Use Worksheet 9.2. Ben West, a 35-year-old computer programmer, earns $57,000 a year. His monthly take-home pay is $3,000. His wife, Ashley, works part-time at their children's elementary school but receives no benefits. Under state law, Ashley's employer contributes to a workers' compensation insurance fund that would provide $2,050 per month for six months if Ben were disabled and unable to work.

1. Use Worksheet 9.2 to calculate Ben's disability insurance needs assuming that he won't qualify for Medicare under his Social Security benefits. Round your answer to the nearest whole.
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2. Based on your answer in part a, what would you advise Ben about his need for additional disability income insurance? Discuss the type and size of disability income insurance coverage he should consider, including possible provisions he might want to include. What other factors should he take into account if he decides to purchase a policy?
   

Some studies show that people who think they are intoxicated will show signs of intoxication, even if they did not consume alcohol. To test whether this is true, researchers had a group of five adults consume nonalcoholic drinks, which they were told contained alcohol. The participants completed a standard driving test before drinking and then after one nonalcoholic drink and after five nonalcoholic drinks. A standard driving test was conducted in a school parking lot where the participants had to maneuver through traffic cones. The number of cones knocked over during each test was recorded. The following table lists the data for this hypothetical study. Driving Test Before Drinking After One Drink After Five Drinks 0 0 3 0 2 2 1 3 3 3 3 5 0 1 0 (a) Complete the F-table. (Round your answers to two decimal places.) Source of Variation SS df MS Fobt Between groups Changed: Your submitted answer was incorrect. Your current answer has not been submitted. Correct: Your answer is correct. Between persons Correct: Your answer is correct. Correct: Your answer is correct. Within groups (error) Incorrect: Your answer is incorrect. Correct: Your answer is correct. Total Incorrect: Your answer is incorrect. Correct: Your answer is correct. (b) Compute a Bonferroni procedure and interpret the results. (Assume experimentwise alpha equal to 0.05. Select all that apply.) Students knocked over significantly more cones after 1 nonalcoholic drink compared with the driving test prior to drinking. Students knocked over significantly more cones after 5 nonalcoholic drinks compared with the driving test after 1 nonalcoholic drink. Students knocked over significantly more cones after 5 nonalcoholic drinks compared with the driving test prior to drinking. There were no significant differences between any of the groups.

Some studies show that people who think they are intoxicated will show signs of intoxication, even if they did not consume alcohol. To test whether this is true, researchers had a group of five adults consume nonalcoholic drinks, which they were told contained alcohol. The participants completed a standard driving test before drinking and then after one nonalcoholic drink and after five nonalcoholic drinks. A standard driving test was conducted in a school parking lot where the participants had to maneuver through traffic cones. The number of cones knocked over during each test was recorded. The following table lists the data for this hypothetical study. Driving Test Before Drinking After One Drink After Five Drinks 0 0 3 0 2 2 1 3 3 3 3 5 0 1 0 (a) Complete the F-table. (Round your answers to two decimal places.) Source of Variation SS df MS Fobt Between groups Changed: Your submitted answer was incorrect. Your current answer has not been submitted. Correct: Your answer is correct. Between persons Correct: Your answer is correct. Correct: Your answer is correct. Within groups (error) Incorrect: Your answer is incorrect. Correct: Your answer is correct. Total Incorrect: Your answer is incorrect. Correct: Your answer is correct. (b) Compute a Bonferroni procedure and interpret the results. (Assume experimentwise alpha equal to 0.05. Select all that apply.) Students knocked over significantly more cones after 1 nonalcoholic drink compared with the driving test prior to drinking. Students knocked over significantly more cones after 5 nonalcoholic drinks compared with the driving test after 1 nonalcoholic drink. Students knocked over significantly more cones after 5 nonalcoholic drinks compared with the driving test prior to drinking. There were no significant differences between any of the groups.

5a) If MSG Corporation issued $102,000 of 3-year, 7% bonds outstanding on December 31, 2020 for $106,000. The bonds pay interest annually and MSG uses straight-line amortization. On May 1, 2021, $10,200 of the bonds were retired at 120. As a result of the retirement, MSG will report: (Do not round intermediate calculations and round final answer to nearest whole dollar.)

Multiple Choice

• a $1,640 loss.

• a $1,684 loss.

• a $3,280 loss.

• a $3,280 gain.

5b) But then on January 1, 2021, MSG Corporation had outstanding $1,000,000 of 8% bonds with a book value of $967,500. The indenture specified a call price of $984,000. The bonds were issued previously at a price to yield 10% and interest payable semi-annually on July 1 and January 1. MSG Corporation called the bonds (retired them) on July 1, 2021. What is the amount of the loss on early extinguishment?

Multiple Choice

• $0.

• $7,778.

• $8,125.

• $8,375.

5c) Now supposed that on January 1, 2016, MSG Corporation issued 3,400 of its 9%, $1,000 bonds for $3,500,000. These bonds were to mature on January 1, 2026, but were callable at 101 any time after December 31, 2019. Interest was payable semiannually on July 1 and January 1. On July 1, 2021, MSG Corporation called all of the bonds and retired them. The bond premium was amortized on a straight-line basis. Before income taxes, MSG Corporation's gain or loss in 2021 on this early extinguishment of debt was:

Multiple Choice

• $34,000 loss.

• $84,000 gain.

• $11,000 gain.

• $21,000 gain.

Horizon Corporation manufactures personal computers. The company began operations in 2012 and reported profits for the years 2012 through 2019. Due primarily to increased competition and price slashing in the industry, 2020's income statement reported a loss of $20 million. Just before the end of the 2021 fiscal year, a memo from the company's chief financial office (CFO) to Jim Filed, the company controller, included the following comments.

If we don't do something about the large amount of unsold computers already manufactured, our auditors will require us to record a write-down. The resulting loss for 2021 will cause a violation of our debt covenants and force the company into bankruptcy. I suggest that you ship half of our inventory to J.B.Sales, Inc., in Oklahoma City. I know the company's president, and he will accept the inventory and acknowledge the shipment as a purchase. We can record the sale in 2021which will boost our loss to a profit. Then J.B. Sales will simply return the inventory in 2022 after the financial statements have been issued.

Answer the following questions (either with a video or written).

1. What is the effect of this transaction, requested by the CFO, on net income?

2. If Jim does not record the sales transaction requested by the CFO, what is the effect on total assets and net income of the inventory write-down?

3. Are investors and creditors potentially harmed by the CFO's suggestion?

4. should Jim follow the CFO's suggestion? Support your answer with accounting.

Fellowes and Associates Chartered Professional Accountants is a successful mid-tier accounting firm with a large range of clients across Canada. During 2020, Fellowes and Associates gained a new client, Health Care Holdings Group (HCHG), which owns 100 percent of the following entities:
• Shady Oaks Centre, a private treatment centre
• Gardens Nursing Home Ltd., a private nursing home
• Total Laser Care Limited, a private clinic that specializes in laser treatment of skin defects.

Year end for all HCHG entities is June 30.

The audit partner for the audit of HCHG, Tania Fellowes, has discovered that two months before the end of the financial year, one of the senior nursing officers at Gardens Nursing Home was dismissed. Her employment was terminated after it was discovered that she had worked in collusion with a number of patients to reduce their fees. The nurse would then take secret payments from the patients.

The nursing officer had access to the patient database. While she was only supposed to update room-location changes for patients, she was able to reduce the patients’ period of stay and the value of other services provided. The fraud was detected by a fellow employee who overheard the nurse discussing the “scam” with a patient. The employee reported the matter to Gardens Nursing Home’s general manager.

A) Which accounts on the balance sheet and income statement are potentially affected by the fraud?

Revenue is overstated

Revenue is understated

Accounts receivable may be understated

Accounts receivable may be overstated

Cost of goods sold is understated

Room expenses may be understated

Use the following information to answer question 1) A-F. Assume today is 12/27/2016. An assistant portfolio manager reviewed the prospectus of a General Electric Corporate (US) bond that will be issued on January 15 of 2017. The Offering Price is 104.50. The call schedule for this $200 million, 5.75% coupon 20-year issue specifies the following:

The Bonds will be redeemable at the option of the Company at any time in whole or in part, upon not fewer than 30 nor more than 60 days’ notice, at the following redemption prices (which are expressed in percentages of principal amount) in each case together with accrued interest to the date fixed for redemption:

If redeemed January 15,

Sinking Fund: The prospectus further specifies that:

The Company will provide for the retirement by redemption of $40 million of the principal amount of the Bonds each January 15th of the years 2032 to and including 2036 at the principal amount thereof (100%), together with accrued interest to the date of redemption.

The assistant portfolio manager made the following statement to a client after reviewing this bond issue. Comment on the statement. (When answering this question, remember that the assistant portfolio manager is responding to statements just before the bond is issued in 2017.)

Answer the following as of issue date: 1/15/2017.

2. What is the bond’s current yield?
3. What is the bond’s yield to maturity?
4. What is bond’s yield to first call?
5. What is bond’s yield to first sink?
6. What is yield to the 2031 call?

SCENARIO-1

ZED plc, a Construction company underwent a major restructuring with new management takeover. The old CFO Mr. John was terminated after the company found a lot of cash embezzlement and forgery work in accounts and invoice payments. Mr. John who was with the company for 15 years had the full authorization power in the company as most of the transactions were routed through his personal account.

The new management was headed by Mr. Fahad. Mr. Fahad noticed that the books and records for the last 8 months were incomplete, cheques to suppliers had got dishonored and the company could not keep track of cash movement.

The new management now wants to get things right and bring in proper control measures. The first initiative taken was to update its accounting records. ZED plc needs to get an immediate review done by their auditor MARKERS & Co. as part of takeover procedure and to submit the audit report to the bank.

Question 1: - (based on Scenario 1) “One of the good management principles is to have a sound Internal control system.” Comment on the failures in internal control system in ZED plc. before takeover and suggest areas of improvement in having a sound internal control system. Page 5 of 6 Assignment /summer/2020

Question 2: -( based on Scenario 1) “Auditors should maintain their fundamental principles in all their audit work while dealing with the client. “ Explain the principles and ethical conduct, that MARKERS & CO should follow in this case, while doing the review work of ZED plc.

What are the different ways of classifying hospitals? Affordable Care Act closed the door on future physician-owned hospitals effective January 2011 if they want to participate in Medicare.  Do you think this is a good restriction? Why or why not?