Changes in Various Ratios
Presented below is selected information for Brimmer Company:

Required
Calculate the following ratios for 2013. The 2012 results are given for comparative purposes.

Round answers to one decimal place. Use 365 days in a year.

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What are two sources of tax guidance (e.g. IRS code, Revenue Procedure) for each Partnership, C corporation, and S corporation? How does it define a component of the tax policy for that form of organization?

Jose decides to open a restaurant. After analyzing costs and forecasting revenue he realizes he can earn about a 14% return on his investment. What factors must Jose think about in making his decision?

Justin has saved 50,000. He can invest it in a real estate venture that will pay 15% for 10 years, and then in a mutual fund for an additional 10 years at a 9.75 annual return. He’s hoping that in 20 years, when he is 40, he will have enough money to pay for his child’s college education, estimated at about $75000 per year. Will he have enough?

Microsoft Corporation decides to invest in developing a robot that will help the elderly with tasks such as putting on socks, eating, etc. The initial investment for this project is $52,000,000 (52M). The cash flows expected from this investment are 28 million in year 1, 19 million in year 2, 23 million in year 3 and 18 million in year 4. What is the Net Present Value of this project? Would this project be a good investment? Or would it be better to invest $52M in a bond paying 8% annually?

Mondial Corporation’s financial accounting records show it had gross revenue of $980,000, cost of goods sold of $420,000, operating expenses of $380,000, and $4,000 of dividends received from a 40-percent-owned owned corporation. Its operating expenses included the following: $6,000 of life insurance premiums on which it was the beneficiary $22,000 of business meal expenses $30,000 of charitable contributions Determine Mondial Corporation’s taxable income. Determine Mondial Corporation’s income tax liability for 2019. Determine Mondial Corporation’s income tax liability if book depreciation is $15,000 less than tax depreciation.

Exercise 9-13 Revenue and Spending Variances [LO9-3]

Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs:

For example, electricity costs are $1,100 per month plus $0.07 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.40 per car washed.

The actual operating results for August are as follows:

Required:

Calculate the company's revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

1. Revenue and Expense Recognition

   Two years ago, Darlene Darby opened a delivery service. Darby reports the following accounts on her income statement:

   Sales	$69,150
   Advertising Expense	3,420
   Salaries Expense	38,480
   Rent Expense	9,440

   These amounts represent two years of revenue and expenses. Darby asks you how she can tell how much of the income is from the first year of business and how much is from the second year. She provides the following additional data:

   1. Sales in the second year are double those of the first year.
   2. Advertising expense is for a $530 opening promotion and weekly ads in the newspaper.
   3. Salaries represent one employee for the first nine months and two employees for the remainder of the time. Each is paid the same salary. No raises have been granted.
   4. Rent has not changed since the business opened.

   Required:

   Prepare income statements for Years 1 and 2. Need solution to c.

1.Merchandising businesses generate revenue by selling goods. include wholesale and retail companies. manufacture the goods that they sell. generate revenue by selling goods and include wholesale and retail companies.

2. A retail company sells goods primarily to other businesses. manufacturing firms. the final consumer. other businesses and the final consumer.

3.Merchandising businesses manufacture the goods they sell. generate revenue primarily by providing services to customers. buy the merchandise they sell from suppliers. include dry cleaning companies and law firms.

4.A discount given to encourage prompt payment on a credit purchase of merchandise is called: a cash discount. a sales discount by the seller. a purchase discount by the buyer. all of these are correct.

5. On January 1, 2014 Morgan Co. purchased a truck that cost $32,000. The truck had an expected useful life of 10 years and a $5,000 salvage value. The amount of depreciation expense recognized in 2015 assuming that Morgan uses the double declining-balance method is: $4,320. $5,120. $5,400. $6,400.

REVENUE CASE 4

As auditor of Da Do Enterprises Bhd, you have just completed of review of the sales ordering system and you have made the following observations: Orders are received by the sales office through the mail from customers. A sales order form is immediately prepared in duplicate for each customer order. These sales order form are pre-printed and kept in the sales office, but are not serially numbered. Copy #2 is retained on file together with the customer order. Copy #1 is sent to the credit department for authorization and approval. The credit manager checks the order against the approved customer’s list and the current accounts receivable subsidiary ledger account balance. The approved sales order is sent to the storekeeper, who checks whether the goods are available in stock to meet the request. If available, a multi-copy sales invoice is prepared. Like the sales order forms, the sales invoices are also preprinted but are not serially numbered. One copy of the sales invoice is sent to the customer. A second copy is sent to the accounts department. A third copy is sent to the customer with the goods as a packing slip. A fourth copy is filed together with the customer order by the storekeeper. The shipping clerks checks to make sure all shipments accomplished by a copy of the sales invoice.

Required:

a) Indicate weakness in internal control over the existing sales ordering system.

b) Recommend one improvement for each of the weakness identified.

c) Describe the audit tests (both tests of controls & substantive tests) the auditor may perform to determine if there are any errors or irregularities.

Gamma Corp. manufactures and sells widgets for $6.00 each. Therefore, its total revenue, TR, from the sale of X widgets in a year is

TR=$6X

It costs Gamma $2 for materials and labour to produce each widget. In addition, Gamma expects to incur $80,000 of other costs during a year. Therefore, Gamma’s total costs for the year, TC, are expected to be

TC =$2X+ $80,000

Gamma’s expected net income, NI, for the year will be

NI =TR -TC

=$6X - ($2X+$80,000)

=$4X-$80,000

PLEASE ANSWER ALL QUESTIONS WILL FULL WORKINGS

a. What is the slope and TR-intercept of a TR vs. X plot? (NEED ANSWERS WILL FULL AND CLEAR WORKINGS)

b. What is the slope and TC-intercept of a TC vs. X plot? (NEED ANSWERS WILL FULL AND CLEAR WORKINGS)

c. What is the slope and NI-intercept of an NI vs. X plot?(NEED ANSWERS WILL FULL AND CLEAR WORKINGS)

d. Which of the three plotted lines is steepest? (NEED ANSWERS WILL FULL AND CLEAR WORKINGS)

e. How much does NI increase for each widget sold?(NEED ANSWERS WILL FULL AND CLEAR WORKINGS)

f. If Gamma were able to reduce its materials and labour cost to $1.75 per widget, state for each plotted line whether its slope would increase, decrease, or remain unchanged. (NEED ANSWERS WILL FULL AND CLEAR WORKINGS)

PLEASE ANSWER ALL QUESTIONS WILL FULL WORKINGS. PLEASE SHOW HOW THE ANSWER WAS DERIVED

I have a question. I am doing revenue report project. I have to write an efficient and effeictive means of testing the control. For payment control, the related assertion is Accuray, and Completeness. Possible test of effectiveness is
observe card and cash transaction procedures from start to finish. I can't come up with any other effectivness. Please help me. Thanks.