Since you are working on your MBA you have been asked to speak to the board of directors of your firm about various methods of analyzing the companies financial statements. One of the board members states she has heard about a technique called"common-size" financial statements, but knows nothing about it. She would like you to explain what they are, how they are prepared,how they differ from regular financial statements, and how they can help the board in its decision making. What your account say?

What additional persons should you now interview as a result of what you just learned from the interviews completed Who do you want to interview and what would you like to ask (two or three questions for each new interviewee)? What physical evidence do you want to collect now as a result of the interviews already completed? Why do you want this evidence – what do you hope it will do for your case? Do you need a search warrant for any of it? Explain your justification for this answer.

Interviews were conducted on this case by you as the investigator. A synopsis of what was said by each interviewee is as follows:

Hospital SW Mary Adams: Mom told the Social Worker that the child fell down the stairs while at home. She initially said it was just her and the child home, but later admitted that dad was home. Dad initially came to the hospital with them and every time mom was asked a question, dad would interrupt and answer for her. When the doctor told dad she had questions about some of the injuries, dad stormed out of the hospital. SW met briefly with the child who told her that she fell down the stairs and that she made her dad mad.

Dr. Meredith Grey: Dr. Grey said that the child has a break to the collar bone that could be consistent with a fall if the child’s arm was outstretched when falling. The linear marks on the lower back and upper arms appear to be more consistent with a strike from a belt or similar object. Those marks/injuries are inconsistent with a fall and likely happened before the break in the collar bone. When she asked the child about the fall, the child would only say it was an accident. When asked about the other marks on her body, she would only say “I don’t know” and “Please don’t tell my step-daddy I said anything”.  

Jane Smith (mom): Mom is very reluctant to talk to law enforcement or CPS. She initially indicates to you that her daughter is clumsy and falls when she runs – which she was doing in the house when she fell down the stairs to the basement. When pressed, mom will admit there have been some problems with dad (Jim Smith). She said he is not Susie’s biological father but has been in her life for the last year and a half. Susie’s biological father (Mark Johnson) lives in the area and sees Susie every other weekend.Susie likes to talk about her “real dad” and this upsets Jim. Jim does drink daily but mom doesn’t think he is an alcoholic.  

Mom said that dad and Susie were arguing about cleaning her room – Susie didn’t do a very good job of cleaning. Dad was mad and they argued when Susie fell. Mom didn’t see this happen – she was in the living room and heard the yelling and then sounds of Susie falling and crying. Dad told her that Susie tried to run and tripped and fell when he told her to go to her room.  

When pressed, mom admits that dad does most of the discipline in the home and is frequently angry with Susie for not listening and has hit her in the past with a belt and a wooden kitchen spoon. Mom maintains that dad is a good man and is only frustrated with Susie’s attitude in the home. When pressed to talk more about the use of the belt, she said that the last time Susie was spanked with a belt was two days ago. She said that Susie was arguing with her dad about cleaning her room and then told him that she didn’t like him and wanted to be with her “real daddy”.  Jim got mad over this and hit her with his belt. Mom said she told him to stop and he did and then told Susie he was sorry.  

Asked about domestic violence between her and Jim, mom will admit that he has hit her but not “in a long time” and only because he is under a lot of stress from his work (he’s in financial management). She wasn’t able to (or wouldn’t) give an estimation of what a “long time ago” meant.

Mom said Susie attends Tacoma Elementary School as a 1st grader and mom thinks her daughter’s best friend is named Lisa who is in the same class.

Susie Smith: Susie was interviewed by a forensic interviewer. You were present and helped provide the questions asked and took notes of the interview. She was reluctant to talk but eventually said that she wants to live with her mom and her “real dad”. She said she likes being around him (her biological father) because he is fun and easy to talk to about things. Asked about her step-dad (Jim), she said that he gets mad at her a lot when she doesn’t do exactly what he tells her to do.  

Susie said that he yelled at her yesterday about how dirty her room was and she started to cry and left her room to find her mom. Her dad was angry and grabbed her by the arm. He took off his belt and hit her on her back and butt with it. She said she told him to “stop” and leave her alone and he grabbed her by her arms and pulled them behind her back. He pushed her and she fell down the stairs outside of her room. The stairs lead to the basement. She said he was wearing his blue “Seahawks” belt – it has a Seahawk logo and football on it by the buckle. She also said he has hit her before with this belt.

Susie said her arm hurt “real bad” after she fell and her mom came running down to help her. Her mom started yelling at her dad who told her to “Shut up”. Her mom wanted to call the doctor about her arm and dad got made and grabbed mom’s cell phone and threw it against the basement wall. Her mom screamed at him to “get away from us”. The man and lady who live next door in the blue house came over and knocked on the door and asked if everything was okay because they heard some screaming and crying. Dad went to the door and told them that she fell down the stairs and they were going to take her to the hospital.   

Susie was asked if she ever told anyone else about what happens with her step-dad. She said she has told her best friend at school – Lisa Simpson but she begged Lisa not to tell anyone.

Results from the National Health Interview Survey show that among the U.S. adult population, 45.9% do not meet physical activity guidelines, 3.5% meet only strength activity, 29.0% meet only aerobic activity, and 21.6% meet both strength and aerobic activity. We sampled 4475 adults from Ohio and the results were as follows: 50.0% do not meet physical activity guidelines, 5.0% meet only strength activity, 35.0% meet only aerobic activity, and 10.0% meet both strength and aerobic activity. Conduct an appropriate hypothesis test to determine if the distribution in physical activity among Ohioans is similar to the U.S. population. Interpret your results.

Results from the National Health Interview Survey show that among the U.S. adult population, 45.9% do not meet physical activity guidelines, 3.5% meet only strength activity, 29.0% meet only aerobic activity, and 21.6% meet both strength and aerobic activity. We sampled 4475 adults from Ohio and the results were as follows: 50.0% do not meet physical activity guidelines, 5.0% meet only strength activity, 35.0% meet only aerobic activity, and 10.0% meet both strength and aerobic activity. Conduct an appropriate hypothesis test to determine if the distribution in physical activity among Ohioans is similar to the U.S. population. Interpret your results.

Headland 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. Headland’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.

A)Compute taxable income and income taxes payable for 2020.

B)Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020.

c)Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.”

D)Compute the effective income tax rate for 2020

On January 1, 2020, Sweet Company issued 10-year, $2,020,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 16 shares of Sweet common stock. Sweet’s net income in 2020 was $475,300, and its tax rate was 20%. The company had 97,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020.

(a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.)

(b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $970,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Sweet common stock. (Round answer to 2 decimal places, e.g. $2.55.)

Splish Company reports pretax financial income of $66,300 for 2020. The following items cause taxable income to be different than pretax financial income.

Splish’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.

1. Compute taxable income and income taxes payable for 2020.

2. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020.

3. Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.”

4. Compute the effective income tax rate for 2020.

On January 1, 2020, Spalding Company sold 12% bonds having a maturity value of $1,000,000 for $1,075,815, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2020 and they mature on January 1, 2025, with semiannual interest payable on July 1 and January 1 each year. The company uses the effective-interest method. Instructions:

a) Prepare a complete amortization schedule for these bonds in good form.

b) Prepare the journal entry needed to record the issuance of bonds on January 1, 2020.

c) Prepare the journal entry needed to record the payment accrual of interest on July 1, 2020. Show all calculations.

d) Determine how much interest expense will be on the income statement for the year ended December 31, 2020.

e) Show what will be on the balance sheet related to these transactions as of December 31, 2020. Indicate clearly if any assets or liabilities are current or noncurrent.

The following data applies to the two unrelated companies Aldi Ltd    Wooli Ltd:

All taxable and deductible temporary differences relate to the profit or loss. Assume a corporate tax rate of 30%.

1. For each company, prepare the journal entries to record the current and deferred tax for 30 June 2020. Show all calculations

2. For each company, prepare the income tax section of the statement of profit or loss and other comprehensive income for the year ended 30 June 2020, and show the note disclosure for the current and deferred components of income tax expense.

Purple Company has $200,000 in net income for 2020 before deducting any compensation or other payment to its sole owner, Kirsten. Kirsten is single and she claims the $12,400 standard deduction for 2020. Purple Company is Kirsten's only source of income.

Ignoring any employment tax considerations, compute Kirsten's after-tax income for each of the following situations.

Click here to access the 2020 individual tax rate schedule to use for this problem. Assume the corporate tax rate is 21%.

When required, carryout intermediate tax computations to the nearest cent and then round your final tax liability to the nearest dollar.

a. Purple Company is a proprietorship and Kirsten withdraws $50,000 from the business during the year; Kirsten claims a $37,520 deduction for qualified business income.

Kirsten's taxable income is $_150,080__, and her after-tax income is $______________

b. Purple Company is a C corporation and the corporation pays out all of its after-tax income as a dividend to Kirsten.

Note: Individual taxpayers received preferential treatment regarding the taxation of qualified dividends (0%,15%,20%). For single taxpayers, the 0 percent rate applies to the first $40,000 of taxable income.

Purple Corporation's after-tax income is $ 158,000 and Kirsten's after tax income is $_________________?

c. Purple Company is a C corporation and the corporation pays Kirsten a salary of $158,000.

Purple Corporation's after-tax income is $________________ and Kirsten's after-tax income is $________________?