Monica Orgeta, president and owner of Star Enterprises, applied for a $250,000 loan from Carmel National Bank. The bank requested financial statements from Star Enterprises as a basis for granting the loan. Monica has told her accountant to provide the bank with a balance sheet. Monica has decided to omit the other financial statements because there was a net loss during the past year.

-Is Monica behaving in a professional manner by omitting some of the financial statements?

-What types of information about their businesses would owners be willing to provide bankers?

-What types of information would owners not be willing to provide?

-What common interests are shared by bankers and business owners?

-As the loan officer for Carmel National Bank, would you accept only the balance sheet in considering lending funds to Star or any business?

On 1/1/2011, Shamrock Corporation issued a 10-year $2,950,000 bond with stated interest rate of 8%. Interests were payable annually on 12/31. The bond was issued for $3,157,196 cash. Shamrock used the effective interest method to amortize any bond discount/ premium using.

a. what is the interest rate for the bond?

b. Prepare journal entries on 1/1/2011 and 12/31/2011 for shamrock

c. After paying interests due on 12/31/2015, Shamrock recalled 70% of the bond at 101. Call expenses totaled $5,500. Prepare journal entries for the interest payment and retirement of the bond on 12/31/2015.

d. Assume that everything else is the same except that Shamrock amortizes any bond discount/premium using the straight-line method. redo item (c.) above.

Gruman Company purchased a machine for $198,000 on January 2, 2016. It made the following estimates:

In 2016, Gruman uses the machine for 2,000 hours and produces 40,000 units. In 2017, Gruman uses the machine for 1,200 hours and produces 30,000 units. If required, round your final answers to the nearest dollar.

1. Compute the depreciation for 2016 and 2017 under each of the following methods:

1. Straight-line method

   2016	$
   2017	$

2. Sum-of-the-years'-digits method

   2016	$
   2017	$

3. Double-declining-balance method

   2016	$
   2017	$

4. Activity method based on hours worked

   2016	$
   2017	$

5. Activity method based on units of output

   2016	$
   2017	$

2. For each method, what is the book value of the machine at the end of 2016? At the end of 2017?

1. Straight-line method

   2016	$
   2017	$

2. Sum-of-the-years'-digits method

   2016	$
   2017	$

3. Double-declining-balance method

   2016	$
   2017	$

4. Activity method based on hours worked

   2016	$
   2017	$

5. Activity method based on units of output

   2016	$
   2017	$

3. If Gruman used a service life of 8 years or 15,000 hours and a residual value of $9,000 , what would be the effect on the following under the straight-line, sum-of-the-years'-digits, and double-declining-balance depreciation methods?

Depreciation expense

1. Straight-line method

   2016	$
   2017	$

2. Sum-of-the-years'-digits method

   2016	$
   2017	$

3. Double-declining-balance method

   2016	$
   2017	$

Book value

1. Straight-line method

   2016	$
   2017	$

2. Sum-of-the-years'-digits method

   2016	$
   2017	$

3. Double-declining-balance method

   2016	$
   2017	$

#9

Pharoah Company issued 2,500, 9%, 5-year, $1,000 bonds dated January 1, 2019, at 100. Interest is paid each January 1.

a. Prepare the journal entry to record the sale of these bonds on January 1, 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

b. Prepare the adjusting journal entry on December 31, 2019, to record interest expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

c. Prepare the journal entry on January 1, 2020, to record interest paid. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

The cloudy afternoon mirrored the mood of the conference of division managers. Claude Meyer, assistant to the controller for Hunt Manufacturing, wore one of the gloomy faces that were just emerging from the conference room. “Wow, I knew it was bad, but not that bad,” Claude thought to himself. “I don’t look forward to sharing those numbers with shareholders.”

The numbers he discussed with himself were fourth-quarter losses which more than offset the profits of the first three quarters. Everyone had known for some time that poor sales forecasts and production delays had wreaked havoc on the bottom line, but most were caught off guard by the severity of damage.

Later that night he sat alone in his office, scanning and rescanning the preliminary financial statements on his computer monitor. Suddenly his mood brightened. “This may work,” he said aloud, though no one could hear. Fifteen minutes later he congratulated himself, “Yes!”

The next day he eagerly explained his plan to Susan Barr, controller of Hunt for the last six years. The plan involved $300 million in convertible bonds issued three years earlier.

Meyer: By swapping stock for the bonds, we can eliminate a substantial liability from the balance sheet, wipe out most of our interest expense, and reduce our loss. In fact, the book value of the bonds is significantly more than the market value of the stock we’d issue. I think we can produce a profit.

Barr: But Claude, our bondholders are not inclined to convert the bonds.

Meyer: Right. But, the bonds are callable. As of this year, we can call the bonds at a call premium of 1%. Given the choice of accepting that redemption price or converting to stock, they’ll all convert. We won’t have to pay a cent. And, since no cash will be paid, we won’t pay taxes either.

1. What would be the impact of following up on Claude’s plan? Who would be affected if the plan is implemented? Who would benefit? Who would be injured? Consider people or related parties both inside and outside of the company.

2. Do you perceive an ethical dilemma? Use at least one of “The Ethical Guidelines”.

3. Should Susan follow Claude’s suggestion? Why or why not?

Required information

[The following information applies to the questions displayed below.]

The following data refer to Twisto Pretzel Company for the year 20x1.

3. Prepare the company’s income statement for 20x1.

Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 103,950 units at a price of $51 per unit during the current year. Its income statement for the current year is as follows: Sales $5,301,450 Cost of goods sold 2,618,000 Gross profit $2,683,450 Expenses: Selling expenses $1,309,000 Administrative expenses 1,309,000 Total expenses 2,618,000 Income from operations $65,450 The division of costs between fixed and variable is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% Administrative expenses 50% 50% Management is considering a plant expansion program that will permit an increase of $408,000 in yearly sales. The expansion will increase fixed costs by $40,800, but will not affect the relationship between sales and variable costs. Required: 1. Determine the total variable costs and the total fixed costs for the current year. Enter the final answers rounded to the nearest dollar. Total variable costs $ Total fixed costs $ 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Enter the final answers rounded to two decimal places. Unit variable cost $ Unit contribution margin $ 3. Compute the break-even sales (units) for the current year. Enter the final answers rounded to the nearest whole number. units 4. Compute the break-even sales (units) under the proposed program for the following year. Enter the final answers rounded to the nearest whole number. units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $65,450 of income from operations that was earned in the current year. Enter the final answers rounded to the nearest whole number. units 6. Determine the maximum income from operations possible with the expanded plant. Enter the final answer rounded to the nearest dollar. $ 7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year? Enter the final answer rounded to the nearest dollar. $ Income 8. Based on the data given, would you recommend accepting the proposal? In favor of the proposal because of the reduction in break-even point. In favor of the proposal because of the possibility of increasing income from operations. In favor of the proposal because of the increase in break-even point. Reject the proposal because if future sales remain at the current level, the income from operations will increase. Reject the proposal because the sales necessary to maintain the current income from operations would be below the current year sales. Choose the correct answer. b Feedback 1. Multiply the percentages for fixed and variable costs by each cost. 2. a. Divide the total variable costs by number of units. 2. b. Sales price per unit minus variable costs per unit equals contribution margin per unit. 3. Fixed costs divided by unit contribution margin equals break-even point. 4. Fixed costs under the proposed program divided by contribution margin equals new break-even point. 5. (Fixed costs + Target profit) divided by unit contribution margin equals sales units. 6. Determine the increase in units by dividing the sales increase by the price per unit. Add the additional revenue and additional fixed costs when calculating: Sales minus fixed and variable costs equals income from operations. 7. Subtract the additional fixed costs from the operating income. 8. Consider the break-even point and the sales needed for the proposed level. Learning Objective 2, Learning Objective 3. Check My Work Previous

Required information

[The following information applies to the questions displayed below.]

The following data refer to Twisto Pretzel Company for the year 20x1.

2. Prepare the company’s schedule of cost of goods sold for 20x1. The company closes overapplied or underapplied overhead into Cost of Goods Sold.

Complete and submit the assignment in an EXCEL file.

Full credit is earned only if the formulas for the calculations is evident in the spreadsheet

She Shed. Corp was organized in 2017. These business events occurred during the year, affecting intangible assets.

1.    Purchased a license for $20,000 on July 1, 2017. The license gives She Shed exclusive rights to sell its sheds in the tri-state region and will expire on July 1, 2025.

2.    Purchased a patent on January 2, 2018, for $40,000. It is estimated to have a 5-year life.

3.    Costs incurred to develop an exclusive Internet connection process as of June 1, 2018, were $45,000. The process has an indefinite life.

4.    On April 1, 2018, She Shed. purchased a small circuit board manufacturer for $350,000. Goodwill recorded in the transaction was $90,000.

5.    On July 1, 2018, legal fees for successful defense of the patent purchased on January 2, 2018, were $11,400.

6.    Research and development costs incurred as of September 1, 2018, were $75,000.

(a) Prepare the journal entries to record all the entries related to the patent during 2018.

(b) At December 31, 2018, an impairment test is performed on the license purchased in 2017. It is estimated that the net cash flows to be received from the license will be $13,000, and its fair value is $7,000.

Compute the amount of impairment, if any, to be recorded on December 31, 2018.

(c) What is the amount to be reported for intangible assets on the balance sheet at December 31, 2017 and December 31, 2018?

What is the other error that this engagement letter is missing?

October 30, 2018

Mr. Donald Phillips, President

36 Clearwater Lake Road

Ocean City, Florida 33140

Dear Mr. Phillips:

You have requested that we audit the financial statements of Oceanview Marine Company, which comprise the balance sheet for December 31, 2018, and the related statements of income, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes to the financial statements. We are pleased to confirm our acceptance and understanding of this audit engagement by means of this letter. Our audit will be conducted with the objective of our expressing an opinion on the financial statements.

We will perform our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement are free from material misstatement and determine whether it was due to fraud or error. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risk of material misstatement of the financial statements. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

Because of the inherent limitations of and audit, together with the inherent limitations of internal control, an unavoidable risk that some material misstatements may not be detected exists, even though the audit is properly planned and performed in accordance with GAAS.

In making our risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. However, we will communicate to you in writing concerning and significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit.

Our audit will be conducted on the basis that the management of Oceanview Marine Company acknowledges and understands that it has responsibility for

1. the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America;
2. the design, implementation and maintenance of internal control relevant to the fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.
3. to provide us with access to all information of which management is aware that is relevant to the preparation of the financial statements such as records, documentation, and other matters; additional information that we may request from management for the purpose of the audit; and unrestricted access to persons within the entity from whom we determine it necessary to obtain audit evidence.

As part of our audit process, we will request from management written confirmation concerning representations made to use in connection with the audit.

We will issue a written report upon completion of our audit of Oceanview Marine Company’s financial statements. Our report will be addressed to the board of directors of Oceanview Marine Company. We cannot provide assurance than an unmodified opinion will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion, add an emphasis-of-matter or other-matter paragraph, or withdraw from the engagement.

The timing of our services is scheduled for performance and completion as follows:

            Begin interim fieldwork                        December 1, 2018

            Completion of fieldwork                       March 15, 2019

            Delivery of management letter              March 22, 2019

            Delivery of audit report                         March 29, 2019

            Delivery of tax returns                          March 29, 2019

Our fees will be based on our standard hourly rates. Invoices will be submitted periodically as the work progresses and are payable upon presentation. Should we find any conditions that could significantly affect our initial estimated total fees of $32,000, we will notify you immediately.

Please sign and return the attached copy of this letter to indicate your acknowledgement of, and agreement with, the arrangements for our audit of the financial statements including our respective responsibilities.

Yours very truly,

Charles Ward          

Charles Ward, CPA

Partner

Per:    Donald Phillips     

Donald Phillips, President

Oceanview Marine Company

       November 10, 2018

On February 5, the directors declare a 18% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $41 per share on February 5 before the stock dividend. The stock’s market value is $35 per share on February 28.

2. One stockholder owned 850 shares on February 5 before the dividend. Compute the book value per share and total book value of this stockholder’s shares immediately before and after the stock dividend of February 5. (Round your "Book value per share" answers to 3 decimal places.)

Mechem Corporation produces and sells a single product. In April, the company sold 2,000 units. Its total sales were $164,000, its total variable expenses were $81,000, and its total fixed expenses were $57,900.

a. Construct the company's contribution format income statement for April. (Do not round intermediate calculations.)

b. Redo the company's contribution format income statement assuming that the company sells 1,900 units. (Do not round intermediate calculations.)

Kuwait Dental Clinic has incurred the following overhead costs during the past year.

Required: Use the high-low method,

1. What is the variable overhead costs per one test?
2. What is the total fixed overhead costs of the Clinic?
3. Predict the level of Clinic’s overhead costs that would be incurred during a month when 17,000 tests are taken.

please make sure to solve all parts clearly and it's correct 100%

Precision Construction entered into the following transactions during a recent year.

1. 1-b. Prepare the journal entries for each of the above transactions.
2. 2. For the tangible and intangible assets acquired in the preceding transactions, determine the amount of depreciation and amortization that Precision Construction should report for the quarter ended March 31. The equipment is depreciated using the double-declining-balance method with a useful life of five years and $45,000 residual value.
3. 3. Prepare a journal entry to record the depreciation and amortization calculated in requirement 2.

Your friend is currently paying $734 in rent monthly in Fort Wayne and wants to know how much she could borrow using a 30 year mortgage at 4.67% APR using the same payment as her current rent. What could you type into Excel to calculate this value?