PRINCE Company has the following opening account balances in its general and subsidiary ledgers on March 1^st, 2020. The Company uses the periodic inventory system. All accounts have normal debit and credit balances.

                             General Ledger

The following transactions take place in the month of March 2020.

Jan 1           Purchased merchandise from Heaven Trade $3,500, FOB shipping point, 2/15, n/45.

   1           Paid 12-month fire insurance $7,200, covering year 2020.

   3           Received checks for $4,500 from Westly N.R. and paid $350 to Quick Delivery for the freight on merchandised purchased on January 1^st.

   5           Sent a credit memo of $200 to Fortune D.C. for the allowance granted on unsatisfied merchandise.

   8           Sold merchandise of $3,600 to Zooick, terms FOB destination, 1/8, n/15. The relevant delivery charge, $400, was paid.

   9           Sent a check of $4,900, after a 2% discount, to Heaven Trade. Also, paid DeeBeeDee in full.

   9           Received payment in full from Apple Green and Fortune D.C..

  12          Paid rent of $2,500 for January.

13          Sold merchandise on account to Apple Green $1,900 and Westly N. R. $900, terms 1/8, n/20.

15          Paid Heaven Trade for the Jan.1 purchase.

16          Purchased merchandise on account from DeeBeeDee $15,000, terms 5/5, n/30.

17          Paid $600 cash for office supplies.

18          Returned $1,000 of inferior quality merchandise to DeeBeeDee and receive credit.

20          Cash sales totaled $17,500.

22          Received payment from Apple Green and Zooick.

22          Paid Brothers Inc. $15,300, no discount taken. Also paid DeeBeeDee.

25         Paid salaries of $8,300.

26         Sold merchandise to SunWing, $16,800, terms 1/EOM, n/30.

31          Received from Zooick a down payment of $10,000 for merchandise specifically ordered to its request.

Other information available on January 31^st, 2020

1. A count showed supplies on hand was $1,200.
2. Out of the $3,000 prepaid insurance on January 1^st, $300 was expired.
3. Depreciation expense for the month totaled $225.
4. Ending inventory was $29,000, out of which $1,200 was found to be not sellable anymore. The management decided to recognize a loss separately.
5. Utility bill of $1,350 was received but not yet paid. A separate payable account is used.

Required:

1. Journalize the March transactions in the general journal, no need to provide explanations to the entries. Use additional accounts when necessary.

(30.5 marks)

2. Prepare the Income Statement for the month ended March 31^st, 2020, the Statement of Financial Position as of that date.

(19.5 marks)

PRINCE Company has the following opening account balances in its general and subsidiary ledgers on March 1^st, 2020. The Company uses the periodic inventory system. All accounts have normal debit and credit balances.

                             General Ledger

The following transactions take place in the month of March 2020.

Jan 1           Purchased merchandise from Heaven Trade $3,500, FOB shipping point, 2/15, n/45.

   1           Paid 12-month fire insurance $7,200, covering year 2020.

   3           Received checks for $4,500 from Westly N.R. and paid $350 to Quick Delivery for the freight on merchandised purchased on January 1^st.

   5           Sent a credit memo of $200 to Fortune D.C. for the allowance granted on unsatisfied merchandise.

   8           Sold merchandise of $3,600 to Zooick, terms FOB destination, 1/8, n/15. The relevant delivery charge, $400, was paid.

   9           Sent a check of $4,900, after a 2% discount, to Heaven Trade. Also, paid DeeBeeDee in full.

   9           Received payment in full from Apple Green and Fortune D.C..

  12          Paid rent of $2,500 for January.

13          Sold merchandise on account to Apple Green $1,900 and Westly N. R. $900, terms 1/8, n/20.

15          Paid Heaven Trade for the Jan.1 purchase.

16          Purchased merchandise on account from DeeBeeDee $15,000, terms 5/5, n/30.

17          Paid $600 cash for office supplies.

18          Returned $1,000 of inferior quality merchandise to DeeBeeDee and receive credit.

20          Cash sales totaled $17,500.

22          Received payment from Apple Green and Zooick.

22          Paid Brothers Inc. $15,300, no discount taken. Also paid DeeBeeDee.

25         Paid salaries of $8,300.

26         Sold merchandise to SunWing, $16,800, terms 1/EOM, n/30.

31          Received from Zooick a down payment of $10,000 for merchandise specifically ordered to its request.

Other information available on January 31^st, 2020

1. A count showed supplies on hand was $1,200.
2. Out of the $3,000 prepaid insurance on January 1^st, $300 was expired.
3. Depreciation expense for the month totaled $225.
4. Ending inventory was $29,000, out of which $1,200 was found to be not sellable anymore. The management decided to recognize a loss separately.
5. Utility bill of $1,350 was received but not yet paid. A separate payable account is used.

Required:

Prepare the Income Statement for the month ended March 31st, 2020, the Statement of Financial Position as of that date.

There no adjusted trial balance.

John Smith is the CEO of Alpha Manufacturing Pty Ltd. This company manufactures high value products in the form of small model aircraft jet engines that are mainly sold online.  The raw materials input for the Jet engines are a series of high value easily marketable items mainly exotic metals and electronic systems that support the engine controllers. There are five models of engine produced, each requiring about 25 components, including screws and fuel connectors. About ten of these components are made in house from the exotic raw materials. The controllers are assembled in house from about 10 electronic components and are common to all the engines. The business has been enjoying a long period of several years of continuous growth both in sales and profit. However, compared to the growth of sales net operating profit growth seems lower. John contracted with a business consulting firm to identify the reasons for this inconsistency. The consultants came up with a series of findings, the principal ones being:

• A poor inventory management system meant that it was impossible to properly identify the cost of production of the finished goods.
• The result is that management reports do not indicate the true costs of production.
• The Online Sales system was not integrated with either the inventory control system or the financial recording system.
• Alpha Manufacturing offered its own credit terms to customers but had no formal credit process.
• The computer system was linked to the internet to support the Online Sales System, but had no security system monitoring it.

In addition, the present accounting system is a hybrid of electronic and manual kept records. The result is that the growth rate of sales had diverged from the growth rate of net operating profit. The analyst has suggested redesigning the whole accounting process with a contemporary integrated accounting solution for the business.

John has taken the issue to the board and has decided to appoint you to implement an efficient automated accounting information system. As you have technical knowledge, you need to give a detailed plan about the new efficient information system including its possible cost and benefits. In addition, if the project plan is approved you need to implement this information system as project in-charge for the business.

You required

Following the receipt of your reports, John has attended a conference, in which salesmen from three organisations made sales pitches about outsourcing. As a result John is considering outsourcing the entire record keeping operation. Prepare a report for John detailing the advantages and disadvantages of continuing to run the information system in house with the different outsourcing arrangements such as arranging for an outsourcing vendor to own and operate a small onsite data centre for you, a service bureau, an applications service provider (ASP), Business Process Outsourcing (BPO), and software as a service (SaaS).

John Smith is the CEO of Alpha Manufacturing Pty Ltd. This company manufactures high value products in the form of small model aircraft jet engines that are mainly sold online.  The raw materials input for the Jet engines are a series of high value easily marketable items mainly exotic metals and electronic systems that support the engine controllers. There are five models of engine produced, each requiring about 25 components, including screws and fuel connectors. About ten of these components are made in house from the exotic raw materials. The controllers are assembled in house from about 10 electronic components and are common to all the engines. The business has been enjoying a long period of several years of continuous growth both in sales and profit. However, compared to the growth of sales net operating profit growth seems lower. John contracted with a business consulting firm to identify the reasons for this inconsistency. The consultants came up with a series of findings, the principal ones being:

• A poor inventory management system meant that it was impossible to properly identify the cost of production of the finished goods.
• The result is that management reports do not indicate the true costs of production.
• The Online Sales system was not integrated with either the inventory control system or the financial recording system.
• Alpha Manufacturing offered its own credit terms to customers but had no formal credit process.
• The computer system was linked to the internet to support the Online Sales System, but had no security system monitoring it.

In addition, the present accounting system is a hybrid of electronic and manual kept records. The result is that the growth rate of sales had diverged from the growth rate of net operating profit. The analyst has suggested redesigning the whole accounting process with a contemporary integrated accounting solution for the business.

John has taken the issue to the board and has decided to appoint you to implement an efficient automated accounting information system. As you have technical knowledge, you need to give a detailed plan about the new efficient information system including its possible cost and benefits. In addition, if the project plan is approved you need to implement this information system as project in-charge for the business.

Assessment Tasks:

Prepare a report for presentation to the board critically explaining the risks associated with the weaknesses of the current accounting system. The paper should also provide a detailed outline of what could be expected from a replacement system

Training Evaluation at Ryan Door Reinventing the Wheel at Ryan Door Company Jack Ryan, CEO of Ryan Doors, has a problem. No matter how often he tells his employees how to do their jobs, they invariably “decide to do it their way,” as he puts it, and arguments ensure between Jack, the employee, and the employee’s supervisor. One example is the door-design department, where the designers are expected to work with the architects to design doors that meet the specifications. While it is not “rocket science” as Jack puts it, the designers invariably make mistakes – such as designing in too much steel, a problem that can cost Ryan Doors tens of thousands of wasted dollars, once you consider the number of doors in a large office tower! The current training process is as follows: None of the jobs has a training manual per se, although several have somewhat out-of-date job descriptions. The training for new employees is on-the-job. Usually, the employee leaving the company trains the new person during a one or two week overlap timeframe, but if there is no overlap, the new employee is trained as well as possible by other employees who have filled in occasionally on-the-job in the past. Jack Ryan has decided to form a task force to help with the design and evaluation of a new training program for the design group. The task force is to submit recommendations based upon the following:

Explain in detail: What should be done to improve the training process at Ryan Door.

Identify in detail: a) the types of outcomes to use in evaluating the improved training process

Jane owns​100% of Carnate Corporation’s stock and also runs the company as its CEO. Carnate is a C corporation that expects to earn $420,000 before deducting any salary paid to Jane. Jane wants the corporation to pay her $230,000 for current year in pretax dollars. She is considering three different options: (1) a $230,000 dividend. (2) a $115,000 dividend plus a $115,000 salary, or (3) a $230,000 salary.

Any dividends qualify for the preferential capital gains tax rates. Jane​'s husband has no earnings of his own in the current​ year, so her income is the sole source for the family.Jane and her husband file a joint tax return and claim the $24,000 standard deduction.

​* The corresponding amounts if married filing separately are half of the amounts for filing jointly. The preferential rate is zero for taxable income up to

$ 38 comma 600$38,600

if married filing separately.

Calculate the total tax liability​ (corporate and​ individual) for each of the three​options, and determine which option results in the lowest overall tax.

Jerry is the CEO of XYZ Motors, a large automotive company that produces affordable four-passenger cars for the typical lower-income class family. Each model is typically driven only five years. The model from two years ago, the XYZ-8, which sold for $8,000, has been involved in four car crashes where the cars, when struck from the rear when the right blinker signal is activated, causes the fuel in the gas tank to ignite. There have been no fatalities, but several injuries. Victims have begun organizing into a class action lawsuit against the company.

A technician at the company discovered the issue with the blinker circuit soon after the last explosion was analyzed. He wrote the following memo to his superiors:

“We can recall each of the XYZ-8 models that we have sold and replace the blinker circuit with a new lining. It is highly likely this will correct the issue. This will lead to a cost to the company of $20 per car for the repair and an estimated $50 in lost labor revenues, since we cannot charge for the refit. There are an estimated 500,000 cars that are affected. Estimated cost to the company of this refit program: $35 million. If we do not act soon, there could be an estimated two explosions per year.”

Soon after reading this memo, Jerry gives his accounting department a hypothetical scenario: what would be the cost of settling a class action lawsuit out of court for ten low-income families? Estimating the present value of typical future earnings from a blue collar worker, aged 18 to retirement age of 65, the accountant gives a figure of $600,000 per family, amounting to a total settlement of $6 million.

Jerry orders his legal counsel to proceed with settling the class action lawsuit and does not inform his board of directors about the technician’s memo. Discuss.

Assume you are the CEO of a publically traded company. Your chief financial officer (CFO) informs you that your company will not be able to meet earnings per share targets for the current year. In that event your stock price will likely decline. The CFO proposes reducing the quarterly provision for uncollectible amounts (bad debt expense) to increase your EPS to the level analysts expect. This will result in an allowance that is less than it should be. The CFO explains that outsiders cannot easily detect a reduction in this allowance and that the allowance can be increased next year. The benefit is that your shareholders will not experience a decline in stock price.

1. Identify the parties likely to be affected by this proposed action.

2. How will reducing the provision for uncollectible accounts affect the income statement and the balance sheet?

3. How will reducing the provision for uncollectible accounts in the current period affect the income statement and the balance sheet in a future period?

4. What argument might the CFO use to convince the company's internal auditors that this action is justified?

5. How might an analyst detect this earnings management activity?

6. How might this action affect the moral compass of your company? What repercussions might this action have?

Mohammed is the CEO of ABC Motors, a large automotive company that produces affordable four-passenger cars for the typical lower-income class family. Each model is typically driven only five years. The model from two years ago, the ABC-8, which sold for $8,000, has been involved in four car crashes where the cars, when struck from the rear when the right blinker signal is activated, causes the fuel in the gas tank to ignite. There have been no fatalities, but several injuries. Victims have begun organizing into a class action lawsuit against the company.

A technician at the company discovered the issue with the blinker circuit soon after the last explosion was analyzed. He wrote the following memo to his superiors:

“We can recall each of the ABC-8 models that we have sold and replace the blinker circuit with a new lining. It is highly likely this will correct the issue. This will lead to a cost to the company of $20 per car for the repair and an estimated $50 in lost labor revenues, since we cannot charge for the refit. There are an estimated 500,000 cars that are affected. Estimated cost to the company of this refit program: $35 million. If we do not act soon, there could be an estimated two explosions per year.”

Soon after reading this memo, Mohammed gives his accounting department a hypothetical scenario: what would be the cost of settling a class action lawsuit out of court for ten low-income families? Estimating the present value of typical future earnings from a blue collar worker, aged 18 to retirement age of 65, the accountant gives a figure of $600,000 per family, amounting to a total settlement of $6 million.

Mohammed orders his legal counsel to proceed with settling the class action lawsuit and does not inform his board of directors about the technician’s memo. Discuss.

Ms. B is a 40-year-old woman who is the CEO of a struggling company. Lately she has been experiencing headaches that are so severe that she gets dizzy and nauseated, and she is unable to carry out her usual daily routines. She reports that they usually begin as a throbbing pain in the left temple and then seem to spread throughout her head. A diagnosis of migraine headache is made after several tests.

Based on the patient history and signs and symptoms, discuss this type of headache and its physiological causes. (See Headaches—Migraines.)

Discuss the available treatments to prevent and/or relieve the patient’s migraine. (See Migraines.)