Citation Builders, Inc., builds office buildings and single-family homes. The office buildings are constructed under contract with reputable buyers. The homes are constructed in developments ranging from 10–20 homes and are typically sold during construction or soon after. To secure the home upon completion, buyers must pay a deposit of 10% of the price of the home with the remaining balance due upon completion of the house and transfer of title. Failure to pay the full amount results in forfeiture of the down payment. Occasionally, homes remain unsold for as long as three months after construction. In these situations, sales price reductions are used to promote the sale. During 2018, Citation began construction of an office building for Altamont Corporation. The total contract price is $15 million. Costs incurred, estimated costs to complete at year-end, billings, and cash collections for the life of the contract are as follows: 2018 2019 2020 Costs incurred during the year $ 3,000,000 $ 7,125,000 $ 3,375,000 Estimated costs to complete as of year-end 9,000,000 3,375,000 — Billings during the year 1,500,000 7,500,000 6,000,000 Cash collections during the year 1,350,000 6,050,000 7,600,000 Also during 2018, Citation began a development consisting of 12 identical homes. Citation estimated that each home will sell for $720,000, but individual sales prices are negotiated with buyers. Deposits were received for eight of the homes, three of which were completed during 2018 and paid for in full for $720,000 each by the buyers. The completed homes cost $540,000 each to construct. The construction costs incurred during 2018 for the nine uncompleted homes totaled $3,240,000.

Required:

1. Which method is most equivalent to recognizing revenue at the point of delivery?

2. Answer the following questions assuming that Citation uses the completed contract method for its office building contracts: 2-a. How much revenue related to this contract will Citation report in its 2018 and 2019 income statements? 2-b. What is the amount of gross profit or loss to be recognized for the Altamont contract during 2018 and 2019? 2-c. What will Citation report in its December 31, 2018, balance sheet related to this contract? (Ignore cash.)

3. Answer the following questions assuming that Citation uses the percentage-of-completion method for its office building contracts. 3-a. How much revenue related to this contract will Citation report in its 2018 and 2019 income statements? 3-b. What is the amount of gross profit or loss to be recognized for the Altamont contract during 2018 and 2019? 3-c. What will Citation report in its December 31, 2018, balance sheet related to this contract? (Ignore cash.)

Paper I: Letter to the CEO

RE: - Accounting Principles: Why ethics is a fundamental business concept

Accounting is an information system that identifies, records, and communicates the economic events of an organization to interested users. Because of the confidential nature to which the creating and maintaining of these reports are handled, honesty and integrity are highly regarded traits to the hospitality professional accountant. Professional ethics, or the standards of conduct to which actions are judged to be right or wrong, depends on the honesty of the individuals you deal with as a manager of a business.

For this paper, assume you are the Director of Operations for a hypothetical chain of 24 mid-service roadside motels. The CEO of the chain has sent you a memo stating that he would like to replace the current accounting firm that handles all the operational accounting for the firm. The reason he has decided that their services are no longer needed was not made evident to you in the memo. However, you suspect it may have something to do with the fact that their accounting practices were brought up as “questionable” at last month’s operations meeting, where last cycles income statements were openly discussed and examined by upper management.


The CEO further outlines in his memo that he wishes for you to begin researching new accounting firms. Write a letter addressed to the CEO, Days Inn of America outlining how you propose to value ethical conduct when interviewing prospective companies. In your letter, you should include / address the following areas:

1. Your “personal” philosophy on ethics as a fundamental business concept
2. How you plan on identifying and analyzing the principle elements of business ethics within the prospective accounting firms (be specific)
3. How you plan to ensure the non-ethical conduct of the previous firm will not happen again (internal control measures) specifically under three headings:

a. Cost analysis
b. Analysis of new contracts
c. Participation in efforts to control expenses efficiently
4. An analysis of what challenges you anticipate facing during this project

The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31, 2017.

1. On July 31, the company’s Cash account has a $24,752 debit balance, but its July bank statement shows a $27,080 cash balance.
2. Check No. 3031 for $1,520 and Check No. 3040 for $752 were outstanding on the June 30 bank reconciliation. Check No. 3040 is listed with the July canceled checks, but Check No. 3031 is not. Also, Check No. 3065 for $536 and Check No. 3069 for $2,288, both written in July, are not among the canceled checks on the July 31 statement.
3. In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that Check No. 3056 for July rent expense was correctly written and drawn for $1,280 but was erroneously entered in the accounting records as $1,270.
4. The July bank statement shows the bank collected $7,500 cash on a noninterest-bearing note for Branch, deducted a $38 collection expense, and credited the remainder to its account. Branch had not recorded this event before receiving the statement.
5. The bank statement shows an $805 charge for a $795 NSF check plus a $10 NSF charge. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF.
6. The July statement shows a $11 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received.
7. Branch’s July 31 daily cash receipts of $8,652 were placed in the bank’s night depository on that date but do not appear on the July 31 bank statement.

Required:

1. Prepare the bank reconciliation for this company as of July 31, 2017.

2. Prepare the journal entries necessary to bring the company’s book balance of cash into conformity with the reconciled cash balance as of July 31, 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
  

1.

Tuco Salamanca Corp. sold a machine for $4,000 on December 31, 2019. The machine was purchased on January 1, 2016, for $8,500. The residual value was estimated at $500, and the firm uses the straight-line depreciation method with an estimated useful life of 8 years. Which of the statements is correct?

2.

Which of the following costs will not be part of the value of PP&E that is constructed by a company for internal use?

3.

The depreciation expense will never appear in:

4.

Skinny Pete Inc. uses the units method of depreciation for one of its machines. The company bought the machine on March 12, 2017, for $1,400. The company estimates that the machine will be used to produce 300 gadgets in 2017, 500 gadgets in 2018, and 400 gadgets in 2019. The company further estimates that the machine has a residual value of $200. The machine was sold on December 31, 2018, for $600. Which of the statements is correct?

How does accounting for a nongovernmental not-for-profit organization differ from accounting for a for-profit corporation? Choose a not-for-profit, review its financial statements, and explain the items that you find that are different from what you would see in the financial statements of a for-profit corporation.

Bad debts -Direct Write-off and Allowance Methods -

EchoGnomics is a wholesaler of garden figurines, selling mainly to independent gardening shops in Australia. All sales are conducted on a 30-day credit basis and no early payment or cash discounts are given. The following information has been extracted from the accounting records as at 30 June 2020.

Sales $874 000 , Sales Returns & Allowances 45 600 , Cash Collected ($549 600 + GST 10%) 604 560 , Bad Debts to be written off 6 952 , Accounts Receivable written off ($6 952 + GST10%) 7 647 GST Payable/ Collections (874 000 -$45 600) x 10% = 82 840

Required:

A. Assuming that EchoGnomics uses the direct write-off method of accounting for bad debts:

1. Show the general journal entry required to write-off method of accounting for bad debts.

2. What amount would be shown for bad debts expense in the income statement at 30June 2020?

3. What amount would beshown for accounts receivable in the balance sheet at 30 June2020?

B. Assuming that EchoGnomics uses the allowance method for accounting for bad debts and the following information was found after examination of the accounts:

i] Allowance for doubtful debts (1 July 2019)$7 920 Cr . ii] Allowance calculated based on 1% of net credit sales for the year

1. Show the general journal entries required to write off the bad debts and recognise the required allowance for doubtful debts.

2. What amount would be shown for bad debts expense in the income statement at 30 June 2020?

3. What amount would be shown for accounts receivable in the balance sheet at 30 June 2020?

Will you show me a vertical analysis of the assets portion of this balance sheet?

he plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2020:

Transactions during 2021 were as follows:

1. On January 2, 2021, equipment were purchased at a total invoice cost of $265,000, which included a $5,600 charge for freight. Installation costs of $28,000 were incurred.
2. On March 31, 2021, a small storage building was donated to the company. The person donating the building originally purchased it three years ago for $26,000. The fair value of the building on the day of the donation was $17,400.
3. On May 1, 2021, expenditures of $51,000 were made to repave parking lots at Pell's plant location. The work was necessitated by damage caused by severe winter weather. The repair doesn't provide future benefits beyond those originally anticipated.
4. On November 1, 2021, Pell acquired a tract of land with an existing building in exchange for 10,000 shares of Pell’s common stock that had a market price of $39 per share. Pell paid legal fees and title insurance totaling $23,500. Shortly after acquisition, the building was razed at a cost of $36,000 in anticipation of new building construction in 2022.
5. On December 31, 2021, Pell purchased a small storage building by giving $15,500 cash and an old automobile purchased for $18,500 in 2014. Depreciation on the old automobile recorded through December 31, 2021, totaled $13,875. The fair value of the old automobile was $3,800.

Required:

For each asset classification, prepare a schedule showing depreciation for the year ended December 31, 2021, using the following depreciation methods and useful lives:

Land improvements—Straight line; 15 years.
Building—150% declining balance; 20 years.
Equipment—Straight line; 10 years.
Automobiles—Units-of-production; $0.50 per mile

Depreciation is computed to the nearest month and no residual values are used. Automobiles were driven 38,500 miles in 2021. (Do not round intermediate calculations and round your final answers to 2 decimal places.)

1. Connor Company is considering the purchase of new equipment for $144,000. The expected life of the equipment is 8 years with no residual value. The equipment is expected to earn revenues of $114,000 per year. Total expenses, including depreciation, are expected to be $90,000 per year. Connor management has set a minimum acceptable rate of return of 20%. Assume straight-line depreciation.

   a. Determine the equal annual net cash flows from operating the equipment. Round to the nearest dollar.
   $

   Present Value of an Annuity of $1 at Compound Interest
   Year	6%	10%	12%	15%	20%
   1	0.943	0.909	0.893	0.870	0.833
   2	1.833	1.736	1.690	1.626	1.528
   3	2.673	2.487	2.402	2.283	2.106
   4	3.465	3.170	3.037	2.855	2.589
   5	4.212	3.791	3.605	3.352	2.991
   6	4.917	4.355	4.111	3.784	3.326
   7	5.582	4.868	4.564	4.160	3.605
   8	6.210	5.335	4.968	4.487	3.837
   9	6.802	5.759	5.328	4.772	4.031
   10	7.360	6.145	5.650	5.019	4.192

   b. Calculate the net present value of the new equipment using the present value of an annuity of $1 table above. Round to the nearest dollar. If required, use the minus sign to indicate a negative net present value.

   Annual net cash flow	$
   Present value of equipment cash flows	$
   Less equipment costs	$
   Net present value of equipment	$

   c. Does your analysis support the purchase of the new equipment?
   

write an essay about Special Order Decisions in your own words.

he following costs result from the production and sale of 4,900 drum sets manufactured by Tight Drums Company for the year ended December 31, 2017. The drum sets sell for $340 each. The company has a 35% income tax rate.

Required:

1. Prepare a contribution margin income statement for the company.
2. Compute its contribution margin per unit and its contribution margin ratio.

Why would a company choose a value-based pricing system in lieu of a cost-plus pricing system and what are the pros and cons to each pricing system.

Slick Corporation is a small producer of synthetic motor oil. During May, the company produced 5,000 cases of lubricant. Each case contains 12 quarts of synthetic oil. To achieve this level of production, Slick purchased and used 16,500 gallons of direct materials at a cost of $20,924. It also incurred average direct labor costs of $14 per hour for the 4,239 hours worked in May by its production personnel. Manufacturing overhead for the month totaled $9,956, of which $2,200 was considered fixed. Slick's standard cost information for each case of synthetic motor oil is as follows.

Required:

c. Compute the manufacturing overhead spending and volume variances.

d. Prepare the journal entries to:

1. Charge materials (at standard) to Work in Process.

2. Charge direct labor (at standard) to Work in Process.

3. Charge manufacturing overhead (at standard) to Work in Process.

4. Transfer the cost of the 5,000 cases of synthetic motor oil produced in May to Finished Goods.

5. Close any over- or underapplied overhead to cost of goods sold.

Genuine Spice Inc. began operations on January 1 of the current year. The company produces 8-ounce bottles of hand and body lotion called Eternal Beauty. The lotion is sold wholesale in 12-bottle cases for $100 per case. There is a selling commission of $20 per case. The January direct materials, direct labor, and factory overhead costs are as follows:

Part A—Break-Even Analysis

The management of Genuine Spice Inc. wishes to determine the number of cases required to break even per month. The utilities cost, which is part of factory overhead, is a mixed cost. The following information was gathered from the first six months of operation regarding this cost:

Part B—August Budgets

During July of the current year, the management of Genuine Spice Inc. asked the controller to prepare August manufacturing and income statement budgets. Demand was expected to be 1,500 cases at $100 per case for August. Inventory planning information is provided as follows:

Finished Goods Inventory:

Materials Inventory:

There was negligible work in process inventory assumed for either the beginning or end of the month; thus, none was assumed. In addition, there was no change in the cost per unit or estimated units per case operating data from January.

Part C—August Variance Analysis

During September of the current year, the controller was asked to perform variance analyses for August. The January operating data provided the standard prices, rates, times, and quantities per case. There were 1,500 actual cases produced during August, which was 250 more cases than planned at the beginning of the month. Actual data for August were as follows:

The prices of the materials were different than standard due to fluctuations in market prices. The standard quantity of materials used per case was an ideal standard. The Mixing Department used a higher grade labor classification during the month, thus causing the actual labor rate to exceed standard. The Filling Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less than standard.

1. Determine the fixed and variable portions of the utility cost using the high-low method. Round your per unit cost to two decimal places.

2. Determine the contribution margin per case. Round your answer to two decimal places.  per case

3. Determine the fixed costs per month, including the utility fixed cost from part (1). Refer to the lists of Amount Descriptions for the exact wording of the answer choices for text entries.

4. Determine the break-even number of cases per month. cases

5. Prepare the August production budget. For those boxes in which you must enter subtractive or negative numbers use a minus sign.

Neil Corporation has three projects under consideration. The cash flows for each of them are shown in the following​ table:

The firm has a cost of capital of 16​%.

a.  Calculate each​ project's payback period.

Which project is preferred according to this​ method?

b.  Calculate each​ project's net present value ​(NPV).

Which project is preferred according to this​ method?