Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows:

*Common costs allocated on the basis of machine-hours.

†Common costs allocated on the basis of sales dollars.

Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses.

Required:

What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?

Branded Shoe Company manufactures only one type of shoe and has two divisions, the Stitching Division and the Polishing Division. The Stitching Division manufactures shoes for the Polishing Division, which completes the shoe and sells it to retailers. The Stitching Division "sells"shoes to the Polishing Division. The market price for the Polishing Division to purchase a pair of shoes is $42. (Ignore changes in inventory.)   Stitching's costs per pair of soles are: Direct materials $10 Direct labor $ 8 Variable overhead $ 6 Division fixed costs $ 4 Polishing's costs per completed pair of shoes are: Direct materials $14 Direct labor $ 6 Variable overhead $ 4 Division fixed costs $16 7. Calculate and compare the difference in overall corporate net income of Branded Shoe Company between Scenario A and Scenario B if the Polishing Division sells 100,000 pairs of shoes for $120 per pair to customers. Scenario A: Negotiated transfer price of $30 per pair of soles Scenario B: Market-based transfer price A) $1,000,000 more net income under Scenario A B) $1,000,000 of net income using Scenario B C) $200,000 of net income using Scenario A. D) The net income would be the same under both scenarios. 8. Assume the transfer price for a pair of shoes is 180% of total costs of the Stitching Division and 40,000 of soles are produced and transferred to the Polishing Division. The Stitching Division's operating income is ________. A) $896,000 B) $720,000 C) $800,000 D) $880,000 9. If the Polishing Division sells 100,000 pairs of shoes at a price of $120 a pair to customers, what is the operating income of both divisions together? (Assume that the Stitching Division has no other customers) A) $8,800,000 B) $6,800,000 C) $6,000,000 D) $5,200,000

Ken entered into a contract to purchase two retail store premises in June 2003. The cost of each was $300,000, with stamp duty of $20,000 each. Settlement was during August 2003.He used these retail premises (which had been previously unoccupied) to commence a business that sold furniture to the public.During the time that Ken owned the store, they each had an annual aggregated turnover of approximately $3 million.During November 2019, Ken, who was 53 at the time, wanted to have more spare time and not carry on a business anymore.He had found that although his turnover was high, after costs his profitswerevery modest.As a result, he entered into the following contract with Jane:•The first of the two furniture premises was to be sold to Jane for $1,200,000,and the goodwill attached to it soldto Janefor $400,000.•The second store was to be rented to Jane for a two year lease (with an option to renew for another two year period). Rent was set at $2,000 a month, with an upfront lease premium of $25,000 payable. •Jane was to pay Ken $200,000 to not compete with her for the following 3 years.At the time of the November 2019 contract, Ken owned the following assets:•Full ownership of a main residence in Hawthorn, worth $3 million.•42% ownership of a company called PI Pty Ltd, which invests in rural properties. The total market value of PI Pty Ltd was $300,000. •80% share on an investment property (Ken's cousin owns the other 20%). The total value of the property was $500,000.It had a $300,000 mortgage over it.•Superannuation worth $1.5 million.•Shares in BHP worth $200,000.•An apartment in Kew (see below)On 1 December2015 Ken had bought an apartment in Kew to live in. This cost him $400,000. After living in it for 2 years, on 1 December 2017,Ken bought and moved into his Hawthorn house (mentioned above),which he from that point on claimed as his main residence. At the time, his apartment in Kew was worth $500,000, which he immediately rented out. The Kew apartment was sold for $510,000 in December 2019. 5Advise Ken as to the CGT consequences regarding the 2019-20 tax year. In doing so please discuss Ken's ability to utilise the CGT Small Business Concessions. Please also include a discussion of the Net Capital Gain made by Ken for the 2019-20 tax year.

Suppose you want to find the auditing standard issued by the PCAOB that discusses audit

evidence Which auditing standard is this? Give the official name What are the 7 types of evidence discussed in this standard?

Question 2 Bank Reconciliation

The Duluth Manufacturing Company has a business chequing account at the Bank of Ontario. The bank provides a bank statement and cancelled cheques once a month. The cut-off date is the last day of the month. The bank statement for the month of May is summarized as follows:

Balance, May 1, 2016                                          $32,120

       Deposits                                               82,140

       Cheques processed                                       (78,433)

       Service charges                                       (80)

       NSF cheque from customer                                              (2,187)

       Note payment collected by bank (includes $120 interest)          1,120

Balance May 31, 2016                                                $34,680

The company’s general ledger cash account has a balance of $35,276 at the end of May. A review of the company records and the bank statement reveals the following:

1. Cash receipts not yet deposited total $2,965.

2. A deposit of $1,020 was made on May 31 that will not be credited to the company’s account until June.

3. All cheques written in April have been processed by the bank. Cheques written in May that have not been    processed by the bank total $5,536.

4. A cheque written for $1,790 was incorrectly recorded by the company as a $790 disbursement. The original Accounts Payable was $1,790.

Required:

a. Prepare the bank reconciliation for the month of May.

b. Prepare the journal entries required to adjust the general ledger cash account to actual.

Legend Service Center just purchased an automobile hoist for $37,200. The hoist has an 8-year life and an estimated salvage value of $3,400. Installation costs and freight charges were $2,600 and $800, respectively. Legend uses straight-line depreciation. The new hoist will be used to replace mufflers and tires an automobiles. Legend estimates that the new hoist will enable his mechanics to replace 5 extra mufflers per week. Each muffler sells for $72 installed. The cost of a muffler is $37, and the labor cost to install a muffler is $15.

(a) Compute the cash payback period for the new hoist. Cash payback period = _______ YEARS

(b) Compute the annual rate of return for the new hoist. (Round answer to 2 decimal places, e.g. 10.529.)

Annual rate of return = ________

1. What are alaska air groups earnings per share amounts disclosed on the income statement for the most recent year? What dilutive securities are discussed in the footnotes? Please identify and describe other examples of dilutive securities. How do these impact earnings per share?

Ellis issues 7.0%, five-year bonds dated January 1, 2017, with a $580,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $604,738. The annual market rate is 6% on the issue date.

Required:

1. Complete the below table to calculate the total bond interest expense over the bonds' life.
2. Prepare a straight-line amortization table for the bonds’ life.
3. Prepare the journal entries to record the first two interest payments.

Complete the below table to calculate the total bond interest expense over the bonds' life.

Prepare a straight-line amortization table for the bonds’ life.

Prepare the journal entries to record the first two interest payments.

• Record the first interest payment on June 30, 2017.

• Record the second interest payment on December 31, 2017.

1:        Users of financial statements

Identify at least three types of users of financial statements. Describe their primary use of the financial statements and how the misstatement of those statements might injure the user.

2:        Overview of the Financial Statement Audit

What is a financial statement audit, and what is the overall objective of the audit? What must the auditor do to accomplish this objective?

Walbin Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in a particular department consisted of 19,000 units, 100% complete with respect to materials cost and 30% complete with respect to conversion costs. The total cost in the beginning work in process inventory was $25,600. A total of 55,000 units were transferred out of the department during the month. The costs per equivalent unit were computed to be $1.80 for materials and $3.50 for conversion costs. The total cost of the units completed and transferred out of the department was:
Multiple Choice
•   $291,500
•   $314,500
•   $233,750
•   $280,300

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Vallin Manufacturing Corporation’s beginning work in process inventory consisted of 9,700 units, 100% complete with respect to materials cost and 60% complete with respect to conversion costs. The total cost in the beginning inventory was $53,000. During the month, 57,000 units were transferred out. The equivalent unit cost was computed to be $4.20 for materials and $4.70 for conversion costs under the weighted-average method. Given this information, the total cost of the units completed and transferred out was:
Multiple Choice
•   $426,000
•   $355,600
•   $507,300
•   $354,000
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Mundes Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in its Painting Department consisted of 3,600 units that were 60% complete with respect to materials and 40% complete with respect to conversion costs. The cost of the beginning work in process inventory in the department was recorded as $10,400. During the period, 9,600 units were completed and transferred on to the next department. The costs per equivalent unit for the period were $5.60 for material and $6.60 for conversion costs. The cost of units transferred out during the month was:
Multiple Choice
•   $63,360
•   $66,400
•   $117,120
•   $84,000

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In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $32,000 and ending work in process inventory of $37,000. During the month, the cost of units transferred out from the department was $167,000. In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be:
Multiple Choice
•   $69,000
•   $138,000
•   $151,000
•   $204,000

On January 4, 2018, Runyan Bakery paid $324 million for 10 million shares of Lavery Labeling Company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to excercise significant influence over Lavery's operations. Runyan chose the fair value option to account for this investment. Runyan received dividends of $2.00 per share on December 31, 2018, and Lavery reported net income of $160 million for the year ended December 31, 2018. The market value of Lavery's common stock at December 31, 2018 was $31 per share. On the purchase date, the book value of Lavery's net assets was $800 million and:

a. The fair value of Lavery's depreciable assets, with an average remaining useful life of six years, exceeded their book value by $80 million.

b. The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill. Required:

1-a. Prepare all appropriate journal entries related to the investment during 2018, assuming Runyan accounts for this investment under fair value option, and accounts for the Lavery investment in a manner similar to what it would use for securities for which there is not specific influence.

(Record the purchase of Lavery stock for $324 million) (Record Runyan share of Lavery's $160 mil net income)

(Record the receipt of cash dividends of $2 per share on 10 mil shares)

(Record any nec. entry related to depreciation. The fair value of Lavery's depreciable assets, with an average remaining useful life of six years, exceeded their book value by $80 mil) (Record any nec. adj entry to correctly report the investment on the balance sheet. The market value of Lavery's common stock at Dec 31 2018 was $1 per share)

1-b Calculate the effect of these journal entries on 2018 net income, and the amount at which the investment is carried in the December 31, 2018, balance sheet.

(Effect on net income)

(Investment)

2-a Prepare all appropriate journal entries related to the investment during 2018, assuming Runyan accounts for this investment under the fair value option, but uses equity method accounting to account for Lavery's income and dividends, and then records a fair value adjustment at the end of the year that allows it to comply with GAAP.

(Record the purchase of Lavery Labeling stock for $324 mil)

(Record Runyan's share of Lavery's $160 mil net income)

(Record the receipt of cash dividends of $2 per share on 10 mil shares)

(Record any nec entry to related depreciation. The fair value of Lavery's depreciable assets, with an avg remaining useful life of six years, exceeded their book value by $80 mil) (Record any nec adj entry to correctly report the investment on the bal sheet. The market value of Lavery's common stock at Dec 31, 2018 was $1 per share)

2-b Calculate the effect of these journal entries on 2018 net income, and the amount at which the investment is carried in the December 31, 2018, balance sheet.

(Calculate the effect of these journal entries on 2018 net income, and the amount at which the investment is carried in the Dec 31, 2018 balance sheet)

(net income) (Investment)

The partnership of Dennis and Grover reports the following​ information:

• Mike Dennis withdrew cash of $151,000 for personal use.

• Frank Grover withdrew cash of $128,000 during the year.

• Net income is $268,000. The first $134,000 is shared based on the partner capital investments ​(Dennis $108,000 and Grover $160,000​). The next $100,000 is shared based on partner​ service, with Dennis receiving 60 percent and Grover receiving 40 percent. The remainder is shared equally.

Journalize the entries on December 31 to close to each Capital account with the net income to the​ partners, and to close the​ partners' Withdrawal accounts. Explanations are not required. Indicate the amount of increase or decrease in each​ partner's Capital balance. What was the overall effect on partnership​ capital?

Explain computing Earnings & profits and Determined Dividends received by Shareholders?

1-

Direct Materials Variances

Silicone Engine Inc. produces wrist-worn tablet computers. The company uses Thin Film Crystal (TFC) LCD displays for its products. Each tablet uses one display. The company produced 450 tablets during December. However, due to LCD defects, the company actually used 500 LCD displays during December. Each display has a standard cost of $6.00. LCD displays were purchased for December production at a cost of $3,150.

Determine the price variance, quantity variance, and total direct materials cost variance for December. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. And, enter your final variance amounts to the nearest whole dollar.

2-

Direct Materials and Direct Labor Variance Analysis

Abbeville Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 70 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows:

Required:

a. Determine the standard cost per faucet for direct materials and direct labor. Round the cost per unit to two decimal places.

b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

[The following information applies to the questions displayed below.]fNotes with important tax information are provided below

XYZ is a calendar-year corporation that began business on January 1, 2017. For 2018, it reported the following information in its current year audited income statement. Notes with important tax information are provided below. Exhibit 16-6.

Notes:

1. XYZ owns 30 percent of the outstanding Hobble Corp. (HC) stock. Hobble Corp. reported $1,000,000 of income for the year. XYZ accounted for its investment in HC under the equity method and it recorded its pro rata share of HC's earnings for the year. HC also distributed a $200,000 dividend to XYZ.
2. Of the $20,000 interest income, $5,000 was from a City of Seattle bond (issued in 2017), $7,000 was from a Tacoma City bond issued in 2015, $6,000 was from a fully taxable corporate bond, and the remaining $2,000 was from a money market account.
3. This gain is from equipment that XYZ purchased in February and sold in December (i.e., it does not qualify as §1231 gain).
4. This includes total officer compensation of $2,500,000 (no one officer received more than $1,000,000 compensation).
5. This amount is the portion of incentive stock option compensation that vested during the year (recipients are officers)
6. XYZ actually wrote off $27,000 of its accounts receivable as uncollectible.
7. Tax depreciation was $1,900,000.
8. In the current year, XYZ did not make any actual payments on warranties it provided to customers.
9. XYZ made $500,000 of cash contributions to qualified charities during the year.
10. On July 1 of this year XYZ acquired the assets of another business. In the process it acquired $300,000 of goodwill. At the end of the year, XYZ wrote off $30,000 of the goodwill as impaired.
11. XYZ expensed all of its organizational expenditures for book purposes. It expensed the maximum amount of organizational expenditures allowed for tax purposes.
12. The other expenses do not contain any items with book-tax differences.
13. This is an estimated tax provision (federal tax expense) for the year. Assume that XYZ is not subject to state income taxes.

Estimated tax information:

XYZ made four equal estimated tax payments totaling $480,000. Assume for purposes of estimated tax penalties, assume XYZ reported a tax liability of $800,000 in 2017. During 2018, XYZ determined its taxable income at the end of each of the four quarters as follows:

Finally, assume that XYZ is not a large corporation for purposes of estimated tax calculations. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

a. Compute XYZ’s taxable income.

ANSWER FOR A IS 1,868,360

b. Compute XYZ’s income tax liability.