Required:

1. Discuss factors that a company might look at when determining prices for its products.

2. What are the advantages and disadvantages of target pricing versus cost-based pricing?

3. Why might a company price goods below costs?

Selected comparative financial statements of Haroun Company follow.

Required:
1. Complete the below table to calculate the trend percents for all components of both statements using 2011 as the base year. (Round your percentage answers to 1 decimal place.)

In finance and accounting system, if you have established an (Separation of Duty) SoD rule, is there ever a time when the rule should be broken to allow an SoD violation in the system? Please provide the rationale for your response.

Robatelli's Pizzeria Case Study Introduction

On the morning of October 31st, Elaine Black, Chief I... Robatelli's Pizzeria Case StudyIntroduction On the morning of October 31st, Elaine Black, Chief Information Officer at Robatelli's Pizzeria, was waiting for both Jim Saxton, database administrator, and Peter Greyton, operations manager, to come to her office for a meeting. While waiting, Elaine was thinking about the surge of telephone and Internet orders expected to be received through the company's customer order center within the next 12 hours. Halloween had always been the most popular day of the year for people in the greater Pittsburgh area to order pizza from Robatelli's. There were 53 restaurant locations to serve these customers, but only one location to receive all of the orders and forward them to the right restaurant. Elaine's thoughts were interrupted as Jim and Peter entered her office. The following conversation took place: ELAINE Well, guys, it's here again, our biggest day of the year. Not only is Halloween a busy day, but we have the upcoming day after Thanksgiving, the week before Christmas, and Super Bowl Sunday. Can our current computer system's infrastructure and people keep pace with the orders we expect? JIM I think our systems are all running at peak performance. We shouldn't have any computer concerns for today or those other busy days. PETER Everyone in the customer order center is focused on making sure that our customers get their pizzas as ordered. We have plenty of people scheduled to work tonight, so we're good to go. ELAINE Terrific. But every time we face one of these peak sales days, I start wondering about the long-term capacity and effectiveness of our computer systems. Jim, we need to think long term about our computer system. I was just reading an article that I'd like you to take a look at. It's about Anheuser-Busch Companies and their use of data mining. JIM I do agree with you, Elaine; we should always be thinking about how newer IT systems can help us. Could you e-mail me the link to the article? ELAINE Sure, and I would like you to think about how we might use the same approach in our business. Peter, your order center people are doing a great job, but again there's something I'd like us to think about in the long run. As you know, we now have to manually enter all customer order center sales and store sales into our general ledger (GL). I think we could improve a lot of things if those sales are automatically fed into our GL software. Why don't you think about any advantages you see for an automatic interface, and we'll look at the costs compared to those advantages. How's that sound? PETER I'll do that. I'll give it some thought and work on a report about an automatic interface between our GL software and the point of sale systems in our restaurants as well as the phone and Internet sales. How soon do you want to meet again to look at these issues? ELAINE Let's say, in two weeks at the same time. As Jim and Peter left her office, Elaine continued to think about the features of the company's accounting information systems and whether or not data extracted from these systems could facilitate the multiple needs of the company. The focus had always been on providing accurate financial accounting information from the various locations; however, the company's aggressive growth strategies meant increased emphasis on the system's ability to analyze detailed customer information that could be translated into increased sales opportunities. Elaine knew the challenges they faced could very well affect the company's ability to maintain its competitive advantage. She realized that her department must continually improve the company's information systems to help it achieve growth strategies. Operating state-of-the-art systems was imperative to position the company to execute those growth plans. However, she was concerned about the possibility that restrictions of the current information systems could actually prevent the company from doing what it wanted to do. Allowing restrictive systems to prevent them from achieving business strategies was a risk that Elaine would not tolerate! Background Robatelli's Pizzeria is a great American success story. Started by Dino Robatelli in the 1960s, the business impetus was a family pizza recipe. Introduced to the public at a church festival in Pittsburgh's Little Italy, Robatelli's pizzas are now a recognized tradition in the Greater Pittsburgh area. A full menu and local expansion have led to its growing popularity over the years and have helped it achieve nearly 50 percent of the area market share. Annual sales now exceed $100 million. Following is a timeline of milestones in the company's history: 1962 Dino and Gloria Robatelli contributed $500 and the family pizza recipe to a partnership that opened the first Robatelli's Pizzeria. 1965 The Robatellis bought out their business partners. 1967 The first Robatelli's franchise opened. 1971–77 Dozens of new Robatelli's franchises opened throughout the surrounding region. 1983 Home delivery service began. 1992 A central, one-number calling system for all restaurants was launched. 2003 Internet ordering began. The first “prototype pizzeria” opened. Today A total of 53 locations are in operation.

Review the Robatelli's Pizzeria Case Study. Considering the nature of the relationship between Robatelli's Pizzeria home office and its franchise owners, the company may be quite vulnerable to theft or fraudulent financial reporting committed by these franchise owners.

In 700 to 1,050 words, discuss the following: Describe three components of the fraud triangle and how each would relate to a franchise owner's likelihood to defraud Robatelli's Pizzeria. Identify three types of fraud to which Robatelli's Pizzeria may be susceptible. Indicate whether the fraud is classified as management fraud, employee fraud, vendor fraud, customer fraud, or computer fraud for each. Suggest an internal control that could be implemented to prevent or detect the potential fraud for each. Design a 5- to 6-bulleted item code of ethics for Robatelli's Pizzeria. You may find guidance by searching the Internet for examples.

Locate information on the procedure by which an individual tax payer can request a photocopy of a prior year federal income tax return. What is the number to request a photocopy? Does the IRS charge a fee for this service?

Based on the interim results below for Cabben Fashion Limited, it has shown a favourable receivables turnover ratio. Discuss 4 possible strategies that Cabben Fashion Limited may have implemented to achieve an improved receivable turnover from 135 days to 91 days.              

Cabbeen Fashion Limited
(incorporated in the Cayman Islands with limited liability)

Cabbeen announces 2018 interim results
Profit for the period increased by 24.1% to RMB109.1 million
*** ***
(1 August 2018, Hong Kong) Cabbeen Fashion Limited ("Cabbeen" or the "Company", including subsidiaries, the "Group", HKSE stock code: 2030), one of the leading menswear designer brands in China, announces its results for the six months ended 30 June 2018 (the "period").

Results and Operation Highlights:

Financial Highlights

Revenue increased by 37.5% to RMB 558.1 million.

Gross profit increased by 23.0% to RMB 267.3 million, with gross profit margin at 47.9%.

Profit for the period increased by 24.1% to RMB109.1 million, with net profit margin at 19.6%.

Basic earnings per share were RMB 0.1640, up 31.3% from the same period in 2017.

Resolved to declare an interim dividend of 13.2 HK cents per share.

Encouraging results from e-commerce business

Revenue from online shops increased 66.9% from the same period in 2017 to RMB 214.0 million.

The number of membership and fan accounts on WeChat as of 30 June 2018 were 3,119,000 (30 June 2017: 1,944,000), of which 360,000 members (30 June 2017: 337,000) made purchases amounted to RMB 788.6 million (30 June 2017: RMB 681.6 million).

Improved overall inventory

Up to 30 June 2018, sell-through rate of the Group's 2017 collections was 81.5% and 2018 spring/summer collections was 56.0%.

Average inventory turnover days improved to 200 days from 296 days for the same period in 2017.

Further enhanced financial robustness

Cashflow from operating activities improved to net inflow of RMB48 million from net cash outflow during the first half of 2017.

Average turnover days of trade and bills receivables improved to 91 days from 135 days for the first half of 2017.

Cash and cash equivalents, pledged deposits, financial assets and time deposits with initial terms of over three months totaled RMB 994.9 million, up from RMB945.6 million on 31 December 2017.

Net debt position on 30 June 2018 improved to RMB 25.3 million, down from RMB 153.5 million on 31 December 2017.

Identify and discuss the steps in the recording process. Be sure to discuss what each step does and how it relates to the steps before and after it. Then, answer the following questions:

Should business transactions credits and debits be recorded directly into the ledger accounts?

What are the advantages of recording in the journal before posting transactions into the ledger?

Part C

Question 1

Mr. Kenny is an accountant at AF Textile, and he plays squash with Mr. Zuni, the CEO of AF Textile. The CEO wanted to decrease net income with the objective to pay lesser tax. Mr. Kenny was eager to get into Mr. Zuni’s elite social circle; he boasted to Mr. Zuni that he knew some accounting tricks that could decrease company income by simply disclosing company’s capital expenditure as their revenue expenditure. At the end of the year, Mr. Kenny changed the debits from “capital expenditures” to “revenue expenditure” on several transactions. Later, Mr. Zuni achieved his objective of paying lesser tax, and the manipulations were never discovered.

Required:

Differentiate between Capital Expenditure and Revenue Expenditure. (4 marks)

How did the change in journal entries affect the net income and net assets of the company at year-end?                                 (3 marks)

National Foods Pvt. Ltd. is a company producing canned foods. Below are the company’s financial statements:

Required:

Prepare the statement of cash flows for Hasniza Foods Pte. Ltd. for the year ended 31 August 2018 using the direct method. (Show all calculations).                    

On December 31, 2017, Vaughn Company acquired a computer from Plato Corporation by issuing a $595,000 zero-interest-bearing note, payable in full on December 31, 2021. Vaughn Company’s credit rating permits it to borrow funds from its several lines of credit at 12%. The computer is expected to have a 5-year life and a $75,000 salvage value.

1-Prepare the journal entry for the purchase on December 31, 2017

2-Prepare any necessary adjusting entries relative to depreciation (use straight-line) and amortization (use effective-interest method) on December 31, 2018 (To record the depreciation.) (To amortize the discount.) ( Schedule of note discount amortization)

3-Prepare any necessary adjusting entries relative to depreciation and amortization on December 31, 2019.(To record the depreciation.)(To amortize the discount.) 3-

The following account balances were taken from ABC Company’s unadjusted trial
balance at December 31, 2020:

Accounts Payable ............  $56,000
Accounts Receivable .........  $42,000
Cash ........................  $11,000
Common Stock ................  $63,000
Cost of Goods Sold ..........  $52,000
Income Tax Expense ..........  $12,000
Insurance Expense ...........  $21,000
Inventory ...................  $70,000
Land ........................  $68,000
Mortgage Payable ............  $49,000
Patent ......................  $31,000
Prepaid Insurance ...........  $17,000
Rental Revenue ..............  $46,000
Retained Earnings ...........  $72,000 (at January 1, 2020)
Sales Revenue ...............  $95,000
Supplies ....................  $19,000
Wage Expense ................  $38,000

ABC Company has not yet recorded adjusting entries related to the following
two items:

(1)  $11,000 of supplies were used up during 2020.

(2)  ABC Company has provided services to a customer totaling $14,000 as of
     December 31, 2020. However, the customer has not yet paid ABC Company.

Calculate the total assets reported in ABC Company's December 31, 2020 balance
sheet after the appropriate adjusting entries have been recorded and posted.

Short answer

1. The Company uses the balance sheet approach to estimate bad debt expense. Credit sales for the period were $10 million. The beginning balance in the allowance for doubtful accounts was a credit balance of $44,300. During the year, $41,000 of receivables were written off. The aging schedule suggests that the ending balance in the allowance for doubtful accounts is $51,500. What was bad debt expense for the period? Credit sales were $950,000. Cash flow from operating activities was $650,000. Cash sales were $350,000. Accrual expenses were $925,000. Cash flow from financing activities was $400,000. What was net income? What does the current portion of long term debt represent? In periods of rising prices, which inventory method (LIFO or FIFO) will provide you with a higher net income? Record the journal entry to write off $4,000 of receivables that were deemed uncollectible.Assume that $500 of the receivables written off in (8) were subsequently collected. Record the journal entry to record the collection of the $500. What does a deferred tax liability represent?What does a deferred tax asset represent?What was the gain on the disposal of a piece of equipment if the equipment had a historical cost of $25,000, related accumulated depreciation of $13,500, and was sold for $15,500. In addition, in its last year, the equipment had produced 4,000 units of inventory that had been sold for $3.50 a piece. Each piece had an inventory cost of $1.75 a piece. What is goodwill on the balance sheet? What does a gain on the disposal of an asset represent? Why is the loss on the disposal of an asset considered a non-cash item? Current assets are $45,000. Current liabilities are $35,000. Long term assets are $60,000. Long term liabilities are $10,000. What is the current ratio?