Amanda Ltd is a manufacturing company operating in Parramatta, Sydney. The company has been successful since its inception in the early 1990 and has even won twice the “Best Corporate Citizen Award” presented by the City of Parramatta Council. The company has recently been facing multiple problems including declining profit, loss of inventory (through theft or spoilage) in the warehouse, and declining reputation from its stakeholders. Coincidently, all these problems started when the head of Accounting Department, Sofia Bryant, voluntarily retired from her position recently. Her retirement was provoked by a sarcastic comment made by the Sales Manager during board meeting, that “Amanda Ltd can cut down its cost by shutting down Accounting Department. After all we will even be better off without this department”.

Part A

1. Evaluate the statement, “Accounting is the Language of Business”.

2. Discuss how Accounting and Governance helped Amanda Ltd in winning the Best Corporate Citizen Award.

Part B

3. a. Why some firms might prefer a perpetual inventory system to a period inventory system?

b. Explain how using perpetual inventory system could help Amanda Ltd to minimise the loss of inventory.

4. How would the application of the principle of segregation of duties could prevent the loss of inventory at Amanda LTD?

The controller of Dash Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:

The company expects to sell about 15% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $6,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in July, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 75% are expected to be paid in the month in which they are incurred and the balance in the following month.

Current assets as of March 1 include cash of $44,000, marketable securities of $62,000, and accounts receivable of $128,600 ($101,000 from February sales and $27,600 from January sales). Sales on account for January and February were $92,000 and $101,000, respectively. Current liabilities as of March 1 include a $58,000, 12%, 90-day note payable due May 20 and $6,000 of accounts payable incurred in February for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. It is expected that $3,500 in dividends will be received in March. An estimated income tax payment of $16,000 will be made in April. Dash Shoes' regular quarterly dividend of $6,000 is expected to be declared in April and paid in May. Management desires to maintain a minimum cash balance of $34,000.

Required:

1. Prepare a monthly cash budget and supporting schedules for March, April, and May. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign. Assume 360 days per year for interest calculations.

The following information is available concerning the inventory of Carter Inc.:

During the year, Carter sold 994 units. It uses a periodic inventory system.

Required:

1. Calculate ending inventory and cost of goods sold for each of the following three methods:

In your calculations round average unit cost to the nearest cent, and round all other calculations and your final answers to the nearest dollar.

2. Assume an estimated tax rate of 30%. How much more or less (indicate which) will Carter pay in taxes by using FIFO instead of LIFO?

On January 1, a company issues bonds with a par value of $500,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 12%. Calculate the sale price and record the journal entry for this sale. Using the straight-line method, calculate the amount of interest expense for the first semiannual interest period and record the journal entry.

2. Write the General Ledger and Reporting General Controls used in companies to overcome the threats.

Swifty Company uses a perpetual inventory system. Its beginning inventory consists of 58 units that cost $39 each. During June, (1) the company purchased 173 units at $39 each on account, (2) returned 7 units for credit, and (3) sold 144 units at $58 each.

Journalize the June transactions. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Trident Repairs & Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations:

Trident Repairs & Service

UNADJUSTED TRIAL BALANCE

November 30, 20Y3

For preparing the adjusting entries, the following data were assembled:

1. Journalize the adjusting entries necessary on November 30, 20Y3. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

2. Determine the revenues, expenses, and net income of Trident Repairs & Service before the adjusting entries.

3. Determine the revenues, expenses, and net income of Trident Repairs & Service after the adjusting entries.

4. Determine the effect of the adjusting entries on Retained Earnings.

The Retained Earnings account increases by $ _____________

Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. She is a tax accountant with Mesa Manufacturing Company, 1203 Western Avenue, Mesa, AZ 85201 (employer identification number 11-1111111). She also writes computer software programs for tax practitioners and has a part-time tax practice. Beth is single and has no dependents. Beth was born on July 4, 1973, and her Social Security number is 123-45-6785. She wants to contribute $3 to the Presidential Election Campaign Fund.

The following information is shown on Beth's Wage and Tax Statement (Form W–2) for 2019.

During the year, Beth received interest of $1,300 from Arizona Federal Savings and Loan and $400 from Arizona State Bank. Each financial institution reported the interest income on a Form 1099–INT. She received qualified dividends of $800 from Blue Corporation, $750 from Green Corporation, and $650 from Orange Corporation. Each corporation reported Beth's dividend payments on a Form 1099–DIV.

Beth received a $1,100 income tax refund from the state of Arizona on April 29, 2019. On her 2018 Federal income tax return, she used the standard deduction.

Fees earned from her part-time tax practice in 2019 totaled $3,800. She paid $600 to have the tax returns processed by a computerized tax return service.

On February 8, 2019, Beth bought 500 shares of Gray Corporation common stock for $17.60 a share. On September 12, 2019, Beth sold the stock for $14 a share.

Beth bought a used sport utility vehicle for $6,000 on June 5, 2019. She purchased the vehicle from her brother-in-law, who was unemployed and was in need of cash. On November 2, 2019, she sold the vehicle to a friend for $6,500.

On January 2, 2019, Beth acquired 100 shares of Blue Corporation common stock for $30 a share. She sold the stock on December 19, 2019, for $55 a share.

During the year, Beth records revenues of $16,000 from the sale of a software program she developed. Beth incurred the following expenses in connection with her software development business.

Beth elected to expense the maximum portion of the cost of the computer, printer, and furniture allowed under the provisions of § 179. These items were placed in service on January 15, 2019, and used 100% in her business.

Although her employer suggested that Beth attend a convention on current developments in corporate taxation, Beth was not reimbursed for the travel expenses of $1,420 she incurred in attending the convention. The $1,420 included $200 for the cost of meals.

During the year, Beth paid $300 for prescription medicines and $2,875 for doctor interest to credit card bills and hospital bills. Medical insurance premiums were paid for her by her employer. Beth paid real property taxes of $1,766 on her home. Interest on her home mortgage (Valley National Bank) was $3,845, and interest to credit card companies was $320. Beth contributed $2,080 to various qualifying charities during the year. Professional dues and subscriptions totaled $350.

Beth paid estimated taxes of $1,000. Beth does not own or use any virtual currency.

Required:

Compute the net tax payable or refund due for Beth R. Jordan for 2019.

1. ABC Versus ABM

   Harvey Company produces two models of blenders: the “Super Model” (priced at $399) and the “Special Model” (priced at $201). Recently, Harvey has been losing market share with its Special Model because of competitors offering blenders with the same quality and features but at a lower price. A careful market study revealed that if Harvey could reduce the price of its Special Model to $181, it would regain its former share of the market. Management, however, is convinced that any price reduction must be accompanied by a cost reduction of the same amount so that per-unit profitability is not affected. Earl Wise, company controller, has indicated that poor overhead costing assignments may be distorting management’s view of each product’s cost and, therefore, the ability to know how to set selling prices. Earl has identified the following overhead activities: machining, inspection, and rework. The three activities, their costs, and practical capacities are as follows:

   Activity	Cost	Practical Capacity
   Machining	$5,310,000	88,500 machine hours
   Inspection	3,393,000	43,500 inspection hours
   Rework	1,822,800	43,400 rework hours

   The consumption patterns of the two products are as follows:

   	Special	Super
   Units	100,000	30,200
   Machine hours	49,500	39,000
   Inspection hours	9,200	34,300
   Rework hours	7,000	36,400

   Harvey assigns overhead costs to the two products using a plantwide rate based on machine hours.

   Required:

   1. Calculate the unit overhead cost of the Special Model using machine hours to assign overhead costs. Round intermediate calculations and your final answer to the nearest cent, if rounding is required.
   $fill in the blank 1 per unit

   Now, repeat the calculation using ABC to assign overhead costs. Round intermediate calculations and your final answer to the nearest cent, if rounding is required.
   $fill in the blank 2 per unit

   Did improving the accuracy of cost assignments solve Harvey’s competitive problem?

   2. Now, assume that in addition to improving the accuracy of cost assignments, Earl observes that defective supplier components are the root cause of both the inspection and rework activities. Suppose further that Harvey has found a new supplier that provides higher-quality components such that inspection and rework costs are reduced by 50 percent. Now, calculate the cost of the Special Model (assuming that inspection and rework times are also reduced by 50 percent) using ABC. The relative consumption patterns also remain the same. Round intermediate calculations and your final answer to the nearest cent, if rounding is required.
   $fill in the blank 4 per unit

   Comment on the difference between ABC and ABM.

Nihonno Tsukuruno, Inc. uses the FIFO method of process costing. The firm has only one production department. It has the following cost per equivalent unit rates for the month of January. $12.50 direct materials per equivalent unit $17.25 conversion costs per equivalent unit Here are some additional details about the firm. The firm began the period (i.e. January 1) with $10,000 of direct materials cost and $15,000 of conversion costs in beginning WIP. Those beginning WIP costs were incurred for 1,000 beginning WIP units that were 50% complete with respect to conversion costs and direct materials. The firm completed and transferred out a total of 59,000 units in January. What is the cost of units completed and transferred out for January (including direct materials costs and conversion costs)? Selected Answer: d. $1,755,250 Answers: a. $1,780,250 b. $1,740,375 c. $1,765,375 d. $1,755,250

Isuzu Company provided the following data as of January 1, 2028:
• 6% Preference share-10,000 shares, par 200 2,000,000
• Ordinary share-50,000 shares, par P100 5,000,000
• Share Premium-Preferred 400,000
• Share Premium-Ordinary 1,000,000
• Accumulated Profits/Retained Earnings 4,000,000

Transactions during 2028 were as follows:
• Issued 10,000 ordinary shares at P100 per share for cash considerations
• Purchased 2,500 treasury shares (Ordinary) at P110 per share
• Declared share split ordinary share, 2 for 1
• Reissued 1,500 treasury shares (Ordinary) for P90 per share
• Shareholders donated 5,000 corporation’s owned ordinary shares to the corporation.
• Subsequently 3,000 donated shares were reissued at P40 per share.
• Net income for the year was P 1,600,000. (Close to Accumulated Profits/ Retained Earnings)
• Appropriated Accumulated Profits equal to the cost of treasury shares.

Required:
1. Prepare the journal entries
2. Present the total shareholder’s equity on December 31,2028

ACCT505 – Project 1 Instructions You have just been contracted as a budget consultant by LBJ Company, a distributor of bracelets to various retail outlets across the country. The company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. You have decided to prepare a cash budget for the upcoming fourth quarter in order to show management the benefits that can be gained from proper cash planning. You have worked with accounting and other areas to gather the information assembled below. The company sells many styles of bracelets, but all are sold for the same $10 price. Actual sales of bracelets for the last three months and budgeted sales for the next six months follow (shown in number of units): July (actual) 20,000 August (actual) 26,000 September (actual) 40,000 October (budget) 70,000 November (budget) 110,000 December (budget) 60,000 January (budget) 30,000 February (budget) 28,000 March (budget) 25,000 The concentration of sales in the fourth quarter is due to the Christmas holiday. Sufficient inventory should be on hand at the end of each month to supply 40% of the bracelets sold in the following month. Suppliers are paid $4 for each bracelet. Fifty-percent of a month's purchases is paid for in the month of purchase; the other 50% is paid for in the following month. All sales are on credit with no discounts. The company has found, however, that only 20% of a month's sales are collected in the month of sale. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible. Monthly operating expenses for the company are given below. Variable expenses: Sales commissions 4% of sales Fixed expenses: Advertising $220,000 Rent $20,000 Salaries $110,000 Utilities $10,000 The company plans to purchase $22,000 in new equipment during October and $50,000 in new equipment during November; both purchases will be for cash. The company declares dividends of $20,000 each quarter, payable in the first month of the following quarter. Other relevant data is given below: Cash balance as of September 30 $74,000 Merchandise purchases for September $200,000 The company maintains a minimum cash balance of at least $50,000 at the end of each month. All borrowing is done at the beginning of a month; any repayments are made at the end of a month. The company has an agreement with a bank that allows the company to borrow the exact amount needed at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded.

Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below:

From past experience, the company has learned that 20% of a month’s sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.

Required:

1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

2. What is the accounts receivable balance on June 30th?

Blue Skies Equipment Company uses the aging approach to estimate bad debt expense at the end of each accounting year. Credit sales occur frequently on terms n/60. The balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, (2) up to one year past due, and (3) more than one year past due. Experience has shown that for each age group, the average loss rate on the amount of the receivable at year-end due to uncollectibility is (a) 9 percent, (b) 12 percent, and (c) 35 percent, respectively.

At December 31, 2019 (end of the current accounting year), the Accounts Receivable balance was $49,900 and the Allowance for Doubtful Accounts balance was $1,000 (credit). In determining which accounts have been paid, the company applies collections to the oldest sales first. To simplify, only five customer accounts are used; the details of each on December 31, 2019, follow:

Required:

1. Compute the estimated uncollectiable amount for each age category and in total

Not yet Due______

Up to one year past due______

More than one year past due____

Total accounts recieveable___

2) Journal Entry

3)Partial Income Statement & Partial Balance sheet

The auditor’s decisions regarding evidence accumulation can be broken into four sub decisions:

• Which audit procedures to use
• What sample size to select for a given procedure
• Which items to select from the population covering the sampling area
• When to perform the procedures (timing)

One decision relates to determining the nature of the audit procedure to be used to collect the evidence; i.e., which audit procedures to use.

Examine one of the remaining three audit evidence decisions that the auditor makes.

• Which of the four sub decisions is the most important and why?
• Which is the least important and why?
• If one of the sub decisions were removed, how would it impact the auditor’s decisions regarding evidence accumulation?