if a company  was incorporated in England in 1952, however did not begin operating in Austrlalia until February 2017. The head office continued to be located in England, with the majority of shareholders residing across the England. The board of directors had met monthly at the head office to discuss the objectives and the running of the firm. In February 2017, three key directors transferred to the newly opened office in Austrlia inclluding a handful of the firms architectural and administrative staff. ask when and which part need to be count tax in Australia and why

Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products. Forbes Division, which has $7.7 million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $6.9 million in automated equipment for test machine assembly. The division's expected income statement at the beginning of the year was as follows:

A sales representative from LSI Machine Company approached Oscar in October. LSI has for $8.4 million a new assembly machine that offers significant improvements over the equipment Oscar bought at the beginning of the year. The new equipment would expand division output by 10 percent while reducing cash fixed costs by 5 percent. It would be depreciated for accounting purposes over a three-year life. Depreciation would be net of the $690,000 salvage value of the new machine. The new equipment meets Pitt's 12 percent cost of capital criterion. If Oscar purchases the new machine, it must be installed prior to the end of the year. For practical purposes, though, Oscar can ignore depreciation on the new machine because it will not go into operation until the start of the next year.

The old machine, which has no salvage value, must be disposed of to make room for the new machine.

Pitt has a performance evaluation and bonus plan based on residual income. Pitt uses a cost of capital of 12 percent in computing residual income. Income includes any losses on disposal of equipment. Investment is computed based on the end-of-year balance of assets, net book value. Ignore taxes.

Oscar Clemente is still assessing the problem of whether to acquire LSI’s assembly machine. He learns that the new machine could be acquired next year, but if he waits until then, it will cost 14 percent more. The salvage value would still be $690,000.

Required:

Calculate the residual income for the coming year assuming that the new equipment is bought at the beginning of the year. (Do not round intermediate calculations. Enter your answer in thousands of dollars not in millions of dollars. Round your final answers to nearest whole number value.)

In 2008, Doolan Company sold 10,000 units of inventory at twice their purchase price of $27.50 each.   In 2009, Doolan had a gross profit of $200,000 and cost of goods sold of $225,000.

A. What were Doolan’s sales in 2008?

B. What was Doolan’s gross profit in 2008?

C. What were Doolan’s sales in 2009?

D. What was Doolan’s gross profit percentage in 2009?

Moana is a single taxpayer who operates a sole proprietorship. She expects her taxable income next year to be $250,000, of which $200,000 is attributed to her sole proprietorship. Moana is contemplating incorporating her sole proprietorship. (Use the tax rate schedule). a. Using the single individual tax brackets and the corporate tax rate of 21 percent, find out how much current tax this strategy could save Moana (ignore any Social Security, Medicare, or self-employment tax issues). (Round your intermediate calculations and final answer to nearest whole dollar amount.)

b. How much income should be left in the corporation?

FRAUDD EXAMINATION

Case 4

Stephanie Adkins is an accountant who is trained in forensic accounting. She is an experienced fraud investigator. She was recently hired by Lake Side Hotels, a closely-held corporation, to investigate a company manager who is suspected of taking kickbacks from vendors.

Stephanie gave Lake Side her standard engagement letter stating that the scope of the engagement would be limited to investigating only one suspect. It did not guarantee findings or results.

According to the provisions of Stephanie’s engagement, she was to communicate directly with Bernie James, the company’s controller, and Amanda Peterson, the outside attorney.

At the first meeting of this team, Bernie indicated that Lake Side had received four separate anonymous tips about possible kickbacks. All the tips indicated that Laurie Miller, an evening manager, was taking kickbacks from food vendors. One tip named a particular vendor, the Mid States Beef Source, a company that supplies meat to the hotel’s restaurants.

Stephanie asked if Bernie had any documentation that supports Laurie Miller’s possible involvement in kickbacks. Bernie had no documentation but hoped Stephanie could help them substantiate the information from the anonymous tips. He was concerned that kickbacks would hurt the hotel financially.

Amanda, the outside attorney, said that she had already talked to several hotel employees and was convinced that Laurie was guilty.

Kickback schemes can be difficult to uncover, so Stephanie wanted to proceed cautiously.

Bernie wanted to confront Laurie immediately. He was convinced she would confess if he told her that he had evidence against her.

Stephanie asked what evidence Bernie had. Bernie said, “Only the anonymous tips, but I know she will confess if we bluff.” It was against Stephanie’s professional principles to lie and she said so.

“Detectives do it all the time on cop shows,” Bernie said. Stephanie insisted she would need to run the investigation her way or she wouldn’t be able to undertake this engagement.

In relation to this scenario, write responses to the following:

What steps might Stephanie follow to proceed with her investigation?

What mistakes, if any, have already been made in the investigation?

please continue and identify and describe the two balance sheet liability classifications and explain the purpose of financial statement disclosures? Why do we need financial statements and how does it really do for us?

Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:

Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.

Required:

1. Assuming the estimated variable manufacturing overhead cost per unit is $0.40, what must be the estimated total fixed manufacturing overhead cost per quarter? Answer: $172,000

2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter? Answer: $4.64

3. What is causing the estimated unit product cost to fluctuate from one quarter to the next? Answer:The fixed portion of hte manufacturing overhead cost is causing the unit porduct costs to flucuate.  

4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year. ***I need help on this one***

You are preparing to discuss borrowing needs with your​ bank's loan officer who asks you to prepare​ pro-forma financial statements. Below are the financial statements for the year just ended. Your sales department is projecting a 32​% increase in sales. Days sales outstanding are expected to improve to 45 days. With respect to inventory and accounts​ payable, assume that purchases will be ​$10,890,000 and cash payments will be ​$9,801,000. The Company expects to invest ​$1,670,000 ​(net of​ depreciation) to expand its storage capacity and achieve scale savings. ​ Accordingly, gross profit margins are expected to be 25​% in the future. Other expenses are expected to remain the same percentage of sales. The retention ratio is 45​%. For ease of​ calculation, assume interest expense remains the same. Prepare​ pro-forma financial statements and determine the amount of borrowing​ needs, which will be reflected in​ long-term debt.​ (round your answers to the nearest​ integer, and fill in all amounts including​ totals

Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove Company expects fixed costs of $485,300, a unit variable cost of $46, and a unit selling price of $69.

a. Compute the anticipated break-even sales (units). __________units

b. Compute the sales (units) required to realize operating income of $112,700. ________units

Andretti Company has a single product called a Dak. The company normally produces and sells 83,000 Daks each year at a selling price of $56 per unit. The company’s unit costs at this level of activity are given below:

A number of questions relating to the production and sale of Daks follow. Each question is independent.

Required:

1-a. Assume that Andretti Company has sufficient capacity to produce 103,750 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 83,000 units each year if it were willing to increase the fixed selling expenses by $110,000. What is the financial advantage (disadvantage) of investing an additional $110,000 in fixed selling expenses?

1-b. Would the additional investment be justified?

3. The company has 600 Daks on hand that have some irregularities and are therefore considered to be "seconds." Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price?

4. Due to a strike in its supplier’s plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period.

a. How much total contribution margin will Andretti forgo if it closes the plant for two months?

b. How much total fixed cost will the company avoid if it closes the plant for two months?

c. What is the financial advantage (disadvantage) of closing the plant for the two-month period?

d. Should Andretti close the plant for two months?

Cost Data for Financial Reporting and Special Order Decisions

Friendly Greeting Card Company produces a full range of greetings cards sold through pharmacies and department stores. Each card is designed by independent artists. A production master is then prepared for each design. The production master has an indefinite life. Product designs for popular cards are deemed to be valuable assets. If a card sells well, many batches of the design will be manufactured over a period of years. Hence, Friendly Greeting maintains an inventory of production masters so that card may be periodically reissued. Cards are produced in batches that may vary by increments of 1,000 units. An average batch consists of 10,000 cards. Producing a batch requires placing the production master on the printing press, setting the press for the appropriate paper size, and making other adjustments for colors and so forth. Following are facility-, product-, and unit-level cost information:

Product design and production master per new card…………… $ 2,000.00

Batch setup (typically per 10,000 cards)………………………….       200.00

Materials per 1,000 cards…………………………………………..       100.00

Conversion per 1,000 cards………………………………………..         80.00

Shipping

   Per batch…………………………………………………………...         25.00

   Per card…………………………………………………………….           0.02

Selling and administrative

   Companywide…………………………………………………….. 200,000.00

   Per product design marketed……………………………………         500.00

Previous year

Products designs and masters prepared for new cards………..                90

Product designs marketed…………………………………………              120

Batches manufactured……………………………………………..              500

Cards manufactured and solid…………………………………….    5,000,000

Required

a.         Describe how you would determine the cost of goods sold and the value of any ending inventory for financial reporting purposes. (No computations are required.)

b.         You have just received an inquiry from Walgreens stores to develop and manufacture 20 special designs for sale exclusively in Walgreens stores. The cards would be sold for $1.50 each, and Walgreens would pay Friendly Greeting $0.35 per card. The initial order is for 20,000 cards of each design. If the cards sell well, Walgreens plans to place additional orders for these and other designs. Because of the preestablished sales relationship, no marketing costs would be associated with the cards sold to Walgreens. How would you evaluate the desirability of the the Walgreens proposal?

c.         Explain any differences between the costs considered in your answer to requirements (a) and the costs considered in your answers to requirements (b).

Facts and information below are needed to resolve questions 24 through 26:

Jim Realty LLC, a partnership owned entirely by individuals, sells an apartment building for $72,200,000. The basis of the building immediately prior to the sale is as follows

24. Using the above information, determine the gain or loss on the sale of the apartment building to the individual owners.

25. Assuming that the allocation of the selling price is $20,000,000 to land, $52,000,000 to building and $200,000 to furniture and fixtures, prepare an estimate of the total taxes for the owners on the sale.

26. Prepare an alternative calculation for the sale with the total sales price of $72,200,000 that would result in lower taxes for the individuals

Problem 13-28 Net Present Value Analysis [LO13-2]

Bilboa Freightlines, S.A., of Panama, has a small truck that it uses for intracity deliveries. The truck is worn out and must be either overhauled or replaced with a new truck. The company has assembled the following information:

If the company keeps and overhauls its present delivery truck, then the truck will be usable for five more years. If a new truck is purchased, it will be used for five years, after which it will be traded in on another truck. The new truck would be diesel-operated, resulting in a substantial reduction in annual operating costs, as shown above.

The company computes depreciation on a straight-line basis. All investment projects are evaluated using a 6% discount rate.

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables.

Required:

1. What is the net present value of the “keep the old truck” alternative?

2. What is the net present value of the “purchase the new truck” alternative?

3. Should Bilboa Freightlines keep the old truck or purchase the new one?

Based on actual dollars, discuss Apple Inc performance compared to the prior year. 2017,2019,2018 from the company's balance sheet. Explain how you can tell whether the company is performing better or worse, and highlight at least three items from the income statement that justify your assessment.

Explain any changes or growth in the marketplace that have contributed to the Apple Inc performance.

Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). The table that follows shows the direct expenses incurred and square footage occupied by all four departments, as well as total sales for the two operating departments for the year 2017.