1. the audit firm of PWC evaluates the risk of material misstatement by disaggregating the total risk into its main components and sub components as indicated below

(a) inherent risk, (b) Control risk, (c) Detection risk (d) Operational risks, (e) finance risk and (f) compliance risk

required:

for each of the scenarios below, select the component of risk that is most directly illustrated. the component may be used once, more than once, or not at all. also suggest the effect on the financial statement and hoe the auditor might mitigate the risk (you may present your answer in the format below)

SCENARIO COMPONENT RISK EFFECT ON THE FINANCIAL STATEMENT HOW TO REDUCE THE RISK

A

B

C

D

E

F

A) A client fails to discover employee fraud on a timely bases because bank accounts are not reconciled monthly

B) The client's business manly deals with cash sales which is more susceptible to theft than credit sales

C) Confirmation of receivables by a new audit staff fails to detect a material misstatement

D) Disbursements (payouts) have occurred without proper approval

E) There is inadequate segregation of duties in the payroll section

F) The client is very close to violating debt covenants

G) XYZ Company, a client, lacks sufficient working capital to continue operations

Rooney Corporation builds sailboats. On January 1, 2019, the company had the following account balances: $75,000 for both cash and common stock. Boat 25 was started on February 10 and finished on May 31. To build the boat, Rooney had incurred cash costs of $5,800 for labor and $5,650 for materials. During the same period, Rooney paid $7,500 cash for actual manufacturing overhead costs. The company expects to incur $156,000 of indirect overhead cost during 2019. The overhead is allocated to jobs based on direct labor cost. The expected total labor cost for the year is $120,000.

Rooney uses a just-in-time inventory management system. Consequently, it does not have raw materials inventory. Raw materials purchases are recorded directly in the Work in Process Inventory account.

Required

1. Use the horizontal financial statements model, to record Rooney’s business events. The first row shows beginning balances.

2. If Rooney desires to earn a profit equal to 10 percent of cost, for what price should it sell the boat?

3. If the boat is not sold by year-end, what amount would appear in the Work in Process Inventory and Finished Goods Inventory on the balance sheet for Boat 25?

4. Is the amount of inventory you calculated in Requirement c the actual or the estimated cost of the boat?

• If Rooney desires to earn a profit equal to 10 percent of cost, for what price should it sell the boat? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) _____
• Required C:
• If the boat is not sold by year-end, what amount would appear in the Work in Process Inventory and Finished Goods Inventory on the balance sheet for Boat 25? (Do not round intermediate calculations.)
• Required D:
• Is the amount of inventory you calculated in Requirement c the actual or the estimated cost of the boat?

On January 1, 2016, when its $30 par value common stock was selling for $80 per share, Novak Corp. issued $10,400,000 of 8% convertible debentures due in 20 years. The conversion option allowed the holder of each $1,000 bond to convert the bond into five shares of the corporation’s common stock. The debentures were issued for $11,232,000. The present value of the bond payments at the time of issuance was $8,840,000, and the corporation believes the difference between the present value and the amount paid is attributable to the conversion feature. On January 1, 2017, the corporation’s $30 par value common stock was split 2 for 1, and the conversion rate for the bonds was adjusted accordingly. On January 1, 2018, when the corporation’s $15 par value common stock was selling for $135 per share, holders of 30% of the convertible debentures exercised their conversion options. The corporation uses the straight-line method for amortizing any bond discounts or premiums.

(a) Prepare the entry to record the original issuance of the convertible debentures. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

(b) Prepare the entry to record the exercise of the conversion option, using the book value method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Please show the calculations! doing it in excel!

Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 units of each product. Its average cost per unit for each product at this level of activity are given below:

The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars.

1-1. Assume that Cane normally produces and sells 69,000 Betas and 89,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 13,000 units. What is the financial advantage (disadvantage) of discontinuing the Beta product line?

1-2. Assume that Cane expects to produce and sell 89,000 Alphas during the current year. A supplier has offered to manufacture and deliver 89,000 Alphas to Cane for a price of $116 per unit. What is the financial advantage (disadvantage) of buying 89,000 units from the supplier instead of making those units?

1-3. Assume that Cane expects to produce and sell 59,000 Alphas during the current year. A supplier has offered to manufacture and deliver 59,000 Alphas to Cane for a price of $116 per unit. What is the financial advantage (disadvantage) of buying 59,000 units from the supplier instead of making those units?

2. How many pounds of raw material are needed to make one unit of each of the two products? (Alpha / Beta)

whether auditor should be blamed when a company which they have expressed an unmodified audit opinion fails ? explain

a)   Asher Corporation's equipment had an original life of 140 months, and the straight-line depreciation method is used. As of January 1, the equipment was 40 months old. The equipment will be worthless at the end of its useful life.

b)   As of the end of the month, Asher Corporation has provided services to customers for which the earnings process is complete. Formal billings are normally sent out on the first day of each month for the prior month's work. January's unbilled work is $25,000.

c)   Utilities used during January, for which bills will soon be forthcoming from providers, are estimated at $1,500.

d)   A review of supplies on hand at the end of the month revealed items costing $3,500.

e)   The $2,400 balance in prepaid insurance was for a 6-month policy running from January 1 to June 30.

f)   The unearned revenue was collected in December of 20X7. Sixty percent of that amount was actually earned in January with the remainder to be earned in February.

g)   The loan accrues interest at 1% per month. No interest was paid in January.

Buffalo BBQ Restaurant is trying to become more efficient in training its chefs. It is experimenting with two training programs aimed at this objective. Both programs have basic and advanced training modules. The restaurant has provided the following data regarding the two programs after two weeks of implementation:

a. Compute the following performance metrics for each program:

(1) Average hours of employee training per chef, rounded to one decimal place.

Program A:  hrs. per chef

Program B:  hrs. per chef

(2) Average number of mistakes per chef, rounded to one decimal place.

Program A:  mistakes per chef

Program B:  mistakes per chef

b. Which program should the restaurant implement moving forward?

On January 1, 2016, Flash and Dash Company adopted a healthcare plan for its retired employees. To determine eligibility for benefits, the company retroactively gives credit to the date of hire for each employee. The following information is available about the plan:

Required:

Prepare the entries to record:

PAGE 1

GENERAL JOURNAL

Analysis

Compute the OPRB expense for 2016 if the company uses the average remaining service life to amortize the prior service cost.

OPRB expense: _______________

please explain in depth:

Explain what method is used to account for investments in equity securities with 20% to 50% ownership. Briefly describe how dividends received and share of net income are accounted for under this method

Exercise 8-14 Sales and Production Budgets [LO8-2, LO8-3]

The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):

The selling price of the company’s product is $24 per unit. Management expects to collect 75% of sales in the quarter in which the sales are made, 20% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $73,200.

The company expects to start the first quarter with 2,500 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 20% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 2,700 units.

Required:

1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole.

2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole.

3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole.

Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole.

Requirement 2

Requirement 3

Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2018. The manufacturing cost of the computers was $19 million.

This non-cancelable lease had the following terms:

1.) Lease payments: 3,287,947 semiannually, first payment at January 1, 2018; remaining payments at June 30 and December 31 each year through June 30, 2022

2.) Lease term: 5 years (10 semi-annual payments)

3.) No residual value; no purchase option

4.) Economic Life of equipment: 5 years

5.) Implicit interest rate and lessee's incremental borrowing rate: 9% semiannually

6.) Fair Value of the computers at January 1, 2018: $23 million

What is the interest revenue that Technoid would report for this lease in its 2018 income statement?

_______5.

Happy Days, Inc.

Comparative Balance Sheet

June 30, 2019 and 2018

1. Prepare a comparative balance sheet (horizontal analysis) for June 30, 2019 and 2018. (Round percentages to one decimal place.)

2. Interpret your findings: Focus on two accounts you find most interesting and explain why. What may have caused the accounts to change?

3. Vertical Analysis: In 2019: Current Assets are what % of Total Assets?   _____________

Prepare journal entries to record the following merchandising transactions of Lowe’s, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable—Aron.) Aug. 1 Purchased merchandise from Aron Company for $4,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. 5 Sold merchandise to Baird Corp. for $2,800 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $2,000. 8 Purchased merchandise from Waters Corporation for $3,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. 9 Paid $140 cash for shipping charges related to the August 5 sale to Baird Corp. 10 Baird returned merchandise from the August 5 sale that had cost Lowe’s $500 and was sold for $1,000. The merchandise was restored to inventory. 12 After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe’s received a credit memorandum from Waters granting a price reduction of $300 off the $3,000 of goods purchased. 14 At Aron’s request, Lowe’s paid $380 cash for freight charges on the August 1 purchase, reducing the amount owed to Aron. 15 Received balance due from Baird Corp. for the August 5 sale less the return on August 10. 18 Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12. 19 Sold merchandise to Tux Co. for $2,400 under credit terms of n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $1,200. 22 Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe’s sent Tux a $400 credit memorandum toward the $2,400 invoice to resolve the issue. 29 Received Tux’s cash payment for the amount due from the August 19 sale less the price allowance from August 22. 30 Paid Aron Company the amount due from the August 1 purchase.

1. Going forward, how do you see 'sustainability' play into the big picture of how businesses are operated and viewed? Please back up your perspective with a decent explanation and rationale. Also, not overly brief or generic