1) Process Solutions Company received $193 from a charge customer which was recorded and posted as $391. The journal entry to correct the error is:

a) a credit to Cash for $198 and a debit to Accounts Payable for $198.

b) a debit to Cash for $391 and a credit to Accounts Receivable for $391.

c) a credit to Cash for $198 and a debit to Income from Services for $198.

d) a debit to Cash for $193 and a credit to Accounts Payable for $193.

e) a debit to Accounts Receivable for $198 and a credit to Cash for $198.

2) Lohan Company had the following account balances as of June 30.

Cash $29,000
Equipment $15,000
Accounts Payable $2,800
T. Lohan, Capital $62,700
T. Lohan, Drawing $5,000
Income from Services $35,000
Rent Expense $12,000
Salaries Expense $8,000

What is the debit balance of the trial balance?

a) $141,700

b) $136,700

c) $69,000

d) $64,000

3) Rich Company paid transport expenses of $3,000 in cash. Which of the following journal entries records this transaction?

a)Transport Expense $3,000

Cash $3,000

b) Cash $3,000

Transport Payable       $3,000

c) Prepaid Expense    $3,000

Cash $3,000

d) Transport Expense $3,000

Prepaid Expense     $3,000

4) The general ledger shows a complete record of the transactions recorded in each individual account.

False

True

1) All of the following are differences in an asset acquisition compared to a stock acquisition except for:

A) Who the consideration is paid to by the acquiring company

B) The recognition of any gain or loss on the part of the target company

C) The valuation used to account for the value of the acquired assets and liabilities

D) The journal entries that would be made on the part of the acquiring company

2) Company ABC owns 100% of the outstanding shares of Company XYZ, and accounts for the net income of Company XYZ using the Cost Method. When Company XYZ reports quarterly Net Income of $40,000 on 6/30/18, Company ABC will:

Q1.Determine if the statement is true or false

1.s128 gives the company powers of a natural person and states the company can issue shares.

2.A share is considered intangible property.

3.A court can validate the invalid issue of shares.

4.Preference shares have particular rights attached to them but they usually also limit the voting right of the shareholder.

Q2.Select the correct answer.

2. The Personal Properties Securities Register...

1. allows a potential lender to check whether a particular asset is already registered as security
2. B.contains the details a banned directors.
3. determines who is a member of the company.
4. is maintained by ASIC.

Q3.Choose all that apply.

1.An auditor..

A.must provide an independent opinion and true and fair view of the financial health of a company in audit report.

B.has a right to access the company's books.

C.can be removed by members of the company by resolution.

D.can only be appointed by a director.

Q4.S95A (1)

A.defines 'winding up'.

B.defines solvency as being able to pay debts as they become due and payable.

C.defines the duties of the auditor.

D.is used to determine whether a director has acted in good faith in the best interests of the company.

Q5.Select all that apply.

1.A voluntary administration ...

A.is managed by the auditor and the receiver

B.is managed by an administrator with owes duties to the company, like directors.

C.imposes duties on the administrator towards the creditors.

D.is triggered by directors who are hoping to save the company from financial collapse.

A University found that 27% of its graduates have taken an introductory statistics course. Assume that a group of 15 graduates have been selected.

1. Compute the probability that from this group, there are exactly 2 graduates that have taken an introductory statistics course.
2. Compute the probability that from this group, there are at most 3 graduates that have taken an introductory statistics course.
3. Compute the probability that from this group, there are at least 4 graduates that have taken an introductory statistics course.
4. Compute the expected number, the variance and the standard deviation of graduates that have taken an introductory statistics course.

A University found that 27% of its graduates have taken an introductory statistics course. Assume that a group of 15 graduates have been selected.

1. Compute the probability that from this group, there are exactly 2 graduates that have taken an introductory statistics course.
2. Compute the probability that from this group, there are at most 3 graduates that have taken an introductory statistics course.
3. Compute the probability that from this group, there are at least 4 graduates that have taken an introductory statistics course.
4. Compute the expected number, the variance and the standard deviation of graduates that have taken an introductory statistics course.

Short answer question:

Mr. Jones needs to send a shipment from China to the United States. His boss asks him to prepare a set of potential crash options for accomplishing this in 5 days, 4 days, 3 days, 2 days, and 1 day. He calls an air transport company and finds out that the shipment can be flown in one day for a cost of $1000. Then he calls an ocean shipping company and finds out that it can be transported in 5 days for a cost of $200. He uses these two numbers to find the slope: it costs $800 more to reach the US 4 days earlier, or $200 per day. Then, he uses the slope to calculate the cost of a 4-day trip ($400), a 3- day trip ($600), and a 2-day trip ($800). What is wrong with Mr. Jones’s approach?

Crunch Fitness company started operating in Melbourne in January 2016. The company experienced significant growth and expansion since it had listed on the ASX with only 20 centres. By January 2019 they were running 300 fitness centres across Australia. Their cash flows had grown significantly over the four years of operation. Crunch Fitness company was led by senior management who had aggressive expansion strategy, relying heavily on borrowings from the banks. Moreover, the management focusing on short term targets and not considering long term impacts, encouraged high risk taking. The Board was also ignorant of the risk facing the company. The company went from a positive cash flow of $400 million from its operating activities in its 2018 full year accounts to a deficit of almost $150 million in the second half of 2019. In February 2020, its Board concluded the company had insufficient cash to repay nearly $1 billion of debts to creditors and appointed administrators to take control of the company. Few months later Crunch Fitness ceased its operations.

Discuss the aspects of corporate governance and board mechanisms that could have served to limit the likelihood of Crunch Fitness company failure.

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 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 negotiated 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 agree to a negotiated rate of $80.00 per hour to be paid to the Tax Division 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”.

AJ Ventures Ltd is a company engaged in the manufacture of water bottles which are bought mainly for sporting activities. Present sales are direct to retailers, but in recent years there has been a steady decline in output because of increasing foreign competition. In the last business year (2018) the company produced its lowest profit in ten (10) years. The forecast for 2019 indicates that the present deterioration in profits is likely to continue.

The company considers that a profit of $80,000 should be achieved to provide an adequate return on capital. The managing director has asked that a review be made of the present pricing and marketing policies. The marketing director has completed this review, and passes the proposals on to you for evaluation and recommendation, together with the Income statement for the year ending December 31, 2018 (see below).

AJ Ventures limited.

INCOME STATEMENT

For the Year Ending, December 31, 2018

The information to be submitted to the managing director includes the following three proposals:

(i) To proceed on the basis of analyses of market research studies that indicate that the demand for the bottles is such that a 10% reduction in selling price would increase demand by 40 %.

(ii) To proceed with an enquiry that the marketing director has had from a mail order company about the possibility of purchasing 50,000 bottles annually if the selling price is right. The mail order company would transport the bottles from AJ ventures to its own warehouse, and no sales commission would be paid on these sales by AJ ventures. However, if an acceptable price can be negotiated, AJ ventures would be expected to contribute $60,000 per annum towards the cost of producing the mail order catalogue. It would also be necessary for AJ ventures to provide special additional packaging at a cost of $0.50 per bottle. The marketing director considers that in 2019 the sales from existing business would remain unchanged at 100,000 bottles, based on a selling price of $10 if the mail order contract is undertaken.

(iii) To proceed on the basis of a view held by the marketing director that a 10% price reduction, together with a national advertising campaign costing $30,000, may increase sales to the maximum capacity of 160,000 bottles.

Required

a. The calculation of break-even sales value based on the 2018 results.

b. A financial evaluation of proposal (i)

c. A calculation (under proposal (i)) of the number of bottles AJ ventures would need to sell at $9 each to earn the target profit of $80.000.

d. A calculation of the minimum prices that would have to be quoted to the mail order company to

1.              I.    ensure that AJ ventures would at least break even on the mail order contract

1.             II.    ensure that the same overall profit is earned as in proposal (i) from the mail order contract.

1.           III.    Ensure that the overall target profit is earned, from the mail order contract.

e. A financial evaluation of proposal (iii)

Jenna Aracel, the owner, invested $180,000 cash, office equipment with a value of $7,000, and $70,000 of drafting equipment to launch the company. The company purchased land worth $55,000 for an office by paying $7,100 cash and signing a long-term note payable for $47,900. The company purchased a portable building with $55,000 cash and moved it onto the land acquired in b. The company paid $4,300 cash for the premium on an 18-month insurance policy. The company completed and delivered a set of plans for a client and collected $7,600 cash. The company purchased $21,000 of additional drafting equipment by paying $9,500 cash and signing a long-term note payable for $11,500. The company completed $16,500 of engineering services for a client. This amount is to be received in 30 days. The company purchased $1,900 of additional office equipment on credit. The company completed engineering services for $26,000 on credit. The company received a bill for rent of equipment that was used on a recently completed job. The $1,449 rent cost must be paid within 30 days. The company collected $7,000 cash in partial payment from the client described in transaction g. The company paid $2,400 cash for wages to a drafting assistant. The company paid $1,900 cash to settle the account payable created in transaction h. The company paid $975 cash for minor maintenance of its drafting equipment. Jenna Aracel withdrew $10,890 cash from the company for personal use. The company paid $1,300 cash for wages to a drafting assistant. The company paid $3,200 cash for advertisements on the Web during June.Required: 1. Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106); Prepaid Insurance (108); Office Equipment (163); Drafting Equipment (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); J. Aracel, Capital (301); J. Aracel, Withdrawals (302); Engineering Fees Earned (402); Wages Expense (601); Equipment Rental Expense (602); Advertising Expense (603); and Repairs Expense (604). 2. Post the journal entries from part 1 to the ledger accounts. 3. Prepare a trial balance as of the end of June.