Stadium Manufacturing has the following data available for its September 30, 2011, payroll:

Wages earned $315,000

Income Taxes withheld 79,900

Wages earned are subject to Social Security and Medicare matching and withholding of 6.2 percent and 1.45 percent.

Federal unemployment taxes of 0.80 percent and state unemployment taxes of 1.20 percent are payable on $295,312.50 of the wages earned.

Compute the amounts of taxes payable and the amount of wages that will be paid to employees. Then prepare the journal entries to record the wages earned and the payroll taxes. (Round to the nearest penny)

Elatrip Company provides package tours for customers. The following transactions were completed by the company during September 2019.

Sept 1   Shareholders invested $ 500,000 into the business in exchange for ordinary shares.

Sept 2   Purchased $600 worth of office supplies for cash.

Sept 4   Purchased furniture from Damro Company for $5,000 and issued a 90 day, 8% promissory note.

Sept 7   Purchased equipment for $800 and postponed payment until September 28.

Sept 11 Earned revenue of $4,000, of which $3,000 is collected in cash and the balance is due on September 18.

Sept 13 Purchased a commuter van for $100,000. Elatrip paid $60,000 in cash and signed a 6 month, 7% promissory note for the balance due.

Sept 15 Company received $2,000 cash in advance for the service to be rendered on October 5.

Sept 16 Paid $6,000 rent for 2 months. (October and November 2017)

Sept 18 Collected the balance due from September 11.

Sept 20 Performed services for $ 5,000 and received a one month, 9% promissory note from customer.

Sept 25 Incurred $1,000 for repair and maintenance cost and the company issued a check for the amount.

Sept 27 A $800 bill was received for electricity and water expense for the month. The entire amount is due on October 1.

Sept 28 Company paid the balance due from September 7.

Sept 30 Paid $2,000 for employees’ salaries.

The company uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 113 Notes receivable, No. 124 Office supplies, 136 Prepaid rent, No.140 Furniture, No 145 Equipment, No 156 Commuter van, No 201 Accounts payable, No 211 Notes payable, No 220 Unearned service revenue, No 311 Share capital- ordinary, No 400 Service revenue, No 726 Repair and maintenance expense, No 735 Utilities expense, No 738 Salaries expense.

1)JOURNALIZE

International Trade

The Director of Purchasing for parts distribution company wants to purchase steel coach screws from Germany; however, he is not sure what the best option is. The director comes to you and asks your opinion. You know that Germany, Canada, and Korea are the best sources for obtaining this product. While your research shows coach screws from Germany are of the highest quality, the United States imposes a tariff of 12.5%, which makes this option noncompetitive.

Which US trade laws should you consider when selecting a country?

Is there any way by which you can seek a reduction on the tariff? If so, how? If not, why?

Select an alternative country (Canada or Korea) for purchasing the coach screws and explain your reasons for selecting the country.

In December 2012, the FASB issued a proposed Accounting Standai·ds Update (i.e., an Exposure Draft), Financial Instruments-Credit Losses (Subtopic 825-15) and solicited constituent feedback. Locate this proposed standard.

1. Read the summary section of this proposed standard. What change in accounting does this exposure draft propose?

2. Look for comment letters related to this exposure draft. From fasb.org, navigate to Projects, then Comment Letters. Under "Accounting for Financial Instrnments," locate this topic, then click on the link to view comment letters. Next:

a. Locate a comment letter that looks interesting to you. What company or individual wrote the letter, and what is their perspective in writing this letter (i.e., are they writing from the perspective of a financial statement user, preparer, etc.)?

b. What aspects of the proposed standard does the commenter support?

c. What concerns does the commenter raise regai·ding the proposed standard?

. How would you expect a company (preparer) might react to this proposed standard compared to how a banker (investor) might react? Explain.

Millennium University College has engaged Messrs Wilkado Construction Limited to construct a thousand bed hostel facility. As an underwriter with All Peoples Insurance Company Limited, identify the specific insurance policy for the project, list and explain the constituent parts of the policy (i.e. policy structure), discuss the main areas (items or activities) of this project which could be covered under the policy, the perils or (indemnifiable causes of loss); including five exclusions usually included in such policies.

a. What is a warranty, as used in a fire policy? Give an example.

2. Explain the roles of people and information technology in providing quality service. How does the Ritz carlton Hotel Group use employees and information technology for quality service? Give examples.

3. Discuss how either good or poor quality affects you personally as a consumer. Describe experiences in which your expectations were a. Met b. Exceeded c. Not met. Did your experience change your regard for the organization and/or its products? Explain how.

4. High quality is not necessarily related to price. Drawing from your own knowledge and experience, provide examples where this a. May or b. May not be true.

5. Choose a product or service to illustrate in detail how several definitions of quality can apply simultaneously.

6. How can you internalize and practice quality at a personal level in your daily activities. Dive detailed examples.

7. Why should a company make it easy for customers to complain? Use an example that you personally experienced to describe in detail the features of an effective complaint Management process.

8. Many organizations, such as banks, cellphone providers and cable/satellite TV providers, offer significant incentives to attract new customers. However, existing customers rarely receive incentives to stay. Have you encountered any of these practices in your personal life? What are the implications, pro and con, of them? Give details.

9. Design a customer satisfaction questionnaire for high school students and their parents who take a campus visit and are considering applying to a university.

10. How should teams deal with slackers? How would you deal with them in the context of a student project team? Give details

On December 16th, 2015, FED decided to raise first time the record low target rate of federal reserve fund from 1/4% to 1/2%.

On December 14th, 2016, Fed decided to raise the second time the federal fund rate from 1/2% to 3/4%.

On March 15th, 2017, Fed decided to raise the federal fund rate from 3/4% to 1%.

On June 14th, 2017, Fed decided to raise the federal fund rate from 1% to 1.25%.

On December 13th, 2017, Fed decided to raise the federal fund rate from 1.25% to 1.5%.

On March 21st, 2018, Fed decided to raise the federal fund rate from 1.5% to 1.75%.

On June 13th, 2018, Fed decided to raise the federal fund rate from 1.75% to 2%.

On September 26th, 2018, Fed decided to raise the federal fund rate from 2% to 2.25%.

On December 19th, 2018, Fed decided to raise the federal fund rate from 2.25% to 2.5%.

On July 31st, 2019, Fed decided to cut the federal fund rate from 2.5% to 2.25%.

On September 18th, 2019, Fed decided to cut the federal fund rate from 2.25% to 2%.

On October 30th, 2019, Fed decided to cut the federal fund rate from 2% to 1.75%.

Fed agrees that economic recovery is sound, Also Fed feels that the job market is strengthening, but the long term inflation signs still stabilized. Now Fed feel it is not necessary to maintain such accommodating easy monetary policy including very low interest rate until unemployment improves further and inflation rate goes up to 2.0%.

Fed decided that the size of the mortgage bond purchase as QE policy was winding down on October 2014 as the economy continues to improve.

The future rate hike will be gradual, depending upon the upcoming economic indicators.

1) What's your opinion about the Fed policy decision by next FOMC meeting?

2) Do you feel that this near-zero interest was a necessary one, or may not work to save declining economy, due to liquidity trap? or can we be back in double-dip recession due to too early exit strategy by the FED's tight monetary policy?

3) Are you concerned about the inflation come back due to such easy monetary policy with zero interest rate for long time? if so, how fast is the Fed supposed to tighten its monetary policy as an normalizing strategy?

4) Will the new president's proposal of spending increase on infrastructure and defense as well as tax cut on corporate income tax and individual income tax may overheat US economy to be inflationary? if so, will it cause Fed to speed up the rate hike? If Tariff over trade and possible retaliation could be inflationary, does it give another incentive for Fed to speed the rate hike?

5) Is there any risk that tight Fed policy may put the US economy back into another recession, if tight Fed policy is ahead of curve , although it is gradual tightening? Do you think the US will be in recession the next year(Year 2020)? Yes or No. Can You predict how many times Fed will raise FFR(federal fund rate) this year? or how many times FED will cut FFR due to trade issues and global slowdown?

FIN 610 - Practice Questions - Week 1

You have recently been hired by the Treasury department of the firm QLogic. The Controller of QLogic showed you the most recent draft financial statements (Balance Sheet, Income Statement, and Statement of Cash Flows). He admitted that major transactions had not been entered. Your task is to correct the financial statements. Apparently, the following three events were missed when preparing the financial statements:

1) An accident at a plant caused damage to machinery that was not currently in use and which was not repaired. However, the book value of Property, Plant, and Equipment (PP&E) decreased by $7 million as a result.

2) QLogic sold inventory for $5.2 million cash. The inventory had a book value of $3 million.

3) QLogic used Cash of $8 million to pay off a part of its Long Term Debt.

There are no taxes.

Question: The following items may change but other items do not change when you correct the financial statements. You should explain by what amount the following items change or do they remain unchanged?

1) Accounts Payable, Accounts Receivable, PP&E, Assets (sum of the left side of the B/S), Liabilities and Owners' Equity (sum of the right side of the B/S), Retained Earnings, Net Income, and Cash Flows from Operations.

2) PP&E, Cash (item on the left side of the B/S), Inventory, Assets (sum of the left side of the B/S), Liabilities and Owners' Equity (sum of the right side of the B/S), Retained Earnings, Net Income, Cash Flows from Operations, Cash Flows from Investing Activities, and Net Sales.

3) PP&E, Cash (item on the left side of the B/S), Assets (sum of the left side of the B/S), Liabilities and Owners' Equity (sum of the right side of the B/S), Retained Earnings, Long Term Debt, Net Income, Cash Flows from Operations, Cash Flows from Financing Activities, and Net Sales.

Additional information:

Sometimes students ask whether they have to prepare (or even need) the entire financial statements, and the answer is no. You just have to find the changes to the financial statements due to individual transactions.

For example, suppose you have the completed financial statements ready and then a colleague comes and says “There was a transaction I forgot to tell you about. There were ten units of our product in inventory priced at $1,000 that we sold for $1,200 cash. The cost of transporting the product to the customer was $50 (borne by us), but we haven’t paid the transportation company as yet.”

So how would the above change the financial statements.

1) In the left side of the Balance Sheet, you would have Cash increase by $1,200 and Inventory go down by $1,000. So total Assets would increase by $200.

2) The entire transaction created a net profit of $1,200 - $1,000 - $50 = $150. So in the Income Statement you would have Net Income increase by $150. This would imply that in the Balance Sheet you would have an increase of $150 in Retained Earnings.

3) In the Cash Flows statement “Cash Flows from Operations” would increase by $1,200. The net increase in cash would also by $1,200 (as the transportation company hasn’t been paid yet). So in the Balance Sheet you would have an increase of $1,200 in Cash.

4) Come back to the Balance Sheet, on the right side you would have an increase in Retained Earnings of $150. However, as the left side has increased by $200, there must be something else that happens to the right side to restore balance. The last item to change would be Accounts Payable, which would increase by $50 (money owed to transportation company).

As you can see from the above example, you don’t need the entire financial statements to calculate changes due to individual transactions.