1. Please discuss the concept of "voluntary compliance" as it relates to our federal tax system.
2. Please compare and contrast the differences between civil and criminal penalties.
3. Would you rather work as an IRS agent or as a tax practitioner? Please explain your answer.
In: Accounting
(Recognition of Profit on Long-Term Contract
—Overall Loss) Assume the facts given in E6.37 except that
Vaughn's non-cancellable fixed price contract with Atlantis is for
$9.5
million. Billings and collections are lower in 2022 by $500,000
each.
2020 2021 2022
Costs for the year $3,825 $4,675 $1,200
Estimated costs to complete 4,675 1,270 –0–
Progress billings for the year (non-refundable) 3,500 4,100
1,900
Cash collected for the year 3,100 4,150 2,250
Instructions
a. Using the percentage-of-completion method, calculate the
percent complete for 2020 and 2021. Round the percent
complete
to the nearest whole percentage point.
b. Calculate the amount of revenue to be recognized in 2020
and
2021.
c. Calculate the construction costs to be expensed in 2021.
d. Prepare the journal entry at December 31, 2021, to record
longterm
contract revenues, expenses, and losses for 2021.
e. What is the balance in the Contract Asset/Liability account
at
December 31, 2020 and 2021?
f. Show how the construction contract would be reported on
the
SFP and the income statement for the year ended December 31,
2021.
g. Assume that Vaughn uses the zero-profit or
completed-contract
method. What would be the journal entry recorded on December 31,
2021?
In: Accounting
You are an expert in the field of forming partnership. Stephen Curry and Dwayne Wade want to establish a partnership to start "Pasta Shop", and they are going to meet with you to discuss their plans. Prior to the meeting you will send them a memo discussing the issues they need to consider before their visit. Write a memo in good form to be sent to Curry and Wade.
In: Accounting
Lonergan Company occasionally uses its accounts receivable to obtain immediate cash. At the end of June 2018, the company had accounts receivable of $1,060,000. Lonergan needs approximately $640,000 to capitalize on a unique investment opportunity. On July 1, 2018, a local bank offers Lonergan the following two alternatives:
Required:
1. Prepare the journal entries that would be
recorded on July 1 for:
a. alternative a.
b. alternative b.
2. Assuming that 80% of all June 30 receivables
are collected during July, prepare the necessary journal entries to
record the collection and the remittance to the bank for:
a. alternative a.
b. alternative b.
Prepare the journal entries that would be recorded on July 1 for alternative b. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Note: Enter debits before credits.
Assuming that 80% of all June 30 receivables are collected during July, prepare the necessary journal entries to record the collection and the remittance to the bank for alternative a. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
In: Accounting
Pam Corporation holds 70 percent ownership of Northern Enterprises. On December 31, 20X6, Northern paid Pam $28,000 for a truck that Pam had purchased for $33,000 on January 1, 20X2. The truck was considered to have a 20-year life from January 1, 20X2, and no residual value. Both companies depreciate equipment using the straight-line method.
Required:
a.
Prepare the worksheet consolidation entry or entries needed on December 31, 20X6, to remove the effects of the intercompany sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
*Record the entry to eliminate the gain on the truck and to correct the asset's basis.
b.
Prepare the worksheet consolidation entry or entries needed on December 31, 20X7, to remove the effects of the intercompany sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
*Record the entry to eliminate the gain on the truck and to correct the asset's basis.
*Record entry to adjust Accumulated Depreciation.
In: Accounting
|
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Name | ||||||||||
Company Name | ||||||||||
Ticker Symbol | ||||||||||
Company Website | ||||||||||
Fiscal Year End | ||||||||||
Industry Classification and Description | ||||||||||
Major Product and Service Categories and listing of products or services | ||||||||||
Brand Names | ||||||||||
Description of Business | ||||||||||
Market Segments | ||||||||||
Geographic Regions - Countries the Company Operates In | ||||||||||
Reporting Segments | ||||||||||
Customers (Direct and Indirect) | ||||||||||
Suppliers | ||||||||||
Competitors | ||||||||||
Inputs (raw materials, components, labor etc.) | ||||||||||
Employees | ||||||||||
Business Activities (steps in making, selling, and delivering product and services) | ||||||||||
Financial Highlights | ||||||||||
Income Statement Revenue line items | ||||||||||
Income Statement Cost items | ||||||||||
Income Statement Operating Income | ||||||||||
Balance Sheet (Total Assets or Total Liabilities plus Equity) | ||||||||||
Statement of Cash Flows Depreciation Expense | ||||||||||
Statement of Cash Flows Cash Flow from Operating Activities | ||||||||||
Statement of Cash Flows Cash Flow from Investing Activities | ||||||||||
Statement of Cash Flows Cash from Financing Activities | ||||||||||
Statement of Stockholder's Equity (Total) | ||||||||||
List the headings to several Notes to the Financial Statements | ||||||||||
List a couple of things from the Segment Financial Information | ||||||||||
List a couple of things from the Management Discussion and Analysis (MD&A) | ||||||||||
List any advertising expense amount | ||||||||||
List any financial and non-financial performance measures | ||||||||||
List any Major Initiatives, projects, or changes in operations |
In: Accounting
Clean Air Products owns 80 percent of the stock of Superior Filter
Company, which it acquired at underlying book value on August 30,
20X6. At that date, the fair value of the noncontrolling interest
was equal to 20 percent of the book value of Superior Filter.
Summarized trial balance data for the two companies as of December
31, 20X8, are as follows:
Clean Air Products | Superior Filter Company | ||||||||||||||
Debit | Credit | Debit | Credit | ||||||||||||
Cash and Accounts Receivable | $ | 148,000 | $ | 94,000 | |||||||||||
Inventory | 221,000 | 126,000 | |||||||||||||
Buildings & Equipment (net) | 275,000 | 184,000 | |||||||||||||
Investment in Superior Filter Stock | 263,200 | ||||||||||||||
Cost of Goods Sold | 173,000 | 138,000 | |||||||||||||
Depreciation Expense | 35,000 | 25,000 | |||||||||||||
Current Liabilities | $ | 163,400 | $ | 60,000 | |||||||||||
Common Stock | 191,000 | 82,000 | |||||||||||||
Retained Earnings | 452,000 | 211,000 | |||||||||||||
Sales | 264,000 | 214,000 | |||||||||||||
Income from Subsidiary | 44,800 | ||||||||||||||
Total | $ | 1,115,200 | $ | 1,115,200 | $ | 567,000 | $ | 567,000 |
On January 1, 20X8, Clean Air's inventory contained filters purchased for $67,000 from Superior Filter, which had produced the filters for $47,000. In 20X8, Superior Filter spent $107,000 to produce additional filters, which it sold to Clean Air for $157,000. By December 31, 20X8, Clean Air had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $47,100 of the 20X8 purchase from Superior Filter.
Required:
a.
Prepare all consolidation entries needed to complete a consolidation worksheet for 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
*Record the basic consolidation entry.
*Record the entry to reverse last year's deferral.
*Record the entry to defer the current year's unrealized profits on inventory transfers.
b.
Compute consolidated net income and income assigned to the controlling interest in the 20X8 consolidated income statement.
c.
Compute the balance assigned to the noncontrolling interest in the consolidated balance sheet as of December 31, 20X8.
In: Accounting
QUESTIONS
1.What are the key procedures you would perform regarding client acceptance? Where would you get the data? Use the format by listing under each:
PROCEDURE DATA
2. Williams Gens, an audit partner with your firm, has selected you to prepare a memo regarding the acceptance of CBA as an audit client. The audit will, if accepted, occur during the firms’s slow season when there is excess employee capacity.
Consider the following category:
1. The predecessor auditor explained that, due to disagreements on the application of GAAP, CBA Inc. chose to engage another auditing firm. The auditor, fearing Litigation would not specify the specific area of disagreement.
2. CBA regularly pays its accounts payable 30-60 days late.
3. Management turnover has been excessive.
4. CBA is in a highly regulated, competitive industry.
5. Account Receivable turnover is 43 days.
Requirement for question 2:
What are the procedures that you would undertake for each of the category 1-5?
In: Accounting
Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours. The budgeted variable manufacturing overhead is $3.40 per direct labor-hour and the budgeted fixed manufacturing overhead is $999,000 per year.
The standard quantity of materials is 4 pounds per unit and the standard cost is $6.50 per pound. The standard direct labor-hours per unit is 1.5 hours and the standard labor rate is $12.70 per hour.
The company planned to operate at a denominator activity level of 135,000 direct labor-hours and to produce 90,000 units of product during the most recent year. Actual activity and costs for the year were as follows:
Actual number of units produced | 108,000 | |
Actual direct labor-hours worked | 175,500 | |
Actual variable manufacturing overhead cost incurred | $ | 368,550 |
Actual fixed manufacturing overhead cost incurred | $ | 1,053,000 |
Required:
1. Compute the predetermined overhead rate for the year. Break the rate down into variable and fixed elements.
2. Prepare a standard cost card for the company’s product.
3a. Compute the standard direct labor-hours allowed for the year’s production.
3b. Complete the following Manufacturing Overhead T-account for the year.
4. Determine the reason for the underapplied or overapplied overhead from (3) above by computing the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances.
In: Accounting
McCaffy Company uses a periodic inventory system. It sold 1,000 units of Product H. Its beginning inventory and purchases during the month were as follows: April 1 Beginning inventory 200 units @ $1 5 Purchases 200 units @ $2 10 Purchases 200 units @ $3 15 Purchases 200 units @ $4 20 Purchases 200 units @ $5 25 Purchases 200 units @ $6 Compute the cost of the ending inventory under each of three methods: (a) average-cost, (b) LIFO, and (c) FIFO.
In: Accounting
The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:
Work in process, August 1, 500 pounds, 60% completed | $2,300* | |||
*Direct materials (500 X $3.7) | $1,850 | |||
Conversion (500 X 60% X $1.5) | 450 | |||
$2,300 | ||||
Coffee beans added during August, 16,000 pounds | 58,400 | |||
Conversion costs during August | 25,280 | |||
Work in process, August 31, 800 pounds, 50% completed | ? | |||
Goods finished during August, 15,700 pounds | ? |
All direct materials are placed in process at the beginning of production.
a. Prepare a cost of production report, presenting the following computations:
Direct materials and conversion equivalent units of production for August.
Direct materials and conversion costs per equivalent unit for August.
Cost of goods finished during August.
Cost of work in process at August 31.
If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.
Morning Brew Coffee Company | |||
Cost of Production Report-Roasting Department | |||
For the Month Ended August 31 | |||
Unit Information | |||
Units charged to production: | |||
Inventory in process, August 1 | |||
Received from materials storeroom | |||
Total units accounted for by the Roasting Department | |||
Units to be assigned costs: | |||
Equivalent Units | |||
Whole Units | Direct Materials (1) | Conversion (1) | |
Inventory in process, August 1 | |||
Started and completed in August | |||
Transferred to finished goods in August | |||
Inventory in process, August 31 | |||
Total units to be assigned costs | |||
Cost Information | |||
Cost per equivalent unit: | |||
Direct Materials | Conversion | ||
Total costs for August in Roasting Department | $ | $ | |
Total equivalent units | |||
Cost per equivalent unit (2) | $ | $ | |
Costs assigned to production: | |||
Direct Materials | Conversion | Total | |
Inventory in process, August 1 | $ | ||
Costs incurred in August | |||
Total costs accounted for by the Roasting Department | $ | ||
Costs allocated to completed and partially completed units: | |||
Inventory in process, August 1 balance | $ | ||
To complete inventory in process, August 1 | $ | $ | |
Cost of completed August 1 work in process | $ | ||
Started and completed in August | |||
Transferred to finished goods in August (3) | $ | ||
Inventory in process, August 31 (4) | |||
Total costs assigned by the Roasting Department | $ | ||
b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July). If required, round your answers to the nearest cent.
Increase or Decrease | Amount | |
Change in direct materials cost per equivalent unit | $ | |
Change in conversion cost per equivalent unit | $ |
In: Accounting
Survey empirical evidence to discuss the impact of government regulations (e.g., Sarbanes–Oxley Act of 2002 and Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010) on corporate operation and financial performance.
Please provide discussion of the above topic and citation of resources.
Thanks!!
In: Accounting
Q.2 (Max Marks:90)
Bombera Ltd operates at capacity and makes glass-topped dining
tables and wooden chairs, which are then typically sold as sets of
four chairs with one table. However, some customers purchase
replacement or extra chairs, and others buy some chairs or a table
only, so the sales mix is not exactly 4:1. Bombera Ltd is planning
its annual budget for the financial year 2018. Information for 2018
follows:
Input prices Direct materials Wood $5.30 per board
metre Glass $11.5 per sheet Direct manufacturing labour $14 per
direct manufacturing labour-hour
Input quantities per unit of output
Chairs Tables Direct materials Wood
1.2 board metres 1.7 board metres Glass — 2 sheets Direct
manufacturing labour 3 hours 6 hours Machine-hours (MH) 2 MH 5
MH
Inventory information, direct materials
Wood Glass Beginning inventory 27 200 board
metres 8 700 sheets Target ending inventory 29 360 board metres 9
500 sheets
ACT501 Semester 2, 2018 Page 4
Sales and inventory information, finished goods
Chairs Tables Expected sales in units 172 000 45
000 Selling price $70 $900 Target ending inventory in units 8 400 2
050 Beginning inventory in units 7 500 2 150
Chairs are manufactured in batches of 500 and tables are
manufactured in batches of 50. It takes three hours to set up for a
batch of chairs and two hours to set up for a batch of tables.
Bombera Ltd uses activity-based costing and has classified all
overhead costs as shown in the table below:
Cost type
Budgeted variable
Budgeted fixed Cost driver/allocation base
Manufacturing: Materials handling $342 840 $600
000 Number of board metres used Set-up 97 000 300 740 Set-up hours
Processing 789 250 5 900 000 Machine-hours
Nonmanufacturing: Marketing 2 011 200 4 500 000
Sales revenue Distribution 54 000 380 000 Number of
deliveries
Delivery trucks transport units sold in delivery sizes of 500
chairs or 500 tables.
Required For the year 2018:
5. Prepare the direct materials usage budget and the direct
materials purchases budget. 6. Use the direct materials
usage budget to find the budgeted allocation rate for
materials-handling costs. (2.5 marks) 7. Prepare the direct
manufacturing labour cost budget. (1.5 marks) 8. Prepare the
manufacturing overhead cost budget for materials handling, set-up
and processing. (1.5 marks) 9. Prepare the budgeted unit cost of
finished good (16.5 marks) and ending inventories budget. (4.5
marks) 10. Prepare the cost of goods sold budget. 11.
Prepare the non-manufacturing overhead costs budget for marketing
and distribution. (1 mark) 12. Prepare a budgeted income statement
(ignore income taxes). 13. Compare the budgeted unit cost
of a chair to its budgeted selling price. Why might Bombera Ltd
continue to sell the chairs for only $70?
In: Accounting
In: Accounting
Forecast Sales Volume and Sales Budget
For 20Y6, Raphael Frame Company prepared the sales budget that follows.
At the end of December 20Y6, the following unit sales data were reported for the year:
Unit Sales | ||||
8" × 10" Frame |
12" × 16" Frame |
|||
East | 26,670 | 13,462 | ||
Central | 7,107 | 2,450 | ||
West | 6,144 | 1,545 |
Raphael Frame Company Sales Budget For the Year Ending December 31, 20Y6 |
|||||||
Product and Area | Unit Sales Volume |
Unit Selling Price |
Total Sales | ||||
8" × 10" Frame: | |||||||
East | 25,400 | $35 | $889,000 | ||||
Central | 6,900 | 35 | 241,500 | ||||
West | 6,400 | 35 | 224,000 | ||||
Total | 38,700 | $1,354,500 | |||||
12" × 16" Frame: | |||||||
East | 12,700 | $36 | $457,200 | ||||
Central | 2,500 | 36 | 90,000 | ||||
West | 1,500 | 36 | 54,000 | ||||
Total | 16,700 | $601,200 | |||||
Total revenue from sales | $1,955,700 |
For the year ending December 31, 20Y7, unit sales are expected to follow the patterns established during the year ending December 31, 20Y6. The unit selling price for the 8" × 10" frame is expected to increase to $36 and the unit selling price for the 12" × 16" frame is expected to increase to $38, effective January 1, 20Y7.
Required:
1. Compute the increase or decrease of actual unit sales for the year ended December 31, 20Y6, over budget. Use the minus sign to indicate a decrease in amount and percent. Round percents to the nearest whole percent.
Unit Sales, Year Ended 20Y6 |
Increase (Decrease) Actual Over Budget |
||||||
Budget | Actual Sales | Amount | Percent | ||||
8" × 10" Frame: | |||||||
East | % | ||||||
Central | % | ||||||
West | % | ||||||
12" × 16" Frame: | |||||||
East | % | ||||||
Central | % | ||||||
West | % |
2. Assuming that the increase or decrease in actual sales to budget indicated in part (1) is to continue in 20Y7, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 20Y7. Use the minus sign to indicate a decrease in percent. Round budgeted units to the nearest whole unit.
20Y6 Actual Units |
Percentage Increase (Decrease) |
20Y7 Budgeted Units (rounded) |
|||
8" × 10" Frame: | |||||
East | % | ||||
Central | % | ||||
West | % | ||||
12" × 16" Frame: | |||||
East | % | ||||
Central | % | ||||
West | % |
3. Prepare a sales budget for the year ending December 31, 20Y7.
Raphael Frame Company | |||
Sales Budget | |||
For the Year Ending December 31, 20Y7 | |||
Product and Area | Unit Sales Volume | Unit Selling Price | Total Sales |
8" × 10" Frame: | |||
East | $ | $ | |
Central | |||
West | |||
Total | $ | ||
12" × 16" Frame: | |||
East | $ | $ | |
Central | |||
West | |||
Total | $ | ||
Total revenue from sales | $ |
In: Accounting