What do we have in common or not?

1. Build an argument against requiring current market values on the balance sheet.

Utilizing the historical value on the balance sheet provides a look into the real transactional value of the asset. What the company paid is ultimately what the company paid – there is nothing left for interpretation. Utilizing the historical cost approach maintains consistency in the documentation of assets and liabilities. For example, in today’s COVID climate, a company could decide to report higher valuations of certain assets/liabilities to make their balance sheets look more appealing. Even if the exercise was done in all levels of honesty, the value of assets and liabilities can change daily – especially in a volatile economy, Giving businesses the autonomy to make valuation decisions could lead to a misrepresented balance sheet.

2. Build an argument against using historical cost.

Utilizing current market values can provide a more realistic view of the company’s overall worth. For example, if a company had purchased a building/property in 1970 for $100,000 that building/property would certainly be worth 5 -10 times more than that in 2020. In a situation where a company was trying to sell their business, understanding, and documenting, the current market value of an asset (like a building) would make for a more realistic balance sheet and the company’s overall worth.

3. Which of the two arguments do you find most convincing?

I feel that using historical cost method should still be used in order to properly document. I feel that footnotes in filing paperwork could easily outline the age and potential worth of an asset in question. I believe giving companies the option of noting what they “believe” is a value of an asset could cause them issues down the road on what they truly have as assets in the company.

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What do we have in common or not?

a. If assets will be recorded in the balance sheet at current market value it shall be subject to manipulation of accounts and financial statements . It is not possible in case of every assets to ascertain its current market value exactly in such case possibility of bias arises and it may results in distorted information. Thus chances of manipulation also arises.

b. Historical cost is price paid for asset, with time market cost may change but asset shall be recorded in financial statements at historical cost only. This will result in incomplete information because financial statements are showing historical cost which is not valid for current time.

c The most convincing argument is argument against requiring current market values on balance sheet(option a) because doing so will give rise to manipulation which shall effect users decisions. More over if assets are not shown at current market values which shall result in incomplete information this shortcoming can be eliminated by disclosing current market values in footnotes to financial statements.

Ashby clothing is a female clothing line selling high end winter apparel. The company has four brick and mortar locations in central Pa. All locations share the use of the professional back office staff personnel at the company's headquarters. In 2018 the cost of the marketing department was $133,500. The cost of the accounting department was $184,850. The cost of the information technology department was $61,155. Lastly, the customer service call center had a cost of $77,020. Below you will find information was provided about the operations about each store location. Question: Allocate the cost of the back office departments to each of the stores based on, (A) Total Revenue, (B) Gross Margin, and (C) Quantity of winter coats sold.

In your own words, describe each of the four financial statements. Go online and find the most recent set of financial statements for a publicly traded company that you are interested in and explain what you learned about that company from exploring its financial statements.

It is your first day as an intern at Frank's furniture, a major supplier of tables and chairs to some of the largest restaurants in the world. The Plant Controller has a big meeting tomorrow with the executive team and requests your help in preparing the financial information for the meeting. The Controller asks you to review the General Ledger accounts and prepare (A) an income statement and attach (B) a supporting cost of goods manufactured and sold statement.

The following is a partial audit program for the audit of cash receipts:

1. Review the cash receipts journal for large and unusual transactions.

2. Trace entries from the prelisting of cash receipts to the cash receipts journal to determine if each is recorded.

3. Compare customer name, date, and amount on the prelisting with the data on the cash receipts journal.

4. Examine the related remittance advice for entries selected from the prelisting to determine if cash discounts were approved.

5. Trace entries from the prelisting to the deposit slip to determine if each has been deposited.

Required:

1. Identify which audit procedures could be tested using attribute sampling.

2. What is the appropriate sampling unit for the tests in part (a)?

3. List the attributes for testing in part (a).

Matthew frequently purchased a food truck from a local supplier. He is considering travelling to Harrisburg for a local festival to sell his tacos. Before Matthew purchases a permit to sell food at the festival, he wants to calculate how much volume he would need to sell for the trip to be profitable. Matthew met with his accountant to determine his food costs and what his tax liability would be, which in fact is a modest 20% tax on profits. After reviewing the below information, calculate (A) What number of tacos Matthew must sell to break even. (B) What number of tacos Matthew must sell to make a profit before tax of $650. and (C) What number of tacos must Matthew sell to make an after tax profit of $400?

World Gourmet Coffee Company (WGCC) is a distributor and processor of different blends of coffee. The company buys coffee beans from around the world and roasts, blends, and packages them for resale. WGCC currently has 15 different coffees that it offers to gourmet shops in one-pound bags. The major cost is raw materials; however, there is a substantial amount of manufacturing overhead in the predominantly automated roasting and packing process. The company uses relatively little direct labor. Some of the coffees are very popular and sell in large volumes, while a few of the newer blends have very low volumes. WGCC prices its coffee at full product cost, including allocated overhead, plus a markup of 20 percent. If prices for certain coffees are significantly higher than market, adjustments are made. The company competes primarily on the quality of its products, but customers are price-conscious as well. Data for the 20x1 budget include manufacturing overhead of $12,532,320, which has been allocated on the basis of each product’s direct-labor cost. The budgeted direct-labor cost for 20x1 totals $1,253,232. Based on the sales budget and raw-material budget, purchases and use of raw materials (mostly coffee beans) will total $5,900,000. The expected prime costs for one-pound bags of two of the company’s products are as follows: Kona Malaysian Direct material $ 3.00 $ 4.00 Direct labor 0.50 0.50 WGCC’s controller believes the traditional product-costing system may be providing misleading cost information. She has developed an analysis of the 20x1 budgeted manufacturing-overhead costs shown in the following chart. Activity Cost Driver Budgeted Activity Budgeted Cost Purchasing Purchase orders 2,341 $ 2,387,820 Material handling Setups 3,640 2,966,600 Quality control Batches 1,460 598,600 Roasting Roasting hours 193,200 4,057,200 Blending Blending hours 67,600 1,419,600 Packaging Packaging hours 52,500 1,102,500 Total manufacturing-overhead cost $ 12,532,320 Data regarding the 20x1 production of Kona and Malaysian coffee are shown in the following table. There will be no raw-material inventory for either of these coffees at the beginning of the year. Kona Malaysian Budgeted sales 2,200 lb. 101,000 lb. Batch size 550 lb. 20,200 lb. Setups 3 per batch 3 per batch Purchase order size 550 lb. 50,500 lb. Roasting time 1 hr. per 100 lb. 1 hr. per 100 lb. Blending time 0.5 hr. per 100 lb. 0.5 hr. per 100 lb. Packaging time 0.1 hr. per 100 lb. 0.1 hr. per 100 lb.
Required: 1. Using WGCC’s current product-costing system:

a. Determine the company’s predetermined overhead rate using direct-labor cost as the single cost driver.

b. Determine the full product costs and selling prices of one pound of Kona coffee and one pound of Malaysian coffee.

2. Develop a new product cost, using an activity-based costing approach, for one pound of Kona coffee and one pound of Malaysian coffee.

Marwick’s Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,507 per unit and then sells them to retail customers for an average price of $2,900 each. The company’s selling and administrative costs for a typical month are presented below:

During August, Marwick’s Pianos, Inc., sold and delivered 60 pianos.

Required:

1. Prepare a traditional format income statement for August.
2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down through contribution margin.

What are the key management information requirements? 120–150 words

Please do not copy and paste from another source. Thanks

Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 75.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 75.0 when he fully retires, he will begin to make annual withdrawals of $135,088.00 from his retirement account until he turns 86.00. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 10.00% interest rate.

You are on the audit team of Apollo Shoes, Inc. for the year ending December 31, 2015 and your manager has asked you to prepare a draft of the engagement letter
Some things to note:

All pre-engagement activities have been completed

They are a public entity

Mr. Larry Lancaster is the president and chairman of Apollo Shoes Board of directors

Instructions: Prepare the draft engagement letter

Lewis Securities Inc. has decided to acquire a new market data and quotation system for its Richmond home office. The system receives current market prices and other information from several online data services and then either displays the information on a screen or stores it for later retrieval by the firm’s brokers. The system also permits customers to call up current quotes on terminals in the lobby.

The equipment costs $1,000,000 and, if it were purchased, Lewis could obtain a term loan for the full purchase price at a 10% interest rate. Although the equipment has a 6-year useful life, it is classified as a special-purpose computer and therefore falls into the MACRS 3-year class. If the system were purchased, a 4-year maintenance contract could be obtained at a cost of $20,000 per year, payable at the beginning of each year. The equipment would be sold after 4 years, and the best estimate of its residual value is $200,000. However, because real-time display system technology is changing rapidly, the actual residual value is uncertain.

As an alternative to the borrow-and-buy plan, the equipment manufacturer informed Lewis that Consolidated Leasing would be willing to write a 4-year guideline lease on the equipment, including maintenance, for payments of $260,000 at the beginning of each year. Lewis’s marginal federal-plus-state tax rate is 40%. You have been asked to analyze the lease-versus-purchase decision and, in the process, to answer the following questions:

1. What is the net advantage to leasing (NAL)? Does your analysis indicate that Lewis should buy or lease the equipment? Explain.

2. Now assume that the equipment’s residual value could be as low as $0 or as high as $400,000, but $200,000 is the expected value. Because the residual value is riskier than the other relevant cash flows, this differential risk should be incorporated into the analysis. Describe how this could be accomplished. (No calculations are necessary, but explain how you would modify the analysis if calculations were required.) What effect would the residual value’s increased uncertainty have on Lewis’ lease-versus-purchase decision?

3. The lessee compares the present value of owning the equipment with the present value of leasing it. Now put yourself in the lessor’s shoes. In a few sentences, how should you analyze the decision to write or not to write the lease?

Periodic Inventory by Three Methods

The units of an item available for sale during the year were as follows:

There are 1,220 units of the item in the physical inventory at December 31. The periodic inventory system is used.

a. Determine the inventory cost by the first-in, first-out method.
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b. Determine the inventory cost by the last-in, first-out method.
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c. Determine the inventory cost by the weighted average cost method. Do not round intermediate calculation and round final answer to the nearest whole dollar.
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Mary and Kay, Inc., a distributor of cosmetics throughout Florida, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the company’s accounting records: All sales are on account. Sixty percent of customer accounts are collected in the month of sale; 30 percent are collected in the following month. Uncollectibles amounting to 10 percent of sales are anticipated, and management believes that only 20 percent of the accounts outstanding on December 31, 20x0, will be recovered and that the recovery will be in January 20x1. Sixty percent of the merchandise purchases are paid for in the month of purchase; the remaining 40 percent are paid for in the month after acquisition. The December 31, 20x0, balance sheet disclosed the following selected figures: cash, $90,000; accounts receivable, $210,000; and accounts payable, $75,000. Mary and Kay, Inc. maintains a $90,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 10 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid at that time. Additional data: January February March Sales revenue $ 540,000 $ 630,000 $ 645,000 Merchandise purchases 360,000 390,000 510,000 Cash operating costs 102,000 81,000 144,000 Proceeds from sale of equipment — — 24,000 Required: Prepare a schedule that discloses the firm’s total cash collections for January through March. Prepare a schedule that discloses the firm’s total cash disbursements for January through March. Prepare a schedule that summarizes the firm’s financing cash flows for January through March.

The following information is available for the preparation of the government-wide financial statements for the City of Southern Springs as of April 30, 2020:

From the preceding information, prepare a Statement of Net Position for the City of Southern Springs as of April 30, 2020. Assume that outstanding bonds were issued to acquire capital assets and restricted assets total $716,000 for governmental activities and $255,000 for business-type activities. (Negative amounts should be indicated by a minus sign)