what is channel stuffing and how managers use the method in earning management

The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production department factory overhead rate method. The following factory overhead was budgeted for Firebolt:

Direct labor hours were estimated as follows:

In addition, the direct labor hours (dlh) used to produce a unit of each product in each department were determined from engineering records, as follows:

Single Plantwide Method

Shaded cells have feedback.

a. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the single plantwide factory overhead rate method, using direct labor hours as the activity base . If required, round all per-direct labor hours and per-unit answers to the nearest cent.

Points:

0 / 2

Feedback

Multiple Production Department Method

Shaded cells have feedback.

b. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the multiple production department factory overhead rate method, using direct labor hours as the activity base for each department. If required, round all per-unit answers to the nearest cent.

1) W XYZ Limited is evaluating Project X , which requires an initial investment of RO40,000 . The expected net cash flows are RO15,000 pa for five years at today's prices . However these are expected to rise by 6.0 % pa because of inflation . The firm's cost of capital is 13 % . Find the NPV by : ( a ) discounting money cash flows ( b ) discounting real cash flows .

2) XYZ Limited is evaluating Project X, which requires an initial investment of RO60,000. The expected net cash flows are RO15,000 pa for first two years, RO20,000 for the third and fourth year and RO30,000 for the fifth year. However these are expected to rise by 6.0% pa because of inflation. The firm's cost of capital is 13%. Find the NPV by: (a) discounting money cash flows (b) discounting real cash flows.

The following questions relate to nonstatistical and monetary unit sampling. Choose the best response.

1. A number of factors influence the sample size for a substantive test of details of an account balance. All other factors being equal, which of the following would lead to a larger sample size?

   1. Greater reliance on internal control

   2. Greater reliance on substantive analytical procedures

   3. Smaller expected frequency of errors

   4. Smaller measure of tolerable misstatement

2. The risk of incorrect acceptance relates to

   1. substantive tests and affects audit efficiency.

   2. substantive tests and affects audit effectiveness.

   3. tests of controls and affects audit efficiency.

   4. tests of controls and affects audit effectiveness.

3. In a probability-proportional-to-size sample with a sampling interval of $3,000, which of the following is true?

   1. An overstatement error of $200 in an item recorded at $300 will result in a projected error of $2,000.

   2. An overstatement error of $700 in an item recorded at $3,500 will result in a projected error of $600.

      1. I only

      2. II only

      3. Both I and II

      4. Neither I nor II

Please answer all parts as I cant post separatelty because they are connected

Questions 4-8 USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (5) QUESTIONS:

Ramsey, Inc. sold merchandise to Min Corporation on June 1, 2019 and accepted an interest-bearing note with an 8% APR.  Min agreed to make annual payments of P&I in the amount of $27,000 per year for 5 years with the first payment being made immediately.  The remaining payments are to be remitted each June 1^st.  Ramsey’s year-end is December 31^st. Min’s normal cost to borrow is 8%.

Required:

Question 4

Determine the Face Value of the note receivable that Ramsey would recognize on Jun 1, 2019: $____________________________

(round your answer to the nearest whole dollar

Question 5

Using the information presented in #4 above, determine the Interest Revenue that Ramsey will recognize for the year ended Dec 31, 2020 on their Income Statement: $________________________

Question 6

Using the information in #4 above, answer the next (3) questions by preparing the Balance Sheet as of Dec 31, 2019:

Current Assets:

Interest Receivable $___________________

Note Receivable $___________________

Long-Term Investments:

Note Receivable $___________________

Question #6:

Determine the balance in the Interest Receivable account as of Dec 31, 2019: $___________________

Question 7

Using the information presented in #4 above, determine the current maturity of the long-term note receivable. (I.e. how much principal will be repaid in 2020 and therefore should be classified as a current asset.)

Question 8

Using the information presented in #4 above, determine the balance of the Note Receivable that should be classified as a Long-Term Investment (I.e. the balance of the note receivable that will not be repaid within the next 12 months from the balance sheet dated Dec 31, 2019.)

what are the approaches of earnings

You  are an entrepreneur who is designing a new line of boutique hotels located along Florida’s coastlines. Each of the 75 guest rooms in each hotel will offer upscale decor, Wi-Fi, and iPod docks for a nightly rate of $299. The hotels will have a spa, an on-site restaurant and a separate full-service bar that features local musicians. Describe the demographics—age, gender, family life cycle, income and social class, ethnicity, and place of residence—of your target customer.

4). Grill Time sells its barbecue sets for $170 each. Suppose the company incurs the following average cost per barbecue set:

Direct materials $52

Direct labor 28

Variable manufacturing overhead 11

Variable selling expenses 5

Fixed manufacturing overhead* 24 Total cost $120

* $ 1,800,000 / 75,000 units

Grill Time has enough idle capacity to accept a one-time-only special order from Backyard Living, Inc. for 2,000 barbecue sets at a sales price of $130 per set. Grill Time will not incur $2 of variable selling expenses for this order.

How would accepting the order affect Grill Time's operating income?

In 2013, Apple Inc. sold $17 billion of bonds in the biggest corporate offering on record as the iPhone maker seeks to help finance a $100 billion capital reward for shareholders. This financial policy changed Apple’s capital structure significantly. The leverage ratio of Apple increased after the buyback of common stocks and the issuance of long-term bonds. Repurchase is a way to give it back to shareholders. It is especially the case for Apple as the company has been piling up cash and now shows signs of a slowdown in innovation and growth.

There are several ways a firm could give back to loyal shareholders. Companies could reward shareholders by paying dividends, using existing cash to buy back shares, granting preferred stocks to existing shareholders, or issuing bonds to buy back shares.

Discuss:

1. What is the potential impact of the policy on Apple’s capital structure? Discuss Apple’s financial positions, profitability and risk by analyzing the commitment of cash payment, the tax liabilities, the risk of financial distress, and the growth opportunities.
2. Do you think issuing bonds and using the cash to buy back shares is Apple’s best financial strategy? What would you recommend?

At the end of the December 31 2016 fiscal year, Yin trucking corporation which follows IFRS 16, negotiated and closed a long term lease contract for newly constructed truck terminals and freight storage facilities. The buildings were erected to the company’s specifications on land owned by the company. On January 1 2017, Yin trucking corporation took possession of the leased properties and made a cash payment of 1,048,00$. Although the useful life of each terminal is 40 years, the non cancellable lease runs for 20 years from January 1 2017 with a purchase option available upon expiration of the lease. The 20 year lease is effective for the period January 1 2017 through December 31 2036. Advance rental payments of 900,000$ are payable to the lessor on January 1 of each first 10 years of the lease term. Advance rental payments of 320,000$ are due on January 1 of each first 10 years of the lease term.The company has an option of purchasing all of these leased facilities for 1 million on December 31 2036 although their fair value at that time is to be estimated at 3 million$. At the end of the 40 years, the terminals and the facilities will have no remaining value. Yin trucking must also make annual payments on January 1 of each year to the lessor of 125,000$ for property taxes and 23,00$ for insurance. The lease was negotiated at 6% rate of return.

Required:

1) assuming a capitalized value of terminal facilities at January 1 2017 of 8.7 million, prepare the journal entries for YIN TRUCKING CORPORATION.

a) The signing of the lease

b) the cash payment to the lessor on January 1 2017

c) Depreciation of the cost of the properties for 2017 using the straight line method

d) The accrual of interest expense at December 31 2017 and any other adjusting journal entries

1.Owner's equity for our company is $500,000, and total liabilities are $250,000. The company paid $50,000 in dividends during the year. What do our total assets equal?

$250,000

$300,000

$700,000

$750,000

2.The net income for our company this year is $20,000. The beginning and ending retained earnings balances were $46,000 and $52,000, respectively. The company issued no common stock. Calculate the amount of dividends paid by the company this year.

$14,000

$54,000

$60,000

$106,000

3.Which of the following accounts is increased with a credit?

cash

prepaid insurance

salaries expense

unearned revenue

4.On August 21, we paid four months' rent in advance, which totaled $3,200. What account would we credit when we journalize this entry?

rent expense

cash

prepaid rent

account payable

5.On September 5, we received an $11,400 payment on account. What account would we debit when we journalize this entry?

accounts payable

cash

accounts receivable

fees earned

6.On September 11, we performed $5,750 of service and billed our customer. What account would we credit when we journalize this entry?

service revenue

cash

accounts receivable

retained earnings

7.On September 22, we purchased supplies on account for $1,150. What account would we debit when we journalize this entry?

supplies

cash

accounts payable

supplies expense

Superior Company manufactures three products using the same production process: tables, benches, and planters. The costs incurred up to the split-off point are $250,000. These costs are allocated to the products on the basis of their sales value at the split-off point. The number of units produced, the selling prices per units at each point in production, and the additional processing costs are as follows:

1) Which information is not relevant to the decision on whether or not to process the products further (1 pt)?

2) Prepare an incremental analysis (with labels!) of the three products (6 pts).

3) Which products should be processed further and which should be sold at the split-off point (2 pts)?

4) Would your decision in #3 be different if the company was using quantity of output to allocate joint costs? Explain (1 pt).

Use the Internet to research a recent accounting scandal within the past five years related to irregularities in financial statement reporting.

Using the case (see above) as a reference and from the e-Activity, discuss the improper recognition treatment you researched, and make a recommendation regarding the type of analytical procedure that should have detected the improper accounting transactions. Propose the internal control activities or audit plan that might have detected the improper transactions. Be specific with your recommendation.

1.On January 1 of the current year (Year 1), our company acquired a truck for $75,000. The estimated useful life of the truck is 5 years or 100,000 miles. The residual value at the end of 5 years is estimated to be $5,000. The actual mileage for the truck was 22,000 miles in Year 1 and 27,000 miles in Year 2. What is the depreciation expense for the second year of use (Year 2) if we use the units of production method?

$14,000

$15,400

$16,800

$18,900

2.On January 1, our company purchased a truck for $85,000. The estimated useful life of the truck is 4 years. The residual value at the end of 4 years is estimated to be $5,000.

What is the depreciation expense for the second year of use if we use the double-declining balance method?

What is the balance in accumulated depreciation at the end of the second year of use if we use the double-declining balance method?

What is the book value at the end of the second year of use if we use the double-declining balance method.

3.On January 1, our company purchased a truck for $80,000. The estimated useful life of the truck is 4 years. The residual value at the end of 4 years is estimated to be $10,000. What is the depreciation expense for the third year of use if we use the straight-line method?

$17,500

$20,000

$35,000

$52,500

4.Our company uses the percentage of receivables method to estimate bad debt expense for the year. We had the following account balances on our unadjusted trial balance at the end of the year (December 31): accounts receivable, debit balance of $150,000; allowance for bad debts, debit balance of $1,000. We estimate that 3.5% of accounts receivable at the end of the year are uncollectible. What amount will be debited to bad debt expense when we record the adjusting entry?

$4,000

$4,250

$5,250

$6,250

5.Our company uses the percentage of sales method to estimate bad debt expense for the year. Our allowance for bad debts account has a credit balance of $1,000 prior to the adjusting entry for bad debt expense. We have estimated that 2% of net credit sales will be uncollectible for the current year. Net credit sales for the year totaled $200,000. What amount will be debited to bad debt expense when we record the adjusting entry?

3,000

$4,000

$5,000

$6,000

Multiple Choice Question 82

An analysis of stockholders' equity of Bonita Industries as of January 1, 2018, is as follows:

Bonita uses the cost method of accounting for treasury stock and during 2018 entered into the following transactions:

Acquired 2460 shares of its stock for $78720.
Sold 1890 treasury shares at $36 per share.
Sold the remaining treasury shares at $18 per share.

Assuming no other equity transactions occurred during 2018, what should Bonita report at December 31, 2018, as total additional paid-in capital?