreciation on equipment $ 1,080 and miscellaneous costs of $ 480 incurred on account.

A summary of materials requisition slips and time tickets for June shows the following.

Overhead was charged to jobs at the same rate of $ 1.25 per dollar of direct labor cost. The patios for customers Rodgers, Stevens, and Linton were completed during June and sold for a total of $ 22,680 . Each customer paid in full.

Journalize the June transactions: (1) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred; (2) assignment of direct materials, labor, and overhead to production; and (3) completion of jobs and sale of goods. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 2,500.)

Post the entries to Work in Process Inventory. (Round answers to 0 decimal places, e.g. 2,500.)

Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs. (Round answers to 0 decimal places, e.g. 2,500.)

Prepare a cost of goods manufactured schedule for June. (Round answers to 0 decimal places, e.g. 2,500.)

PLEASE DO NOT EVEN ATTEMPT THIS IF YOU ARE NOT WILLING TO DO ALL OF THESE QUESTIONS! IF YOU ARE NOT WILLING TO DO ALL, SOMEONE ELSE WILL BE, PLEASE DO NOT WASTE MY QUESTION

• 9–1What is a static planning budget?

• 9–2What is a flexible budget and how does it differ from a static planning budget?

• 9–3What are some of the possible reasons that actual results may differ from what had been budgeted at the beginning of a period?

• 9–4Why is it difficult to interpret a difference between how much expense was budgeted and how much was actually spent?

• 9–5What is an activity variance and what does it mean?

• 9–6What is a revenue variance and what does it mean?

• 9–7What is a spending variance and what does it mean?

• 9–8What does a flexible budget performance report do that a simple comparison of budgeted to actual results does not do?

• 9–9How does a flexible budget based on two cost drivers differ from a flexible budget based on one cost driver?

• 9–10What assumption is implicitly made about cost behavior when actual results are directly compared to a static planning budget? Why is this assumption questionable?

9–11What assumption is implicitly made about cost behavior when all of the items in a static planning budget are adjusted in proportion to a change in activity? Why is this assumption questionable?

Which financial investments are valued at amortized cost? Explain the rationale.

If a shareholder receives more than a proportionate share of the assets of a liquidating corporation, the excess is treated as a payment received that is attributable to those shareholders who receive less than their proportionate share.

7:        Professional DecisionMaking

To achieve audit quality, auditors must make quality decisions throughout the audit process. What are the characteristics of quality audit decisions?

8:        Auditor independence

Why is it important that users perceive auditors to be independent? What is the difference between being independent in fact and being independent in appearance?

the following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents.

Required:

Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)

• 1) Record the purchase of storage shed components for $105,000.

• 2) Record the payment of $4,000 to have the storage shed erected.

• 3) Record the purchase of a pickup truck for $51,000.

• 4) Record the repairs of $900 to the pickup truck.

• 5) Record the purchase of a patent for $10,000 on a new paper bag manufacturing process.

• 6) Record the depreciation and amortization expense on the pickup truck, storage shed and patent for the year.

• 7) Record the depreciation for the truck up to the date of sale.

• 8) Record the sale of the truck for $43,000 cash.

• 9) Record the depreciation on the storage shed for the year.

• 10) Record the Patent Amortization expense for the full year.

• 11) Record the reversal of the accumulated amortization of patents.

• 12) Record any impairment loss incurred on the patent.

Carlisle State College had the following account balances for the year ended and as of June 30, 2018. Debits are not distinguished from credits, so assume all accounts have a “normal” balance.

Required

Prepare, in good form, a Statement of Revenues, Expenses, and Changes in Net Position for Carlisle State College for the year ended June 30, 2017.

PLEASE DO IN EXCELL AND START WITH OPERATING REVENUES.