The proportion of public accountants who have changed companies within the last three years is to be estimated within 4%. The 95% level of confidence is to be used. A study conducted several years ago revealed that the percent of public accountants changing companies within three years was 22. (Use z Distribution Table.) (Round the z-values to 2 decimal places. Round up your answers to the next whole number.)

a. To update this study, the files of how many public accountants should be studied?

b. How many public accountants should be contacted if no previous estimates of the population proportion are available?

1. Describe a Computer Operations internal control that you would implement to give you comfort that each of the following objectives is being met:

1. Controls provide reasonable assurance that data recorded, processed and reported remain complete, accurate and valid throughout the update and storage process.
2. Controls provide reasonable assurance that authorized programs are executed as planned and deviations from scheduled processing are identified and investigated, including controls over job scheduling, processing, error monitoring and system availability.
3. Controls provide reasonable assurance that any problems and/or incidents are properly responded to, recorded, resolved or investigated for proper resolution.

Task: You are employed to Peter Pan Ltd a company owned by Peter Pantry, a merchandiser involved in the business of selling baking utensils and equipment. On January 1st, 2018 you were appointed to the position of Chief Financial Officer which made you responsible for the maintenance of the company’s accounting records, internal control and preparation of the financial statements. The following trial balance was extracted from the books of Peter Pan Ltd, at June 30, the end of the company’s fiscal year.

Peter Pan Ltd Trial Balance as at June 30, 2018

The following additional information is available at June 30, 2018:

(i) Eight (8) months’ rent amounting to $280,000 was PAID IN ADVANCE on January 1, 2018

(ii) The Furniture and equipment is being depreciated over 10 years on the double-declining balance method of depreciation, down to a residue of $80,000.

(iii) Wages earned by employees NOT yet paid amounted to $35,000 at June 30, 2018.

(iv) A physical count of inventory at June 30, 2018, reveals $290,000 worth of inventory on hand.

(v) On January 1, 2018 the company received $260,000 IN ADVANCE for sales to be provided evenly from January 1, 2018, through October 31, 2018. None of the revenue from this client has been recorded.

(vi) The aging of the Accounts Receivable schedule at June 30, 2018 indicated that the Allowance for Bad-Debts should be $65,000.

Required:

a) Prepare the necessary adjusting journal entries on June 30, 2018. [Narrations are not required]

b) Prepare the company’s multiple-step income statement for the year ended June 30, 2018.

c) Prepare the company’s statement of owner’s equity for the year ended June 30, 2018.

d) Prepare the company’s classified balance sheet as at June 30, 2018.

Sherrod, Inc., reported pretax accounting income of $100 million for 2016. The following information relates to differences between pretax accounting income and taxable income:

Income from installment sales of properties included in pretax accounting income in 2018 exceeded that reported for tax purposes by $8 million. The installment receivable account at year-end had a balance of $10 million (representing portions of 2017 and 2018 installment sales), expected to be collected equally in 2019 and 2020.

Sherrod was assessed a penalty of $4 million by the Environmental Protection Agency for violation of a federal law in 2018. The fine is to be paid in equal amounts in 2018 and 2019.

Sherrod rents its operating facilities but owns one asset acquired in 2017 at a cost of $120 million. Depreciation is reported by the straight-line method assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight-line depreciation the first two years but less than straight-line depreciation the next two years ($ in millions):

Warranty expense of $7 million is reported in 2018. For tax purposes, the expense is deducted when costs are incurred, $4 million in 2018. At December 31, 2018, the warranty liability was $4 million (after adjusting entries). The balance was $1 million at the end of 2017.

In 2018, Sherrod accrued an expense and related liability for estimated paid future absences of $14 million relating to the company’s new paid vacation program. Future compensation will be deductible on the tax return when actually paid during the next two years ($9 million in 2019; $5 million in 2020).

During 2017, accounting income included an estimated loss of $4 million from having accrued a loss contingency. The loss is paid in 2018 at which time it is tax deductible.

Balances in the deferred tax asset and deferred tax liability accounts at January 1, 2018, were $2.0 million and $4.4 million, respectively. The enacted tax rate is 40% each year.

Required:
1. Determine the amounts necessary to record income taxes for 2018 and prepare the appropriate journal entry.
2. What is the 2018 net income?
3. Show how any deferred tax amounts should be classified and reported in the 2018 balance sheet.

Note: I nned help with number 3

Sassafras Yacht Corporation began operations on December 1, 2017. The company uses normal

costing as part of a job-order cost system. During December, the company purchased $75,000 of

direct material, and then used $60,000 of these direct materials to start Job 450. The company

charged total conversion costs of $80,000 (direct labor and overhead) to Job 450 during December.

As of the end of December Job 450 was not complete. There was no underapplied or overapplied

overhead for December.

The company charges overhead to jobs using direct labor HOURS (careful!). The estimated direct

labor hours for 2018 are 25,000 hours and the estimated overhead cost for 2018 is $600,000. During

2018, the following transactions occurred.

1.

There were 5 jobs that had work completed on them in 2018. Some of the data for these jobs

are shown below:

Job 450

Job 500

Job 550

Job 600

Job 650

Direct Material Cost

$8,000

$60,000

$80,000

$20,000

$12,000

Direct Labor

Hours

5,000 hrs.

6,000 hrs.

10,000 hrs. 2,000 hrs.

3,000 hrs.

2.

The Direct Labor Rate for 2018 is $40 per hour.

3.

The company purchased $200,000 of direct materials.

4.

At the end of 2018, the jobs that were not finished were Jobs 600 and 650. Job 450 consisted

of 5,000 units of which 4,200 sold in 2018 at a selling price of $200 each. Job 550 consisted of

15,000 units of which 10,000 sold in 2018 at a selling price of $100 each. Job 500 consisted of

10,000 units, none of which sold at the end of 2018.

5.

Other costs incurred during 2018 include the following:

Advertising Expense

$125,000

Indirect Labor

$275,000

Maintenance- Factory

$ 75,000

Factory Insurance

$ 45,000

Administrative Expense

$450,000

Corporate General Expenses

$150,000

Depreciation- Factory

$60,000

F.G. Warehouse Depreciation

$ 40,000

Utilities- Factory

$110,000

Miscellaneous Overhead

$ 60,000

Selling Expense

$200,000

Indirect Materials

$ 75,000

Your Task:

A.

Prepare, in good form, a Schedule of Cost of Goods Manufactured for 2018.

B.

Add up the total costs of Jobs A, B and C. Does this total equal your Cost of Goods

Manufactured from Part A? Should it?

C.

Compute the underapplied or overapplied overhead for 2018. Is it under or overapplied?

D.

Assume that any underapplied or overapplied overhead is closed totally to Cost of Goods Sold

at the end of 2018. Prepare, in good form, an Income Statement for 2018.

In April of 2015, the FASB issued an Exposure Draft related to financial reporting of not-for-profit organizations. As a result of feedback received from constituents, the FASB decided to divide the proposed update to not-for-profit financial reporting into two phases. Phase one was completed and resulted in Accounting Standard Update (ASU) 2016-14, Presentation of Financial Statements of Not-For-Profit Entities. Phase two considers whether a measure of operations should be required, and, if so, how it should be measured. At the FASB board meeting on May 29, 2013, the FASB tentatively decided to define an operating measure on the basis of two key dimensions: (1) whether resources are from or used to carry out the mission of the organization and (2) whether resources are available for use in the current period. As this textbook goes to press, the FASB has not yet begun to redeliberate phase two.

Required:

a. Research the current status of phase two of the FASB project. (Hint: The FASB website is www.fasb.org. However, you may wish to also search for other current articles about the project.) Write a summary of the project status to date. Has the FASB deliberated on phase two? If so, what is the status of those deliberations?

b. In addition to the operating measure component of phase two of the project, there were two other project objectives. Identify the objectives and discuss what, if any, proposals are being considered as part of these objectives.

c. After having performed this research, what is your opinion? Do you believe the proposed changes will, in fact, improve financial reporting? Explain the rationale for the position you take.

Wesson United is considering updating its equipment to meet increased demand for its product. The cost of the equipment update is $380,000, plus $20,000 in installation costs. Due to the increased sales, there will be an additional $40,000 working capital needed. The company will depreciate the equipment to zero over its 5 year life using a straight-line depreciation method. Additional sales revenue from the modifications should amount of $220,000 per year, and additional operating expenses and other costs (excluding depreciation) will amount to 35% of the additional sales. The company has an ordinary tax rate of 30%. Wesson’s market value balance sheet shows a capital structure of 60% debt and 40% ordinary shares. The firm expects to maintain this debt equity mix. Its outstanding bonds offer investors a 5.4% yield to maturity. The risk-free rate currently equals 5%, and the expected risk premium on the market portfolio equals 6%. Wesson’s ordinary equity beta is 1.5.

a) What is Wesson company’s required return on equity?                        

b) What opportunity cost of capital should Wesson Company use to evaluate the above project?

c) What incremental operating cash flows will result if Wesson updates its equipment?

i) at time zero

ii) each of years 1-4 of the project

iii) at the end of the project (year 5)

d) What is the value (NPV) of this project?

e) Should Wesson update the equipment? Why or why not?

A company acquires a(n) ____ to reimburse the company in the event of an employee fraud.

(2pts)

indemnity contract

fraud option contract

defalcation policy

fidelity bond

None of the above

32)

Pick and pack is a step in the

(2pts)

order-to-cash process

pay-to-play process

general ledger process

purchase-to-pay process

All of the above

None of the above

33)

Assuring that cash collections recorded in the cash receipts event data are credited to the right customer in the accounts receivable master data addresses the control goal of:

(2pts)

ensure input completeness

ensure update completeness

ensure update accuracy

ensure input accuracy

All of the above

None of the above

34)

When prenumbered documents are used in random order in a batch data entry process, a ______ would likely be used at the start of the batch processing run as a check for omitted documents.

(2pts)

confirm input acceptance check

key verification check

hash total check

cumulative sequence check

All of the above

None of the above

35)

Establishing a viable internal control system is primarily the responsibility of _____.

(2pts)

the external auditors

government authorities

the internal auditors

programmers

All of the above

None of the above

36)

A warehouse supervisor prepares a sales order listing items to be shipped to a customer and then signs it approving the removal of the items from the warehouse. The supervisor is performing which functions?

(2pts)

authorizing and executing events

executing and recording events

authorizing events and safeguarding of resources

authorizing and recording events

All of the above

None of the above

Create in raptor

In this progress report, you will be focusing on setting up accounts for multiple users. You will include defensive programming and error checking to ensure your program functions like an ATM machine would. The account details for your customers are as follows:

Customer UserName Pass Savings Checking

Rober Brown rbrown blue123 2500.00 35.00

Lisa White lwhite Red456 500.00 1250.00

Mark Black mblack Green789 750.00 200.00

For this progress report, update the Progress Report 4 Raptor program to allow one of the above users at a time to safely log in to their account, complete a maximum of 3 transactions, and end the program. Three incorrect attempts at entering the user name and password will end the program. Allow the user to make up to a maximum of 3 transactions at a time. After 3 transactions, the program will terminate. After a transaction is completed, the program will update the running balance and give the customer a detailed description of the transaction. A customer cannot overdraft on their account; if they try to withdraw more money than there is, a warning will be given to the customer. Also note that the ATM doesn’t distribute or collect coins – all monetary values are in whole dollars (e.g. an integer is an acceptable variable type). Any incorrect transaction types will display an appropriate message and count as a transaction.

1 – Deposit (adding money to the account)

2 – Withdrawal (removing money from the account)

3 – Balance Inquiry (check current balance)

4 – Transfer Balance (transfer balance from one account to another)

5 – Log Out (exits/ends the program)