What are some patterns that could be found using diagnostic analysis? Between which types of variables?

A lease agreement that qualifies as a finance lease calls for annual lease payments of $20,000 over a eight-year lease term (also the asset’s useful life), with the first payment at January 1, 2016, the beginning of the lease. The interest rate is 4%. The lessor’s fiscal year is the calendar year. The lessor manufactured this asset at a cost of $128,000. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: a. Determine the price at which the lessor is “selling” the asset (present value of the lease payments). b. Create a partial amortization schedule through the second payment on January 1, 2017. c. What would be the amounts related to the lease that the lessor would report in its income statement for the year ended December 31, 2017 (ignore taxes)?

Subsequent Events Facts:

You are performing an annual audit of a company with a December 31, 20X1 year-end. Your firm is planning to complete the audit on March 1, 20X2 and release the report on March 31, 20X2. On March 15, 20X2, two material subsequent events occur:

• A fire caused extensive damage to the company’s manufacturing plant in New Jersey.

• A large customer went bankrupt. At December 31, 20X1, the Company had a receivable of $2,500,000 from this customer; at December 31, 20X1 the Company had established an allowance for doubtful accounts of $700,000 for this customer.

Required:

1. Explain whether each subsequent event is a Type 1 or Type 2 Subsequent Event.

2. What is the impact of each subsequent event on the company’s audited financial statements for the year ended December 31, 20X1? Be specific as to whether (a) there will be an adjustment which will cause the company’s balance sheet and / or income statement to change plus footnote disclosure, (b) there will only be footnote disclosure, or (c) there will be no impact to either the financial statements or the footnote disclosures.

3. How should your Audit Firm date its audit report?

25

Chhom, Inc., manufactures and sells two products: Product F9 and Product U4. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:

The direct labor rate is $24.40 per DLH. The direct materials cost per unit is $258 for Product F9 and $215 for Product U4.

The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

The overhead applied to each unit of Product U4 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

I am supposed to provide verbiage (shown below) and a chart to support the verbiage. I need your help in making a chart that I can paste into my word document from the current ratios from PepsiCo and Coca-Cola provided below. I know very little about excel or charts and hope you can assist me in learning this process. It will definitely be worth a 5-star rating for you. Thank you for your time and support.

The current ratio is enumerated from the balance sheet and is a comparison of the current assets to current liabilities which is calculated by dividing the two numbers (Law, 2016). PepsiCo’s total current assets for 2017 were $31,027,000 and the total current liabilities for the same period was $20,502,000. When these two numbers are divided, the current ratio is 1.51: 1 (PepsiCo, 2019). Coca-Cola’s total current assets for the same time frame were $36,545,000 and their total current liabilities in 2017 equaled $27,194,000. The partition of the statistics is equivalent to the current ratio of 1.34: 1 (Coca-Cola, 2018).

One Friday afternoon years ago I was sitting in my office as the CEO of a young software company, when my department heads of software development and finance came in separately to each request an additional $125,000 in funding. My software development director wanted new product testing equipment and my CFO wanted to upgrade our accounting and business systems software. Both were legitimate requests that would help move the business forward. I couldn’t help but laugh: In the span of 10 minutes I was being asked to approve two unplanned expenses of $125,000, and they were as different as apples and oranges. Framing the Problem This story captures the dilemma faced by CEOs every day and is unique to the job. How do you compare two expenses that have almost no relation to each other?

When you have to decide between two expenses, you choose the one that you think based upon your experience will generate the most.

True or False and why please:)

On May 31, 2016, Sandals report purchased a truck at a cost of $160,000. before placing the truck into service, The company spend $2,500 painting it, $500 replacing tires, and $5,000 overhauling the engine. The truck should remain in service for 5 years and have a residual value of $7,500. The truck’s annual mileage is expected to be 15,000 in each of the first two years and 10,000 miles in the next three years. In deciding which depreciation method to use, the general manager request depreciation schedule for each of the depreciation methods (straight line, unit-of production, and double – declining-balance). work out each depreciation in the depreciation schedule. pass all transaction in the journal entry. journal entry must be included. show working out for each depreciation.

work out the unit of production depreciation in the depreciation schedule. should work out based off the following information listed below

Miles                                       60,000

Cost                                         165,000                                  

Residual value                        7,500                                      

Depreciable amount                $165,000 - $7,500 = $157,500

Depreciation per unit             157,500 / 60,000 = 2.63

1. Analyzing Manufacturing Cost Accounts

   Clapton Company manufactures custom guitars in a wide variety of styles. The following incomplete ledger accounts refer to transactions that are summarized for May:

   Materials
   May 1	Balance	105,600	May 31	Requisitions	(a)
   31	Purchases	500,000

   Work in Process
   May 1	Balance	(b)	May 31	Completed jobs	(f)
   31	Materials	(c)
   31	Direct labor	(d)
   31	Factory overhead applied	(e)

   Finished Goods
   May 1	Balance	0	May 31	Cost of goods sold	(g)
   31	Completed jobs	(f)

   Wages Payable
   			May 31	Wages incurred	396,000

   Factory Overhead
   May 1	Balance	26,400	May 31	Factory overhead applied	(e)
   31	Indirect labor	(h)
   31	Indirect materials	15,400
   31	Other overhead	122,500

   In addition, the following information is available:

   1. Materials and direct labor were applied to the following jobs in May:

      Job No.		Style	Quantity		Direct Materials				Direct Labor
      101		AF1	330			$ 82,500				$ 59,400
      102		AF3	380			105,400				72,600
      103		AF2	500			132,000				110,000
      104		VY1	400			66,000				39,600
      105		VY2	660			118,800				66,000
      106		AF4	330			66,000				30,800
      		Total	2,600			$570,700				$378,400

   2. Factory overhead is applied to each job at a rate of 50% of direct labor cost.
   3. The May 1 Work in Process balance consisted of two jobs, as follows:

      Job No.	Style	Work in Process, May 1
      101	AF1	$26,400
      102	AF3	46,000
      Total		$72,400

   4. Customer jobs completed and units sold in May were as follows:

      Job No.	Style	Completed in May	Units Sold in May
      101	AF1	X	264
      102	AF3	X	360
      103	AF2		0
      104	VY1	X	384
      105	VY2	X	530
      106	AF4		0

   Required:

   1. Determine the missing amounts associated with each letter by completing the table below. If required, round your unit cost to two decimal places. If an answer is zero, enter in "0". Enter amounts as positive numbers.

   Job No.	Style	Quan- tity		May 1 Work in Process		Direct Materials			Direct Labor		Factory Overhead		Total Cost		Unit Cost		Units Sold		Cost of Goods Sold
   No. 101	AF1	330		$		$82,500			$59,400		$		$		$				$
   No. 102	AF3	380				105,400			72,600
   No. 103	AF2	500				132,000			110,000
   No. 104	VY1	400				66,000			39,600
   No. 105	VY2	660				118,800			66,000
   No. 106	AF4	330				66,000			30,800
   Total		2,600		$		$570,700			$378,400		$		$						$

   a. Materials Requisitions $

   b. Work in Process Beginning Balance $

   c. Direct Materials $

   d. Direct Labor $

   e. Factory overhead applied $

   f. Completed jobs $

   g. Cost of goods sold $

   h. Indirect labor $

   2. Determine the May 31 balances for each of the inventory accounts and factory overhead. Enter all amounts as positive numbers.

   Materials	$
   Work in Process	$
   Finished Goods	$
   Factory Overhead	$

Abiy's Apple Pies purchases pies from a supplier, which it then sells to customers. During the year, it had the following information related to its inventory:

A. Using the information above, complete the following table related to Abiy's Apple Pies. Assume Abiy's uses the periodic inventory method. Round your final answer to the nearest whole number.

B. Using the same information for Abiy's Apple Pies, complete the following table. Assume Abiy uses the perpetual inventory method.

Going Concern

Facts:

• A Chicago area company (“Company”) has been manufacturing metal gas tanks for passenger automobiles since 1918. The Company has always been a privately held family run business.

• The Company has been profitable for much of its history; retained earnings at the end of 20X1 was $20 million.

• Recently mandated EPA mpg requirements have caused automobile manufacturers to move to utilizing plastic gas tanks – which are much lighter than metal. This change in materials helped automobile manufacturers reduce auto weights and meet the increased mpg requirements.

• The Company decided not to convert their operation to plastic gas tanks because their expertise was only in manufacturing metal products.

• A few years back, the owners were faced with two options: Liquidate and distribute available assets or move into a different line of business. The Company decided to do the latter. The Company felt it could use its expertise to manufacture metal frames for televisions (like for Toshiba, Panasonic, etc.)

• The Company built a new manufacturing plant in Georgia for manufacturing these metal TV frames; the plant was financed with low interest rate IRBs (Industrial Revenue Bonds).

• The IRBs were for $25 million with a 20-year term. The Company has no other debt.

• Unfortunately, in its first two years of operation of the new metal picture frame plant– 20X2 & 20X3 – the Company lost $11 million and $8 million, respectively. The metal TV frame business is extremely competitive; sales prices of metal TV frames are quite low. The Company was simply unable to produce large quantities of metal frames at a cost which would enable the Company to generate adequate gross profit.

• You are finishing your Audit of 20X3 & discussed the Going Concern issue with the Company’s management, including the family owners. The owners / managers feel they have no choice but to continue producing metal TV frames – due to the 20-year IRB term.

• Management prepares financial projections for the next year which shows the Company breaking even; the projections reflect a significant increase in the gross profit – it is unclear how management will improve their gross profit margin so significantly. Part 1 (Continued)

Required: State whether you believe there is or is not substantial doubt about the Company’s ability to continue as a Going Concern. Provide your supporting arguments, specifically addressing: • Conditions and Events • Management’s Plans

Stating that you believe there is substantial doubt means that your Audit Firm’s Independent Auditor’s Report for the year of 20X3 will include an emphasis of a matter paragraph with the supporting footnote. (There is no need to formally draft the paragraph & supporting footnote.)

Stating that you believe there is not substantial doubt means that your Audit Firm’s Independent Auditor’s Report for the year of 20X3 will not include an emphasis of a matter paragraph but the Audited Financial Statements will include a footnote describing the conditions and events and how management’s plans alleviated the conditions and events. (There is no need to formally draft the footnote.)

(a) Prepare a horizontal analysis of the balance sheet data for Metlock, using 2016 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)

(b) Prepare a vertical analysis of the balance sheet data for Metlock for 2017.

Each of the four independent situations below describes a sales-type lease in which annual lease payments of $100,000 are payable at the beginning of each year. Each is a finance lease for the lessee. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Determine the following amounts at the beginning of the lease. (Round your intermediate and final answers to the nearest whole dollar amount.)

Which of the following cash payments would involve the immediate recording of an expense? Why?

1. Paid vendors for office supplies previously purchased on accohnt

2. Paid an auto dealer for a new company auto

3. Paid the current month's rent

4. Paid salaries for the last half of the current month

2 answers meet this requirement.

Practice questions

(1)        The standard costs of wooden ducks on wheels, for the CURRENT year, for 5 mm board and for cutting are as follows:-

            5 mm board: 0.2 sq. metre at £4.50 per sq. metre.

            Cutters: 1.5 minutes at £7.20 per hour.

In the most recent period, 120 wooden ducks on wheels were produced.

25 sq. metres of 5 mm board were requisitioned from stores at a total cost of £110.

            2.75 hours were recorded for cutters at a total cost of £22.

            Required

(a)        Calculate the material price variance and material usage variance for 5 mm board

(ii)        Calculate the wage rate variance and labour efficiency variance for cutters

Suggest possible reasons for the variances calculated.

(2)        Given standard cost per unit:

            Direct materials (4 kg. @ 75p per kg)

            Direct labour (2 hrs @ £1.60 per hr)

            Actual details are:

            Calculate:         Material and labour variances.

Part A

Tank Corporation manufactures and sells 300,000 electrical meters using a capacity of 110,000 machine hours, enough to make 330,000 units each year, which usually includes 30,000 units that have to be reworked. Contribution margin –CM - per saleable unit is $8. Additional costs per reworked unit are:

      $7

Company engineers have devised a new process that would completely eliminate defects and therefore avoid the need for rework, and would actually increase capacity, however, this will add $315,000 in fixed manufacturing overhead each year.

Required:

1.      Determine the impact of the new process if Tank were to produce the same quantity of units as in the past. Clearly show any cost savings and extra costs.

Part B     

       Assume that Tank has proceeded with the anticipated changes, and is exploring new markets as a result of the engineering changes referred to above aswell as the increase in capacity, and has accepted a proposal to make 20,000 units of a modified version of the meter which will generate $10 of contribution margin per unit.

Required:

2.      Should Tank go ahead with this new job? Explain with proof.

3.      What other nonfinancial and qualitative factors should be considered in making this decision?