You are a manager who works for Ross, Sigh LLP, a local accounting firm. Your client is Transport Logistics (TL) transports hazardous materials from disposal facilities located in Alberta to a secure area.

Upon review of the minutes of the Board of Directors, you discover that TL has set up a higher than historical average provision for contingent liabilities related to spills that occurred while transporting the hazardous materials.

Required: Discuss 5 audit procedures performed during the completion of the audit phase that you would perform pertaining to contingent liabilities for TL.

Burns Corporation's net income last year was $99,200. Changes in the company's balance sheet accounts for the year appear below:

The company did not dispose of any property, plant, and equipment, sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend of $4,300.

Required:

a. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.)

b. Prepare the investing activities section of the company's statement of cash flows for the year.

c. Prepare the financing activities section of the company's statement of cash flows for the year.

Curtain Co. paid dividends of $1,500; $3,000; and $4,000 during Year 1, Year 2, and Year 3, respectively. The company had 700 shares of 3.5%, $100 par value preferred stock outstanding that paid a cumulative dividend. The amount of dividends received by the common shareholders during Year 3 would be:

• 2,450.

• $1,500.

• $950.

• $1,150.

During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $61 per unit) $ 915,000 $ 1,525,000 Cost of goods sold (@ $36 per unit) 540,000 900,000 Gross margin 375,000 625,000 Selling and administrative expenses* 294,000 324,000 Net operating income $ 81,000 $ 301,000 * $3 per unit variable; $249,000 fixed each year. The company’s $36 unit product cost is computed as follows: Direct materials $ 6 Direct labor 13 Variable manufacturing overhead 2 Fixed manufacturing overhead ($300,000 ÷ 20,000 units) 15 Absorption costing unit product cost $ 36 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 20,000 20,000 Units sold 15,000 25,000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year.

Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify):

Transactions and events during 2018 (summarized in thousands of dollars) follow:

1. Borrowed $13 cash on March 1 using a short-term note.
2. Purchased land on March 2 for future building site; paid cash, $7.
3. Issued additional shares of common stock on April 3 for $34.
4. Purchased software on July 4, $12 cash.
5. Purchased supplies on account on October 5 for future use, $17.
6. Paid accounts payable on November 6, $14.
7. Signed a $30 service contract on November 7 to start February 1, 2019.
8. Recorded revenues of $140 on December 8, including $30 on credit and $110 collected in cash.
9. Recognized salaries and wages expense on December 9, $75 paid in cash.
10. Collected accounts receivable on December 10, $14.

Data for adjusting journal entries as of December 31:

11. Unrecorded amortization for the year on software, $5.
12. Supplies counted on December 31, 2018, $11.
13. Depreciation for the year on the equipment, $7.
14. Interest of $2 to accrue on notes payable.
15. Salaries and wages earned but not yet paid or recorded, $13.
16. Income tax for the year was $9. It will be paid in 2019.

7. Prepare the closing journal entry. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.)

On December 31, Pacifica, Inc., acquired 100 percent of the voting stock of Seguros Company. Pacifica will maintain Seguros as a wholly owned subsidiary with its own legal and accounting identity. The consideration transferred to the owner of Seguros included 58,430 newly issued Pacifica common shares ($20 market value, $5 par value) and an agreement to pay an additional $130,000 cash if Seguros meets certain project completion goals by December 31 of the following year. Pacifica estimates a 50 percent probability that Seguros will be successful in meeting these goals and uses a 4 percent discount rate to represent the time value of money.

Immediately prior to the acquisition, the following data for both firms were available:

In addition, Pacifica assessed a research and development project under way at Seguros to have a fair value of $137,000. Although not yet recorded on its books, Pacifica paid legal fees of $20,400 in connection with the acquisition and $10,200 in stock issue costs.

a. Prepare Pacifica’s entries to account for the consideration transferred to the former owners of Seguros, the direct combination costs, and the stock issue and registration costs.(Use a 0.961538 present value factor where applicable. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b.&c. Present a worksheet showing the postacquisition column of accounts for Pacifica and the consolidated balance sheet as of the acquisition date.

(For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Round your answers to the nearest whole dollar.)

1. Jan. 1: Xenon issued $40,000 of common stock.
2. Jan. 1: Xenon paid $18,000 cash to purchase an equipment. The equipment has an estimated useful life of 5 years and an estimated salvage value of $3,000.
3. Jan. 1: Xenon paid $7,000 cash for two years of insurance coverage starting on Jan. 1, 2020.
4. March 1:Xenon rented a building and paid $2,400 for one year’s rent (starting 3/1).
5. April 1: Xenon purchased $5,700 of inventory on account.
6. June 1: Xenon sold $23,000 of software on account. The cost is $3,500.
7. Sept. 1: Xenon collected $7,000 cash from its customers for the previous sales on account.
8. Oct 31: Xenon paid $5,000 cash for employee wages earned during the first ten months (Jan 1 to October 31, $500 per month).
9. Nov 1: Xenon paid $3,300 cash to suppliers for inventory purchases made on account.
10. Dec 1: Xenon started an on-line service where customers pay an annual subscription fee when they sign up for a 12-month service plan. On Dec. 1, Xenon received $3,600 of cash from customers for one year of subscription fees (for online services from Dec 1, 2020 to Nov 30, 2021).

Additional Info:

-Xenon uses Straight Line Depreciation

-Two months of employee wages was accrued on Dec. 31, 2020. Xenon plans to pay employees Jan. 1 2021

Questions

Fill out the summary of T-Accounts for

1. Revenue and Expenses (Temporary Income Statement Accounts)

       -Includes: Sales and Service Revenue, Costs of Goods sold, Wages Expense, Insurance Expense, Rent Expense, Depreciation Expense.

2. Assets (Permanent Balance Sheet Accounts)

      -Includes: Cash, Inventory, accounts receivable, prepaid insurance, equipment, accumulated depreciation, prepaid rent.

3. Liabilities and Equities (Permanent Balance Sheet Accounts)

      -Includes: Accounts payable, unearned revenue, wages payable, common stock, retained earnings

4. What are the total Assets?

5. What are the total Liabilities & Shareholder's Equity?

    Note: Total assets and Liabilities + Shareholders equity should balance.

Use the following information regarding Musketeer Novelties:

Activity Activity Costs Cost driver

Product design $212,000 1,500 design hours

Product scheduling $180,000 400 Set ups

Machining $600,000 5,000 machine hours

Material Handling $160,000 4,000 Pallet moved

Cost and activity with procuring 2,000 units of a Blueblob Bobblehead are as follows:

Direct Materials: $5,400

Direct Labor: $1,200

Design Hours: 5

Set-Ups: 3

Labor Hours 40

Machine Hours 18

Pallets Moved 10

United produced 400

1.) Develop activity rates for each of the four activities of Musketeer Novelties

2.) What is the product cost for ONE Blueblob Bobblehead using ABC (ACTIVITY BASE COSTING) rates for applying overhead?

3.)What is the product cost of one Blueblob bobblehead if Musketeer Novelties uses a plant-wide overhead rate based on machine hours. (assume 5,000 machine hours plant-wide)

I have to have two entire pages for Managerial Accounting....

Your topic is the how managerial accounting information is used in decision making. Or how can a management accountant use information to make decisions. What decisions can be made with the information from managerial accounting

Budgeting is generally thought to be an important function within an organization from a planning, control, and performance assessment perspective. Discuss whether you believe that budgeting process should be a priority in the organizationn and why or why not. Be sure that you address the planning, control, and performance assessment characteristics of operations in your response. Ensure your response addresses budgeting of income, balance sheet, and cash flows.

Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Activity Rate Supporting direct labor $ 20 per direct labor-hour Order processing $ 202 per order Custom design processing $ 265 per custom design Customer service $ 432 per customer Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months: Standard Model Custom Design Number of gliders 14 2 Number of orders 1 2 Number of custom designs 0 2 Direct labor-hours per glider 26.50 33.00 Selling price per glider $ 1,700 $ 2,390 Direct materials cost per glider $ 464 $ 570 The company’s direct labor rate is $20 per hour. Required: Using the company’s activity-based costing system, compute the customer margin of Big Sky Outfitters. (Do not round intermediate calculations. Round your final answer to the nearest dollar.)

ABC Company issued the following when opening business on Jan 1, 2017:

1000 Shares of 4% $50 par value preferred stock for $100000

40000 Shares of 4% $5 par value common stock for $800000 2

017 Reported income: $350000 ---- no dividends paid in 2017

2018 Reported income: $400000 ---- $70000 dividends paid in 2018

How is the dividend divided between common and preferred stockholders if the preferred stock in non-cumulative non-participating? EPS for 2017? EPS for 2017?

How is the dividend divided between common and preferred stockholders if the preferred stock in cumulative non-participating? EPS for 2017? EPS for 2017?

J & J Enterprises is considering a cash acquisition of Patterson Steel Company for $5,000,000. Patterson will provide the following pattern of cash inflows and synergistic benefits for the next 20 years. There is no tax loss carry-forward.

The cost of capital for the acquiring firm is 15 percent.

a. Calculate the net present value. (Use a Financial calculator to arrive at the answers. Negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round the final answer to nearest whole dollar.)

Net present value           $

After expanding Smith Sales Company, Tom Smith asked you to become the controller of the company. Upon accepting the job, you realize that by offering a warranty on several products, Smith Sales Company could significantly raise revenues. Tom understands the benefits of offering warranties, but does not understand the accounting for them.

Requirements: (Part A: 50 points maximum; part B: 50 points maximum)

A. Explain to Tom:

     1. The rational for accounting for contingent liabilities, and

     2. The procedure for estimating and recording warranty expense.

Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows:

During the year, Ravenna paid a $14,100 cash dividend and it sold a piece of equipment for $7,050 that had originally cost $16,800 and had accumulated depreciation of $11,200. The company did not retire any bonds or repurchase any of its own common stock during the year.

a. What is the amount of gross cash outflows reported in the investing section of the company’s statement of cash flows?

b.What is the company’s net cash provided by (used in) investing activities?

c.What is the amount of gross cash inflows reported in the financing section of the company’s statement of cash flows?

d.What is the company’s net cash provided by (used in) financing activities?