On May 3, 2017, Nassau Company consigned 80 freezers, costing $500 each, to Exuma Company. The cost of shipping the freezers amounted to $840 and was paid by Nassau Company. On December 30, 2017, a report was received from the consignee, indicating that 40 freezers had been sold for $750 each. Remittance was made by the consignee for the amount due after deducting a commission of 6%, advertising of $200, and total installation costs of $320 on the freezers sold.

Instructions: i) Compute the amount of cash that will be remitted by the consignee to the consignor,

and ii) Prepare the journal entry of the consignor to record the sale, expenses and cash remittance

Problem 5-1A

Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 94,800 units per year is:

Direct materials $ 2.00

Direct labor $ 3.00

Variable manufacturing overhead $ 0.70

Fixed manufacturing overhead $ 3.75

Variable selling and administrative expenses $ 2.00

Fixed selling and administrative expenses $ 2.00

The normal selling price is $25.00 per unit. The company’s capacity is 130,800 units per year. An order has been received from a mail-order house for 3,000 units at a special price of $22.00 per unit. This order would not affect regular sales or the company’s total fixed costs.

1. What is the financial advantage (disadvantage) of accepting the special order?

2. As a separate matter from the special order, assume the company’s inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for these units?

Hemming Co. reported the following current-year purchases and sales for its only product.
    

Required:
Hemming uses a periodic inventory system.
  
(a) Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.

(b) Determine the costs assigned to ending inventory and to cost of goods sold using LIFO.

(c) Compute the gross margin for each method.

Hemming Co. reported the following current-year purchases and sales for its only product.
    

Cost of Units Completed and in Process The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production. Work in Process—Assembly Department Bal., 5,000 units, 35% completed 16,175 To Finished Goods, 115,000 units ? Direct materials, 118,000 units @ $1.8 212,400 Direct labor 372,700 Factory overhead 144,960 Bal. ? units, 55% completed ? a. Based on the above data, determine the different costs listed below. If required, round your interim calculations to two decimal places. 1. Cost of beginning work in process inventory completed this period. $ 2. Cost of units transferred to finished goods during the period. $ 3. Cost of ending work in process inventory. $ 4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent. $ b. Did the production costs change from the preceding period? No c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period?

Whispering Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2017, the following accounts were included in stockholders’ equity.

The following transactions affected stockholders’ equity during 2018.

Prepare the stockholders’ equity section for Whispering Company at December 31, 2018. (Enter account name only and do not provide descriptive information.)

Sorfina Berhad, a diversified manufacturer has four divisions that operate throughout Malaysia. The company has historically allowed its divisions to operate autonomously. Corporate intervention occurred only when planned results were not obtained. Corporate management has high integrity, but the board of directors and audit committee are not very active. Sorfina Berhad has a policy of hiring competent people. The company has a code of conduct, but there is little monitoring of compliance by employees. Management is fairly conservative in terms of accounting standards and practices, but employee compensation packages depend highly on performance. The company does not have an internal audit department, and it relies on external auditor to review the controls in each division. Shahrul is the general manager of the Fabricator Division. This division produces a variety of standardised parts for small appliances. Shahrul has been the general manager for the last ten years, and each year he has been able to improve the profitability of the division. He is compensated based largely on the division’s profitability. Much of the improvement in profitability has come through aggressive cost cutting, including substantial reduction in control procedures over inventory. During the last year a new competitor has entered Fabricator’s markets and has offered substantial price reductions in order to gain market share. Shahrul has responded to the competitor’s actions by matching the price cuts in the hope of maintaining market share. He is very concerned because he cannot see any other areas where costs can be reduced so that the division’s growth and profitability can be maintained. If profitability is not maintained, his salary and bonus will be reduced. BAC5083 AUDITING AND ASSURANCE JULY-SEPT 20Final AssessmentCONFIDENTIAL Page 6 of 7 2020 Turn Over Shahrul has decided that one way to make the division more profitable is to manipulate inventory because it represents a large amount of the division’s balance sheet. He also knows that controls over inventory are weak. He views this inventory manipulation as a short-run solution to the profit decline due to the competitor’s price cutting. He is certain that once the competitor stops cutting prices or goes bankrupt, the misstatement in inventory can be corrected with little impact on the bottom line. Required: (a) Discuss FIVE (5) strengths and FIVE (5) weaknesses of Sorfina Berhad’s internal control. [20 marks] (b) Identify the control environmental factors that causes that Shahrul’s manipulation of inventory in Sorfina Berhad

b:

The Companies Act 2016 requires a company to appoint an approved company
auditor. The final responsibility of the auditor is to issue a written report expressing
an opinion on whether the financial statements give a true and fair view.
i. Explain the term 'true' and 'fair' view.

ii. Explain THREE (3) rights that enable auditors to carry out their duties.

(b) Discuss the differences between errors, frauds, and illegal acts. Give an example of
each.

(c) Discuss THREE (3) reasons why auditors are responsible for "reasonable" but not
"absolute" assurance.

Charleston Corporation operates a branch operation in a foreign country. Although this branch operates in euros, the U.S. dollar is its functional currency. Thus, a remeasurement is necessary to produce financial information for external reporting purposes. The branch began the year with 504,000 euros in cash and no other assets or liabilities. However, the branch immediately used 312,000 euros to acquire a warehouse. On May 1, it purchased inventory costing 127,000 euros for cash that it sold on July 1 for 182,000 euros cash. The branch transferred 26,000 euros to the parent on October 1 and recorded depreciation on the warehouse of 11,000 euros for the year. Currency exchange rates for 1 euro follow: January 1 $1.47 = 1 euro May 1 1.51 = 1 July 1 1.53 = 1 October 1 1.51 = 1 December 31 1.41 = 1 Average for the year 1.49 = 1 What is the remeasurement gain or loss to be recognized in the consolidated income statement? rev: 07_22_2017_QC_CS-91913 Multiple Choice $18,060 gain. $18,060 loss. $190 loss. $190 gain.

The Filling Department of Eve Cosmetics Company had 3,300 ounces in beginning work in process inventory (50% complete). During the period, 37,000 ounces were completed. The ending work in process inventory was 2,600 ounces (50% complete).

What are the total equivalent units for conversion costs?

If required, round to the nearest unit.

a. Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow:

Exercise 11-27 (Algo) Cost Allocation: Direct Method (LO 11-2)

Required:

Compute the allocation of service department costs to producing departments using the direct method. (Do not round intermediate calculations.)

b. Assume that both Machining and Assembly work on just two jobs during the month of August: CM-22 and CM-23. Costs are allocated to jobs based on machine-hours in Machining and labor-hours in Assembly. The number of labor- and machine-hours worked in each department are as follows:

Required:
How much of the service department costs allocated to Machining and Assembly in the direct method should be allocated to Job CM-22? How much should be allocated to Job CM-23?

Part #4: E Company has budgeted sales revenues of $160,000 for May, $210,000 for June, $235,000 for July, and $172,000 for August. To prepare a cash budget, the company must determine the budgeted cash collections from sales. Generally the trend has been 55 percent collected in the month of sale, 25 percent collected in the month following sale, 18 percent collected in the second month following sale, and 2 percent uncollectible. Also, E Company grants a 2 percent cash discount to customers who pay in the month of sale (so they only collect 98 percent of the total amount for those sales instead of the usual 100 percent). Prepare a schedule of cash collections for the month of July only. Part #5: At the beginning of September, L Company had 1,600 finished goods units. Budgeted sales for October, November, December, and January are 8,000 units and 10,200 units and 13,600 units and 7,400 units respectively. L Company wants to have sufficient units on hand at the end of each month to meet 20 percent of the following month’s budgeted sales. Prepare a Production Budget with columns for October, November, December and Total 4th Quarter.Part #6: H Company’s Direct Labor Budget indicates the number of direct labor hours to be used in July, August, and September are 20,000 and 19,100 and 22,900 respectively. Variable overhead is expected to be $0.80 per direct labor hour. Fixed overhead per month is expected to be $6,200. Prepare an Overhead Budget with columns for July, August, September, and Total 3rd Quarter.   

Part #5: At the beginning of September, L Company had 1,600 finished goods units. Budgeted sales for October, November, December, and January are 8,000 units and 10,200 units and 13,600 units and 7,400 units respectively. L Company wants to have sufficient units on hand at the end of each month to meet 20 percent of the following month’s budgeted sales. Prepare a Production Budget with columns for October, November, December and Total 4^th Quarter.

Part #6: H Company’s Direct Labor Budget indicates the number of direct labor hours to be used in July, August, and September are 20,000 and 19,100 and 22,900 respectively. Variable overhead is expected to be $0.80 per direct labor hour. Fixed overhead per month is expected to be $6,200. Prepare an Overhead Budget with columns for July, August, September, and Total 3^rd Quarter.

1. Lessee enters into a four-year lease of equipment and concludes that the agreement is a finance lease because the lease contains an option for Lessee to purchase the equipment at the end of the lease and the Lessee is reasonably certain to exercise that option. The arrangement provides the following:

Complete the following schedule to show the impact on the income statement and balance sheet.

• Prepare the journal entries at the time of the lease commencement and for Year 1 of the lease term.

Southwestern Wear Inc. has the following balance sheet:

The trustee's costs total $290,500, and the firm has no accrued taxes or wages. Southwestern has no unfunded pension liabilities. The debentures are subordinated only to the notes payable. If the firm goes bankrupt and liquidates, how much will each class of investors receive if a total of $2.3 million is received from sale of the assets? Round your answers for monetary values to the nearest dollar and for percentage values the nearest whole number. If your answer is zero, enter “0”. Enter your answers as positive values.

Distribution of proceeds on liquidation:

Distribution to general creditors:

Round your answer for monetary value to the nearest dollar and for percentage value to two decimal places.

The remaining $   will go to the common stockholders. They will receive only   % of the amount of equity on the balance sheet.

[The following information applies to the questions displayed below.]
  
On January 1, 2021, Red Flash Photography had the following balances: Cash, $25,000; Supplies, $9,300; Land, $73,000; Deferred Revenue, $6,300; Common Stock $63,000; and Retained Earnings, $38,000. During 2021, the company had the following transactions:

The following information is available on December 31, 2021:

1. Employees are owed an additional $5,300 in salaries.
2. Three months of the rental space has expired.
3. Supplies of $6,300 remain on hand.
4. All of the services associated with the beginning deferred revenue have been performed.

Required:

1. Record the transactions that occurred during the year. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
  

2. Record the adjusting entries at the end of the year. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)
  

3. Prepare an adjusted trial balance.

4. Prepare an income statement, statement of stockholders’ equity, and classified balance sheet.

5. Prepare closing entries. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month:

The Production Department planned to work 4,300 labor-hours in March; however, it actually worked 4,100 labor-hours during the month. Its actual costs incurred in March are listed below:

Required:

1. Prepare the Production Department’s planning budget for the month.

2. Prepare the Production Department’s flexible budget for the month.

3. Prepare the Production Department’s flexible budget performance report for March, including both the spending and activity variances.

Garrison 16e Rechecks 2018-12-18

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