The balance sheet for Garcon Inc. at the end of the current fiscal year indicated the following:

Income before income tax was $365,400, and income taxes were $54,000, for the current year. Cash dividends paid on common stock during the current year totaled $79,407. The common stock was selling for $18 per share at the end of the year.

Determine each of the following. Round answers to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers for subsequent requirements, if required.

You are the field manager on the audit of Hotshot Ltd for the year ended 30 September 2015. You have asked Michelle Psi, a new audit analyst to assist you and you are busy ensuring that she has a proper understanding of the work to be done before she starts. Consider the following procedures, which are included in the audit programmes:

1. Vouch a sample of sales transactions recorded in the sales journal to ensure that they have been appropriately authorised in terms of credit terms and policies.

2. Inspect minutes and contracts for evidence of any assignment, pledges, factoring or other liens over debtors.

3. Enquire of client personnel whether sales invoices are independently checked to ensure that Price x Quantity calculations are correct.

4. Select a sample of sales invoices and trace these to the sales journal.

5. Use Generalised Audit Software to scan the client’s computerised accounting records for 2015 for any transactions which have a date of 1 October 2015 or later.

6. Check the results of the Integrated Test Facility (ITF) report to identify whether unauthorised journal entries writing off debtors were processed or were rejected by the client’s computerised accounting system.

Required: For each of the procedures above:

a) Identify whether it is a Test of control OR Substantive test.

b) Identify one assertion (for each procedure) that will be tested.

c) Identify a potential misstatement that could occur (i.e. if the procedure yielded unsatisfactory evidence, explain how the accounts concerned could be misstated)

Please do not copy & paste others' wrong answer. Thanks

One year consumers spent an average of ​$22 on a meal at a restaurant. Assume that the amount spent on a restaurant meal is normally distributed and that the standard deviation is ​$4 Complete parts​ (a) through​ (c) below.

a. What is the probability that a randomly selected person spent more than $24

b. What is the probability that a randomly selected person spent between $12 and $19

c. Middle 95% of the amounts of cash spent will fall between X = $___ and X = $___

1. Assume that the functional form for new homes in a community each year is as follows:

Q_d = 1025 – (10*P) + (3*P_e) + (.25*P_r) + (8*Y) + (25*F) - (.75*T)

            And take the following values as constant:

                        P_e = 100 (in thousands of $)

                        P_r = 700 (in dollars per month)

                        Y = 45 (in thousands of $ per year)

                        F = 2.8 (in persons per household)

                        T = 120 (in $ of tax per home per year)

(The demand equation requires variables in the units mentioned for each of the five variables)

Solve for the reduced form linear demand function.

2. Turning to supply, assume that the price of new housing (P), the price of building materials (P_m), the wages of construction workers (W), the price of undeveloped land (P_u), and the level of impact fees they must pay to build a new house (IF) all affect the amount firms are willing to supply new homes. Take the specific functional form to be:

Q_s = 100 + (12*P) – (8*P_m) – (20*W) – (8*P_u) – (10*IF)

And take the following values as constant and given:

P_m = 30 (in thousands of $ per house)

W = 18 (in $ per hour)

P_u = 15 (in thousands of $ per lot)

IF = 4 (in thousands of $ per new house)

(The supply equation requires variables in the units mentioned for each of the four variables)

Solve for the reduced form linear supply function.

3. Using the reduced form Linear Demand & Supply functions you found in problems 1 & 2, solve for the equilibrium price (P) and quantity (Q) in this market. If either does not turn out to be an integer, please round to one decimal point.

4. Mathematically derive an equation that shows how the price of new homes (P) varies with the price of existing homes (P_e). Assume all variables other than P_e are held constant at the values given in problems 1 & 2.

The net changes in the balance sheet accounts of KMD, Inc. for the year 2018 are shown below:

                  Account                                                                          Debit                         Credit    

Cash                                                                                              $   130,000

Accounts receivable                                                                                                      $     14,000

Allowance for doubtful accounts                                                           4,000                                

Inventory                                                                                              80,000

Prepaid expenses                                                                                10,000

Held-to-Maturity Securities                                                                                                 100,000

Available-for-Sale Securities                                                             300,000

Equipment                                                                                         700,000                                

Accumulated depreciation:

         Equipment                                                                                            0                               0

Goodwill                                                                                                                                10,000

Accounts payable                                                                                                               105,000

Notes payable                                                                                                                     325,000

Common stock                                                                                                                    100,000

Additional paid-in capital—common                                                                                   120,000

Retained earnings                                                                        _________                    450,000

                                                                                                      $1,224,000               $1,224,000

Additional information:

    1. Net income for 2018 was $690,000

    2. cash dividends declared/paid $240,000

    3. Equipment costing $400,000 with a book value of $150,000 was sold for $150,000

    4. Held-to-Maturity (HTM) stock sold for $135,000. There were no other HTM transactions

    5. 10,000 Shares of Common Stock were issued for $22/share.

Instructions

Prepare a statement of cash flows (indirect method). Ignore tax effects. Use the format provided on next page. Please attach your supporting calculations or spreadsheets.

a. Prepare the amortization schedule for a thirty-year loan of $100,000. The APR is 3% and the loan calls for equal monthly payments. The following table shows how you should prepare the amortization schedule for the loan. Month Beginning Balance Total Payment Interest Payment Principal Payment Ending Balance 1 $100,000.00

b. Use the annuity formula to find how much principal you still owe to the bank at the end of the third year. Check that this value is the same you have in your amortization schedule.

c. Suppose that in the beginning of the first month of the fourth year the interest rate decreased to 2%. Modify the amortization schedule in order to consider this change in the interest rate (you should change the values in your schedule that occur after the first month of the fourth year, not the ones before this date).

d. Use the annuity formula to find how much principal you still owe to the bank at the end of the fifth year. Check that this value is the same you have in your amortization schedule.

e. Suppose that in beginning of the first month of the fourth year (month 37) you are able to refinance your mortgage at the rate of 3%. Assume that there is no change in the time scheduled to pay the mortgage. If the cost of refinancing is $1,100, should your refinance your mortgage at the new rate of 2%, or keep the initial rate of 3%?

f. You are planning to sell you current house and buy a bigger one sometime in the future, at which point you will pay off your mortgage. For how long will you stay in your current house to be worth the refinancing described in the previous question?

g. Suppose that at the end of the seventh year you earned an unexpected amount of money (for example from your end of year bonus at work) and decided to pay a non-scheduled payment of $5,000 of the principal of the loan. You will keep paying the same monthly total payment that you were paying in the previous months. How can you change your amortization schedule, considering that you will keep paying the same total monthly amount? Prepare a new amortization schedule that accounts for these changes.

A couple will retire in 40 years; they plan to spend about $35,000 a year in retirement, which should last about 20 years. They believe that they can earn 9% interest on retirement savings.

a. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Annual Savings =

b. How would the answer to part (a) change if the couple also realize that in 15 years they will need to spend $65,000 on their child’s college education? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Annual Savings =

A security is expected to pay a dividend of $2.50 next year. In addition, dividends are expected to grow at 4% per annum and investors have a 12% required rate of return. a. What will the dividends be in each year for the next 200 years? Set this up on an excel spreadsheet with the years going down a column using Excel. What is the present value of the above dividend stream ?  What is the sum of the dividends expected to be paid?

A restaurant in London is in its first 12 months of business. The year was somewhat successful, with the owner averaging $1,000 net profit per month after all deductions and expenses. However, he is unhappy with the amount of time it has been taking staff to provide customer service (measured from the time the customer enters to the moment they leave with their food). The restaurant design team was convinced that the restaurant’s design would allow for an average delivery time of approximately 7 minutes. As the owner was concerned they might not be hitting the mark, the design team asked a consultant to conduct a small study to examine customer service delivery time. A sample of 20 restaurant customers was selected, and the delivery time was recorded to the nearest minute.

Minutes:

5, 6, 7, 10, 6, 4, 7, 6, 8, 5, 11, 8, 7, 9, 7, 8, 8, 7, 9, 3

(A) Does the empirical evidence suggest that it takes significantly longer on average to service customers than the 7 minutes anticipated by the design team? Construct a 90% confidence interval a estimate of the average customer service delivery time at this restaurant. Interpret the meaning of the interval. Ensure that the interpretation of the results addresses the owner’s concerns. Please use clear, easy-to-understand, non-technical language.

(B) How would the consultant explain what they did in (A) to the restaurant’s design team - if they do not understand technical statistical language, and you have to explain in an easy-to-understand way?

You are on the police force in a small town. During an election year, a candidate for mayor claims that fewer police are needed because the average police officer makes only four arrests per year. You think the population mean is much higher than that, so you conduct a small research project. You ask 12 other officers how many arrests they made in the past year. The average for this sample of 12 is 6.3, with a standard deviation of 1.5. With your sample evidence, test the null hypothesis that the population mean is four arrests against the alternative that it is greater than four. Set your alpha level at .01.