Waterways prepared the balance sheet and income statement for the irrigation installation division for 2020. Now the company also needs to prepare a statement of cash flows for the same division. The comparative balance sheets for Waterways Corporation’s Irrigation Installation Division for the years 2019 and 2020 and the income statement for the year 2020 are presented below. Additional information: 1. Waterways sold a company vehicle for $24,200. The vehicle had been used for 10 years. It cost $80,500 when purchased and had a 10-year life and a $6,100 salvage value. Straight-line depreciation was used. 2. Waterways purchased with cash new equipment costing $209,100. 3. Prepaid expenses increased by $33,800. All changes in accounts payable relate to inventory purchases.

(a) Prepare a statement of cash flows using the indirect method for the year 2020. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Q1. Two partnerships of A & B and C&D began business on Jan 1^st2017; each partnership owns one retail appliance store. The two partnerships agree to combine as of April 1^st2017 to form a new partnership, ABCD Discount Stores. The two businesses agreed upon the following points:

1. Profit and loss ratios.

2. Capital investments.The opening capital investments for the new partnership are to be in the same ratio as the profit and loss sharing ratios for the new partnership. If necessary, certain partners may have to contribute additional cash, and others may have to withdraw cash to bring the capital investments into the proper ratio.
3. Accounts receivable. The partners agreed to set the new partnership’s allowance for bad debts at 3% of the accounts receivable contributed by A&B and 12% of the accounts receivable contributed by C&D.
4. Inventory.The new partnership’s openinginventory is to be valued by the FIFO method.  B&M used the FIFO method to value inventory (which approximates its current value), and A&J used the LIFO method. The LIFO inventory represents 85% of its FIFO value.
5. Property and equipment. The partners agree that the building’s current value is approximately 70% of the building’s historical cost, as recorded on each partnership’s books.
6. Unpaid liability. After each partnership’s books were closed on 31^stMarch 2017, an unrecorded merchandise purchase of $1,500 by A&B was discovered. The merchandise had been sold by 31^stMarch 2017.
7. The 31^stMarch 2017 post  closing trial balances of the partnerships was as follow.

Required:

1. Prepare the journal entries to record the initial capital contribution after considering the effect of this information.  Use separate entries for each of the combining partnerships.
2. Prepare a schedule computing the cash contributed or withdrawn by each partner to bring the initial capital balances into the profit and los sharing ratio.

2. Debra and Merina sell electronic equipment and supplies through their partnership. They wish to expand their computer lines and decide to admit Wayne to the partnership. Debra’s capital is $200,000, Merina’s capital is $160,000, and they share income in a ratio of 3:2, respectively.      

Required:

  Record Wayne’s admission for each of the following independent situations:

   a. Wayne directly purchases half of Merina’s investment in the partnership.   

   b. Wayne invests the amount needed to give him a one-third interest in the capital of the partnership if no goodwill or bonus is recorded.

  c. Wayne invests $110,000 for a one-fourth interest if Goodwill is to be recorded.   

3. Taif city levied property taxes totaling $750,000.  Of this amount, $10,000 was estimated to be uncollectible. Collections during the year totaled $725,000, of which $12,000 were associated with property taxes levied in the prior year that had been declared delinquent at the end of the prior year.  All of the remaining property taxes receivable at the beginning of the current year, totaling $5,000, were written off as uncollectible. The net realizable amount at 6/30/X8 ($11,000) is expected to be collected within 60 days. Pass Journal entries.

Sushi Corp. purchased and installed electronic payment equipment at its drive-in restaurants in San Marcos, TX, at a cost of $40,500. The equipment has an estimated residual value of $2,700. The equipment is expected to process 268,000 payments over its three-year useful life. Per year, expected payment transactions are 64,320, year 1; 147,400, year 2; and 56,280, year 3.

Required:

Complete a depreciation schedule for each of the alternative methods.

1. Straight-line.

2. Units-of-production.

3. Double-declining-balance.

Sonic Inc. makes running shoes. The shoes are made out of specialized fabric, foam for cushioning, and rubber for the soles. Each pair of shoes is considered to be one unit. Sonic Inc. is currently preparing their budget for the next quarter (April, May, June). They believe they will sell 5,000 pairs of shoes over the next three months and that they will sell each pair for $ 87 each. They estimate that, on average, each pair of shoes will need 2.5 square feet (sqft) of fabric, 4 ounces of foam and .45 kilograms of rubber. Each pair of shoes should take 3.5 hours of direct manufacturing labor to make. They estimate that for the quarter, they will spend $3.20 on each sqft of fabric, $1.75 on each ounce of foam and $5.50 on each kilogram of rubber. They also estimate they will spend $148,750 on labor, $75,250 on variable manufacturing overhead, and $39,375 on fixed manufacturing overhead. On March 31st, their inventory accounts had these numbers: Fabric: $ 3,843 (1,220 sqft) Foam: $ 3,293 (1,850 ounces) Rubber: $ 1,233 (225 kilograms) Finished Goods: $ 26,532 (495 pairs of shoes) At the end of the quarter, they want these amounts in their ending inventory: Fabric: 1,300 sqft Foam: 1,800 ounces Rubber: 200 kilograms Finished Goods: 500 pairs of shoes Sonic Inc. uses the FIFO method to cost direct materials and finished goods inventory. For the purpose of this budget, the work-in-process inventories are considered to be negligible and ignored and the unit costs of direct materials purchased and finished goods are assumed to be constant for the period. With this information, please prepare these parts of the master budget for Sonic Inc. for the next quarter (April, May, June). a. The Revenues Budget (Schedule 1) b. The Production Budget (Schedule 2) c. The Direct Materials Usage Budget (Schedule 3a) d. The Direct Materials Purchases Budget (Schedule 3b) e. The Direct Manufacturing Labor Budget (Schedule 4) f. The Manufacturing Overhead Cost Budget (Schedule 5) g. The Ending Inventories Budget (Schedule 6A (units); Schedule 6B (dollars)) h. The Cost of Goods Sold Budget (Schedule 7)

In his own words, Daniel Jones was “The Dude.” With his waist-long dreadlocks, part-time rock band, and well-paid job managing a company’s online search directory—he seemed to have it all. Originally from Germany, Jones, now age 32, earned his doctorate and taught at the University of Munich before coming to the United States, where he started his career in computers. When Jones started working with the company as a director of operations for U.S.-Speech Engineering Service and Retrieval Technology—he was assigned to work on a new, closely guarded search engine tied to the company’s .net concept.

The company allows employees to order an unlimited amount of software and hardware, at no cost, for business purposes. In one year’s time, Jones ordered or used his assistant and other employees (including a high school intern) to order nearly 1,700 pieces of software which had very low cost but were worth a lot on the street. He then resold them for reduced prices— reaping millions. When items with a cost of goods sold of more than $1,000 are ordered, an e-mail is sent to the employee’s direct supervisor, who must click on an “Approve” button before the order is filled. In no individual order was the cost of goods more than $1,000—he made sure none of the orders required a supervisor’s approval. The loosely controlled internal ordering system reflects the trust the company puts in its employees.

During this time frame, FBI agents said they saw Jones exchanging a large box of software for cash in a department store parking lot. The FBI contacted the company’s security and began monitoring Jones’s bank accounts. Previously, one account with his bank had an average balance of $2,159. In a short time, however, the average balance ballooned to $129,775. Another account at another bank showed irregular deposits totaling $500,000—none of which appeared to be from any legitimate income or other source.

Investigators also noted that Jones purchased a Ferrari, a Jaguar, and traded in lesser vehicles for a Hummer, a Mercedes, and a Harley-Davidson motorcycle. He also bought an $8,000 platinum diamond ring, a $2,230 wristwatch, and a $4,000 bracelet. “You figured that I like big boy’s toys by looking at some of my pictures,” Jones wrote on his personal Web page. “I just can’t resist.” The Dude’s Web page includes a camera for monitoring his cat and photos of his yacht, cars, and other treasures. For a relatively low-level manager, it was an impressive collection. But at his company, where teenage software engineers can earn more than company directors, no one noticed anything unusual.

A neighbor across the street from Jones said that he was clearly wealthy, but not flamboyant with his money. He described Jones as an intelligent man who didn’t flaunt his education, would loan neighbors tools, and was always friendly. The neighbor was surprised to hear the accusations against someone he called his friend. All he knew about Jones was that he was a good neighbor who loved cars. “He was very, very helpful. The few times I had problems with my PC, he’d come and help straighten them out,” the neighbor said. “They are just ideal neighbors. I feel terrible for him and his wife.” Jones and his wife lived in a modest home.

Jones also joined the city’s Rotary Club, “where he seemed more outgoing and personable than the stereotype techie,” said a local jeweler and immediate past president of the club. “He seemed like what I would expect a genius software developer to be.” Eventually, the fraud was discovered and Jones was fired. He was also charged with 15 counts of wire, mail, and computer fraud—with each count carrying a maximum of fives years in prison. He is expected to remain in custody until his preliminary hearing.

Questions:

1. Describe the symptoms of fraud that might be evident to a fellow employee.

2. Recently, his employer has been putting more empha- sis on controlling costs. With the slowing of overall technology spending, executives have ordered managers to closely monitor expenses and have given vice presidents greater responsibility for balance sheets. What positive or negative consequences might this pose to the company in future fraud prevention?

3. As discussed previously, all frauds involve the following key elements: perceived pressure, perceived opportunity, and rationalization. Describe two of the key elements of the Jones fraud— pressure and opportunity.

4. From the scenario, what measures has the company taken to prevent fraud? In what ways could the company improve?

ABC Company’s budgeted sales for June, July, and August are 15,400, 19,400, and 17,400 units, respectively. ABC requires 30% of the next month’s budgeted unit sales as finished goods inventory each month. Budgeted ending finished goods inventory for May is 4,620 units. Each unit that ABC Company produces uses 3 pounds of raw material. ABC requires 25% of the next month’s budgeted production as raw material inventory each month. Required: Calculate the number of pounds of raw material to be purchased in June.

Determine accounting periods and methods for partnerships? And calculate a partnership's ordinary income? Describe the basis and passive loss rules?

a-

Explain securitization structure and its disclosure requirement for mortgage banks and

b-

discuss the alternatives to securitizations.

(minimum 200 words - no handwriting or photo)

Identify each of the following a feature of managerial accounting (M) or financial accounting (F):

1- Information is prepared for external users and is historically based.

2- Information prepared must follow GAAP.

3- It is important that information is prepared timely and may contain estimates.

4- Information is prepared for internal users and may report on segments or divisions of the company.

5- The prepared financial statement analyze the company as a Whole.

2- Identify the following costs as product costs (PR) or SG&A/ period costs (SGA):

a) Salaries for staff in the legal department

b) Labor Costs for factory workers.

c) Utilities paid for the corporate headquarter offices.

d) Supplies Used by the company accountant.

f) Tools used to maintain the production equipment.

Has there been a reason given by government as to why they won't fully eliminate double taxation?

SHARE-BASED PAYMENTS

Kiwi Car Direct Limited is a New Zealand company which purchases car parts from the United States. It has a balance date of 31 March.

In March 2017 Kiwi Car Direct Limited negotiated the purchase of car parts from its longstanding supplier in the US, Eagle Auto Parts Limited. In this case, Kiwi Car Direct Limited negotiated to settle the purchase of the transaction with 35,000 shares in Kiwi Car Direct Limited. The car parts were received on the 31 March 2017 and are considered to have a total fair value of $260,000. The fair value of Kiwi Car Direct Limited’s shares on the 31 March 2017 was $7.50 per share.

Furthermore, on the 1 April 2017, Kiwi Car Direct Limited granted 10,000 share options to its CEO. All services had been performed by the CEO at that date. The entity reliably estimated the fair value of each option at $6.50.

Required:

(a) Provide the journal entry to record the purchase of the car parts by Kiwi Car Direct Limited on the 31 March 2017.

(b) Calculate the remuneration expense which will be reported in the financial statements of Kiwi Car Direct Limited for the year to 31 March 2018 for services received from the CEO

as consideration for the share options granted.

(c) Discuss the extent to which you consider that the share options granted to the CEO of Kiwi Car Direct Limited are likely to align his/her interests with those of shareholders.

1. On April 1, 2018, Sukyoon registered the book store with the local government and the IRS by investing $500. Sukyoon owns 10 shares of the company. Jay also invested $2,000 for 40 shares of the company. Jay agreed that Sukyoon would be running the business.
2. To house the business, the company bought an abandoned building near Snell Park for $150 on April 1. The purchase documents allocated $100 to the land and $50 to the building. The company paid for the building with $30 cash and a $120 (5 year/10%) mortgage from the Community Bank. The company expect the building have the useful life of 4 years with the expected salvage value of $
3. On May 1, the company purchased 40 bookshelves at an average cost of $6 per unit. ($240 total). Sukyoon felt the shelves would only last for two years, at which time they would have no remaining value for sale.
4. On June 15, the book store ordered hundreds of used books from AMAZON for $800 to be delivered on the same day. The book store was able to purchase the inventory “on account”, which meant he had up to 90 days after delivery to pay the supplier.
5. On July 1, the book store signed a contract with a local advertising agency to provide various forms of advertising for a period of one year. The company paid $100 upfront for advertising through June 30, 2019
6. On June 30, the book store also hired two employees, Eugene and Sarah, to run the store. They signed employment contracts promising each salaries of $5 per month
7. On July 1, the book store recorded its first sales of used books totaling $600, most of which were paid in cash immediately. The original cost of these used books was $200. However, Sukyoon allowed a select number of students to pay later. The amount of credit sales out of the total sales was $100.
8. On July 5, Jay called to check in on the business. Upon hearing that Clarkson “The Great” Book Store only had $__________ of cash left in the bank, Jay became concerned about his investment. Thinking fast, Sukyoon stated that he was so confident of Clarkson “The Great” Book Store’s prospects that he declared and paid a $0.10 per share dividend. This dividend seemed to reassure Jay.
9. On July 10, the book store paid Amazon $200 it was owed
10. On July 15, one students who purchased a book on credit on July 1 went bankrupt and the book store decided to write off sales of $2 to him.
11. On July 31, the book store’s two employees were paid wages of $10 total during this one-month period and Sukyoon drew a salary of $10.
12. On July 31, the book store’s made a payment of $8 in principal and interest payment of $4 to the Bank.
13. On July 31, the company booked the depreciation expenses relating to the fixed assets during the 4-month period and booked the expense relating to the service provided by a local advertising agency during July.
14. On July 31, the book store booked 10% of the pretax income as an income taxes expenses.

Create an income statement, balance sheet, and cash flow statement

Job Cost Sheet

Remnant Carpet Company sells and installs commercial carpeting for office buildings. Remnant Carpet Company uses a job order cost system. When a prospective customer asks for a price quote on a job, the estimated cost data are inserted on an unnumbered job cost sheet. If the offer is accepted, a number is assigned to the job, and the costs incurred are recorded in the usual manner on the job cost sheet. After the job is completed, reasons for the variances between the estimated and actual costs are noted on the sheet. The data are then available to management in evaluating the efficiency of operations and in preparing quotes on future jobs. On October 1, Remnant Carpet Company gave Jackson Consulting an estimate of $2,520 to carpet the consulting firm’s newly leased office. The estimate was based on the following data:

On October 3, Jackson Consulting signed a purchase contract, and the delivery and installation were completed on October 10.

The related materials requisitions and time tickets are summarized as follows:

Required:

Enter amounts as positive numbers.

1. Complete that portion of the job order cost sheet that would be prepared when the estimate is given to the customer.

2. Record the costs incurred, and complete the job order cost sheet.

What is the best explanation for the variances between actual costs and estimated costs. (For this purpose, assume that the additional meters of material used in the job were spoiled, the factory overhead rate has proven to be satisfactory, and an inexperienced employee performed the work.)

1. The direct materials cost exceeded the estimate by $124 because 4 meters of materials were spoiled. The direct labor cost exceeded the estimate by $80 because an additional 4 hours of labor were used by an inexperienced employee. The factory overhead cost exceeded the estimate because an additional $60 of factory overhead was allocated because of the increase in direct labor.
2. Management didn't provide enough direction to complete tasks on budget.
3. The direct materials cost exceeded the estimate by $75 because 3 meters of materials were spoiled.
4. The direct labor cost exceeded the estimate by $120 because an additional 4 hours of labor were used by an inexperienced employee.

Select the correct answer from the above choices.

Presented below is a list of the accounts and balances of Wildcat Corporation at December 31, 2018.

Debit   Credit

Note:        
·       Assume a 30% effective tax rate on all items for the year.      
·       A preliminary estimate of accrued income taxes has been recorded and is included in the trial balance above.
If this is not the correct amount of tax expense, you will need to make an additional adjusting entry.      
·       Investments in Bonds are considered "held to maturity"; Investments in Stocks are considered "available for sale"      
      
      
Required: PREPARE THE FOLLOWING STATEMENTS IN GOOD FORM      
      
1.     Multi-step Income Statement with EPS calculations.      
2.     Statement of Stockholder's Equity (no new shares were issued during the year)      
3.     Classified Balance Sheet        
      
(All statements should be prepared according to GAAP and in "good form" (proper format, alignment, spelling, $ signs, underlines, etc.))