YOUCPA is a regional CPA firm engaged in public audit work of small- and medium-size firms in the Midwest. The YOUCPA firm has their main office in Chicago, Illinois, and regional offices in Minneapolis, Minnesota and Indianapolis, Indiana. The managing partners are located in Chicago. YOUCPA also provides tax preparation and information consulting to customers and is an approved PCOAB audit firm.

Your client, the publicly traded Fresno Freezer Corporation, is located in Elgin, Illinois, a small city located outside of Chicago. The client has the main plant there and has distribution centers in Indianapolis and Minneapolis.

The Fresno Freezer Corporation has contracted with YOUCPA for an audit. During the audit, the audit team has asked you to determine if everyone on the engagement team is independent.

The following individuals are on the engagement team and on the management of YOUCPA:

• Sarah Ball, Senior Partner, YOUCPA
• Bill Davis, Managing Partner, YOUCPA
• David Youssef, Manager of Taxation Services, YOUCPA
• Yewel Faraday, Manager of Information Consulting, YOUCPA
• Frank Bell, Supervisor of Auditing assigned to Client, YOUCPA

The following individuals are on the engagement team and on the management of YOUCPA:

• Sarah Ball, Senior Partner, YOUCPA
  • Manages the YOUCPA partnership
  • No financial interest in client
  • No relative with firm
  • No past history working with client in a direct manner (meaning working for the client as an employee)
• Bill Davis, Managing Partner, YOUCPA
  • Managing the audit of the client
  • No financial interest in the client
  • No relative with the firm
  • No past history working with the client in a direct manner
• David Youssef, Manager of Taxation Services, YOUCPA
  • Manages the taxation services for the accounting firm
  • No financial interest in the client
  • No relative with the firm
  • No past history working with the client in a direct manner
• Yewel Faraday, Manager of Information Consulting, YOUCPA
  • Manages the information consulting for the accounting firm
  • Yewel has no financial interest in the client
  • No relative with the client in a direct manner
• Frank Bell, Supervisor of Auditing assigned to Client, YOUCPA
  • Will supervise the audit at the main plant
  • No financial interest in the client
  • Wife works with client as a worker in the plant
  • Wife has no control or influence on the impact or creation of the financial statements
  • Wife has been working there for 20 years

For each individual on the engagement team and on the management of YOUCPA, complete the following:

• Determine if they are or are not independent.
• Explain your reasoning.

2 Required information

Serial Problem Business Solutions LO P1, P2, P3, P4

[The following information applies to the questions displayed below.]

Santana Rey created Business Solutions on October 1, 2019. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer. The following chart of accounts includes the account number used for each account and any balance as of December 31, 2019. Santana Rey decided to add a fourth digit with a decimal point to the 106 account number that had been used for the single Accounts Receivable account. This change allows the company to continue using the existing chart of accounts.

In response to requests from customers, S. Rey will begin selling computer software. The company will extend credit terms of 1/10, n/30, FOB shipping point, to all customers who purchase this merchandise. However, no cash discount is available on consulting fees. Additional accounts (Nos. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company’s new merchandising activities. Its transactions for January through March follow:

The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation:

1. The March 31 amount of computer supplies still available totals $2,155.
2. Prepaid Insurance coverage of $681 expired during this 3-month period.
3. Lyn Addie has not been paid for seven days of work at the rate of $195 per day.
4. Prepaid rent of $2,715 expired during this 3-month period.
5. Depreciation on the computer equipment for January 1 through March 31 is $1,080.
6. Depreciation on the office equipment for January 1 through March 31 is $260.
7. The March 31 amount of merchandise inventory still available totals $554.

2. Post the journal entries in part 1 to the accounts in the company’s general ledger. Note: Begin with the ledger’s post-closing adjusted balances as of December 31, 2019. (Record the transactions in the order presented. Do not skip rows.)

Required information

[The following information applies to the questions displayed below.]

Santana Rey created Business Solutions on October 1, 2019. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer. The following chart of accounts includes the account number used for each account and any balance as of December 31, 2019. Santana Rey decided to add a fourth digit with a decimal point to the 106 account number that had been used for the single Accounts Receivable account. This change allows the company to continue using the existing chart of accounts.

In response to requests from customers, S. Rey will begin selling computer software. The company will extend credit terms of 1/10, n/30, FOB shipping point, to all customers who purchase this merchandise. However, no cash discount is available on consulting fees. Additional accounts (Nos. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company’s new merchandising activities. Its transactions for January through March follow:

The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation:

1. The March 31 amount of computer supplies still available totals $2,165.
2. Prepaid Insurance coverage of $690 expired during this 3-month period.
3. Lyn Addie has not been paid for seven days of work at the rate of $155 per day.
4. Prepaid rent of $2,685 expired during this 3-month period.
5. Depreciation on the computer equipment for January 1 through March 31 is $1,190.
6. Depreciation on the office equipment for January 1 through March 31 is $210.
7. The March 31 amount of merchandise inventory still available totals $644.

2. Post the journal entries in part 1 to the accounts in the company’s general ledger. Note: Begin with the ledger’s post-closing adjusted balances as of December 31, 2019.

Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information:

Each T-shirt is expected to sell for $21.

The purchasing manager buys the T-shirts for $8 each.

The company needs to have enough T-shirts on hand at the end of each quarter to fill 31 percent of the next quarter’s sales demand.

Selling and administrative expenses are budgeted at $62,000 per quarter plus 18 percent of total sales revenue.

1. Determine budgeted sales revenue for each quarter.
Budgeted Sales Revenue  
Quarter1:

Quarter 2:

Quarter 3:

2. Determine budgeted cost of merchandise purchased for each quarter.
Budgeted Cost of Merchandise Purchased
Quarter1:

Quarter 2:

Quarter 3:

3. Determine budgeted cost of good sold for each quarter.
Budgeted Cost of Goods Sold
Quarter1:

Quarter 2:

Quarter 3:

4. Determine selling and administrative expenses for each quarter.

Budgeted Selling and Administrative Expenses

Quarter1:

Quarter 2:

Quarter 3:

Complete the budgeted income statement for each quarter.

A firm gives discounts to its customers who pay their bills on time. A customer receives a ten percent discount on the next invoice when a bill is paid in full before its due date. Thirty percent of all customers use the discount. If the company sends out eight bills, what is the expected number of customers that will take the discount (round answers to three decimal places, for example, 0.xxx)?

A firm gives discounts to its customers who pay their bills on time. A customer receives a ten percent discount on the next invoice when a bill is paid in full before its due date. Thirty percent of all customers use the discount. If the company sends out eight bills, what is the probability that at least three take the discount (round answers to three decimal places, for example, 0.xxx)?

A firm gives discounts to its customers who pay their bills on time. A customer receives a ten percent discount on the next invoice when a bill is paid in full before its due date. Thirty percent of all customers use the discount. If the company sends out eight bills, what is the probability that exactly three take the discount (round answers to three decimal places, for example, 0.xxx)?

A firm gives discounts to its customers who pay their bills on time. A customer receives a ten percent discount on the next invoice when a bill is paid in full before its due date. Thirty percent of all customers use the discount. If the company sends out eight bills, what is the probability that less than three take the discount (round answers to three decimal places, for example, 0.xxx)?

Scoresby Inc. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.

A recent survey conducted by a foundation reported that 74​% of teens admitted to texting while driving. A random sample of 42 teens is selected. Use the normal approximation to the binomial distribution to answer parts a through e.

a. Calculate the mean and standard deviation for this distribution.

The mean is _________.

​(Round to four decimal places as​ needed.)

The standard deviation is ___________.

b. What is the probability that more than 36 of the 42 teens admit to texting while​ driving?

The probability is __________..

​(Round to four decimal places as​ needed.)

c. What is the probability that exactly 24 of the 42 teens admit to texting while​ driving?

The probability is _____________.

​(Round to four decimal places as​ needed.)

d. What is the probability that 27​, 28​, or 29 of the 42 teens admit to texting while​ driving?

The probability is ___________.

​(Round to four decimal places as​ needed.)

e. What is the probability that fewer than 32 of the 42

teens admit to texting while​ driving?

The probability is ___________.

​(Round to four decimal places as​ needed.)

Scoresby Inc. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.