Define the following: fixed cost, variable cost, marginal cost and marginal revenue

You are in the process of preparing the journal entries for Sailwork Services. Total sales revenue information for the year included credit sales of $270,000 and cash sales of $30,000. Sailwork Services uses the allowance method to measure bad debts.

Collections on account during the year were $260,000 and $500 of specific accounts receivable were identified as never being collectible as the customer had filed for bankruptcy.

Sailwork began the current year with an account receivable debit balance of $30,500 and an allowance for doubtful accounts debit balance of $100. The accounts receivable sub-ledger reveals the following aging at the end of the year:

Aged Accounts Receivable

                                           0-30 days    31-60 days      61-90 days      >90 days                    Total

A/R subtotals                     $17,000       $4,000               $2,400           $16,600                       $40,000

Estimated % uncollectible   1%                2%                     8%               40%                                 

1) Record the following journal entries for the year (explanations are not required):

1. All sales for the year                                                                                                                     (1 Mark)

2. Collection of account receivables                                                                                                 (1 Mark)

3. Bad debt expense using the percent of sales method based on 2.5% of credit sales were uncollectable.                                                                                                                                                     

4. Bad debt expense assuming the aging-of-receivables method was used instead of the percent of sales method.                                                                                                                                       

5. A/R from High Risk Corporation in the amount of $50 is determined not to be collectible.        (1 Mark)

Geraldo Inc. sells several products. Information of average revenue and costs is as follows:

1. The Geraldo Inc. contribution margin ratio is
   1. 33.13%
   2. 42.51%
   3. 29.82%
   4. 63.70%
   5. 70.20%

2. The Geraldo Inc. break-even point in sales dollars is
   1. $156,693.
   2. $156,696.
   3. $156,695.1.
   4. $156,720.
   5. $156,690.

3. The Geraldo Inc. break-even point in units is
   1. 5,223 units.
   2. 5,224 units.
   3. 5,223.17 units.
   4. 5,223.2 units.
   5. 5,223.1 units.

What can you do if the IRS revenue agent auditing is uncooperative or hostile?

. A budget variance occurs when we anticipate that an expense/revenue will be one amount, but then the actual happens and comes in at another amount. The difference is a variance and it can be favorable or unfavorable.

Think about a book, TV show, movie, sports event, etc. What did you anticipate would happen? What actually happened? Was the difference favorable or unfavorable, why?

As my example, consider Jack and Jill who went to go get a pail of water. The anticipation is that they will come back with the water. But instead, Jack falls and cracks his skull and then Jill falls too. I see this as an unfavorable variance for water acquisition, since no water was delivered, and an unfavorable variance for medical expense since Jack needed surgery on his head, and then maybe an unfavorable variance on cleaning expense since Jill tumbling down the hill probably made her clothes pretty dirty.

Let's come up with three variances from the example you chose. For your responses to other student posts, either suggest another variance example, or discuss the current variance example. So may be you think that it was dangerous to go up the hill in the first place so we should have budgeted for medical expense from the start. Or, perhaps you think there will be a favorable variance for insurance revenue from a lawsuit since the hill was definitely not safe and proper warning signals should have been posted.

. A budget variance occurs when we anticipate that an expense/revenue will be one amount, but then the actual happens and comes in at another amount. The difference is a variance and it can be favorable or unfavorable.

Think about a book, TV show, movie, sports event, etc. What did you anticipate would happen? What actually happened? Was the difference favorable or unfavorable, why?

As my example, consider Jack and Jill who went to go get a pail of water. The anticipation is that they will come back with the water. But instead, Jack falls and cracks his skull and then Jill falls too. I see this as an unfavorable variance for water acquisition, since no water was delivered, and an unfavorable variance for medical expense since Jack needed surgery on his head, and then maybe an unfavorable variance on cleaning expense since Jill tumbling down the hill probably made her clothes pretty dirty.

Let's come up with three variances from the example you chose. For your responses to other student posts, either suggest another variance example, or discuss the current variance example. So may be you think that it was dangerous to go up the hill in the first place so we should have budgeted for medical expense from the start. Or, perhaps you think there will be a favorable variance for insurance revenue from a lawsuit since the hill was definitely not safe and proper warning signals should have been posted.

Explain a fraud technique in relation to the revenue cycle. How can this fraud technique be identified?

Provide the audit risk calculation?

List and describe four of the nine cycles in The Revenue Cycle?

What is the criteria set forth by the SEC must take place for an organization to recognize revenue?

What are the four types of controls over cash which should be present within an organization?

List three methods of auditing the cash account of an organization?

Alumni donations are an important source of revenue for college and universities. If administrators could determine the factors that could lead to increases in the percentage of alumni who make a donation, they might be able to implement policies that could lead to increased revenues. Research shows that students who are more satisfied with their contact with teachers are more likely to graduate. As a result, one might suspect that smaller class sizes and lower student-faculty ratios might lead to a higher percentage of satisfied graduates, which in turn might lead to increases in the percentage of alumni who make a donation. Table 15.13 shows data for 48 national universities (America’s Best Colleges, Year 2000 Edition). The column labeled Graduation Rate is the percentage of students who initially enrolled at the university and graduated. The column labeled % of Classes Under 20 shows the percentage of classes offered with fewer than 20 students. The column labeled Student-Faculty Ratio is the number of students enrolled divided by the total number of faculty. Finally, the column labeled alumni Giving Rate is the percentage of alumni that made a donation to the university.

Following the method outlined in the Jamison reading, calculate the revenue requirement for a utility company with a rate base of $50 million, a cost of equity of 20%, an equity financing proportion of 35%, and a tax rate of 37%. Assume that the values for expenses (E) and depreciation (d) are identical to the example in the Jamison reading.