Question: Complete all steps in accounting cycle. (LO 1, 2) AP Laura Eddy opened Eddy's Carpet Cleaners on ...

Complete all steps in accounting cycle.

(LO 1, 2) AP

Laura Eddy opened Eddy's Carpet Cleaners on March 1, 2017. In March, the following transactions were completed:

Instructions

(e)  

Prepare the income statement and statement of owner's equity for March, and a classified balance sheet at March 31, 2017. Of the note payable, $2,000 must be paid by March 1, 2018.

(f)  

Journalize and post the closing entries.

(g)  

Prepare a post-closing trial balance at March 31.

Smokey and the Bandit produces outdoor activity clothing. The product line consists of pants, jackets, tops, and accessories. Data has been collected related to direct materials and direct labor for the four product lines. Smokey and the Bandit has also collected information on four possible cost drivers (units, batches, machine hours, labor hours). All this information is listed below. Construct a spreadsheet that will allocate overhead for each of these alternative drivers and will calculate the total per unit cost for each product line. Use the VLOOKUP function when constructing the spreadsheet so that you can determine the effect of different cost drivers on the overhead allocated and the resulting cost per unit.   

Total overhead cost to be allocated: $321,560

After constructing your spreadsheet answer the following questions?

1. What is the total cost per unit of each product line when machine hours are used as the cost driver for overhead allocation?
2. How much overhead is allocated to Jackets when direct labor hours are used as the cost driver for overhead allocation?
3. What is the total cost of Tops when direct labor hours are used as the cost driver for overhead allocation?
4. What is the total cost per unit of Accessories when the number of batches is used as the cost driver for overhead allocation?
5. What is the allocation rate when units are used as the cost driver?
6. If you are the manager of the Jackets product line which cost driver would you prefer? Why?
7. Currently the OH cost are being allocated based on DL hours. If the company decides to use units as the cost driver how would you react if you are the Accessories product line manager?

The Angel Corporation purchased an office building for $600,000 12 years ago. The corporation claimed $80,000 of cost recovery deductions before it sold the building for $700,000.

1. Determine the amount and type of gain or loss that Angel Corporation recognizes on the sale of the building
2. Would your answer change if Angel was a sole proprietorship?
3. Would your answer change if Angel Corporation incurred $43,000 of Section 1231 losses in the prior year?

Create a scenario where external auditors determined that a company's internal controls were deficient, but such a deficiency might not mean that a material weakness existed. Ascertain the impact on the audit plan if additional deficiencies are discovered on other related internal controls. Support your position.

Read Case Study 3 in the Final Project Guidelines and Rubric document, and discuss the current or potential legal and/or regulatory issues apparent in this fact pattern that might impact a public offering. Actively engaging with your peers and instructor will help you complete the remaining critical elements for the full case study, due in Module Seven.

Case Study 3 Both Fred’s family and the business have rebounded from their prior issues. Jane sought counseling for her gambling issues and has worked hard to mend her relationships with the family. Prior to cashing the forged checks from Jane, Don was struck by lightning and experienced a spiritual enlightenment. He willingly returned the checks to Fred and Sally and promptly joined the Peace Corps. Likewise, when the church found out the donated check was a forgery, it was immediately returned. Bob’s wife (also Sally’s best friend) found out about Bob’s online sabotage and promptly remedied the situation. Once Fred’s Miracle Cough Syrup was back on track, the company’s growth was exponential. Featured on a widely viewed talk show starring a prominent doctor, online orders and demands from big-box chains nationwide skyrocketed. Fred and Sally have been told that now would be an ideal time to take Fred’s Miracle Cough Syrup public. The only distressing issue at hand involves Tammy, a local girl who had been working as a delivery girl for the company. She applied for Jane’s former job as bookkeeper. Fred and Sally hired Ted, an experienced accountant, instead, and Tammy has filed a claim of sex discrimination against the company and Fred personally. Fred and Sally are seeking your advice regarding Tammy and the possibility of taking the company public. Complete a legal analysis of the given facts, including the following elements. Specifically, the following critical elements must be addressed: I. Evaluate three current or potential legal and/or regulatory issues apparent in this fact pattern that might impact a public offering. II. Determine whether Fred's Miracle Cough Syrup is in compliance with government regulations involving public offerings by analyzing relevant laws and using the appropriate legal test and facts given. III. Support your conclusions and provide recommendations to improve compliance and strategies for corporate growth.

Audit question

Q1. set out the rights and dutoes of auditos unddr cimpany act 2006?

Q2. Explain the responsibilities of:
        - the directors
        - the auditors
       In connection with the preparation and publication of a company's financial statement

Q3. State whether the following statement are true or false and explanation to answer choosen in respect of external auditors responsibilities:
-auditors are responsible for the financial content of the annual account
   (true / false) and why?

-auditors do not have obsalute assurance that the figures that they audit are correct.
(true/false) and why?

How does a tax accountant meet its obligations to both the tax system and his/her client?

SM manufactures small engines that it sells to manufacturers who install them in products such as lawn mowers. The company currently manufactures all the parts used in these engines but is considering a proposal from an external supplier who wishes to supply the starter assemblies used in these engines.

The starter assemblies are currently manufactured in Division 3 of SM. The costs relating to the starter assemblies for the past 12 months were as follows:

Over the past year, Division 3 manufactured 150,000 starter assemblies.

Further analysis of manufacturing overhead revealed the following information:

Of the total manufacturing overhead, only 25% is considered variable. Of the fixed portion, $300,000 is an allocation of general overhead that will remain unchanged for the company as a whole if production of the starter assemblies is discontinued. A further $200,000 of the fixed overhead is avoidable if production of the starter assemblies is discontinued. The balance of the current fixed overhead, $100,000, is the division manager’s salary. If SM discontinues production of the starter assemblies, the manager of Division 3 will be transferred to Division 2 at the same salary. This move will allow the company to save the $80,000 salary that would otherwise be paid to attract an outsider to this position.

Required

1. Good Supply, a reliable supplier, has offered to supply starter-assembly units at $8 per unit. Because this price is less than the current average cost per unit, the vice president of manufacturing is eager to accept this offer. On the basis of financial considerations alone, should SM accept the outside offer assuming that production remains consistent with the past year? Show your calculations.

2. How, if at all, would your response to requirement 1 change if the company could use the vacated plant space for storage and, in so doing, avoid $100,000 of outside storage charges currently incurred? Why is this information relevant or irrelevant?

3. Assume that demand increases and SM requires 190,000 units. On the basis of financial considerations alone, should SM accept the outside offer? Show your calculations.

Required Task:

Part A 1. Choose a country that has adopted IFRSs (i.e. global accounting standards) for at least 3 or more years, as revealed in the accounting literature, and discuss the following:

I. In what year did the country adopt IFRSs?

II. Were the IFRSs introduced all together (at once), or gradually into the local accounting standards of your chosen country? Explain the possible reason.

III. Discuss the benefits and challenges reported in the literature about the adoption of IFRSs in your chosen country.

Australian IFRS Adopted

1. Define the marketing concept. Describe two real companies that in your opinion are good examples of marketing concept being followed or otherwise.

The following is the ending balances of accounts at December 31, 2018 for the Valley Pump Corporation. Account Title Debits Credits Cash 42,000 Accounts receivable 90,000 Inventories 115,000 Interest payable 27,000 Marketable securities 78,000 Land 154,000 Buildings 385,000 Accumulated depreciation—buildings 117,000 Equipment 109,000 Accumulated depreciation—equipment 42,000 Copyright (net of amortization) 29,000 Prepaid expenses (next 12 months) 49,000 Accounts payable 82,000 Deferred revenues (next 12 months) 37,000 Notes payable 335,000 Allowance for uncollectible accounts 7,000 Common stock 370,000 Retained earnings 34,000 Totals 1,051,000 1,051,000 Additional information: The $154,000 balance in the land account consists of $117,000 for the cost of land where the plant and office buildings are located. The remaining $37,000 represents the cost of land being held for speculation. The $78,000 in the marketable securities account represents an investment in the common stock of another corporation. Valley intends to sell one-half of the stock within the next year. The notes payable account consists of a $134,000 note due in six months and a $201,000 note due in three annual installments of $67,000 each, with the first payment due in August of 2019.

Joe Vandal LLC. last year’s sales were $10million. The company spends $3.5 million for purchase of direct materials and $2.5 million for direct labor. Overhead is $3.5 million, and profit is $500,000. Direct labor and direct material vary directly with sales, but overhead does not. The company wants to double its profit.

1. By how much should the firm increase annual sales?
2. By how much should the firm decrease material costs?
3. By how much should the firm decrease labor cost?

Please shown your answer with clearly laid-out table format with numbers labeled.

Great Adventures Problem 3-1

[The following information applies to the questions displayed below.]
  
On July 1, 2018, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The following transactions occur from August 1 through December 31. Also, the balances are provided for the month ended July 31.
  
The articles of incorporation state that the corporation will sell 22,000 shares of common stock for $1 each. Each share of stock represents a unit of ownership. Tony and Suzie will act as co-presidents of the company. The following business activities occur during July for Great Adventures.
  
Jul. 1 Sell $11,000 of common stock to Suzie.
Jul. 1 Sell $11,000 of common stock to Tony.
Jul. 1 Purchase a one-year insurance policy for $5,760 ($480 per month) to cover injuries to participants during outdoor clinics.
Jul. 2 Pay legal fees of $1,800 associated with incorporation.
Jul. 4 Purchase office supplies of $2,000 on account.
Jul. 7 Pay for advertising of $320 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $50 the day of the clinic.
Jul. 8 Purchase 10 mountain bikes, paying $18,200 cash.
Jul. 15 On the day of the clinic, Great Adventures receives cash of $3,500 from 70 bikers. Tony conducts the mountain biking clinic.
Jul. 22 Because of the success of the first mountain biking clinic, Tony holds another mountain biking clinic and the company receives $4,050.
Jul. 24 Pay for advertising of $800 to a local radio station for a kayaking clinic to be held on August 10. Attendees can pay $140 in advance or $190 on the day of the clinic.
Jul. 30 Great Adventures receives cash of $9,800 in advance from 70 kayakers for the upcoming kayak clinic.
Aug. 1 Great Adventures obtains a $37,000 low-interest loan for the company from the city council, which has recently passed an initiative encouraging business development related to outdoor activities. The loan is due in three years, and 6% annual interest is due each year on July 31.
Aug. 4 The company purchases 14 kayaks, paying $19,600 cash.
Aug. 10 Twenty additional kayakers pay $3,800 ($190 each), in addition to the $9,800 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic.
Aug. 17 Tony conducts a second kayak clinic, and the company receives $11,000 cash.
Aug. 24 Office supplies of $2,000 purchased on July 4 are paid in full.
Sep. 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed, purchasing a one-year rental policy for $4,080 ($340 per month).
Sep. 21 Tony conducts a rock-climbing clinic. The company receives $13,300 cash.
Oct. 17 Tony conducts an orienteering clinic. Participants practice how to understand a topographical map, read an altimeter, use a compass, and orient through heavily wooded areas. The company receives $19,300 cash.
Dec. 1 Tony decides to hold the company’s first adventure race on December 15. Four-person teams will race from checkpoint to checkpoint using a combination of mountain biking, kayaking, orienteering, trail running, and rock-climbing skills. The first team in each category to complete all checkpoints in order wins. The entry fee for each team is $510.Dec. 5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $30 in salary for each team that competes in the race. His salary will be paid after the race.Dec. 8 The company pays $1,100 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense.Dec. 12 The company purchases racing supplies for $2,500 on account due in 30 days. Supplies include trophies for the top-finishing teams in each category, promotional shirts, snack foods and drinks for participants, and field markers to prepare the racecourse.Dec. 15 The company receives $20,400 cash from a total of forty teams, and the race is held.Dec. 16 The company pays Victor’s salary of $1,200.
Dec. 31 The company pays a dividend of $3,700 ($1,850 to Tony and $1,850 to Suzie).
Dec. 31 Using his personal money, Tony purchases a diamond ring for $5,300. Tony surprises Suzie by proposing that they get married. Suzie accepts and they get married!

The following information relates to year-end adjusting entries as of December 31, 2018.
  
a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,900.
b. Six months’ worth of insurance has expired.
c. Four months’ worth of rent has expired.
d. Of the $2,000 of office supplies purchased on July 4, $330 remains.
e. Interest expense on the $37,000 loan obtained from the city council on August 1 should be recorded.
f. Of the $2,500 of racing supplies purchased on December 12, $210 remains.
g. Suzie calculates that the company owes $14,300 in income taxes.
  
Assume the following ending balances for the month of July.

Required:
1. Record transactions from July 1 through December 31.

2. Record adjusting entries as of December 31, 2018.

4. Prepare an adjusted trial balance as of December 31, 2018.

5-a. For the period July 1 to December 31, 2018, prepare an income statement.

5-b. For the period July 1 to December 31, 2018, prepare a statement of stockholders’ equity. All account balances on July 1 were zero.

5-c. Prepare a classified balance sheet as of December 31, 2018.

6. Record closing entries as of December 31, 2018.