Hummus Company began operations on January 1, Year 1. Selected ending balances for Year 1 are:

Accounts receivable, $5,600

Allowance for doubtful accounts, $790

Hummus Company experienced the following events during Year 2:

              Earned $225,000 of revenue on account

              Collected $175,000 cash from accounts receivable

              Paid in advance a one-year lease for office rent, $12,000; rental period began May 1, Year 2

Salary expense was $45,000, of which $40,000 had been paid at the end of Year 2

              Operating expenses were $125,000, of which $100,000 had been paid at the end of Year 2

              Wrote off $2,000 of uncollectible accounts

Adjusted the accounting records to reflect management’s belief that 3% of sales on account will be

uncollectible. Hummus Company uses the allowance method for accounting for bad debts.

Collected $500 from accounts that had been previously written off

(3 points) Question 1 – What is Hummus Company’s net income for Year 2?

(3 points) Question 2 – What is the net realizable value that Hummus Company will report on its Year 2 balance sheet (after all adjusting entries have been made)?

Elvis Inc. is planning to establish a subsidiary in Australia to produce canola oil. The manufacturing facility will cost the parent company an initial investment of 5 million U.S. dollars (US$) to set up. The project will end in 3 years. At the end of the project, Elvis will sell the Australian subsidiary for A$8 million to an Australian agriculture firm. This amount is net of capital gain tax and is not subject to the withholding tax. Elvis estimates the after-tax net cash flows are A$6,400,000, A$3,000,000, and A$5,900,000 at the end of the first, second and third year, respectively. The Australian government will impose a corporate tax of 27% and a withholding tax of 19% on remitted funds. Additionally, the Australian law requires the subsidiary to operate locally at least for 3 years before it can remit earnings to its parent company. The parent's required rate of return for the Australian project is 10%. Suppose that the subsidiary can invest at 5% p.a. in Australia throughout the project duration and the exchange rate for the Australian dollar would remain unchanged at $0.141 throughout the project duration. Conduct a capital budgeting analysis to determine the feasibility of this project by completing the table below.

You are the ISO for a medium size company that works in paper, but not any paper but the paper that US dollars are made on.

Write an incident flow chart for some catastrophes happening to your company. Include a flow chart based on the situation.

You make up the catastrophe, man-made or nature or freak accident.

Which practice is in accordance with US GAAP? 1. a company values assets at their market value 2. a company recognizes expenses when they incur them 3. the monetary unit principle takes inflation into account 4. the accoutning period of a buisness keeps changing 5. businesses and owners are legally dependent

Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.

Reconcile the variable and absorption costing net operating income (loss) figures.  (Losses and deductions should be entered as a negative.)

During the second quarter of operations, the company again produced 33,400 units but sold 38,400 units. (Assume no change in total fixed costs.) What is the company’s variable costing net operating income (loss) for the second quarter?

A lawsuit has been filed against XYZ Company. As year-end, the company’s attorney believes that there is an 85% likelihood that the company will be found liable. The attorney believes that the estimated range of the liability is between $50,000 and $150,000 and that all amounts within the range are equally likely. In addition, the company has announced a restructuring plan prior to year-end that has created a valid expectation on the part of the employees to be terminated with an estimated liability of $500,000. As of year-end, there is currently no legal obligation to make any payments to the terminated employees. Lastly, the Company issued stock options with a fair value of $200,000 on January 1st with a 2 year vesting schedule.   

1. What would be the amount, if any, that XYZ would record on the balance sheet related to the lawsuit under IFRS and US GAAP?
2. What would be the amount, if any, that XYZ would record on the balance sheet related to the restructuring under IFRS and US GAAP?

While some of life's experiences are under our control, others are not. External factors are those in life which we cannot control (such as who raised us or where we live). Can you identify events in your life that have contributed to the person you are today? Can you identify events in your life that may have contributed to feelings of inadequacy? If faced with the same event today, would your actions and/or feelings regarding the incident be different? How and in what way? You have a friend that has undergone a major life trauma and has withdrawn from activities he/she once enjoyed. He/she shows some signs of depression and confides in you that he/she has contemplated suicide. How can you help your friend? Who would you contact first? Where on campus might your friend get help? What if someone in your class that you hardly knew gave some of the warning signs? What would you do?

1.Describe the paradox of the phrase "benevolent deception". Are doctors who allow their patients to be involved in potentially harmful clinical treatments in compliance with their Hippocratic Oath? What does the use of “a miserable specimen” by a physician reveal about his/her attitude toward a patient? (Be sure to include supportive examples from either The Immortal Life of Henrietta Lacks or the US Public Health Service Syphilis Study at Tuskegee.)

2. An older married couple without children was involved in a car accident that left the wife with brain damage and her husband in a vegetative state. The wife was willing to liquidate their assets in order to fund additional life support for her husband in the hope that he would regain consciousness at some point. However, doctors at the hospital were debating whether or not the wife had sufficient mental capacity to make an informed decision regarding her husband’s care. You are one of the doctors at that hospital who serve on the medical ethics team. Give your recommendation incorporating Dr. Hopkins’s lecture on the conflicts in the social psychology of paternalism and public health care.

BOR CPAs, Inc. is a closely held corporation owned by three stockholders who used the initials of their last names to form the corporation’s name: Cyrus Bailey, John Ogden, and Samuel Rogers. The firm’s Certified Public Accountants (CPAs) perform audits of both public companies and privately owned companies. BOR’s CPAs also provide tax services to both individuals and businesses.

The corporation is divided into two profit centers: the Audit Division and the Tax Division. Each division is composed of two cost centers. The Audit Division is composed of two cost-center departments: Public Company Audits and Private Company Audits. The Tax Division is composed of two cost-center departments also: Individual Tax and Business Tax.

BOR, a decentralized organization, is interested in evaluating the performance of the two divisions. The stockholders are responsible for deciding on investment in the two divisions. Cyrus Bailey is in charge of the performance evaluation, and turns to you for assistance. Mr. Bailey is only interested in evaluating operations at the profit center (division) level, and not at the cost center (department) level.

Mr. Bailey is considering temporarily using some of the staff from the Tax Division to assist the Audit Division during the upcoming busy audit season, and would like to evaluate the effect of this on net income. The Tax Division is estimated to have 800 hours of excess capacity.

The unit for determining sales revenue in both divisions is the "engagement", which means the total agreed-upon work for a given client in either audit or tax for a given year. The company charges on average a fee of $75,000 per audit engagement, and $15,750 per tax engagement.

The company has its own Payroll Office, which provides payroll services to both divisions and will allocate its total expenses to the two divisions as service department charges.

The following chart shows some basic data for the company:

Mr. Bailey would like you to start by analyzing the Payroll Office expenses, and allocating the total expenses to each division. He has decided to use the number of payroll checks as the activity base for the allocation.

Fill in the following blanks, allocating the total expense for the Payroll Office to each of the two divisions.

Mr. Bailey has prepared the following divisional income statement for you to review, assuming no transfer of excess capacity hours occurs. He has also included the total amounts for BOR CPAs, Inc. in the rightmost column.

Complete the following Income Statements with your data from the Payroll panel. Enter all amounts as positive numbers.

Mr. Bailey asks that you prepare Divisional Income Statements showing what 20Y1 results would have been had the Audit Division purchased all the excess capacity of the Tax Division, using a market transfer price. The divisional managers tell you that, with the excess capacity of the Tax Division of 800 hours, the Audit Division can perform 4 more audits during the year, and the Tax Division would charge the Audit Division the market rate of $110.00 per hour for the additional hours required, selling all its excess capacity to the Audit Division. The Tax Division would still be responsible for paying the salaries of their employees.

Complete the following Income Statements. Enter all amounts as positive numbers. If there is no amount or an amount is zero, enter “0”.

Mr. Bailey asks that you prepare Divisional Income Statements showing what 20Y1 results would have been had the Audit Division purchased all the excess capacity of the Tax Division, using a cost transfer price. The divisional managers tell you that, with the excess capacity of the Tax Division of 800 hours, the Audit Division can perform 4 more audits during the year, and the Audit Division would pay the Tax Division's internal hourly rate of $60.00 per hour for the additional hours required, with the Tax Division selling all its excess capacity to the Audit Division. The Tax Division would still be responsible for paying the salaries of their employees.

Complete the following Income Statements. Enter all amounts as positive numbers. If there is no amount or an amount is zero, enter “0”.

Penny's Pool Service & Supply, Inc. (PPSS) is completing the accounting process for the year just ended, December 31, 2015. The transactions during 2015 have been journalized and posted. The following data with respect to adjusting entries are available:

1. PPSS owed $7,500 wages to the office receptionist and three assistants for working the last 10 days in December. The employees will be paid in January 2016.

2.On October 1, 2015, PPSS received $24,000 from customers who prepaid pool cleaning service for one year beginning on November 1, 2015.

3.The company received a $520 utility bill for December utility usage. It will be paid in January 2016.

4.PPSS borrowed $30,000 from a local bank on May 1, 2015, signing a note with a 10 percent interest rate. The note and interest are due on May 1, 2016.

5.On December 31, 2015, PPSS cleaned and winterized a customer's pool for $800, but the service was not yet recorded on December 31.

6.On August 1, 2015, PPSS purchased a two-year insurance policy for $4,200, with coverage beginning on that date. The amount was recorded as Prepaid Insurance when paid.

7.On December 31, 2015, PPSS had $3,100 of pool cleaning supplies on hand. During 2015, PPSS purchased supplies costing $23,000 from Pool Corporation, Inc., and had $2,400 of supplies on hand on December 31, 2014.

8.PPSS estimated that depreciation on its buildings and equipment was $8,300 for the year.

9.At December 31, 2015, $110 of interest on investments was earned that will be received in 2016.

Required:   Prepare adjusting entries for Penny's Pool Service & Supply, Inc., on December 31, 2015.