Through November, Cameron has received gross income of $107,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,170 of revenue at a cost to Cameron of $4,650, which is deductible for AGI. In contrast, engagement 2 will generate $7,950 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.

Calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

Through November, Cameron has received gross income of $107,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,170 of revenue at a cost to Cameron of $4,650, which is deductible for AGI. In contrast, engagement 2 will generate $7,950 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.

Calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

Through November, Cameron has received gross income of $107,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,170 of revenue at a cost to Cameron of $4,650, which is deductible for AGI. In contrast, engagement 2 will generate $7,950 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.

Calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

Through November, Cameron has received gross income of $107,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,170 of revenue at a cost to Cameron of $4,650, which is deductible for AGI. In contrast, engagement 2 will generate $7,950 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.

Calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

Through November, Cameron has received gross income of $107,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,170 of revenue at a cost to Cameron of $4,650, which is deductible for AGI. In contrast, engagement 2 will generate $7,950 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.

Calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

Through November, Cameron has received gross income of $107,500. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,170 of revenue at a cost to Cameron of $4,650, which is deductible for AGI. In contrast, engagement 2 will generate $7,950 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.

Calculate Cameron’s taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

Cuneo Company’s income statements for the last 3 years are as follows: Cuneo Company Income Statements For the Years 1, 2, and 3 1 Year 1 Year 2 Year 3 2 Sales $1,000,000.00 $1,200,000.00 $1,700,000.00 3 Less: Cost of goods sold (700,000.00) (700,000.00) (1,000,000.00) 4 Gross margin $300,000.00 $500,000.00 $700,000.00 5 Less operating expenses: 6 Selling expenses (150,000.00) (220,000.00) (250,000.00) 7 Administrative expenses (50,000.00) (60,000.00) (120,000.00) 8 Operating income $100,000.00 $220,000.00 $330,000.00 9 Less: 10 Interest expense (25,000.00) (25,000.00) (25,000.00) 11 Income before taxes $75,000.00 $195,000.00 $305,000.00 Required: 1. Prepare a common-size income statement for Year 1 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.) 2. Prepare a common-size income statement for Year 2 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.) 3. Prepare a common-size income statement for Year 3 by expressing each line item as a percentage of sales revenue. (Note: Round percentages to the nearest tenth of a percent.) Refer to the list below for the exact wording of an account title within your income statement. Labels Add Add operating expenses Less Less operating expenses Amount Descriptions Administrative expenses Contribution margin Cost of goods sold Gross margin Income after taxes Income before taxes Interest expense Operating income Sales Selling expenses Total 1. Prepare a common-size income statement for Year 1 by expressing each line item as a percentage of sales revenue. (Note: Enter all amounts as positive numbers. Round answers to the nearest tenth of a percent. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries.) Cuneo Company Income Statement For Year 1 1 Year 1 Percent of Sales in Year 1 2 3 4 5 (Label) 6 7 8 9 (Label) 10 11 2. Prepare a common-size income statement for Year 2 by expressing each line item as a percentage of sales revenue. (Note: Enter all amounts as positive numbers. Round answers to the nearest tenth of a percent. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries.) Cuneo Company Income Statement For Year 2 1 Year 2 Percent of Sales in Year 2 2 3 4 5 (Label) 6 7 8 9 (Label) 10 11 3. Prepare a common-size income statement for Year 3 by expressing each line item as a percentage of sales revenue. (Note: Enter all amounts as positive numbers. Round answers to the nearest tenth of a percent. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries.) Cuneo Company Income Statement For Year 3 1 Year 3 Percent of Sales in Year 3 2 3 4 5 (Label) 6 7 8 9 (Label) 10 11

You are the Chief Operations Officer responsible for overall company operations in ATCHULO Company Ltd, a large courier company in Ghana. Your company has 16 regional offices (terminals) scattered around the country in each of the regional capitals and a main office (hub) located in the capital city of the country. Your operations are strictly domestic. You do not accept international shipments.

The day at each terminal begins with the arrival of packages from the hub. The packages are loaded onto trucks for delivery to customers during morning hours. In the afternoon, the same trucks pick up packages that are returned to the terminal in late afternoon and then shipped to the hub where shipments arrive from the terminals into the late evening and are sorted for delivery early the next day for the terminals.

Each terminal in your company is treated as an investment centre and prepares individual income statements each month. Each terminal receives 30% of the revenue from packages that it picks up and 30% of the revenue from the packages it delivers. The remaining 40% of the revenue from each transaction goes to the hub. Each terminal accumulates its own costs. All costs relating to travel to and from the hub are charged to the hub. The revenue per package is based on size and service type and not the distance the package travels. (There are two services: overnight and ground delivery, which takes between 1 and 7 days, depending on the distance traveled).

All customer service is done through a central service group located in the hub. Customers access this service centre through a toll-free telephone number. The most common calls to customer service include requests for package pickup, requests to trace an overdue package, and requests for billing information. The company has invested in complex and expensive package tracking equipment that monitors the package’s trip through the system by scanning the bar code placed on every package. The bar code is scanned when the package is picked up, enters the originating terminal, leaves the originating terminal, arrives at the hub, leaves the hub, arrives at the destination terminal, and is delivered to the customers. All scanning is done with hand held wands that transmit the information to the regional and then central computer.

The major staff functions in each terminal are administrative (accounting, clerical, and executive), marketing (the sales staff), courier (the people who pick up and deliver the shipments and the equipment they use), and operations (the people and equipment who sort packages in the terminal).

This organisation takes customer service very seriously. The revenue for any package that fails to meet the organisation’s service commitment to the customer is not assigned to the originating and destination terminals.

All company employees receive a wage and a bonus based on the terminal’s economic value added. This system has promoted many debates about the sharing rules for revenues, the inherent inequity of the existing system, and the appropriateness of the revenue share for the hub. Service problems have arisen primarily relating to overdue packages. The terminals believe that most of the service problems relate to wrong sorting in the hub, resulting in packages being sent to the wrong terminals.

Required:

1. Explain why an investment centre is or not an appropriate organisational design in ATCHULO Company Ltd.   
2. Assuming that ATCHULO Company Ltd is committed to the current design, how would you improve it?                                                                                                    
3. C) Assuming that ATCHULO Company Ltd has decided that the investment centre model is unacceptable, what model to performance evaluation would you recommend and why?  

1. The Framework states that an asset should be recognised when and only when:

(i) the asset possesses a cost or other value that can be measured reliably

(ii) it is legally owned by the entity

(iii) it is probable that the future economic benefits embodied in the asset will eventuate.

A.         (i) and (ii) only

B.         (i) and (iii) only

C.         (ii) and (iii) only

D.         (i), (ii) and (iii)

E.         (ii) only

2.     In which of the following transactions or events are the debit entries NOT equal to the credit entries?

A.         Wages owing are recorded as increasing an expense and decreasing a liability

B.         Credit purchase of supplies is recorded as increasing an asset and increasing a liability

C.         Cash sales are recorded as increasing revenue and increasing an asset

D.         Receipt from a customer for the amount previously owed is recorded as increasing an asset and decreasing another asset

E.         Credit sales are recorded as increasing revenue and increasing an asset

3. Given only the following information, what is the balance of shareholders’ equity?

                                                                  $

Cash                                                     10,000

Inventory                                               30,000

Equipment                                           200,000

Accounts payable                                   50,000

Taxes payable                                       40,000

Loans to the company                          100,000

A.         $40,000

B.         $50,000

C.         $100,000

D.         $140,000

E.         None of the above

4. Accounts that have normal debit balances include:

1. Debtors, drawings, wages, accumulated depreciation
2. Debtors, drawings, equipment, depreciation expense
3. Creditors, capital, revenues, depreciation expense
4. Equipment, drawings, accumulated depreciation, inventory
5. Equipment, drawings, advertising, inventory gain

5. The owner of a business completed an electronic funds transfer of $5,000 from her personal bank account to Valley Motors as deposit on a new vehicle for the business costing $28,999. The balance owing is due in 60 days and will be paid for by the business.
   Identify the overall effect on the businesses’ accounting equation:

1. Assets decrease, liabilities increase and owners equity decreases
2. Assets increase, liabilities increase and owners equity decreases
3. Assets increase, liabilities increase and no effect on owners equity
4. Assets increase, liabilities increase and owners equity increases
5. None of the above

6. Suzie Yang runs a catering business. She received a phone booking for a function on 1 January. Susie catered for the birthday function on 28^th January, and received payment on 16^th February. Which of the following statements is correct?

1. If Susie were using cash-basis accounting, the revenue would be recorded in January;
2. If Susie were using cash-basis accounting, the revenue would be recorded in February;
3. If Susie were using accrual-basis accounting, the revenue would be recorded when received in February;
4. If Susie were using accrual-basis accounting, the revenue would be recorded when the booking was made;
5. None of the above.

7. Zia Company reports the following balance sheet information for 2020:

                                                                                           1 July 2019                30 June 2020

                        Assets                                                              $60,000                        $70,000

                        Liabilities                                                          $12,000                        $14,000

Assume that capital contributions during 2020 were $3,000 and that dividends were $12,000. Net profit for the year ended 30 June 2020 must have been:

1. $8,000
2. $11,000
3. $23,000
4. $17,000
5. $9,000

8. Failure to prepare an adjusting entry at the end of a reporting period to record an accrued expense would cause:

1. An overstatement of liabilities and an overstatement of expenses.
2. An overstatement of assets and an understatement of expenses.
3. An understatement of liabilities and an understatement of expenses.
4. An understatement of expenses and an overstatement of liabilities.
5. None of the above

You are the Chief Operations Officer responsible for overall company operations in ATCHULO
Company Ltd, a large courier company in Ghana. Your company has 16 regional offices
(terminals) scattered around the country in each of the regional capitals and a main office (hub)
located in the capital city of the country. Your operations are strictly domestic. You do not accept
international shipments.
The day at each terminal begins with the arrival of packages from the hub. The packages are loaded
onto trucks for delivery to customers during morning hours. In the afternoon, the same trucks pick
up packages that are returned to the terminal in late afternoon and then shipped to the hub where
shipments arrive from the terminals into the late evening and are sorted for delivery early the next
day for the terminals.
Each terminal in your company is treated as an investment centre and prepares individual income
statements each month. Each terminal receives 30% of the revenue from packages that it picks up
and 30% of the revenue from the packages it delivers. The remaining 40% of the revenue from
each transaction goes to the hub. Each terminal accumulates its own costs. All costs relating to
travel to and from the hub are charged to the hub. The revenue per package is based on size and
service type and not the distance the package travels. (There are two services: overnight and ground
delivery, which takes between 1 and 7 days, depending on the distance traveled).
All customer service is done through a central service group located in the hub. Customers access
this service centre through a toll-free telephone number. The most common calls to customer
service include requests for package pickup, requests to trace an overdue package, and requests
for billing information. The company has invested in complex and expensive package tracking
equipment that monitors the package’s trip through the system by scanning the bar code placed on
every package. The bar code is scanned when the package is picked up, enters the originating
terminal, leaves the originating terminal, arrives at the hub, leaves the hub, arrives at the
destination terminal, and is delivered to the customers. All scanning is done with hand held wands
that transmit the information to the regional and then central computer.
The major staff functions in each terminal are administrative (accounting, clerical, and executive),
marketing (the sales staff), courier (the people who pick up and deliver the shipments and the
equipment they use), and operations (the people and equipment who sort packages in the terminal).
This organisation takes customer service very seriously. The revenue for any package that fails to
meet the organisation’s service commitment to the customer is not assigned to the originating and
destination terminals.
All company employees receive a wage and a bonus based on the terminal’s economic value added.
This system has promoted many debates about the sharing rules for revenues, the inherent inequity
of the existing system, and the appropriateness of the revenue share for the hub. Service problems
have arisen primarily relating to overdue packages. The terminals believe that most of the service
problems relate to wrong sorting in the hub, resulting in packages being sent to the wrong
terminals.
Required:
A) Explain why an investment centre is or not an appropriate organisational design in
ATCHULO Company Ltd.
B) Assuming that ATCHULO Company Ltd is committed to the current design, how would
you improve it?
C) Assuming that ATCHULO Company Ltd has decided that the investment centre model is
unacceptable, what model to performance evaluation would you recommend and why?

Inventory Case

JMI Industries (“JMI” or “the Company”), a publicly traded company, manufactures and sells coaxial and fiber optical cable. JMI is contemplating two separate transactions for which it is evaluating the appropriate inventory and revenue recognition.

Transaction 1: BigWire, a customer of JMI,has entered into a binding written agreement to purchase 1,000 feet of fiber optic cable for $3.00 per foot. Because BigWire is constructing a new warehouse, it is unable to take delivery of the cable and has requested in writing that JMI store the cable in its warehouse until construction of BigWire's warehouse is completed. BigWire's warehouse will be completed three months from the time of purchase, at which time BigWire is required to take delivery of the cable. JMI stores fiber optic cable in 10,000-foot spools (spools of cable are considered finished goods and ready for shipment). JMI will not physically segregate the cable that BigWire will purchase; rather, the Company will designate the quantity in its inventory tracking system as "sold," thereby preventing the use of the cable to fulfill other customer orders. In other words, JMI will "virtually" segregate the inventory.

JMI and its auditors have concluded the following with respect to the arrangement with BigWire:

• Risks of ownership of the cable have passed to BigWire.

• BigWire has a substantial business purpose for requesting JMI to hold the cable at its warehouse (waiting on completion of the warehouse).

• JMI does not have additional performance obligations with respect to the cable purchased by BigWire.

JMI has concluded that it is appropriate to recognize revenue for Transaction 1 before the date on which BigWire takes delivery of the 1,000 feet of 18 AWG coaxial cable.

Transaction 2: Grant Telecom, a customer of JMI, entered into a binding written agreement to purchase 1,500 feet of fiber optic cable for $2.95 per foot. Grant Telecom's shipping terms are freight on board (FOB) shipping point, and JMI collected payment before the order shipped. Title transfers upon delivery to the carrier, and Grant Telecom will insure the product while it is in transit. Instead of using a third-party shipper (e.g., FedEx, UPS), JMI has elected to use its own logistics subsidiary, JMI Transit, to deliver the cable to Grant Telecom (JMI Industries owns 100 percent of JMI Transit). JMI Transit provides an array of shipping services to third-party customers outside the cable industry. Only 2 percent of JMI Transit's shipping revenue is expected to be derived from transactions with JMI in the current year.

Required:

Transaction 1

• Is it appropriate for JMI to recognize revenue before the date on which BigWire takes delivery of the 1,000 feet of 18 AWG coaxial cable? ( take a look at ASC 606-10-55-83)

• If JMI and BigWire’s fiscal years end after the agreement is signed but before the cable is delivered, on whose balance sheet should the cable be shown?

Transaction 2

• Is it appropriate for JMI to recognize revenue upon transfer of the inventory to the carrier?

• Would your answer change if 80% of JMI Transit’s shipping revenue came from transactions with JMI?

You should use the GAAP Codification database to answer these questions (and no other sources should be needed). To access the GAAP codification database, go to aaahq.org/FASB-GASB, and use the following access credentials:

Username:         AAA52009

Password:           7S8FrRw

Cite the section number of any relevant sections of the codification in your answer. Treat this assignment as though it were a research request in a professional setting.

Entries for bond (held-to-maturity) investments

Gillooly Co. purchased $360,000 of 6%, 20-year Lumpkin County bonds on May 11, Year 1, directly from the county, at their face amount plus accrued interest. The bonds pay semiannual interest on April 1 and October 1. On October 31, Year 1, Gillooly Co. sold $90,000 of the Lumpkin County bonds at 98 plus $450 accrued interest less a $200 brokerage commission.

Journalize the entries to record the following: Do not round interim calculations. Round final answers to nearest dollar. If an amount box does not require an entry, leave it blank. Assume a 360-day year.

a. The purchase of the bonds on May 11 plus 40 days of accrued interest.

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a. Record the investment at face (debit), interest receivable (debit) for [face amount of bonds x interest rate x (40 days ÷ 360 days)], and the cash paid for the sum of cash plus interest receivable.

b. Semiannual interest on October 1.

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b. Bond principal x interest rate x half a year = total interest. Record this amount as a debit to Cash. Reduce interest receivable (credit) by the amount calculated in requirement (a) and increase interest revenue (credit) for the difference between the cash and the interest receivable adjustment.

c. Sale of the bonds on October 31.

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c. Calculate the proceeds: 98% x face amount of bonds sold, plus accrued interest, less commission. Debit cash for this amount. Credit investments for the face amount of bonds sold and credit interest revenue for accrued interest amount. To complete the entry, enter the difference between the cash sale amount and the face investment amount + accrued interest as a gain or loss.

d. Adjusting entry for accrued interest on December 31, Year 1.

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d. Debit Interest Receivable and credit Interest Revenue for the accrued interest. Remaining bond face after sale x interest rate x (91 days from Oct. 1 to Dec. 31 ÷ 360 days)].

e. The receipt of the face value of the remaining bonds at their maturity on April 1, Year 20.

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Partially correct

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Partially correct

Calculate Microsoft's 2019 and 2020 financial ratios in all the five categories (Liquidity: New Working Capital, Current Ratio, and Quick Ratio. Efficiency: Total Asset Turnover, Fixed Asset Turnover, Inventory Turnover, Average Age of Inventory, Accounts Receivable Turnover, Average Collection Period, and Operating Cycle. Leverage: Debt Ratio, Interest Earned Ratio. Profitability: Net Profit Margin, Return on Asset, and Return on Equity. Market: Price Earning Ratio, Earning per Share, Dividend per Share, and Dividend Payout Ratio). A spreadsheet such as EXCEL is useful. Please show calculations.

INCOME STATEMENT

BALANCE SHEET

You are the Chief Operations Officer responsible for overall company operations in ATCHULO
Company Ltd, a large courier company in Ghana. Your company has 16 regional offices
(terminals) scattered around the country in each of the regional capitals and the main office (hub)
located in the capital city of the country. Your operations are strictly domestic. You do not accept
international shipments.
The day at each terminal begins with the arrival of packages from the hub. The packages are loaded
onto trucks for delivery to customers during morning hours. In the afternoon, the same trucks pick
up packages that are returned to the terminal in the late afternoon and then shipped to the hub where
shipments arrive from the terminals into the late evening and are sorted for delivery early the next
day for the terminals.

Each terminal in your company is treated as an investment centre and prepares individual income
statements each month. Each terminal receives 30% of the revenue from packages that it picks up
and 30% of the revenue from the packages it delivers. The remaining 40% of the revenue from
each transaction goes to the hub. Each terminal accumulates its own costs. All costs relating to
travel to and from the hub are charged to the hub. The revenue per package is based on size and
service type and not the distance the package travels. (There are two services: overnight and ground
delivery, which takes between 1 and 7 days, depending on the distance travelled).
All customer service is done through a central service group located in the hub. Customers access
this service centre through a toll-free telephone number. The most common calls to customer
service include requests for package pickup, requests to trace an overdue package, and requests
for billing information. The company has invested in complex and expensive package tracking
equipment that monitors the package’s trip through the system by scanning the bar code placed on
every package. The bar code is scanned when the package is picked up, enters the originating
terminal, leaves the originating terminal, arrives at the hub, leaves the hub, arrives at the
destination terminal, and is delivered to the customers. All scanning is done with handheld wands
that transmit the information to the regional and then the central computer.
The major staff functions in each terminal are administrative (accounting, clerical, and executive),
marketing (the sales staff), courier (the people who pick up and deliver the shipments and the
the equipment they use), and operations (the people and equipment who sort packages in the terminal).
This organisation takes customer service very seriously. The revenue for any package that fails to
meet the organisation’s service commitment to the customer is not assigned to the originating and
destination terminals.
All company employees receive a wage and a bonus based on the terminal’s economic value-added.
This system has promoted many debates about the sharing rules for revenues, the inherent inequity
of the existing system, and the appropriateness of the revenue share for the hub. Service problems
have arisen primarily relating to overdue packages. The terminals believe that most of the service
problems relate to wrong sorting in the hub, resulting in packages being sent to the wrong
terminals.
Required:
A) Explain why an investment centre is or not an appropriate organisational design in
ATCHULO Company Ltd.
B) Assuming that ATCHULO Company Ltd is committed to the current design, how would
you improve it?
C) Assuming that ATCHULO Company Ltd has decided that the investment centre model is
unacceptable, what model to performance evaluation would you recommend and why?