Give an example of a sustainable practice that would affect a company’s budget. How might this sustainable practice, if adopted, impact the company’s budget in both the short-term and in the long-term?

4. In exhibit 3-4 the internal audit function is included in the assurance box. In light of this assurance role, discuss the pros and cons of the chief audit executive (CAE)reporting to the board of directors (or one of its committees) versus the chief financial officer Relate your answer to the concepts described in Standard 1100: Independence and Objectivity

6. The General Auditor’s Office (CAO) of ABC jurisdiction issued a report on the XYZ Electric Corporative a large member-owned utility. This report reviewed the work of MNO Consulting MNO found numerous internal control weakness. The GAO concurred with MNO’s conclusion and recommendations regarding the overall lack of effective internal controls. In particular, the GAO went on the recommended that the ABC   jurisdiction’s legislature should require by law that each cooperative;

• Create a board of directors (board) and maintain a separate audit committee.
• Employ an internal auditor who reports to the board. A reporter for the local newspaper has a couple of questions for you.

1. Typically, what is the governing board’s responsibility for internal controls?
2. Why would the GAO want each cooperative board to employ an internal audit?

NashFurniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $4,500,000 on January 1, 2020. Nash expected to complete the building by December 31, 2020. Nash has the following debt obligations outstanding during the construction period.

(a)

Assume that Nash completed the office and warehouse building on December 31, 2020, as planned at a total cost of $4,680,000, and the weighted-average amount of accumulated expenditures was $3,240,000. Compute the avoidable interest on this project.

*Answer 366,000 is incorrect.

(b)

Compute the depreciation expense for the year ended December 31, 2021. Nash elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $270,000.

Exercises/Short Answer

1. Warranty expense for a company was $350,000 for the year. They began the year with an $1,200,000 balance in their Allowance for warranty costs account, and ended the year with $1,175,000. How much was incurred for actual warranty costs during the year?

2. Please state the two conditions that must be met in order for a company to accrue a loss contingency

3. On November 1, 2018 Daniels Inc. borrowed $200,000 under a 6% promissory note that was due on April 30, 2019.   Record to journal entries to accrue interest on this note as of December 31, 2018, and to pay it off on April 30, 2019.

4. Porter Co. recorded a cash sale of $250 that was subject to state sales tax rate of 10%. Prepare the journal entry to record this sale.

5. On July 31, 2016 Ernst Corporation called (i.e. redeemed) $10,000,000 par value of bonds payable at 103% of par value. At that time the bonds had an unamortized discount of $145,000. Prepare the journal entry to redeem these bonds.

Outback Outfitters sells recreational equipment. One of the company’s products, a small camp stove, sells for $50 per unit. Variable expenses are $32 per stove, and fixed expenses associated with the stove total $108,000 per month.

Required:

1. What is the break-even point in unit sales and in dollar sales?

2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume that the fixed expenses remain unchanged.)

3. At present, the company is selling 8,000 stoves per month. The sales manager is convinced that a 10% reduction in the selling price would result in a 25% increase in monthly sales of stoves. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes.

4. Refer to the data in (3) above. How many stoves would have to be sold at the new selling price to attain a target profit of $35,000 per month?

Question #1: Compare and contrast a job order costing system and a process costing system - include an example of when each might be used

Question #2: Explain in detail what the term "equivalent units" means. How is it used in Accounting and/or what is its purpose

What special restrictions apply to the deduction of a loss realized on the sale of property between a corporation and a shareholder who owns​ 60% of the​ corporation's stock? What restrictions apply to the deduction of expenses accrued by a corporation at​ year-end and owed to a cash method shareholder who owns​ 60% of the​ corporation's stock?

What special restrictions apply to the deduction of a loss realized on the sale of property between a corporation and a shareholder who owns​ 60% of the​ corporation's stock?

A.

The deduction of the loss may only offset net active income for losses realized on the sale or exchange of property between a corporation and a shareholder who owns more than​ 50% of the​ corporation's stock. Any remaining loss can be carried forward and used at a later date to reduce his or her recognized gain on a subsequent sale or exchange of the property.

B.

The deduction of the loss may only offset net active income for losses realized on the sale or exchange of property between a corporation and a shareholder who owns more than​ 50% of the​ corporation's stock. Any remaining loss can be carried forward and used at a later date to reduce his or her recognized gain on a subsequent sale or exchange of property of the same asset class.

C.

The deduction of the loss is denied for losses realized on the sale or exchange of property between a corporation and a shareholder who owns more than​ 50% of the​ corporation's stock. The purchasing party can use the loss at a later date to reduce his or her recognized gain on a subsequent sale or exchange of property of the same asset class.

D.

The deduction of the loss is denied for losses realized on the sale or exchange of property between a corporation and a shareholder who owns more than​ 50% of the​ corporation's stock. The purchasing party can use the loss at a later date to reduce his or her recognized gain on a subsequent sale or exchange of the property.

What restrictions apply to the deduction of expenses accrued by a corporation at​ year-end and owed to a cash method shareholder who owns​ 60% of the​ corporation's stock?

A.

The deduction is denied for accrued expenses involving a corporation and a controlling shareholder that use different accounting methods when the payee will include the item in gross income at a date that is later than when it is accrued by the payor. The payor deducts the expense at the time the payee includes it in gross income.

B.

The deduction is limited for accrued expenses involving a corporation and a controlling shareholder that use different accounting methods when the payee will include the item in gross income at a date that is later than when it is accrued by the payor. The payor must deduct at least half of the expenses at the time the payee includes it in gross income.

C.

The deduction is denied for accrued expenses involving a corporation and a controlling shareholder that use different accounting methods when the payor will accrue an item at a date that is later than when the payee will include the item in gross income. The payor deducts the expense at the time the payee includes it in gross income.

D.

The deduction is limited for accrued expenses involving a corporation and a controlling shareholder that use different accounting methods when the payor will accrue an item at a date that is later than when the payee will include the item in gross income. The payor must deduct at least half of the expenses at the same time the payee includes the item in gross income.

Melissa Chong, the Director of Finance of your Northern Expeditions company, has advised that the company will be opening an office in Nunavut this year. The office will offer guided northern trips to hunters and adventurers. It expects to mainly employ local guides (40 days over the summer period) but the company will also be periodically bringing in guides from its offices in Alberta, Saskatchewan and Québec. Some of the guides from outside Nunavut may work 10 days, others could work 15 days over the summer depending on the number of bookings; they normally work in their home province for 60 days every year. The average daily rate paid to these guides is $400.

Melissa is asking for information on the Nunavut Payroll Tax. Who pays the tax and how is it calculated? Are there any special considerations or challenges for the calculation of the payroll tax for the guides brought in from Alberta, Saskatchewan and Québec? What are the reporting and remitting requirements during the year? What are the reporting requirements at year-end? Provide examples based on the information provided in the assignment to clarify.

The total variable manufacturing overhead variance was?

What amount should be credited to the Allocated Manufacturing Overhead Control account for the month of December?

Under the 2-variance method, the flexible-budget variance for December was?

Under the 3-variance method, the spending variance for December was?

The following information concerns several of the inventory items at DC’s:

1. Determine the amount of inventory to be reported on the financial statements using the lower of cost or net realizable value method of valuation under lower of cost or net realizable value for each item separately.
2. Determine the amount of inventory to be reported on the financial statements using the lower of cost or net realizable value method of valuation under lower of total cost or total net realizable value.
3. Determine the amount of inventory to be reported on the financial statements using the lower of cost or net realizable value method of valuation under lower of total cost or total net realizable value by department.

(Do not round your intermediate calculations. Round your answers to 2 decimal places.)

Maverick’s inventory count, completed on December 31, 2016, revealed the following ending inventory balances:

The company’s 2017 payroll data revealed the following actual payroll costs for the year:

The following information was taken from Maverick’s Schedule of Plant Assets. All assets are depreciated using the straight-line method.

Other miscellaneous costs for 2017 all paid in cash included:

Additional information about Maverick’s operations in 2017 includes the following:

Prepare the journal entries to record Maverick’s costs for 2017. (Use Salaries Payable and Wages Payable accounts for payroll costs.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Post entries in order presented in the problem. Round answers to 0 decimal places, e.g. 5,275.)

Prepare the appropriate T-accounts for Raw Materials Inventory, Work-in-Process Inventory, Finished Goods Inventory, Manufacturing Overhead Control, Cost of Goods Sold, and Sales, and record Maverick’s transactions for 2017. (Post entries in order presented in the problem. Round answers to 0 decimal places, e.g. 5,275.)

Was manufacturing under- or overapplied in 2017? By how much? (Round answer to 0 decimal places, e.g. 5,275.)

Make the adjusting entry necessary to close the under- or overapplied overhead to cost of goods sold. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.)
If Maverick chooses instead to prorate under- or overapplied overhead, what are the adjusted Work in Process Inventory, Finished Goods Inventory and Cost of Goods Sold account balances for 2017? (Round % of total to 2 decimal places, e.g. 55.75 and final answers to 0 decimal places, e.g. 5,275.)

Job 3827 was started and completed in 2017. The job required 500 machine hours, 300 direct labor hours, and $75,000 in direct materials to complete. What was the total cost of this job? Using Maverick’s 80% markup, what sales price would be charged for this airplane? (Round answers to 0 decimal places, e.g. 5,275.)
If Maverick had chosen to use machine hours as its overhead application base, what would the rate have been in 2017? (Round answer to 2 decimal places, e.g. 52.75.)

The balances of selected accounts of the Dexter Company on December 31, 2019, are given below: Accounts Receivable $ 850,000 Allowance for Doubtful Accounts (credit) 3,000 Total Sales 9,950,000 Sales Returns and Allowances (total) 240,000 (Credit sales were $8,500,000. Returns and allowances on these sales were $200,000.) Required: Compute the amount to be charged to Uncollectible Accounts Expense under each of the following different assumptions: Uncollectible accounts are estimated to be 0.1 percent of net credit sales. Experience has shown that about 3.3 percent of the accounts receivable will prove worthless. Suppose Allowance for Doubtful Accounts has a debit balance of $2,500 instead of a credit balance of $3,000, but all other account balances remain the same. Compute the amount to be charged to Uncollectible Accounts Expense under each assumption in item 1. Analyze: If you were the owner of Dexter Company and wished to maximize profits reported for 2019, which method would you prefer to use? Complete this question by entering your answers in the tabs below. Req 1aReq 1bReq 2aReq 2bAnalyze Uncollectible accounts are estimated to be 0.1 percent of net credit sales. Compute the amount to be charged to Uncollectible accounts. (Round your ''Estimated loss rate'' to 3 decimal places, i.e. 1.2% should be entered as 0.012.) Credit sales Net credit sales Estimated loss rate Amount to be charged to uncollectible accounts expense Req 1aReq 1b

Melinda and Melissa are partners in a clothing design shop trading as M&M Boutique. They share profits and losses in the ration 2:1.

On 30 June 2017, the statement of financial position was as follows:

Page 8 of 18

On 1 July 2017 the decided to admit Melintha to the partnership on the following conditions: a) Assets should be re-valued as follows:

i. ii. iii. iv. v. vi.

2. b) Melintha will

   premium for good will for her share.

3. c) Melinda and Melissa will share the remaining profits in the ratio 3:2. Melinda and

   Melissa must make cash payments/withdrawals in order to get their capital balances in

   line with their profit-sharing ratio.

4. d) Goodwill should not be disclosed in the statement of financial position after admitting

   Melintha.

You are required to:

1. Calculate the new profit sharing ratio after admission of Melintha on 01 July 2017. ( 4 marks)

2. Provide the journal entries of the transactions above. ( 11 Marks)

3. Prepare the capital accounts of the partners in columnar format.

4. Prepare a statement of financial position of a partnership on 30 June 2017. ( 8 Marks)

5. Discuss in short four reasons for the formation of partnerships ( 4 Marks)

Land & buildings Vehicles Furniture Goodwill Inventory

N$ 360, 000.00 N$ 54, 000.00 N$ 16, 000.00 N$ 120, 000.00 N$ 132, 000.00 N$ 180, 000.00

Trade receivable
obtain 1/5 share of partnership and it was agreed that she would pay a

Page 9 of 18

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December.

Required:

1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

2. Prepare On Company's statement of cost of goods manufactured for December.

3. Prepare On Company's income statement for December.