Arborista, Inc. plants trees and shrubs for homeowners. The trees are

purchased from and delivered by a sister company, Trees-R-Us, Inc.;

Arborista specializes in planting. Arborista obtained capital from family

members in exchange for common stock, which provides an ownership

interest to the family members. On December 1, a total of $50,000 was

raised by issuing 10,000 shares of stock.

An additional $20,000 was borrowed from their hometown bank, also on

December 1. The principal must be repaid at the end of two years, along

with 6 percent interest annually, which accrues as time passes.

Also on December 1, Arborista took delivery of, and began using in the

business, two previously owned Ford F-250 pick-ups for which it paid cash

of $7,000 each. These trucks areexpected to last for five more years, and

the best guess is that each will be worth $1,000 at the endof the five-year

period.

Arborista hired two employees to do the planting: Frank and Francois.

Frank is extremely knowledgeable, but a bit taciturn. Francois is generally

ebullient and has a lovely accent, and so his services were in high demand

by the customers of his former employer. As a result of his popularity,

Francois negotiated a deal with Arborista that he will be paid in advance for

every job (i.e., at the time the job is scheduled). Frank is happy to follow the

more generally accepted method of being paid after he does the work. The

employees furnish their own tools (i.e., shovels and picks).

Arborista decides to charge $75 for planting each tree. The worker planting

the tree (i.e., Frank or Francois) will receive $20 per tree as his wage.

On December 18, two clients came into the office to arrange to have trees

planted on their property. The first client, Ms. Imaprimadonna, was

insistent that her 20 trees/shrubs be planted the next day, as it was critical

that the work be completed before the holidays. Furthermore, she insisted

that Frank do the planting, as she had heard Francois was the chatty type

and she did not want to pay someone to chat. In addition, she insisted that

Frank must arrive at her house before the clock truck 8:00 a.m., or the

order was cancelled. Finally, Ms. Imaprimadonna insisted that she be billed

for the job and allowed to pay in three weeks.

2

The second client, Ms. Bonappetit, wanted 30 trees/shrubs planted. She

was flexible about when the work would be completed, as long as it was

scheduled after the first of the year. However, she did ask that Francois do

the work, as she had heard wonderful things about his charming manner

from her friend. Ms. Bonappetit insisted on paying in advance, and

immediately wrote a check for the total amount. Arborista scheduled

Francois to do the work in four weeks and, per their

agreement, paid him immediately.

Frank arrived at Ms. Imaprimadonna’s home at 7:59 a.m. on December 19

and completed the planting to her satisfaction. His next payday is January

5. Ms. Imaprimadonna paid promptly on January 8. Francois performed

the work for Ms. Bonappetit on January 15. Both customers promised to

recommend Arborista, Inc. to their friends.

Required

Prepare a Balance Sheet, Income Statement, and Statement of Cash Flows

as of December 31.

Greive is a sole trader business which only manufactures and sells a set of garden equipment which comprises a spade, a hose pipe and a trowel.

Given below are the sales revenue and profit for 2017.

In 2017 the business manufactured and sold 22,000 sets of garden equipment and had fixed costs of £124,000. All other costs were variable.

Required:

a.Calculate the average selling price, variable cost and contribution for a set of garden equipment for 2017.

b.Calculate the average sales revenue level, both in numbers of sets of garden equipment and in money terms, at which the business broke even in 2017. (Your calculation should be rounded up to the nearest whole number.)

c.Why does it make more sense for a break-even calculation to round up to the nearest whole number and not just to the nearest number?

d.Calculate the number of sets of garden equipment needed to be sold to earn a profit of £200,000.

e.Calculate the margin of safety for Greive for 2017.

Jabieb corporation issued 3,000 convertible bonds on January 1, 2018. The bonds have a 3-year life and are issued at par with a face value of $1,000 per bond, giving total proceedings of $3,000,000. Interest is payable annually at 6%. Each bond is convertible into 200 ordinary shares (par value $1). The market rate of interest on similar non-convertible debt is 8%

a) Compute the liability and equity component of the convertible bond on January 1, 2018.

b) Assume the bond is converted on January 1, 2019, compute the carrying value of the bond payable on

January 1 2019.

c) Prepare the journal entry to record the conversion on January 1, 2019. .

d) Assume that the bonds were repurchased on January 1, 2019 for $2,900,000 cash instead of being

converted. The net present value of the bonds on January 1, 2019 is $2,850,000. Prepare the journal entry

to show the repurchase on January 1, 2019.

Josh Company had 200,000 ordinary shares outstanding on December 31, 2017. The company issued 20,000 shares on April 1, 2018 and retired 10,000 shares on September 1, 2018. Josh company recorded net income for the year ended December 31, 2018 of $300,000 after a loss on discontinued operations of $35,000 (net of tax).

Brief Exercise 9-45 (Algorithmic)
Issuance of Long-Term Debt

Natalie Corp. provides medical supplies to hospitals located in Western Washington and Oregon. This year, Natalie Corp. issued 6,200 bonds with a $1,000 face value. The nominal rate for each bond is 7%.

Required:

Prepare the necessary journal entries to record the issuance of these bonds assuming the bonds were issued (a) at par, (b) at 103, and (c) at 96.

• What are the benefits of adopting international accounting standards for (a) investors, and (b) business enterprises?
• What are the potential risks associated with a move toward the adoption of international accounting standards in a nation

Kubin Company’s relevant range of production is 23,000 to 27,500 units. When it produces and sells 25,250 units, its average costs per unit are as follows:

Required:

1. Assume the cost object is units of production:

a. What is the total direct manufacturing cost incurred to make 25,250 units?

b. What is the total indirect manufacturing cost incurred to make 25,250 units?

2. Assume the cost object is the Manufacturing Department and that its total output is 25,250 units.

a. How much total manufacturing cost is directly traceable to the Manufacturing Department?

b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?

3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $95,950 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.

a. When the company sells 25,250 units, what is the total direct selling expense that can be readily traced to individual sales representatives?

b. When the company sells 25,250 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3

1. Assume the cost object is units of production:

a. What is the total direct manufacturing cost incurred to make 25,250 units? (Round per unit values to 2 decimal places.)

b. What is the total indirect manufacturing cost incurred to make 25,250 units? (Round per unit values to 2 decimal places.)

• Required 1
• Required 2
• Required 3

2. Assume the cost object is the Manufacturing Department and that its total output is 25,250 units.

a. How much total manufacturing cost is directly traceable to the Manufacturing Department? (Round per unit values to 2 decimal places.)

b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?

Show less

3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $95,950 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.

a. When the company sells 25,250 units, what is the total direct selling expense that can be readily traced to individual sales representatives? (Round per unit value to 2 decimal places.)

b. When the company sells 25,250 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

Show less

Brand new auditors can be a problem and something that can slow the process down. Is there any disadvantage to having the same auditors every year?

Cardinal Company is considering a five-year project that would require a $2,860,000 investment in equipment with a useful life of five years and no salvage value. The company’s discount rate is 14%. The project would provide net operating income in each of five years as follows:

2-a. What are the project’s annual net cash inflows?

2-b. What is the present value of the project’s annual net cash inflows? (Round discount factor to 3 decimal places.)

3. What is the project’s net present value? (Round discount factor(s) to 3 decimal places and final answer to the nearest whole dollar amount.)

What is the project profitability index for this project? (Round discount factor(s) to 3 decimal places and final answer to 2 decimal places.)

Thank you

Furry Friends Supplies Inc., a pet wholesale supplier, was organized on May 1. Projected sales for each of the first three months of operations are as follows:

All sales are on account. 53 percent of sales are expected to be collected in the month of the sale, 35% in the month following the sale, and the remainder in the second month following the sale.

Prepare a schedule indicating cash collections from sales for May, June, and July.

Florida State University produces hats and sells them in the Book Store. On March 31, 2019, the Book Store has 1,000 hats in inventory. The hats are sold for $8.00. The Book Store’s policy is to maintain enough hats in inventory equal to 10% of next month’s sales. The Book Store anticipates the following sales activity for the second quarter of the year:

In addition, July’s sales are expected to be 9,000 units.

Required:

(use excel)

Please research what happened to the PCAOB in term of leaking of private data. What ethical values are involved? Opine on both the PCAOB controls and the hiring organizations. Please talk about how a trained CPA could get caught up in such a scandal.

Foxboro Company experienced an accounting event that affected it balance sheet and income statement in the following way:

Assets: -/+

Liabilities: NA

Equity: NA

Revenue: NA

Expenses: NA

Net Income: NA

Which of the following accounting events could have caused these effects on Foxboro's statements:

a. Purchase raw materials inventory on account

b. Transfer cost from work in process to finished good inventory

c. Recognize revenue from merchandise sold for cash

d. None of the above

On May 5, 2018, Sarah purchased a new office building for $2.5 million to use for rental purposes. After review of the appraisal, $100,000 is allocated to the value of the land. On November 3, 2018, she began to lease office space in the building. On March 4, 2023, Sarah sold the building. What is Sarah's depreciation deduction for 2018 and 2023?