1. Standard Costs, Decomposition of Budget Variances, Direct Materials and Direct Labor

   Haversham Corporation produces dress shirts. The company uses a standard costing system and has set the following standards for direct materials and direct labor (for one shirt):

   Fabric (1.5 yds. @ $2.80)	$4.20
   Direct labor (1.1 hr. @ $20)	22.00
   Total prime cost	$26.20

   During the year, Haversham produced 9,900 shirts. The actual fabric purchased was 14,750 yards at $2.74 per yard. There were no beginning or ending inventories of fabric. Actual direct labor was 11,010 hours at $19.50 per hour.

   Required:

   1. Compute the costs of fabric and direct labor that should have been incurred for the production of 9,900 shirts.

   Direct materials	$fill in the blank 0e3850fbb03b03f_1
   Direct labor	$fill in the blank 0e3850fbb03b03f_2

   2. Compute the total budget variances for direct materials and direct labor.

   Direct materials	$fill in the blank 0e3850fbb03b03f_3
   Direct labor	fill in the blank 0e3850fbb03b03f_5

   3. Break down the total budget variance for direct materials into a price variance and a usage variance.

   Materials Price Variance	$fill in the blank 0e3850fbb03b03f_7
   Materials Usage Variance	$fill in the blank 0e3850fbb03b03f_9

   Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank or enter "0".

   Price Variance		fill in the blank 521dbb03efc2fe6_2	fill in the blank 521dbb03efc2fe6_3
   		fill in the blank 521dbb03efc2fe6_5	fill in the blank 521dbb03efc2fe6_6
   		fill in the blank 521dbb03efc2fe6_8	fill in the blank 521dbb03efc2fe6_9
   Usage Variance		fill in the blank 521dbb03efc2fe6_11	fill in the blank 521dbb03efc2fe6_12
   		fill in the blank 521dbb03efc2fe6_14	fill in the blank 521dbb03efc2fe6_15
   		fill in the blank 521dbb03efc2fe6_17	fill in the blank 521dbb03efc2fe6_18

   4. Break down the total budget variance for direct labor into a rate variance and an efficiency variance.

   Labor Rate Variance	$fill in the blank 65c423fcffa2f7f_1
   Labor Efficiency Variance	$fill in the blank 65c423fcffa2f7f_3

   Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank or enter "0".

   		fill in the blank ea46ee0cb02afba_2	fill in the blank ea46ee0cb02afba_3
   		fill in the blank ea46ee0cb02afba_5	fill in the blank ea46ee0cb02afba_6
   		fill in the blank ea46ee0cb02afba_8	fill in the blank ea46ee0cb02afba_9
   		fill in the blank ea46ee0cb02afba_11	fill in the blank ea46ee0cb02afba_12

please answer all

Crane Limited purchased a machine on account on April 2, 2018, at an invoice price of $360,090. On April 4, it paid $1,850 for delivery of the machine. A one-year, $4,250 insurance policy on the machine was purchased on April 5. On April 18, Crane paid $8,280 for installation and testing of the machine. The machine was ready for use on April 30.

Crane estimates the machine’s useful life will be five years or 6,018 units with a residual value of $85,700. Assume the machine produces the following numbers of units each year: 859 units in 2018; 1,504 units in 2019; 1,312 units in 2020; 1,267 units in 2021; and 1,076 units in 2022. Crane has a December 31 year end.

1. determine the cost of the machine

2. calculate

using a. straight line method, b. double diminishing method, c. units of production method

3. Which method causes net income to be lower in the early years of the asset’s life?

Problem 15-1

On January 5, 2017, Crane Corporation received a charter granting the right to issue 5,400 shares of $100 par value, 7% cumulative and nonparticipating preferred stock, and 46,800 shares of $10 par value common stock. It then completed these transactions.

Prepare the stockholders’ equity section of Crane Corporation’s balance sheet as of December 31, 2017. (Enter account name only and do not provide descriptive information.)

Write in your own words some of the things that you have seen or heard which make being more aware of information security important in your organization?

Accounting Information System

Explain COSO internal control-integrated framework? Give example of Saudi organizations that uses COSO framework? (write with max 200 words with evidence in your own words)

Accounting Information System

Does a non-controlling shareholder have access to any information other than the consolidated financial statements to determine how well the subsidiary is doing? Explain.

Advanced accounting

Accounting Theory Question

Case 8- 10 Accounting for Prepaids and Deferrals

Short term deferrals (prepaid and unearned revenues) are classified as current assets and current liabilities. As such included in working capital.

Required

1. Why do accountants include short-term unearned revenues as current liabilities? Do they meet the definition of liabilities found in the conceptual framework? Do they affect working capital? Explain.

2. Present arguments for excluding unearned revenues from current liabilities. Do they affect liquidity? Explain.

Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company is now planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements:

a. The finished goods inventory on hand at the end of each month must be equal to 4,000 units of Supermix plus 20% of the next month’s sales. The finished goods inventory on June 30 is budgeted to be 19,000 units.

b. The raw materials inventory on hand at the end of each month must be equal to one-half of the following month’s production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 94,000 cc of solvent H300.

c. The company maintains no work in process inventories.

A sales budget for Supermix for the last six months of the year follows.

Required:

1. Prepare a production budget for Supermix for the months July, August, September, and October.

3. Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for July, August, and September, and for the quarter in total.

Journalize the following transactions in general journal form for the month of June 20XX. Identify each transaction by date. You may omit explanations of the transactions. Put journal entries in proper form.

June 1​Mike Cline invested $35,000 cash in his business.

June 2​Purchased $400 of office supplies on account.

June 4​Purchased office equipment for $6,000, paid $2,000 in cash and signed a 30-day note for the remainder.

June 6​Real estate commissions billed to clients in the amount of $4,000.

June 9​Paid $700 in cash for current month’s rent.

June 19​Paid $200 of amount owed for the office supplies purchased on June 2.

June 23​Received a bill for $600 advertising for the current month.

June 25​Paid $2,200 cash for office salaries.

June 29​Mr. Cline withdrew $1,200 cash for personal use.

June 30​Received a check for $3,000 from a client in payment of commissions billed on June 6.

The financial records of Leon Paul Inc. were destroyed by fire at the end of 2017. Fortunately the controller had kept certain statistical data related to the income statement as presented below. 1. The beginning merchandise inventory was $184,000 and decreased 20% during the current year. 2. Sales discounts amount to $34,000. 3. 20,000 shares of common stock were outstanding for the entire year. 4. Interest expense was $40,000. 5. The income tax rate is 30%. 6. Cost of goods sold amounts to $1,000,000. 7. Administrative expenses are 20% of cost of goods sold but only 8% of gross sales. 8. Four-fifths of the operating expenses relate to sales activities. Operating expenses consist of selling and administrative expenses. Instructions From the foregoing information, prepare an income statement for the year 2017 in single step form.

The financial records of Leon Paul Inc. were destroyed by fire at the end of 2017. Fortunately the controller had kept certain statistical data related to the income statement as presented below. 1. The beginning merchandise inventory was $184,000 and decreased 20% during the current year. 2. Sales discounts amount to $34,000. 3. 20,000 shares of common stock were outstanding for the entire year. 4. Interest expense was $40,000. 5. The income tax rate is 30%. 6. Cost of goods sold amounts to $1,000,000. 7. Administrative expenses are 20% of cost of goods sold but only 8% of gross sales. 8. Four-fifths of the operating expenses relate to sales activities. Operating expenses consist of selling and administrative expenses. Instructions From the foregoing information, prepare an income statement for the year 2017 in single step form.

Allen Company acquired 100 percent of Bradford Company’s voting stock on January 1, 2014, by issuing 10,000 shares of its $10 par value common stock (having a fair value of $15 per share). As of that date, Bradford had stockholders’ equity totaling $106,800. Land shown on Bradford’s accounting records was undervalued by $13,200. Equipment (with a five-year remaining life) was undervalued by $9,600. A secret formula developed by Bradford was appraised at $20,400 with an estimated life of 20 years. Following are the separate financial statements for the two companies for the year ending December 31, 2018. There were no intra-entity payables on that date. Credit balances are indicated by parentheses. Allen Company Bradford Company Revenues $ (542,000 ) $ (220,000 ) Cost of goods sold 179,000 82,000 Depreciation expense 135,000 60,300 Subsidiary earnings (74,760 ) 0 Net income $ (302,760 ) $ (77,700 ) Retained earnings, 1/1/18 $ (792,000 ) $ (124,200 ) Net income (above) (302,760 ) (77,700 ) Dividends declared 175,500 40,000 Retained earnings ,12/31/18 $ (919,260 ) $ (161,900 ) Current assets $ 300,000 $ 88,000 Investment in Bradford 255,400 0 Company Land 490,000 72,000 Buildings and equipment (net) 744,000 164,000 Total assets $ 1,789,400 $ 324,000 Current liabilities $ (180,140 ) $ (97,100 ) Common stock (600,000 ) (60,000 ) Additional paid-in capital (90,000 ) (5,000 ) Retained earnings, 12/31/18 (919,260 ) (161,900 ) Total liabilities and equity $ (1,789,400 ) $ (324,000 ) a-1. Complete the table to show the allocation of the fair value in excess of book value. a-2. What balance will Allen show in its Subsidiary Earnings account? b. Complete the worksheet by consolidating the financial information for these two companies.

Gary James works for Hills & beans, a professional services firm. James was a onetime business partner of former Florida State Senator Howard Clark and a donor to his campaign. Clark was recently charged with conspiring to defraud the IRS out of hundreds of thousands of dollars during the time James prepared tax returns for Clark’s business. The allegation is that Clark misclassified $2,268,520 as business expense, when the money went to his children’s tuition, a trip to Turks and Caicos Islands, home remodeling, and more. The amount of taxes Clark’s business owed for these deductions was $850,748, but only $56,766 was paid. The IRS is preparing charges against James for his role in the matter.

a. Discuss the ethics violations that may have been committed by James with respect of the AICPA Code discussed in chapter 4.

b. Assume you are the director of auditing for Hills & Beans and Clark approaches you requesting that your firm audit the financial statements of his business and prepare a report that would be submitted along with a loan of $1 million for his business.How might the facts of this case influence whether you agree to provide the audit service?

REVENUE RECOGNITION
If you sign up for and receive a new phone that would normally retail for $500 (cost to manufacture $380). We commit to a three year contract where we will have to pay back an amount that starts at $600 (to pay for the phone) but drops each month until it reaches zero at the end of 3 years (kind of like financing for the phone). We pay an activation fee of $35 along with the first month of service that will be $70 each month for the next 36 months. After one year of service, we will be eligible for $100 off the latest phone if we trade in the one year old phone for a new one. That rises to $200 after two years.

Show all journal entries needed to show revenue recognition.

Allen Company acquired 100 percent of Bradford Company’s voting stock on January 1, 2014, by issuing 10,000 shares of its $10 par value common stock (having a fair value of $15 per share). As of that date, Bradford had stockholders’ equity totaling $106,800. Land shown on Bradford’s accounting records was undervalued by $13,200. Equipment (with a five-year remaining life) was undervalued by $9,600. A secret formula developed by Bradford was appraised at $20,400 with an estimated life of 20 years. Following are the separate financial statements for the two companies for the year ending December 31, 2018. There were no intra-entity payables on that date. Credit balances are indicated by parentheses. Allen Company Bradford Company Revenues $ (542,000 ) $ (220,000 ) Cost of goods sold 179,000 82,000 Depreciation expense 135,000 60,300 Subsidiary earnings (74,760 ) 0 Net income $ (302,760 ) $ (77,700 ) Retained earnings, 1/1/18 $ (792,000 ) $ (124,200 ) Net income (above) (302,760 ) (77,700 ) Dividends declared 175,500 40,000 Retained earnings ,12/31/18 $ (919,260 ) $ (161,900 ) Current assets $ 300,000 $ 88,000 Investment in Bradford 255,400 0 Company Land 490,000 72,000 Buildings and equipment (net) 744,000 164,000 Total assets $ 1,789,400 $ 324,000 Current liabilities $ (180,140 ) $ (97,100 ) Common stock (600,000 ) (60,000 ) Additional paid-in capital (90,000 ) (5,000 ) Retained earnings, 12/31/18 (919,260 ) (161,900 ) Total liabilities and equity $ (1,789,400 ) $ (324,000 ) a-1. Complete the table to show the allocation of the fair value in excess of book value. a-2. What balance will Allen show in its Subsidiary Earnings account? b. Complete the worksheet by consolidating the financial information for these two companies.