Your firm is the incumbent auditor on Biotech Ltd, a pharmaceutical company. Since the previous audit, the company has listed on the Australian Securities Exchange which means the company has to meet additional reporting regulations. Due to rapid growth, Biotech Ltd is financially stretched and its accounting systems are struggling to cope with the growth in the business. You recently read an article in the Australian Financial Review, which stated that Biotech Ltd is currently under investigation by the Australian Taxation Office (ATO) for alleged failure to pay the appropriate amount of Pay As You Go (PAYG) tax on their payroll.

Biotech Ltd is a pharmaceutical company, developing drugs to be licensed for use around the world. Products include medicines such as tablets, medical gels and creams. The market is very competitive, encouraging rapid product innovation. New products are continually in development and improvements are made to existing formulations. Drugs must meet very stringent regulatory requirements prior to being licensed for production and sale. You are aware that during the 2020 financial year, Biotech Ltd lost several customer contracts to overseas competitors.

Biotech Ltd approached its bank during the year to extend its borrowing facilities. An extension of $20 million was sought to its existing loan to support the on-going development of new drugs. The long-term borrowings are subject to debt covenants in which the company must maintain a current ratio of 3.5:1.

In addition, the company asked the bank to make cash of $5 million available if an existing court case against the company is successful. The court case is being brought by an individual who suffered severe side effects when participating in a clinical trial in 2016.

On 8 June 2020, the Company announced to the market it had been the victim of a cyber-security incident that resulted in supplier and customer details being disclosed on the dark web. The Company is assessing the costs of the incident and the subsequent reduction in revenue. The Company expects this to have a material impact on future earnings.

Minutes from the Audit Planning meeting with Simon Jones (Finance Director of Biotech Ltd) held on 30^th April 2020:

Due to the current government restrictions, the planning meeting with Simon Jones was held via Zoom. In attendance at the meeting was the Audit Partner (Michael), the Audit Manager (Amanda) and the Audit Senior (David).

The following key items were discussed during the meeting:

• Mr Jones raised concerns about the conduct of the previous audit, stating numerous examples of when he and his staff had been interrupted when they were busy. He stated that he wanted guarantees that this year's audit will be more efficient, less intrusive and cheaper, otherwise he will seek an alternative auditor in future.
• Michael reminded Mr Jones that fees relating to the audit engagement from the previous year were still outstanding.
• Both Michael and Mr Jones also discussed the range of non-audit services provided to Biotech Ltd, which includes payroll preparation, tax computation and advice.
• Mr Jones gave the audit team an update on the court case pertaining to the individual who suffered severe side effects from a company trial (refer above). According to legal advice provided to Mr Jones by the company’s legal counsel, it is more likely than not that Biotech will lose the court case, which would result in a significant amount of cash having to be paid as a settlement.
• Amanda asked Mr Jones if he considered the decline in profitability as an indicator of a material uncertainty surrounding the going concern assumption. Mr Jones responded by saying, “Look, everything might seem dire, but we have it under control. We will be here this time next year, so keep that in mind”. Michael then looked at Amanda and David and said, “Make sure that you mention the conversation that we have just had with Mr Jones about the appropriateness of the going concern assumption in the audit working papers. This should be sufficient enough audit evidence for us.”
• Mr Jones also mentioned the following: “As you know, Biotech Ltd has a Goodwill asset on the balance sheet. This is an indefinite useful life intangible asset. In accordance with the Accounting Standards (AASB 138), we are required to test the asset for impairment every year. We usually prepare a Value in Use calculation based on discounted future cash flows that we expect to generate in the next five years. I have completed this year’s calculation by rolling forward the prior year’s calculation and have just updated the dates. There was no need to update the future cash flow figures.”

The Audit Team

The audit team consists of 4 people. The partner is Michael. He has been the audit partner on the Biotech Ltd audit for 6 years. The audit manager is Amanda. This is Amanda’s first time on the Biotech Ltd audit. David is the audit senior and is responsible for the initial audit planning. David has recently completed the Graduate Diploma of Chartered Accounting. David has just been offered a well-paying accountant position at Biotech but he has not yet decided whether to accept the position. The graduate on the audit is Audrey. Audrey’s friend is the receptionist at Biotech Ltd. The receptionist has no accounting knowledge and has no involvement with the recording or processing of accounting transactions.

Accounts Receivable / Sales Accounting Cycle and Internal Control System

At the end of each month, the sales manager determines the amount of products required to meet sales demand for the following month based on sales orders received. He reviews the sales orders received from customers and then prepares the pre-numbered inventory requisition forms, which he then sends to the warehouse managers so that they can prepare the goods for delivery. One copy of the sales order and inventory requisition form is sent to the warehouse, one copy is sent to the accounts receivable department and one copy is filed in the sales department.

The warehouse prepares the goods for delivery to the customers and generates the delivery document. When the goods have been delivered, the signed delivery document, which includes the delivery details, is forwarded to the accounts receivable department. The other copy is filed in the warehouse. The accounts receivable clerk matches the signed delivery document with the sales order and inventory requisition form. Once satisfied that all of the details agree, the clerk generates the sales invoice. Once generated, the clerk does another check to ensure that all details per the sales invoice agrees to the delivery document and sales order. Once satisfied, she writes “checked” on the sales invoice and sends it to the customer. At the end of every week, a different clerk in the Accounts Receivable team reviews the bank statements for receipt of payments from customers and performs a reconciliation against the sales invoices. Once a customer has paid the sales invoice, the clerk stamps “received” on the sales invoice and files that along with all the other documents in date order.

The walk-through of the accounts receivable/sales cycle confirmed that the accounting and internal control system was working as documented above.

Test of control:

As part of the audit, Audrey tested the controls over the accounts receivable system. She selected a sample of twenty sales transactions and tested the control that all details had been checked. Out of the 20 sales transactions that were selected for testing, 5 sales invoices in the sample did not have the word “checked” written on them. When documenting the results of the test performed, Audrey concluded that the internal control did not operate effectively and consistently throughout the year but that no further audit work is required.

Substantive test

In order to test the occurrence of the sales transactions, Audrey selected a sample of sales invoices and traced them to the General Ledger to test that they were properly recorded.

Subsequent events not previously mentioned

• One of Biotech Ltd’s major customers went into liquidation in July 2020. The balance due from the customer at 30 June 2020 was $564,000. This is a material amount. There has been no provision/allowance for doubtful debts raised for this debtor in the financial statements for the year ended 30 June 2020. Biotech Ltd’s legal adviser stated in a telephone call that that the probability of any funds being received from the debtor is remote.

• On 2 July 2020, Biotech Ltd declared a one-for-five rights issue of 100,000 shares at $2.20. These shares were payable in full on 31 July 2020.

Misstatements identified

What is the audit opinion for the above case study?

Eureka Design Bhd entered into a contract to deliver one of its fixtures and fittings to Creative Landscaping Bhd on 1st July 2020. The contract requires Creative Landscaping to pay the contract price of RM30,000 in advance on 15th July 2020. Creative pays Eureka on 15th July 2020 and Eureka delivers the fixtures and fittings (with cost of RM19,000) on 31st July 2020.

Required:

i) Explain the 5-step of revenue recognition as outlined in MFRS 15 Revenue from Contract With Customers.

ii) Prepare the journal entry on 1st July 2020 for Eureka Design Bhd.

iii) Prepare the journal entry on 15th July 2020 for Eureka Design Bhd.

iv) Prepare the journal entry on 31st July 2020 for Eureka Design Bhd.

P4.1B:   Karlin Company Information for 2020.

Retained earnings , January 1, 2020 2,250,000

Sales revenue 53,000,000

Cost of goods sold   33,000,000

Interest revenue 120,000

Selling and administrative expenses 8,900,000

Write-off of goodwill 2,100,000

Income taxes for 2020 3,650,000

Loss on the sale of investments 53,000

Loss due to hurricane damage 1,100,000

Gain on the disposition of the retail division (net of tax) 23,000

Loss on operations of the retail division (net of tax) 231,000

Dividends declared on common stock 350,000

Dividends declared on preferred stock 125,000

INSTRUCTIONS:1. Prepare a multiple-step income statement 2. Prepare a separate Retained Earnings StatementOn September 15, Karlin sold the retail operations to Shark CorpAssume that 60,000 shares of common stock are outstanding.

Write a C++ program that will be an information system for Oregon State University using classes as well as demonstrating a basic understanding of inheritance and polymorphism.
You will create a representation of an Oregon State University information system that will contain information about the university. The university will contain a name of the university, n number of buildings, and m number of people. People can be either a student or an instructor. Every person will have a name and an age. Every student will have also have a GPA, but an instructor will NOT have a GPA. Every instructor will have an instructor rating, but a student will NOT have an instructor rating. Every building will have a name, the size in sqft (preferred the real value which you need to look up), and an address (stored as a string, also preferred to look this up).
People will contain a method called “do_work” that will take in a random integer as a parameter that represents how many hours they will do work for. If the person is a student, a message will be printed to the screen that says “PERSON_NAME did X hours of homework.” If the person is an instructor, a message will be printed to the screen that says “Instructor PERSON_NAME graded papers for X hours.” You will need to fill in the appropriate values.
The student GPA can either be an input from the user or randomized, but it must be between 0.0 and 4.0. It cannot be preset. The instructor rating can either be an input from the user or randomized, but it must be between 0.0 and 5.0. The ages of a person can be randomized or an input, but make it realistic. You can choose whether it is randomized or user input, or both.
The university will contain a method that will print the name and address of all the buildings in its information system and another method that will print the name of all the people. The name of the university MUST be “Oregon State University” (because we are the best).
You will manually instantiate at least 1 student, 1 instructor, and 2 buildings, then give them values and store them appropriately in the university object. You can do this in whatever fashion you wish.
You will have a menu that does at least the following:
1) Prints names of all the buildings
2) Prints names of everybody at the university
3) Choose a person to do work
4) Exit the program
Note that option 3 will require you to print another menu that gives options for each person.
You may create any other functions, methods, member variables, etc. to modularize your code and complete the lab.
You may use vectors for this assignment if you so choose.
(10 pts) Program Style/Comments
In your implementation, make sure that you include a program header in your program, in addition to proper indentation/spacing and other comments! Make sure you review the style guidelines for this class, and begin trying to follow them, i.e. don’t align everything on the left or put everything on one line! Also view the “Things not to do in the code” page and the “Things you need to do in your code” page as you will be held to these.

Add an option to save the information system to a file, and add an option to read a saved information system from a file so that you can close the program, but not lose information. This will also require you to be able to add people and/or buildings to the program during runtime. This is an all or nothing extra credit (you will not get partial points for partial completion).

Then please read the article Uber's International 'Launch Playbook:

In 2011, when Uber first took its car service app abroad, the company made its Paris debut an all-consuming event. From headquarters in San Francisco, Chief Executive Officer Travis Kalanick personally hired and oversaw the three people running local operations ahead of the service's tense first day online in France. Every one ofUber's then-20 employees studied Parisian cab rates, or neighborhood traffic density, or French transportation laws. These days, things are less frantic. A few hours before Uber's Nov. 12 launch in Budapest, Austin Geidt , the company's head of global expansion, made time to talk through the process at a San Francisco cafe. A $17 billion valuation will do a lot to soothe jangled nerves. Geidt, a 29-year-old with one employer on her resume, helped Uber roll out in a dozen cities two years ago. Now it's adding one every other day. Budapest marked the 100th foreign city on six continents where Uber rides are available and made Hungary the 46th country where it operates. (Uber is in about 140 cities in the U.S.) While Geidt's team used to agonize over data on competition and demand in different cities to decide where to expand next, "At this point we go so quickly, I wouldn't say that it particularly matters," she says. "If we're not there now, we'll be there in a week." Geidt oversees what Uber calls its "launch playbook," a list of business strategies and operating guidelines that have been compiled by an internal team of about 40 employees. It doesn't cover everything: During a Nov. 14 dinner with New York journalists on the guest list, Uber's senior vice president for business, Emil Michael, suggested the company spend $1 million to hire a team of researchers that would target critical reporters. And Uber said on Nov. 18 that it was investigating Josh Mohrer, the head of its New York office, for tracking rides taken by a BuzzFeed reporter. The playbook includes a blueprint for expansion that begins with three people, mostly locals, in each new city: a marketer, someone to recruit drivers, and a general manager who deals with area authorities and competitors and reports to Geidt. Despite the consistent regimen, she says she tries to view each city operation as its own startup.

That has to change when one ofUber's foreign teams screws up. A brief international public-relations crisis ensued in October, when the Lyon (France) office ran a promotion offering customers a ride with an "incredibly hot chick." The trouble blew over after executives from San Francisco stepped in to stop the ad campaign. In India, Uber's biggest market outside the U.S., the central bank threatened to shut it down for skirting cybersecurity regulations by routing payments through a foreign subsidiary. The company announced in a Nov. 12 blog post that it would comply with Indian laws by hiring Paytm, a local mobile payments business, to set up virtual wallets for Indian users. It's been tougher for Uber to deal with local regulators and labor groups complaining that the company operates as an unlicensed taxi service and drains money from their transportation markets. Taxi drivers organized antiUber protests this summer that blocked streets in London and Western European cities. In the past six months, governments in Australia, Belgium, Germany, and the Philippines have instituted short-lived bans on the service or levied stiff fines on its drivers. Cabbies barricaded the door at the party celebrating Uber's Milan debut. Geidt says governments "are very hesitant to see us come, often. We're a big enough brand now that they catch on to us being there quicker than they used to." Geidt noticed Uber's smartphone app shortly after its launch in 2010, when it was a black-car service confined to San Francisco. "I loved the idea," she says, even though "I was probably too poor to be an actual customer." Having just earned a B.A. in English from the University of California at Berkeley, she e-mailed then-CEO Ryan Graves and scored an internship in the marketing department. Later she helped set up and eventually run Uber's first satellite operation, in New York. "She bounced around quickly enough that, all of a sudden, she was doing all parts of the operations in the city," says Graves, now head of global operations. Soon, Geidt was opening Uber offices across the U.S. She invited Boston cabbies to the Harvard Business School library, where she held recruitment meetings while posing as a student to get a free desk and Wi-Fi. She spent the night at a tow yard in Austin, Texas, paying fines for drivers to retrieve cars impounded in a police sting that targeted unlicensed taxis.

Since taking on international expansion in 2012, Geidt has focused much of her attention on Asia. Last year, CEO Kalanick summoned her and his other lieutenants to Beijing, where they worked for two weeks to hone their plan for China, from business structure and licenses to map data and the most popular forms of payment. "Everyone we talked to said, 'You should take four years to really research China, ' " recalls Geidt. "And we said, 'No, let's just go.'" Uber drivers have begun to roam seven cities on the mainland this year and will add several more soon, says regional manager Candice Lo. Uber couldn't afford to wait. China already has two dominant taxi-booking apps, each backed by one of the country's two biggest Internet companies, Tencent (700:HK) and Alibaba (BABA). It also faces fresh competition in the U.S., where Lyft has been slashing its prices to undercut the company. "We plan to expand internationally, but the U.S. is the biggest opportunity right now," says Lyft CEO Logan Green. To fuel expansion abroad, Uber is in talks to raise $1 billion on top of the $1.2 billion it announced in June, according to two people familiar with the fundraising who weren't authorized to discuss it publicly. "Pretty soon we're going to have more cities outside of the U.S. than inside, and we want to make big bets going forward to make sure that we're able to continue to roll out and invest in these global cities," says Kalanick, who won't confirm the new round of fundraising. Local opposition notwithstanding, the ultimate aim is even grander, says Geidt: "We really do intend to be everywhere."

Write a 500 Word document responding to the following questions:

Why is Uber choosing to expand so rapidly?

Are there first-mover advantages for this business?

Are there any downsides to being a first mover in this business?

How sustainable are any advantages in this business?

South Hampton University is preparing its budget for the upcoming academic year. This is a specialised private university that charges fees for all degree courses. Currently, 30 000 students are enrolled on campus. However, the university is forecasting a 5 per cent growth in student numbers in the coming year, despite an increase in fees to $3 000 per subject. The following additional information has been gathered from an examination of university records and conversations with university managers:
1. South Hampton is planning to award scholarships to 200 students, which will cover their fees.
2. The average class has 80 students, and the typical student takes 4 subjects per semester. South Hampton operates 2 semesters per year.
3. The average academic staff salary is $120 000 per annum including on-costs.
4. South Hampton’s academic staff are evaluated on the basis of teaching, research, administration and professional/community service. Each of the academic staff teaches the equivalent of three subjects during the academic year.
Required:
a. Prepare a revenue budget for the upcoming academic year.
b. Determine the number of staff needed to cover classes.
c. Assume there is a shortage of full-time academic staff. List at least five actions that South Hampton might take to accommodate the growing student numbers

IAS 16. Fixed Assets. We are a graphic arts company, and at the beginning of 2016, we acquired a new printer. The price of this printer was 25,000 euros. The additional expenses of the purchase were as follows:

• Installation and assembly: 3.000 euros.
• Transportation and delivery: 1.150 euros.

All operations have a 21% VAT (not included), and the payment of the amounts is made by bank check.

During January, the assembly and installation of the new printer takes place, which is in perfect working condition from February the 1st.

The useful life expectancy of the printer is estimated at 10 years, and its amortisation will be carried out following the linear method. Additionally, at the end of its useful life, the company will have to face the costs of dismantling and rehabilitation of the place. Estimating said costs in 5,000 euros. Besides, said machinery requires specialised weekly maintenance, amounting to 250 euros per month.

Calculate:

• The initial cost of the acquisition.
• The amortization fees.
• The costs derived from daily maintenance.

IAS 36. Impairment of assets. We are a photo studio, and due to the increase in work and staff, we have had to acquire three new cameras and accessories. The acquisition occurred in January 2018. The prices of the cameras are as follows:

• Camera 1: 1.750 euros
• Camera 2: 3.500 euros
• Camera 3: 1.950 euros
• Accessories: 4.550 euros

Calculate:

• The impairment loss of the asset at the end of 2020, taking into account that the recoverable amount of the acquisitions is:
  • Camera 1: 575 euros
  • Camera 2: 1.500 euros
  • Camera 3: 750 euros
  • Accessories: 2.200 euros

IAS 38. Intangible Assets. On March 1, 2016, we obtained a patent for 7,500 euros.

At the close of the fiscal year, on December 31, 2016, the fair value of the patent was 9,000 euros.

As of December 31, 2017, the fair value of the patent stands at 8,000 euros.

The criterion we use for valuation after the initial recognition of the asset is the revaluation model.

Formulate:

Make the accounting entries corresponding to the acquisition of the asset and at each accounting close.

I have the solution.. I just do not know how they came up with some of the answers. e.g. sales return and allowande. Exercise 5-11

Calculating income statement components L01,5

Referring to Exhibit 5.15 calculate the missing amounts (round to two decimal places).

Company A Company B

2020 2019 2020 2019

Sales     $263,000.00 $187,000.00 ? 114200.00 $48,500.00

Sales Discount $2,630.00 ? 1350.00 $1,200.00 $570.00

Sales Return and Allowance ? 51570 $16,700.00 $6,200.00 ? 2430.00

Net Sales ? 208800.00 $168,950.00 ? 106800.00 $45,500.00

Cost of Goods Sold $157,100.00 ? 106450 $57,700.00 ? 23400.00

Gross Profit from Sales $51,700.00 ? 62500.00 $49,100.00 $22,100.00

Selling Expense $18,620.00 $19,700.00 $25,700.00 ? 9700.00

Administrative Expenses $26,300.00 ? 27700.00 $30,400.00 $9,700.00

Total Operating Expenses ? 44920.00 $47,400.00 ? 56100.00 ? 0

Profit (Loss) ? 6780.00 $15,100.00 ? (7000) $2,700.00

Gross Profit Ration ? 24.76 ? 36.99 ? 45.67 ? 48.57

Solve for ?

On December 31, 2020, Pina Company signed a $1,056,300 note to Grouper Bank. The market interest rate at that time was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Pina’s financial situation worsened. On December 31, 2022, Grouper Bank determined that it was probable that the company would pay back only $633,780 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,056,300 loan.

1. Determine the amount of cash Pina received from the loan on December 31, 2020. (Round present value factors to 5 decimal places, e.g. 0.52513 and final answer to 0 decimal places, e.g. 5,275.)

2. Determine the loss on impairment that Grouper Bank should recognize on December 31, 2022. (Round present value factors to 5 decimal places, e.g. 0.52500 and final answer to 0 decimal places, e.g. 5,275.)