Provide a brief overview of the traditional methods of performance appraisal methods and distinguish these with the modern methiods of performance appraisal

For this assessment, you should assume you are on the internal audit staff of a publicly traded company. Choose company Amazon. You will be required to obtain the last two years’ worth of financial statements and a recent audit report. The internal audit group at the company is tasked with preparing for an upcoming revenue audit and analyzing the business risk internally to mitigate audit findings. You will conduct an internal audit of the company using the information gathered and create a report. Then, you will prepare appropriate memos analyzing the audit report you have prepared, while offering feedback and recommendations.

A. Describe how you would conduct the audit process, incorporating the analytical procedures you would use to investigate selected business transactions.

1. What steps will you take to review the company’s business transactions?

2. What would your plan be to utilize these procedures?

B. Explain the appropriate field work needed to review high-risk business transactions for cash and revenue.

1. What would you need to do in the field to investigate these?

2. Could you convey this information through charts or other supporting documentation?

C. Create a test to assess appropriate assertions for designated high-risk business transactions.

Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products. Forbes Division, which has $4.04 million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $5 million in automated equipment for test machine assembly. The division’s expected income statement at the beginning of the year was as follows.

A sales representative from LSI Machine Company approached Oscar in October. LSI has for $6.12 million a new assembly machine that offers significant improvements over the equipment Oscar bought at the beginning of the year. The new equipment would expand division output by 10 percent while reducing cash fixed costs by 5 percent. It would be depreciated for accounting purposes over a three-year life. Depreciation would be net of the $540,000 salvage value of the new machine. The new equipment meets Pitt's 12 percent cost of capital criterion. If Oscar purchases the new machine, it must be installed prior to the end of the year. For practical purposes, though, Oscar can ignore depreciation on the new machine because it will not go into operation until the start of the next year.

The old machine, which has no salvage value, must be disposed of to make room for the new machine.

Pitt has a performance evaluation and bonus plan based on residual income. Pitt uses a cost of capital of 12 percent in computing residual income. Income includes any losses on disposal of equipment. Investment is computed based on the end-of-year balance of assets, net book value. Ignore taxes.

Required:

a. What is Forbes Division’s residual income if Oscar does not acquire the new machine?

b. What is Forbes Division’s residual income this year if Oscar acquires the new machine?

c. If Oscar acquires the new machine and operates it according to specifications, what residual income is expected for next year?

ANSWER IN DOLLARS NOT PERCENTAGE

(Enter your answers in thousands of dollars. Negative amounts should be indicated by a minus sign. Round your answers to the nearest whole dollars)

The summary of the payroll for the monthly pay period ending July 15 indicated the following:

Journalize the entries to record (a) the payroll and (b) the employer's payroll tax expense for the month. The state unemployment tax rate is 3.1%, and the federal unemployment tax rate is 0.8%. Only $30,000 of salaries are subject to unemployment taxes.

During August, Hill Sales Company had these summary transactions:

q2

On August 1, 2016, Pereira Corporation has sold, on account, 1,800 Wiglows to Mendez Company at $480 each. Mendez also purchased a 1-year service-type warranty on all the Wiglows for $10 per unit. In 2016, Pereira incurred warranty costs of $9,000. Costs for 2017 were $6,000.

Required:

Fill out the IRS required forms and/or schedules for a complete and accurate processable form. On these forms and/or schedules are 203 line entries or boxes that must be checked. These must be made to fill out the forms correctly.

Paul J. and Judy L. Vance are married and file a joint return. Paul is self- employed as a dentist, and Judy is a college professor. Paul and Judy have two children. The oldest is Vince who lives at home. Vince is a law student at the University of Cincinnati and worked part-time during the year, earning $1,500, which he spent for his own support. Paul and Judy provided $6,000 toward Vince’s support. Jennifer is the youngest and lived in the Vance’s home for the entire year. The Vances provide you with the following additional information.

The Vances do not want to contribute to the presidential election campaign.

The Vances live at 621 Franklin Avenue, Cincinnati, OH 45211.

Paul’s birthday is 3/5/1961 and his Social Security number is 333-45-6666.

Judy’s birthday is 4/24/1964 and her Social Security number is 566-77-8888.

Vince’s birthday is 11/6/1996 and his Social Security number is 576-18-7928.

Jennifer’s birthday is 12/12/2009 and her Social Security number is 613-97-8465.

The Vances do not have any foreign bank accounts or trusts.

Judy is a lecturer at Xavier University in Cincinnati, where she earned $30,000. The university withheld federal income tax of $3,375, $1,860 of Social Security tax, and $435 of Medicare tax. She also worked part of the year for Delta Airlines. Delta paid her $10,000 in salary and withheld federal income tax of $1,125, Social Security tax of $620, and Medicare tax of $145.

The Vances received $800 of interest from State Savings Bank on a joint account. They received interest of $1,000 on City of Cincinnati bonds they bought in January with the proceeds of a loan from Third National Bank of Cincinnati. Paul received a dividend of $540 on General Bicycle Corporation stock he owns. Judy received a dividend of $390 on Acme Clothing Corporation stock she owns. Paul and Judy received a dividend of $865 on jointly owned stock in Maple Company. All of the dividends are ordinary dividends.

Paul practices under the name "Paul J. Vance, DDS." His business is located at 645 West Avenue, Cincinnati, OH 45211, and his employer identification number is 01-2222222. Paul’s gross receipts during the year were $111,000. Paul uses the cash method of accounting for his business. Paul’s business expenses are as follows:

Advertising $1,200

Professional dues $490

Professional journals for dentists $360

Contributions to employee pension plans $2,000

Malpractice insurance $3,200

Fine for overbilling State of Ohio for work performed on welfare patients $5,000

Insurance on office contents $720

Interest on money borrowed to refurbish office $600

Accounting services $2,100

Miscellaneous office expense $388

Office rent $12,000

Dental supplies used in dental services for patients $7,672

Utilities and telephone $3,360

Wages $30,000

Payroll taxes $2,400

In June, Paul decided to refurbish his office. This project was completed and the assets placed in service on July 1, 2019. Paul’s expenditures included $8,000 for new office furniture, $6,000 for new dental equipment (seven-year recovery period), and $2,000 for a new computer. Paul elected to compute his cost recovery allowance using MACRS. He did not elect to use §179 immediate expensing and he chose not to claim any bonus depreciation.

Judy’s mother, Sarah, died on July 2, 2018, leaving Judy her entire estate. Included in the estate was Sarah’s residence (325 Oak Street, Cincinnati, OH 45211). Sarah’s basis in the residence was $30,000. The fair market value of the residence on July 2, 2018, was $155,000. The property was distributed to Judy on July 2, 2018. The Vances have held the property and have managed it themselves and they started renting the house to the same tenant starting January 1, 2019.To compute depreciation on the house, the Vances had allocated $15,000 of the property’s basis to the land on which the house is located. The Vances collected rent of $1,000 a month during the months the house was rented during the year.

They incurred the following related expenses during this period:

Property insurance $500

Property taxes $800

Maintenance $465

Depreciation (to be computed by you)

The Vances sold 200 shares of Capp Corporation stock on September 3, 2018, for $42 a share. The Vances received the stock from Paul’s father on June 25, 1980, as an inheritance. Paul’s father originally purchased the stock for $10 per share in 1967. The stock was valued at $14.50 per share on the date of inheritance

Judy is required by Xavier University to visit several high schools in the Cincinnati area to evaluate Xavier University students who are doing their practice teaching. However, she is not reimbursed for the expenses she incurs in doing this. During the spring semester (January through April 2019), she drove her personal automobile 6,800 miles in fulfilling this obligation. Judy drove an additional 6,700 personal miles during 2019. She has been using the car since June 30, 2011. Judy uses the standard mileage method to calculate her car expenses.

Paul and Judy have given you a file containing the following receipts for expenditures during the year:

Prescription medicine and drugs (net of insurance reimbursement) $376

Doctor and hospital bills (net of insurance reimbursement) $2,468

Penalty for underpayment of last year’s state income tax $15

Real estate taxes on personal residence $4,762

Interest on home mortgage (paid to Home State Savings & Loan) $8,250

Interest on credit cards (consumer purchases) $595

Cash contribution to St. Matthew’s church $3,080

Payroll deductions for Judy’s contributions to the United Way $150

Fee for preparation of 2018 tax return paid April 12, 2019, of $500.

The Vances made timely estimated federal income tax payments of $1,700 each quarter during 2019. The Vances made the fourth-quarter payment on December 31, 2019. They would like to receive a refund for any overpayments.

On October 1, 2018, Jay Crowley established Affordable Realty, which completed the following transactions during the month: Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for Common Stock, $27,000. Paid rent on office and equipment for the month, $4,870. Purchased supplies on account, $1,440. Paid creditor on account, $530. Earned sales commissions, receiving cash, $22,140. Paid automobile expenses (including rental charge) for month, $1,350, and miscellaneous expenses, $910. Paid office salaries, $2,830. Determined that the cost of supplies used was $800. Paid dividends, $1,310. Required: 1. Journalize entries for transactions (a) through (i) (in chronological order), using the following account titles: Cash, Supplies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. For a compound transaction, if an amount box does not require an entry, leave it blank. a. b. c. d. e. f. g. h. i. 2. Prepare T accounts, using the account titles in (1). Post the journal entries to these T accounts, selecting the appropriate letter to the left of each amount to identify the transactions. Determine the account balances of the T accounts (when required), after all posting is complete. Accounts containing a single entry only (such as Common Stock) do not need a balance. Cash Bal. Supplies Bal. Accounts Payable Bal. Common Stock Dividends Sales Commissions Rent Expense Office Salaries Expense Automobile Expense Supplies Expense Miscellaneous Expense 3. Prepare an unadjusted trial balance as of October 31, 2018. List all accounts in the order of Assets, Liabilities, Stockholders’ equity, Revenues, and Expenses. For those boxes in which no entry is required, leave the box blank. Affordable Realty Unadjusted Trial Balance October 31, 2018 Debit Balances Credit Balances 4. As a result of the January transactions (a-i), determine the following: a. Amount of total revenue recorded in the ledger. $ b. Amount of total expenses recorded in the ledger. $ c. Amount of net income for October. $ 5. Determine the increase or decrease in retained earnings for October. $

Franklin Products Limited manufactures and distributes a number of products to retailers. One of these products, SuperStick, requires five kilograms of material D236 in the manufacture of each unit. The company is now planning raw materials needs for the third quarter—July, August, and September. Peak sales of SuperStick occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements:

1. The finished goods inventory on hand at the end of each month must be equal to 8,650 units plus 20% of the next month’s sales. The finished goods inventory on June 30 is budgeted to be 22,780 units.
2. The raw materials inventory on hand at the end of each month must be equal to 40% of the following month’s production needs for raw materials. The raw materials inventory on June 30 for material D236 is budgeted to be 131,600 kilograms.
3. The company maintains no work in process inventories.

A sales budget for SuperStick for the last six months of the year follows:

Required:
1. Prepare a production budget for SuperStick for July, August, September, and October.

2. Not available in Connect.

3. Prepare a direct materials purchases budget showing the quantity of material D236 to be purchased for July, August, and September and for the quarter in total.

Multiple-Product Break-even, Break-Even Sales Revenue

Cherry Blossom Products Inc. produces and sells yoga-training products: how-to DVDs and a basic equipment set (blocks, strap, and small pillows). Last year, Cherry Blossom Products sold 13,500 DVDs and 4,500 equipment sets. Information on the two products is as follows:

Total fixed cost is $77,270.

Suppose that in the coming year, the company plans to produce an extra-thick yoga mat for sale to health clubs. The company estimates that 9,000 mats can be sold at a price of $17 and a variable cost per unit of $11. Total fixed cost must be increased by $25,750 (making total fixed cost $103,020). Assume that anticipated sales of the other products, as well as their prices and variable costs, remain the same.

Part 1: Sales Mix Instructions and Part 2: Break-Even

1. What is the sales mix of DVDs, equipment sets, and yoga mats?
3:1:2

2. Compute the break-even quantity of each product.

3b. What is the overall contribution margin ratio? Use the contribution margin ratio to compute overall break-even sales revenue. (Note: Round the contribution margin ratio to the nearest whole percent; round the break-even sales revenue to the nearest dollar.)

4. Compute the margin of safety for the coming year in sales dollars.
$

The Australian Securities and Investment Commission (ASIC) is taking Mountain Ltd to court for breach of the legislation under the Corporations Act 2001 in the 2018 financial year. The matter is still ongoing, and the company does not expect the matter to be resolved until November 2020. 1f found liable, the fines could be between $200,000 and $2,000,000. The company is somewhat confident that they will not be fined the full $2,000,000 but they are uncertain about the outcome. The company wants to ensure that they have reported the matter correctly in the financial accounts for the year ended June 2020. The date is August 1 and the directors have not signed off on the financial accounts. 1. Discuss whether an adjustment in the financial accounts is required or a note disclosure, give reason for your answer. 2. Discuss the effect the scenario has on the accounts and how they are presented.

Long-Term Performance Report

Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below.

At the zero-defect state, Nabors expects to spend $500,000 on quality engineering, $100,000 on vendor certification, and $65,000 on packaging inspection. Assume sales to be $2,400,000.

Required:

1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two decimal places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state.

2. Why are quality costs still present for the zero-defect state?

ndicate how each of the following events should be classified in a statement of cash flows for the current calendar year. Use the following code: O = operating activities, I = investing activities, and

F = financing activities If the event does not involve a cash flow that should be included in the statement of cash flows, use an X. ____

(a) Declared a dividend to be paid early next year. ____

(b) Recorded depreciation expense for the current year. ____

(c) At year-end, paid rent in advance for the next six months. ____

(d) Issued capital stock for cash; management plans to use this cash to invest in marketable securities. ____

(e) Sold a parcel of unused land at a loss. ____

(f) Collected principal amount due on a note receivable. ____

(g) Used the cash received in d, above, to purchase marketable securities. ____

(h) Collected interest due on note receivable described in f, above. ____

(i) Made an adjusting entry to accrue interest payable at year-end. ____

(j) Collected account receivable from a customer who made a large credit purchase in a prior period.

Towing Company manufactures and sells a single product for $40 per unit.
Variable costs are $30 per unit and fixed costs total $168,000. During
2019, the company sold 26,500 units of this product to customers. In
order to improve profitability, the president of Towing Company believes
the following changes should be made in 2020:

1. decrease the selling price of the product by 10%

2. automate a portion of the production process which will reduce
   variable costs by 5% per unit but will add an additional fixed
   cost of $16,310 per year

3. increase advertising by $49,420

Assume these changes are made. 
A) Calculate the number of units that Towing Company must sell in 2020 in order to earn a net income that is 20% greater than the net income earned in 2019.

B) Calculate the number of units that Towing Company must sell in 2020 in order to earn a target profit equal to 12% of sales.

Quest Quality Sportswear (QQS) is an athletic wear company, which manufactures boys, girls, men, and women's clothing. The company is located in NC. QQS is a private company. Therefore, audited financial statements are not available to external users on the company website.

At Quest Quality Sportswear, the following changes took place on the company's balance sheet last year:

Note I is for increase and D is for decrease.

Other information:

• Long-term investments that cost the company $6 were sold during the year for $16
• Land that cost $15 was sold for $9.
• The company declared and paid $30 in cash dividends during the year.
• Besides the sale of land, no other sales or retirements of plant and equipment took place during the year.
• QQS did not retire any bonds during the year or issues any new common stock.
• QQS's beginning cash balance was $90.
• QQS's ending cash balance was $85.

QQS's income statement for the year follows:

1. Use the indirect method to determine the net cash provided by operating activities for the year.

2. Prepare a statement of cash flows for the year.

Be sure to show your work. Not doing so will result in deductions and/or no credit given

Victory Company uses weighted-average process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 700,000 units of product to finished goods. At the end of November, the goods in process inventory consists of 180,000 units that are 30% complete with respect to labor. Beginning inventory had $420,000 of direct materials and $139,000 of direct labor cost. The direct material cost added in November is $2,220,000, and the direct labor cost added is $3,254,000. Beginning work in process consisted of 60,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 60,000 were from beginning work in process and 640,000 units were started and completed during the period.

1. Determine the equivalent units of production with respect to (a) direct materials and (b) conversion
2. Compute both the direct material cost and the conversion cost per equivalent unit
3. Compute the direct material cost and the conversion cost assigned to (a) units completed and transferred out and (b) ending work in process inventory