Public corporations are led by Chief Executive Officers (CEO) and other upper-echelon leaders who, in turn report to shareholders and board of directors (BOD). Interestingly, even though the BOD oversees the CEO, decides on the terms of employment and salaries, and monitors the overall performance, the CEO is, more often than not, the person that nominates board members. The justification? The CEO are well placed to know what type of expertise is needed on the board and should have a BOD that will 'fit' and work with. The relationship between BOD and CEO is a complex. What are the potential ethical and conflicts of interest issues arising from the CEO's involvement in the selection of board members?How can these issues be addressed?
In: Operations Management
The following information was taken from the accounting records of CJTR Company as of December 31, 2020: Accounts Payable .......... ? Accounts Receivable ....... $43,000 Building .................. $68,000 Cash ...................... $17,000 Common Stock .............. $62,000 Cost of Goods Sold ........ $41,000 Dividends ................. ? Equipment ................. $79,000 Interest Revenue .......... $46,000 Inventory ................. $63,000 Land ...................... $82,000 Notes Payable ............. $65,000 Rent Expense .............. $17,000 Retained Earnings ......... ? Salaries Expense .......... $52,000 Salaries Payable .......... $29,000 Sales Revenue ............. $94,000 Supplies .................. $28,000 Trademark ................. $18,000Additional information: 1) At January 1, 2020, CJTR Company reported total assets of $223,000; total liabilities of $121,000; and common stock of $40,000. 2) 20% of CJTR’s 2020 net income was paid to stockholders as dividends. Calculate the balance in the accounts payable account at December 31, 2020.
In: Accounting
On 1 March 2020 Holmes Ltd enters into a binding agreement with a New Zealand company, which requires the New Zealand Company to construct an item of machinery for Holmes Ltd. The cost of the machinery is NZ$750,000. The machinery is completed on 1 June 2021 and shipped FOB Auckland on that date. The debt is unpaid at 30 June 2020, which is also Holmes Ltd’s reporting date.
The exchange rates at the relevant dates are: 1 March 2011 A$1.00 = NZ$1.20 1 June 2011 A$1.00 = NZ$1.30 30 June 2011 A$1.00 = NZ$1.25 Required: a) Determine the amount in AUD, as at: • 1 March 2020; and • 30 June 2020. b) Prepare the journal entries for the above dates showing the amount of exchange gain or loss .
In: Accounting
The following information was taken from the accounting
records of CJTR Company as of December 31, 2020:
Accounts Payable .......... ?
Accounts Receivable ....... $44,000
Building .................. $68,000
Cash ...................... $17,000
Common Stock .............. $56,000
Cost of Goods Sold ........ $41,000
Dividends ................. ?
Equipment ................. $79,000
Interest Revenue .......... $40,000
Inventory ................. $63,000
Land ...................... $82,000
Notes Payable ............. $67,000
Rent Expense .............. $23,000
Retained Earnings ......... ?
Salaries Expense .......... $52,000
Salaries Payable .......... $34,000
Sales Revenue ............. $94,000
Supplies .................. $23,000
Trademark ................. $10,000
Additional information:
1) At January 1, 2020, CJTR Company reported total
assets of $223,000; total liabilities of $118,000;
and common stock of $40,000.
2) 20% of CJTR’s 2020 net income was paid to stockholders
as dividends.
Calculate the balance in the accounts payable account at
December 31, 2020.In: Accounting
Prepare a lease schedule and journal entries for the leased motor vehicle. Useful life = 8 years, no residual value.
18 Feb 2020, entered a lease agreement $42,000
Lease term 5 years, the number of monthly lease payments is 60 months (134 days from 18 Feb 2020 to 30 June 2020), the year 2020 = 366 days
The first lease payment of $660 is made in advance, hence no interest on the first payment.
Thereafter, 59 monthly lease payments are due on the 18th day of each. The final payment is due on 18 Jan 2025.
In the final payment, the company also has to make the guaranteed lease residual payment of $10,000, the company intends to pay out the guaranteed lease residual in 5 years time and take full legal possession.
In: Accounting
A company has the following results for the year ending December 31, 2020
| Sales Revenue | $4,995,000 |
| Cost of Goods Sold | $1,785,000 |
| Salaries and Wages Expense | $602,000 |
| Sales Commissions | $575,000 |
| Sales Discounts | $490,000 |
| Other Administrative Expenses | $307,000 |
| Depreciation of Equipment | $189,000 |
| Rent Revenue | $120,000 |
| Advertising Expense | $85,000 |
| Interest Expense | $55,000 |
| Dividend Revenue | $30,000 |
| Loss of Sale of Investments | $7,000 |
On September 1, 2020, the company decided to eliminate a division. During 2020, losses relating to the eliminated division total $253,000. The above results in the table do not include this amount.
The company's income tax rate is 40%. All given amounts are pre-tax figures.
What is the company's net income or loss from 2020?
In: Accounting
Testbank Multiple Choice Question 71
A company issues $25800000, 9.8%, 20-year bonds to yield 10% on
January 1, 2020. Interest is paid on June 30 and December 31. The
proceeds from the bonds are $25357304. Using effective-interest
amortization, how much interest expense will be recognized in
2020?
| $2535914 |
| $2528400 |
| $2535707 |
| $1264200 |
Testbank Multiple Choice Question 72
A company issues $24950000, 6.6%, 20-year bonds to yield 7% on
January 1, 2020. Interest is paid on June 30 and December 31. The
proceeds from the bonds are $23884381. Using effective-interest
amortization, what will the carrying value of the bonds be on the
December 31, 2020 balance sheet? (Round answer to 0
decimal place, e.g. 52.)
| $23925632 |
| $23896982 |
| $23910029 |
| $24950000 |
In: Accounting
On January 1, 2020, Sheridan Company purchased 11% bonds, having
a maturity value of $301,000 for $324,415.24. The bonds provide the
bondholders with a 9% yield. They are dated January 1, 2020, and
mature January 1, 2025, with interest received on January 1 of each
year. Sheridan Company uses the effective-interest method to
allocate unamortized discount or premium. The bonds are classified
as available-for-sale category. The fair value of the bonds at
December 31 of each year-end is as follows.
|
2020 |
$322,200 |
2023 |
$310,900 | |||
|---|---|---|---|---|---|---|
|
2021 |
$309,800 |
2024 |
$301,000 | |||
|
2022 |
$308,900 |
| (a) | Prepare the journal entry at the date of the bond purchase. | |
|---|---|---|
| (b) | Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. | |
| (c) | Prepare the journal entry to record the recognition of fair value for 2021. |
In: Accounting
The financial year of your audit client Pickles Ltd ended on 31 December 2019. Your audit report was signed on 20 February 2020 and the financial statements were issued on 5 March 2020.
Each of the following independent events, which the auditors have discovered after the end of the financial year, have a material effect on the financial statements:
14 February 2020
You found that the audit client had lost a court case for breaching a contract with a supplier. The litigation started on 2 February 2019. The company is required to pay $45,000 damages to the supplier.
27 February 2020
Pickles Ltd announced that it is making a takeover offer for
another company.
Required:
For each of the two events above, explain the auditor’s responsibilities and the auditor’s appropriate course of action.
In: Accounting
Sheffield Company reports pretax financial income of $76,500 for 2020. The following items cause taxable income to be different than pretax financial income.
1. Depreciation on the tax return is greater than depreciation on the income statement by $15,700.
2. Rent collected on the tax return is greater than rent recognized on the income statement by $23,400.
3. Fines for pollution appear as an expense of $10,500 on the income statement. Sheffield’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020.
Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020.
Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.
In: Accounting