DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the delivery cycle time for each month.

1-c. Compute the manufacturing cycle efficiency (MCE) for each month.

2. Evaluate the company’s performance over the last four months.

3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

Chapter 14 Completion Questions

Select the necessary words from the list of possibilities to complete the following statements.

Use accrued liabilities, an adjusting journal entry, completeness, less, receiving report, related parties, representations, understatement, zero.

1. An ___ of liabilities will exaggerate the financial strength of a company.

2. Auditors are primarily concerned with establishing the ___ of recorded accounts payable.

3. In comparison to the confirmation of accounts receivable, the confirmation of accounts payable is performed ___ frequently.

4. Accounts payable from important vendors should be confirmed, even though the accounts have ___ balances at year-end.

5. When unrecorded liabilities are discovered by the auditors, they should evaluate whether the omission is sufficiently material to want ___.

6. When observing the taking of a physical inventory at year-end, the auditors will record the serial number of the last ___ issued to verify the accuracy of the cutoff of accounts payable.

7. Proper balance sheet presentation of accounts payable requires that any material amounts payable to ____ such as directors and officers, be disclosed separately from other accounts payable.

8. Auditors often obtain written ___ from management regarding the existence of unrecorded payables.

9. Most ___ represent obligations payable sometime during the succeeding period for services of a continuing nature received before the balance sheet date.

10. Because the auditors are primarily concerned with the ___ of recorded payables, much of the audit work on accounts payable is performed after the year-end date.

Write a brief report - 150-200 words minimum - with at least five sentences and two paragraphs. The report should address: What areas did you have difficulty with and what areas did you find easy to understand in Accounting class? Were you successful in time management or did you run out of time to completing work to a high-quality level? Are there any changes you should make in your approach to Accounting class?

Thank you

2.        The following note appeared in the 2018 annual report of Roca Company:

Inventories

Inventories valued at LIFO comprised approximately 44% and 42% of inventories at December 31, 2018 and 2017, respectively.

Problem 1. MACRS & Bonus Depreciation. “MMMM That’s Good, Inc.” (or MTG) owns a successful chain of over 150 casual dining restaurants nationwide. Please calculate the tax depreciation expense for 2018 for all of the assets listed below (which constitute all the new assets purchased or placed into service by MTG in 2018): (i) first using just MACRS AND then (ii) using Bonus Depreciation and MACRS.

(i) MTG purchases a building for a new restaurant on June 20, 2018 for $750,000. The land is worth $300,000. On September 15, 2018, MTG purchases new ovens/stoves, prep lines, refrigerators, and a dish washing machine (collectively the “Kitchen Equipment”) at a cost of $150,000. The restaurant is opened for business on September 30, 2018.

(ii) MTG updates its accounting and inventory management systems for 2015 by purchasing new computer hardware at a cost of $4,500 per store (total cost of $675,000). The computer equipment was all purchased on December 15, 2017 and placed into service on January 5, 2018.

(iii) In order to implement pilot testing for a new menu line at select locations, on December 3, 2018, MTG makes a bulk purchase of smoker machines for 30 of its restaurants at a cost of $25,000 each or a total cost of $750,000, and immediately installs the machines and begins use.

Problem 2.

IRC Section 179 & Elections. Assume MTG’s 179 deduction is not limited in 2018, but applying cost recovery using bonus depreciation pushes MTG into a tax loss and so management is looking to limit its total cost recovery to approximately $550,000. Please describe how you might utilize IRC section 179, bonus depreciation elections, & MACRS depreciation to achieve a total deduction for all cost recovery on new assets of $550,000 and then perform the calculation.

Problem 3.

Dispositions. Returning to the facts of Problem 1, if after the pilot testing MTG decided to sell all of the smoker machines on August 10, 2019 for $400,000, what would be the tax consequences including the amount and nature of any gain or loss?

The Alford Group had 260,000 shares of common stock outstanding at January 1, 2021. The following activities affected common shares during the year. There are no potential common shares outstanding.
  

Required:

1. Determine the 2021 EPS. (Do not round intermediate calculations.)
2. Determine the 2022 EPS.
3. At what amount will the 2021 EPS be presented in the 2022 comparative financial statements?

(For all requirements, Enter your answers in thousands.)

Complete a cash budget for The Stars basketball team based on the following information.  Projected Total Revenues: Q1=$800, Q2=$900, Q3=$950, Q4=$1000, 1 st quarter next yr. = $1000  Accounts Receivable (beginning) are equal to $450  50% of Revenues are cash sales  The rest of the revenues (50%) are collected in the following quarter  Beginning accounts payable are equal to $250  Purchases from vendors each quarter are 50% of next quarter sales  Payments to vendors are scheduled as: 70% in the quarter of the purchases from vendors and the balance of 30% in the following quarter.  Other expenses include: o Team and game expenses which are 30% of total revenues each quarter o Selling and promotional expenses which are 5% of total revenues each quarter o General and administrative expenses which are 7% of total revenues each quarter o Interest expense and taxes which are 6% of total revenues each quarter  The beginning cash balance is $120

One of your audit clients approaches you about doing some additional work for the company. Some of the things that the client needs your firm’s help with include:

Financial projections that includes the acquisition of a failing company.

Preparation of forecasted financial statements for a bank loan.

You are excited to be able to present this new opportunity to the partners of the firm, but there are several factors the firm must consider.

Assume your firm decides to provide these services for the client. Discuss communications that must be made to the client regarding their understanding of the nature of the new engagement. Prepare a PowerPoint presentation to present to the partners discussing these concerns that the firm may have regarding the acceptance of this new engagement.

Your presentation should meet the following criteria:

Be 6-8 slides in length, not including the title and references slides.

1

Which of the following entries records the withdrawal of cash for personal use by D. Bill, the owner of a business?

a.Debit Cash and credit Salary Expense

b.Debit Cash and credit D. Bill, Drawing

c.Debit D. Bill, Drawing and credit Cash

d.Debit Salary Expense and credit Cash

e.None of these choices are correct.

2

A purchase of supplies on account should be recorded as

a.a debit to Supplies and a credit to Cash.

b.a debit to Supplies and a credit to Accounts Payable.

c.a debit to Accounts Payable and a credit to Supplies.

d.a debit to Supplies Expense and a credit to Accounts Receivable.

e.None of these choices are correct.

3

The order the financial statements are prepared is as follows:

a.statement of owner's equity, income statement, balance sheet

b.balance sheet, income statement, statement of owner's equity

c.income statement, statement of owner's equity, balance sheet

d.income statement, balance sheet, statement of owner's equity

4

R. Davis Company has the following accounts and balances at the end of the year:

Cash, $1,200
Accounts Receivable, $280
Office Equipment, $3,000
Accounts Payable, $1,400
Income from Services, $3,500
Rent Expense, $670
Salaries Expense, $1,000

R. Davis, Capital at the beginning of the year was $2,050. Rob Davis also withdrew $800 from the company during the year. What is the amount of total assets reported on the balance sheet?

a.$3,080

b.$9,800

c.$4,480

d.$1,480

5

Jackson Company received cash on account from customers, $2,300. The accountant would record a

a.credit to income from services, $2,300.

b.debit to income from services, $2,300.

c.credit to accounts receivable, $2,300.

d.credit to cash, $2,300.

e.debit to accounts receivable, $2,300

6

Rent Expense is reported on which financial statement?

a.statement of owner's equity

b.balance sheet

c.income statement

d.None of these listed answers are correct.

7

A credit may result in

a.an increase in a revenue account.

b.an increase in a liability account.

c.an increase in the Capital account.

d.a decrease in an asset account.

e.All of these choices are correct.

8

Errors can occur for which of the following reason(s)?

a.Recording only half an entry

b.Recording two debits and no credits

c.Recording incorrect amounts

d.Arithmetic

e.All of these listed answers are correct.

AP9.3 Anna has the task of designing the audit program for the payroll area. There have been no recent changes to the payroll system or to its interface with the general ledger. Among other tests, Anna is considering using the following substantive analytical procedures to gather evidence:

1. Compare payroll tax expenses (such as state and federal unemployment taxes) to the annual payroll multiplied by the statutory tax rates.

2. Compare the relationship between direct labor costs and number of employees with prior periods.

Required

Evaluate the persuasiveness of the evidence obtained from each substantive analytical procedure.

PLEASE MAKE SURE ALL THE NUMBERS ARE CORRECT.

After the success of the company’s first two months, Santana Rey continues to operate Business Solutions. The November 30, 2018, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2018) follows.

Business Solutions had the following transactions and events in December 2018.   

The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company’s first three months:

a. The December 31 inventory count of computer supplies shows $610 still available.

b. Three months have expired since the 12-month insurance premium was paid in advance.

c. As of December 31, Lyn Addie has not been paid for four days of work at $105 per day.

d. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.

e. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.

f. Three of the four months' prepaid rent have expired.

Required:
1. Prepare journal entries to record each of the December transactions and events for Business Solutions.
2-a. Prepare adjusting entries to reflect a through f.
2-b. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger.
3. Prepare an adjusted trial balance as of December 31, 2018.
4. Prepare an income statement for the three months ended December 31, 2018.
5. Prepare a statement of retained earnings for the three months ended December 31, 2018.
6. Prepare a balance sheet as of December 31, 2018.
7. Record and post the necessary closing entries as of December 31, 2018.
8. Prepare a post-closing trial balance as of December 31, 2018.

1. Cameron gave the following gifts to her niece, Jill and nephew, Jack:

• $10,000 to Jill and $10,000 to Jack in 2016

• $15,000 to Jill and $20,000 to Jack in 2017

• $25,000 to Jill and $25,000 to Jack in 2018

The annual exclusion for 2016 & 2017 is $14,000 and for 2018 is $15,000; the lifetime estate and gift tax basic exclusion amount is 2016 in $5,450,000; 2017 in $5,490,000, and 2018 in 11,180,000. Calculate the value of the gift tax using the table below.

Required information

[The following information applies to the questions displayed below.]

During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.)

*$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property).

Ignore the Net Investment Income Tax.

a. Given that Ron and Anne have taxable income of only $24,800 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2018 assuming they file a joint return? (Round all your intermediate computations to the nearest whole dollar amount.)

b. Given that Ron and Anne have taxable income of $404,800 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2018 assuming they file a joint return? (Round all your intermediate computations to the nearest whole dollar amount.)

is the new manager of the materials storeroom for

Parr

Manufacturing.

Mary

has been asked to estimate future monthly purchase costs for part​ #696, used in two of

Parr​'s

products.

Mary

has purchase cost and quantity data for the past 9 months as​ follows:

Month

Cost of Purchase

Quantity Purchased

January

$12,675

2,720 parts

February

12,110

2,820

March

17,426

4,095

April

15,825

3,724

May

13,025

2,912

June

14,022

3,321

July

15,290

3,688

August

10,094

2,262

September

14,970

3,552

Estimated monthly purchases for this part based on expected demand of the two products for the rest of the year are as​ follows:

Multiple-step income statement and balance sheet

The following selected accounts and their current balances appear in the ledger of Kanpur Co. for the fiscal year ended June 30, 20Y7:

Required:

1. Prepare a multiple-step income statement.

2. Prepare a statement of stockholders’ equity. Additional common stock of $7,500 was issued during the year ended June 30, 20Y7.

3. Prepare a balance sheet, assuming that the current portion of the note payable is $20,250.