First, search the internet for the official website of a nonprofit organization that interests you (The American National Red Cross). When you review this website, locate the 2018 or 2019 financial statements. Use the financial statements you locate to answer the following questions:

• How does the audit opinion given to this nonprofit entity by its independent auditors differ from the audit opinion rendered on the financial statements for a for-profit business?
• What are some significant differences you see between the report you just reviewed and a for-profit statement?

Brent received 1,000 shares of Alabama Corporation stock from his uncle as a gift on July​ 20, 2017​, when the stock had a $275,000 FMV. His uncle paid $ 100,000 for the stock on April​ 12, 2002. The taxable gift was $ 275,000​, because his uncle made another gift to Brent for $25,000 in January and used the annual exclusion. The uncle paid a gift tax of $13,750. Without considering the transactions​ below, Brent's AGI is $75,000 in 2018. No other transactions involving capital assets occur during the year.

Analyze each transaction​ below, independent of the​ others, and determine Brent's AGI in each case. ​(Do not round intermediary calculations. Only round the amounts you input in the cells to the nearest dollar. Use a minus sign or parentheses to enter a​ loss.)

a. He sells the stock on October​ 12, 2018​, for $281,000.

b. He sells the stock on October​ 12, 2018​, for $106,750.

c. He sells the stock on December​ 16, 2018​, for $269,000.

Making decisions often involves financial and nonfinancial factors. Provide a hypothetical example from your personal life of a situation in which you would consider both financial and nonfinancial factors. What factors would be considered?

Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2018. Amber paid for the lathe by issuing a $500,000, three-year note that specified 4% interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions that 10% was a reasonable rate of interest. (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: 1-a. Complete the table below to determine the price of the equipment. 1-b. Prepare the journal entry on January 1, 2018, for Amber Mining and Milling’s purchase of the lathe. 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity.

Tracey Incorporated has been experiencing difficulty for some time due to erratic sales of its only product. The company’s contribution format income statement for the most recent month is given below:

1. Complete the table above with the per unit information and the percent of sales information.

2. The president believes that a $16,000 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an $80,000 increase in monthly sales. If the president is right, what will be the effect on the company’s monthly net operating income or loss?

3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $60,000 in the monthly advertising budget, will double unit sales. What will the new contribution format income statement look like if these changes are adopted? Should the changes be adopted?

4. Refer to the original data. The Marketing Department thinks that a fancy new package for the product would help sales. The new package would increase packaging costs by 75 cents per unit. Assuming no other changes, how many units would have to be sold each month to earn a profit of $9,750?

5. Refer to the original data. By automating, the company could reduce variable expense by $3 per unit. However, fixed expenses would increase by $72,000 each month. Assuming that the company expects to sell 26,000 units next month, prepare two contribution format income statements, one assuming that operations are not automated and one assuming that they are.

NOT AUTOMATED

AUTOMATED

1. Computer the break-even point in both units sales and dollar sales for both the Not Automated and the Automated scenarios.

2. Computer the margin of safety in units, dollars, and percentage for both the Not Automated and the Automated scenarios.

3. Computer the degree of operating leverage for both the Not Automated and the Automated scenarios.

4. Compute the unit sales volume at which the net operating income is the same for either metho (This would be ‘the point of indifference’ and it is computed by taking the difference in the fixed expenses and dividing it by the difference in the variable expenses per unit.)

5. Would you recommend that the company automate its operations? Explain.

Is budgetary slack a desirable feature? Can it be prevented? Why or why not?

Heart of the City Electrical Supplies are merchandisers of household fixtures & fittings. The business began the last quarter of 2017 (October to December) with 25 Starburst Wall Clocks at a total cost of $153,000. The following transactions took place during the quarter. October 10 100 clocks were purchased on account at a cost of $6,225 each. In addition, Heart paid $120 cash on each clock to have the inventory shipped from the vendor’s warehouse to their warehouse October 31 During the month 90 clocks were sold at a price of $8,300 each. (20 of these clocks sold were on account to a long-standing customer of the business) November 1 A new batch of 60 clocks was purchased at a total cost of $406,500 November 10 5 of the clocks purchased on November 1 were returned to the supplier, as they were damaged November 30 The sales for November were 58 clocks which yielded total sales revenue of $428,000 December 2 Owing to increased demand, a further 110 clocks were purchased at a cost of $7,400 each and these were subject to a trade discount of 2% each. December 6 William Paul, a customer to whom 8 clocks were sold at the start of the first business day in November, returned 2 of the clocks, as they did not match his specifications. December 31 117 clocks were sold during December at a unit selling price of $9,220. December 31 An actual inventory count was carried out which revealed that there were 22 Starburst wall clocks in the store room. Unless otherwise stated, assume that all purchases are on account and all sales are for cash. Required: i) Prepare a perpetual inventory record for this merchandise, using the last in, first out (LIFO) method of inventory valuation, to determine the company’s cost of goods sold for the quarter and the value of ending inventory. ii) Given that selling & distribution and administrative costs for the quarter were $96,800 and $134,400 respectively, prepare an income statement for Heart of the City Electrical Supplies for the period ended December 31, 2017 iii) State the journal entries necessary to record the transactions on October 10 and October 31, assuming the company uses a: -Periodic inventory system -Perpetual inventory system

A company purchased a piece of manufacturing equipment for $30,000 on January 1, 2018. At that time, the company estimated the equipment would have a 7-year useful life and no salvage value. The company used straight-line depreciation based on this information through 2019. On December 31, 2020, the company determined the equipment instead has a 10-year useful life, with no salvage value. The company’s tax rate has been 30% since 2015.

What is the necessary adjustment to beginning retained earnings in 2020 for this change?

1. The following information is available for the month of April from the First department of the Armque Corporation:

Materials are added in the beginning of the process in the First department. Using the average cost method, what are the equivalent units of production for the month of April?

2. The following information is available for the month of August from the First department of the Twigg Corporation:

Materials are added in the beginning of the process in the First department. Using the average cost method, what are the equivalent units of production for the month of August?

     3.   Information concerning Department A of Ali Company for the month of June is as follows:

All materials are added at the beginning of the process. Using the average cost method, the cost (rounded to two places) per equivalent unit for materials for June is:

     4.   Plemmon Company adds materials at the beginning of the process in the forming department, which is the first of two stages of its production cycle. Information concerning the materials used in the forming department in April follows:

Using the average cost method, what is the materials cost of the work in process at April 30 (rounded to nearest dollar)?

     5.   The following information is available for the month of April from the First department of the Armque Corporation:

Materials are added at the end of the process in the First department. Using the average cost method, what are the equivalent units of production for the month of April?

     6.   The following information is available for the month of August from the First department of the Twigg Corporation:

Materials are added at the end of the process in the First department. Using the average cost method, what are the equivalent units of production for the month of August?

     7.   During June, Birch Bay Company's Department B equivalent unit product costs computed under the average cost method were as follows:

Materials are introduced at the end of the process in Department B. There were 4,000 units (60 % complete as to conversion costs) in work in process at June 30. The total costs assigned to the June 30 work in process inventory should be:

Amasarcas Inc., is a wholesaler that distributes a single product. The company’s revenues and expenses for the last two months are given below:

Which of the expenses (A, B, C, D, and E) are variable? How can you tell?

Which of the expenses (A, B, C, D, and E) are fixed? How can you tell?

Which of the expenses (A, B, C, D, and E) are mixed? How can you tell?

6-5

Chavez Company most recently reconciled its bank statement and book balances of cash on August 31 and it reported two checks outstanding, No. 5888 for $1,097 and No. 5893 for $486. The following information is available for its September 30, 2017, reconciliation.

From the September 30 Bank Statement

From Chavez Company’s Accounting Records

Additional Information
Check No. 5904 is correctly drawn for $2,058 to pay for computer equipment; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash of $2,020. The NSF check shown in the statement was originally received from a customer, S. Nilson, in payment of her account. Its return has not yet been recorded by the company. The credit memorandum is from the collection of a $1,650 note for Chavez Company by the bank. The bank deducted a $21 collection fee. The collection and fee are not yet recorded.

2. Prepare the journal entries to adjust the book balance of cash to the reconciled balance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Prepare journal entries to record the following transactions relating to long-term bonds of Ramirez, Inc. (Show computations)

a) On March 1, 2018, Ramirez, Inc. issued $10,000,000, 9% coupon rate bonds. The market interest rate was 12%. Interest is payable semiannually on February 1 and August 1 with the bonds maturing on February 1, 2021. Hint: This is a bond issued between interest dates.

b) On August 1, 2018, Ramirez paid interest on the bonds and recorded amortization. Ramirez uses effective-interest method of amortization.

c) On September 1, 2018. Ramirez purchased $6,000,000 face value (60% of initial issuance amount) of the bonds at the $6,200,000 PLUS accrued interest.

How will the reservation, purchase agreement, and the delivery of a Model 3 impact Tesla’s financial statements?

Since 2016, Tesla has been accepting reservations for its Model 3 car, which is a mid-size all electric four-door sedan. The long-range battery Model 3 (310 miles on a single charge) starts at $50,000, while the standard range battery Model 3 (220 miles) starts at $35,000. Production cannot keep up with demand for this model. Tesla produced and delivered 1,772 units during 2017. Tesla has said it plans to produce 5,000 units per week in the latter half of 2018. Currently there are more than 400,000 reservations for the Model 3, with 1,800 reservations being added per day. If a customer wants to purchase a Tesla Model 3, the customer will first make a reservation for a Model 3 which puts the customer in line. A reservation requires a $1,000 reservation payment. When the production of that customer’s Tesla would be scheduled within the next 1 – 3 months, Tesla invites the customer to place an actual order. The $1,000 reservation payment is applied to the customer’s purchase agreement. If the customer changes their mind at any point before making the purchase agreement, the $1,000 reservation payment is refundable to the customer. Full payment for the Model 3 (less the $1,000 reservation payment) is collected at the time of delivery to the customer.

Questions:

1. When Tesla receives a $1,000 reservation payment from a customer, what Tesla general ledger accounts does this $1,000 impact? Explain.

2. Now assume that a customer orders a Model 3 by completing the purchase agreement. Will this purchase agreement directly impact Tesla’s balance sheet or income statement at the date of the purchase agreement?

3. When the Model 3 is delivered to the customer and payment is received, how will Tesla’s balance sheet and income statement be impacted at the point of delivery?

3-3

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

Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2017, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items athrough h that require adjusting entries on December 31, 2017, follow.
  
Additional Information Items

1. An analysis of WTI's insurance policies shows that $2,807 of coverage has expired.
2. An inventory count shows that teaching supplies costing $2,433 are available at year-end 2017.
3. Annual depreciation on the equipment is $11,227.
4. Annual depreciation on the professional library is $5,614.
5. On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,700, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2018.
6. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $2,819 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for example, October recognizes one-half month accrual.)
7. WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee.
8. The balance in the Prepaid Rent account represents rent for December.

2-a. Post the balance from the unadjusted trial balance and the adjusting entries in to the T-accounts.
2-b. Prepare an adjusted trial balance.
  3-a. Prepare Wells Technical Institute's income statement for the year 2017.
3-b. Prepare Wells Technical Institute's statement of owner's equity for the year 2017.
3-c. Prepare Wells Technical Institute's balance sheet as of December 31, 2017.
  

Describe the uses and user of accounting information