If a partner is contributing attributes to a partnership such as established clientele or a particular expertise, what methods can be used to record the contribution? Why did you choose this method? Provide examples of the journal entries you would use. Comment on your classmates choices.

stanmore Corporation makes a special purpose machine d4h using the textile industry stanmore has designed the d4h machine for 2017 to be distinct from its competitors it has been generally regarded as a superior machine stanmore presents the following data for 2016 and 2017

Is Stanmore's strategy one of product differentiation or cost leadership? explain briefly

What is the independence standard? Why is it important that users perceive auditors to be independent? Can an auditor be independent in fact, but not in appearance? Explain.

Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.

TIP: Although the purchases and sales are listed in chronological order, Scrappers determines the cost of goods sold after all of the purchases have occurred.

Required:

1. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round "Cost per Unit" to 2 decimal places.)
   a. Last-in, first-out.
   b. Weighted average cost.
   c. First-in, first-out.
   d. Specific identification, assuming that the April 1 sale was selected one-fifth from the beginning inventory and four-fifths from the purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30.
2. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes?

d. CCompute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 using the Specific identification method. Assume that the April 1 sale was selected one-fifth from the beginning inventory and four-fifths from the purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30. (Round "Cost per Unit" anwers to 2 decimal places.)

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Of the four methods, which will result in the highest gross profit?

Which will result in the lowest income taxes?

CarryAll Company produces briefcases from leather, fabric, and synthetic materials in a single
production department. The basic product is a standard briefcase made from leather and lined with
fabric. CarryAll has a good reputation in the market because the standard briefcase is a high-quality
item that has been produced for many years.
Last year, the company decided to expand its product line and produce specialty briefcases
for special orders. These briefcases differ from the standard in that they vary in size, contain both
leather and synthetic materials, and are imprinted with the buyer’s logo (the standard briefcase
is simply imprinted with the CarryAll name in small letters). The decision to use some synthetic
materials in the briefcase was made to hold down the materials cost. To reduce the labor costs per
unit, most of the cutting and stitching on the specialty briefcases is done by automated machines,
which are used to a much lesser degree in the production of the standard briefcases. Because of
these changes in the design and production of the specialty briefcases, CarryAll management
believed that they would cost less to produce than the standard briefcases. However, because they
are specialty items, they were priced slightly higher; standards are priced at $30 and specialty
briefcases at $32.
After reviewing last month’s results of operations, CarryAll’s president became concerned
about the profitability of the two product lines because the standard briefcase showed a loss while
the specialty briefcase showed a greater profit margin than expected. The president is wondering
whether the company should drop the standard briefcase and focus entirely on specialty items.
Units and cost data for last month’s operations as reported to the president are as follows:

Standard Specialty Units produced 10,000 2,500 Direct materials Leather (1 sq. yd. ×$15.00; ½ sq. yd. ×$15.00) $15.00 $7.50 Fabric (1 sq. yd. ×$5.00; 1 sq. yd. × $5.00) $ 5.00 $5.00 Synthetic $5.00 Total materials $20.00 $17.50 Direct labor (½ hr. × $12.00, ¼ hr. × $12.00) $6.00 $3.00 Manufacturing Overhead (1/2 hr. × $8.98, ¼ hr. × $8.98) $4.49 $2.25 Cost per unit $30.49 $22.75
Factory overhead is applied on the basis of direct labor hours. The rate of $8.98 per direct labor
hour was calculated by dividing the total overhead ($50,500) by the direct labor hours (5,625). As
shown in the table, the cost of a standard briefcase is $0.49 higher than its $30 sales price; the
specialty briefcase has a cost of only $22.75, for a gross profit per unit of $9.25. The problem with
these costs is that they do not accurately reflect the activities involved in manufacturing each
product. Determining the costs using ABC should provide better product costing data to help gauge
the actual profitability of each product line.
The manufacturing overhead costs must be analyzed to determine the activities driving the
costs. Assume that the following costs and cost drivers have been identified:
• The Purchasing Department’s cost is $6,000. The major activity driving these costs is the number
of purchase orders processed. During the month, the Purchasing Department prepared the
following number of purchase orders for the materials indicated:
Leather 20 Fabric 30 Synthetic material 50
• The cost of receiving and inspecting materials is $7,500. These costs are driven by the number
of deliveries. During the month, the following number of deliveries were made:
Leather 30 Fabric 40 Synthetic material 80
• Production line setup cost is $10,000. Setup activities involve changing the machines to produce
the different types of briefcases. Each setup for production of the standard briefcases requires one
hour; each setup for specialty briefcases requires two hours. Standard briefcases are produced in
batches of 200, and specialty briefcases are produced in batches of 25. During the last month, there
were 50 setups for the standard item and 100 setups for the specialty item.
• The cost of inspecting finished goods is $8,000. All briefcases are inspected to ensure that quality
standards are met. However, the final inspection of standard briefcases takes very little time
because the employees identify and correct quality problems as they do the hand cutting and
stitching. A survey of the personnel responsible for inspecting the final products showed that 150
hours were spent on standard briefcases and 250 hours on specialty briefcases during the month.
• Equipment-related costs are $6,000. Equipment-related costs include repairs, depreciation, and
utilities. Management has determined that a logical basis for assigning these costs to products is
machine hours. A standard briefcase requires 1/2 hour of machine time, and a specialty briefcase
requires two hours. Thus, during the last month, 5,000 hours of machine time relate to the standard
line and 5,000 hours relate to the specialty line.
• Plant-related costs are $13,000. These costs include property taxes, insurance, administration,
and others. For the purpose of determining average unit costs, they are to be assigned to products
using machine hour

Question:  Reevaluate the president’s concern about the profitability of the two product lines.

LCI Cable Company grants 1.5 million performance stock options to key executives at January 1, 2018. The options entitle executives to receive 1.5 million of LCI $1 par common shares, subject to the achievement of specific financial goals over the next four years. Attainment of these goals is considered probable initially and throughout the service period. The options have a current fair value of $20 per option.

Required:
1. & 2. Record the necessary journal entries.
3. Suppose at the beginning of 2020, LCI decided it is not probable that the performance objectives will be met. Prepare the appropriate entries on December 31 of 2020 and 2021.

1. Record the grant of 1.5 million performance stock options when the options have a fair value of $20 per option as on January 01, 2018.

2. Record the entry that would be made on December 31 of 2018, 2019, 2020 and 2021.

3a. Prepare any necessary entry on December 31, 2020 assuming that it is not probable that the performance objectives will be met.

3b. Prepare any necessary entry on December 31, 2021 assuming that it is not probable that the performance objectives will be met

1. Because of the small size of the company and the limited number of accounting personnel, Dry Goods Wholesale Company Ltd. initially records all acquisitions of goods and services at the time that cash disbursements are made. At the end of each quarter when financial statements for internal purposes are prepared, accounts payable are recorded by adjusting journal entries. The entries are reversed at the beginning of the subsequent period. Except for the lack of a purchasing system, the controls over acquisitions are excellent for a small company. (There are adequate prenumbered documents for all receipt of goods, proper approvals, and adequate internal verification wherever possible.)

   Before the auditor arrives for the year-end audit, the bookkeeper prepares adjusting entries to record the accounts payable as of the balance sheet date. The aged trial balance is listed as of the year-end, and a manual schedule is prepared adding the amounts that were entered in the following month. Thus, the accounts payable balance equals the aged trial balance plus the following month’s journal entry for invoices received after the year-end. All vendors’ invoices supporting the journal entry are retained in a separate file for the auditor’s use.

   In the current year, the accounts payable balance has increased dramatically because of a severe cash shortage. (The cash shortage apparently arose from expansion of inventory and facilities rather than lack of sales.) Many accounts have remained unpaid for several months, and the client is getting pressure from several vendors to pay the bills. Since the company had a relatively profitable year, management is anxious to complete the audit as early as possible so that the audited statements can be used to obtain a larger bank loan.

Required

1. Explain how the lack of a complete aged accounts payable trial balance will affect the auditor’s tests of controls for acquisitions and cash disbursements.

2. What should the auditor use as a sampling unit in performing tests of acquisitions?

3. Assume that no misstatements are discovered in the auditor’s tests of controls for acquisitions and cash disbursements. How will that assumption affect the verification of accounts payable?

4. Discuss the reasonableness of the client’s request for an early completion of the audit and the implications of the request from the auditor’s point of view.

5. List the audit procedures that should be performed in the year-end audit of accounts payable to meet the cutoff objective.

6. State your opinion as to whether it is possible to conduct an adequate audit in these circumstances.

Present Value and Future Value T he following situations require the application of the time value of money: Use the appropriate present or future value table: FV of $1, PV of $1, FV of Annuity of $1 and PV of Annuity of $1 1. On January 1, 2017, $16,000 is deposited. Assuming an 8% interest rate, calculate the amount accumulated on January 1, 2022, if interest is compounded (a) annually, (b) semiannually, and (c) quarterly. Round your answers to the nearest dollar. 2. Assume that a deposit made on January 1, 2017, earns 8% interest. The deposit plus interest accumulated to $20,000 on January 1, 2022. How much was invested on January 1, 2017, if interest was compounded (a) annually, (b) semiannually, and (c) quarterly? Round your answers to the nearest dollar.

Max company makes plastic bottles for the coke bottling company. During the month of May Max produced $150,500 bottles for Coke operating at 60% capacity. Max company reported the following results of its operations:

Sales: $7,525,000

Cost of Goods Sold: $4,000,000

Selling, general and Adm. Expenses :$2,000,000

Net income: $1,525,000

Fixed costs for the period were cost of goods Sold $990,000 and selling General and Administration Expenses $43500

For the month of June, Max company has received a special order to produce $80,000 bottles for Pepsi Bottling Company. Variable Selling, General and Administrative Expenses would increase $2 per bottle because the special courier needed for shipping. Variable cost of Goods sold would decrease $0.50 per bottle because Pepsi would supply its own labels.

Fixed Cost of Goods sold would increase $1 per bottle because a special label placing machine would need to be rented for the month. Pepsi its willing to pay $37 per bottle.

What are the relevant revenues?

What are the relevant costs?

If the order is accepted, what is the overall impact on net income?

Should Max accept the special order?

What non-financial factors should Max consider in making its decision?

Define, briefly explain how it works and affect the treasury cash management and give examples of the following:

Cash Concentration

Positive Pay

Liquidity Management

Availability Float

Factoring

Debt risk

Account analysis

Earnings credit rate

Short-term financing

Long-term financing

Average Rate of Return—Cost Savings

Midwest Fabricators Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $104,000 with a $9,000 residual value and a five-year life. The equipment will replace one employee who has an average wage of $33,590 per year. In addition, the equipment will have operating and energy costs of $10,070 per year.

Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment. If required, round to the nearest whole percent.
%_____________________

1. Washington Corp. (WC) has the capacity to produce 20,000 fax machines per year. WC currently produces and sells 14,000 units per year. The fax machines normally sell for $200 each. Modem Products has offered to buy 4,000 fax machines from WC for $100 each. Unit-level costs associated with manufacturing the fax machines are $50 each for direct labor, $30 each for unit direct materials, and $10 each for unit variable overhead cost. Allocated product-level cost are $12 each and allocated facility-sustaining costs are $16.2 each. Should WC accept the special offer?

   	a.	Reject, profit will decrease by 10,000 if WC accepted this special order.
   	b.	Accept, profit will increase by 440,000 if WC accepted this special order.
   	c.	Reject, profit will decrease by 40,000 if WC accepted this special order.
   	d.	Accept, profit will increase by 40,000 if WC accepted this special order.

Exercise 9-20 Recording Bonds at a Premium and a Discount On January 1, 2012, Hampton, Inc. issues $3,000,000 of 5-year, 10% bonds with interest payable on July 1 and January 1. Hampton prepares financial statements on December 31 and amortizes any discount or premium using the straight-line method. Required: Hide a. Prepare all journal entries necessary in 2012 assuming the bonds were issued at 96. For a compound entries, if an amount box does not require an entry, leave it blank. If required, round to the nearest dollar. b. Prepare all journal entries necessary in 2012 assuming the bonds were issued at 103. For a compound entries, if an amount box does not require an entry, leave it blank. If required, round to the nearest dollar.

No Hand Writing or Pictures (Tax Accounting):

1, Explain the different concepts of income from accounting, economics and taxation perspectives Explain the different concepts of income from accounting, economics and taxation perspectives .

2. What is the difference between deductions for and deductions from adjusted gross income AGI under US tax law? Give two examples of each deduction.

3. To make income taxable, income must be realized and recognized. Explain in your own words the difference between income realization and income recognition, then provide a short numerical example to indicate the difference.