McAdoo & Co. is an engineering firm with offices in several cities in the Carolinas. McAdoo’s fiscal year-end is December 31, and it prepares financial statements just once a year, at year-end. For bookkeeping purposes, McAdoo has adopted a policy to record payments and collections in advance into asset and liability accounts, respectively. The company’s unadjusted trial balance at December 31, 2020 is shown below. All accounts have normal-side balances.

Additional information available at year-end is as follows:

1.         In the first week of January 2021, McAdoo received bills for December 2020 utilities totaling $28,985. The company paid all of these bills in late January 2021.

2.         On June 1, 2020, McAdoo purchased a 24-month insurance policy for $306,720 and paid the full cost of the policy in advance. The policy provides coverage through May 31, 2022. Note – Contrary to the company’s normal practice, McAdoo’s bookkeeper recorded the prepayment into the Insurance Expense account. Give the adjusting entry needed when a company uses the expense approach to record a payment in advance.

3.         McAdoo operates 5 days a week, Mondays through Fridays. Employees are paid each Monday, for hours worked through the previous Friday. On Monday, December 28, 2020, the last payday in 2020, McAdoo paid its employees for hours worked during the week of December 21-25. (Note that Christmas Day is a paid holiday for all employees.) The employees then worked their regular schedule through the end of the year. McAdoo’s payroll averages $14,215 per day.

4.         McAdoo sometimes leases unused space in its buildings to other businesses. On November 1, 2020, a new tenant signed a 1-year lease and paid the first 8 months’ rent of $63,880 in advance. The lease began on that date and runs through October 31, 2021.

5.         McAdoo started the year 2020 with a Supplies account balance of $51,320. During the year, McAdoo made several purchases of supplies totaling $78,465. A physical count at year-end 2020 revealed the company had a total of $59,715 of supplies on hand.

6.         The Notes Payable balance relates to a bank loan taken in 2019 that is payable in full on September 30, 2023. The loan agreement specifies that McAdoo pay interest annually on September 30 at the rate of 5.20% per year. McAdoo’s bookkeeper made the proper entry for the first interest payment, on September 30, 2020. (Hint – Think about the entry McAdoo made on the first interest payment date.)

7.         McAdoo performed $291,670 of legal services for several clients in December 2020 that it has not yet billed, recorded or collected.

8.         McAdoo estimates that 8.55% of the 2020 year-end accounts receivable balance will not be collected.

9.         McAdoo purchased its buildings in 2011 and its equipment in 2015. McAdoo depreciates its fixed assets according to the straight-line method. For the buildings, it uses estimates of 36 years for the useful life and $240,000 for the salvage value. For the equipment, it uses estimates of 12 years for the useful life and $37,000 for the salvage value.

10.       The company’s income tax rate for the year is 25%. (Hint – The income tax rate is applied to the company’s income after all revenues and expenses have been considered except for the income tax charge.)

– Instructions –

Complete the following tasks relating to McAdoo & Co.’s accounting process at year-end 2020:

(b)        Prepare the adjusting journal entries needed at December 31, 2020.

1. Listed below you will see the concept of a “business situation”. You may define/discuss “business situation” as you wish. The possibilities are endless – just be clear in your discussion. For example, it can be in your everyday management of a business or specifically related to a strategic action like an acquisition. This question has three major parts. Please answer ALL parts of the question. If you wish to tailor any or all of your response to a specific company or industry, please feel free to do so. You may certainly incorporate material from all your MBA classes to answer this question.

1. In your opinion, (1) what are the most important accounting and finance concepts/issues/measures (you can be both specific and/or broad) relevant for addressing and understanding a business situation – offer 3, and (2) how are these concepts/issues/measures used to address and understand a business situation?

2. In your opinion, (1) what are the most important management concepts/issues/measures (you can be both specific and/or broad) relevant for addressing and understanding a business situation – offer 3, and (2) how are these concepts/issues/measures used to address and understand a business situation?

3. In your opinion, (1) what are the most important marketing concepts/issues/measures (you can be both specific and/or broad) relevant for addressing and understanding a business situation – offer 3, and (2) how are these concepts/issues/measures used to address and understand a business situation?  

Read the Hospital Scenario for this course and complete the following assignment:

Write a 500-750 word paper that addresses the following: APA style ( title: Leadership styles)

Evaluate the management styles and identify the positive and negatives of each manager’s characteristics.

Identify what transactional and transformational leadership theories are present.

Provide an example of how one leader mentioned in the case study could adapt the servant leadership model into practice, and how this change could have an impact on a quality improvement department within health care.

The Scenario:

Kalia recently accepted the chief executive officer (CEO) position at a steadily declining transitional care organization. After meeting with the board of trustees, she was eager to demonstrate how her vision would change the direction of the failing company. Her hope was to discover allies within the company that could help make it easier to put her plan for the company into action. However, she soon found that her formal authority as CEO had been severely undermined by the pervious CEO, whose practice had been to distribute power within the organization, but had poorly managed those to whom he gave power. During Kalia’s first week, she arranged her schedule so that she could meet with administrative staff as soon as possible. During the meeting, Kalia requested budget information for each manager. None of the administrative staff were able to obtain the information for Kalia. They told her that company financial information was considered classified and could only be accessed through Manny, the chief financial officer (CFO) – the managers were not able to monitor their own budgets. One individual volunteered that sometimes the CFO’s administrative assistant would allow people to review reports, if the CFO was out and “she liked you.” After the meeting, Kalia went to Dominic, the chief information officer (CIO), to see if a centralized shared network could be created so employees could access important and sensitive data necessary for staff to make business decisions. Dominic informed her that the system was complicated, and that he was the only one familiar with how it was set up. He also told her that he would be going on paternity leave, and no one else could be trusted with the system. Therefore, a project like that could not begin until he returned. Dominic suggested that, in the meantime, Kalia begin the request with Manny, the CFO, as he would need to approve the budget for the project because it would be costly. Kalia walked to Manny’s office. As soon as she walked in, Manny said, “I heard you don’t think that the way I handle finances is acceptable. I have 26 years of experience, plus dual master’s degrees in accounting and finance. I am surprised that a young woman starting out would consider herself an expert. Kalia was surprised by Manny’s comments, and she was equally surprised to turn and see two of her administrative staff sitting on the couch in Manny’s office. Uncertain of how to respond, Kalia turned and walked back to her office. In her office, Kalia sat down at her desk and put her face in her hands. She was now questioning everything she thought she knew about the company, being the CEO, and why she was hired.

In the following scenario, each of the four categories of Principles Underlying an Audit Conducted in Accordance with Generally Accepted Auditing Standards are violated. In the box below (1) identify the four categories (the “P – R – P – R”) [2 points each], (2) provide a brief description of each category [2 points each], and (3) indicate at least one way that the actions of the auditor in the scenario violates each of the four categories of principles

Joni Thompson, the CEO of a small privately held company, contacted Darrel Folkert, CPA, about conducting an audit of the company’s records. Joni told Darrel that she needed an audit performed in accordance with generally accepted auditing standards (GAAS) in time to submit two years of audited financial statements to a bank as part of a loan application. Darrel immediately accepted the engagement and agreed to provide an audit report within three weeks. Joni agreed to pay Darrel a fixed fee if the loan was granted.

Darrel hired two Portland State University accounting students to conduct the audit and spent a couple of hours telling them exactly what to do. Darrel told the students not to spend time reviewing internal controls because it is not a publicly traded company, but to concentrate on proving the mathematical accuracy of the ledger accounts and summarizing the data in the accounting records that support Joni’s financial statements. Given the lack of procedures performed by the two accounting students, they did not identify that Joni did not have an allowance for uncollectible accounts, even though more than 50% of the balance in the Accounts Receivable account is two or more years old. The students followed Darrel’s instructions and after two weeks gave Darrel a Balance Sheet, Income Statement, and a Statement of Cash Flows. Darrel received the three statements and immediately prepared an unqualified (clean) audit report. The report did not refer to generally accepted accounting principles (GAAP), and the two accounting students did not check the accounting principles applied in prior periods. There was also no mention as to the responsibility of management or the degree of responsibility that Darrel was taking in the audit report.

Value Products Ltd manufactures a single product. You are the management accountant
responsible for preparing the quarterly budgets of the next quarter from July to September 2020.
Your colleague, the financial accountant, has provided you the following extracted data from
the balance sheet as at 30 June 2020:
Assets Liabilities
Accounts Receivable $250,000 Bank Overdraft $90,000
Plant and Machinery $800,000 (Cost) Dividend Payable $10,000
Long-term Loan 15% $400,000
The following transactions are expected during the next three months:
Sales Purchases Expenses
January $1,500,000 $1,000,000 $200,000
February 2,000,000 1,500,000 250,000
March 3,000,000 2,800,000 300,000
All sales are on credit and the collections have the following pattern:
During the month of sale: 80% (early payment discount of 4% is given)
In the subsequent month: 20% (no discount)
Payments for purchase are made in the month of purchase enjoying a 10% early payment
discount.
Expenses shown above include depreciation of machinery which is calculated at a rate of 12%
per annum on cost. Expenses are paid for in the month in which they are incurred.
The dividend payable will be paid in July.
Loan interest for the three months will be paid in September.
Required:
(a) Prepare a Cash Budget for each of the three months from July to September 2020.

(b) Prepare a Budgeted Income Statement for the period from July to September 2020.

Presented below is information that relates to Halifax Limited for 2020:

Accounts Payable 49,000

Accounts Receivable 78,000

Bond Payable 600,000

Cash dividends declared on common shares 34,000

Collections of credit sales $1,100,000

Cost of goods sold 1,100,000

Equipment 85,000

Gain from transactions in foreign currencies (pre-tax) 220,000

Inventory 120,000

Loss on sale of equipment 350,000

Loss from early debt repayment 340,000

Loss resulting from calculation error on depreciation charge in 2019 460,000

Other expenses 120,000

Other revenues 180,000

Proceeds from issue of Halifax common shares 60,000

Retained earnings, January 1, 2020 800,000

Sales 1,900,000

Selling and administrative expenses 290,000

Unrealized Gain FV-NI 20,000

Additional information to be included: On September 1, 2020, Halifax sold one of its segments (product line) to Best Industries for a gain (pre-tax) of $550,000. During the period January 1 to August 31, the discontinued segment incurred an operating loss (pre-tax) of $480,000. This loss is not included in any of the numbers shown above.

Instructions In good form, prepare a multiple-step income statement for 2020. Assume a 20% income tax rate and that 20,000 common shares were outstanding during the year. Include Earnings Per Share.

Presented below is information that relates to Halifax Limited for 2020:

       Accounts Payable ........................................................................................................ 49,000

       Accounts Receivable .................................................................................................... 78,000

       Bond Payable....................................................................................................... ..... 600,000

       Cash dividends declared on common shares.................................................................... 34,000  

       Collections of credit sales....................................................................................... $1,100,000

       Cost of goods sold.................................................................................................... 1,100,000

       Equipment ................................................................................................................... 85,000

       Gain from transactions in foreign currencies (pre-tax)................................................... 220,000

       Inventory.................................................................................................................... 120,000  

       Loss on sale of equipment .......................................................................................... 350,000  

       Loss from early debt repayment .................................................................................. 340,000

       Loss resulting from calculation error on depreciation charge in 2019.............................. 460,000

       Other expenses........................................................................................................... 120,000

       Other revenues............................................................................................................ 180,000  

       Proceeds from issue of Halifax common shares............................................................... 60,000

       Retained earnings, January 1, 2020.............................................................................. 800,000

       Sales........................................................................................................................ 1,900,000

       Selling and administrative expenses............................................................................. 290,000

       Unrealized Gain FV-NI ........................................................................................           20,000

Additional information to be included:

       On September 1, 2020, Halifax sold one of its segments (product line) to Best Industries for a gain (pre-tax) of $550,000. During the period January 1 to August 31, the discontinued segment incurred an operating loss (pre-tax) of $480,000. This loss is not included in any of the numbers shown above.

Instructions

In good form, prepare a multiple-step income statement for 2020. Assume a 20% income tax rate and that 20,000 common shares were outstanding during the year. Include Earnings Per Share.

Presented below is information that relates to Halifax Limited for 2020:

       Accounts Payable ........................................................................................................ 49,000

       Accounts Receivable .................................................................................................... 78,000

       Bond Payable....................................................................................................... ..... 600,000

       Cash dividends declared on common shares.................................................................... 34,000  

       Collections of credit sales....................................................................................... $1,100,000

       Cost of goods sold.................................................................................................... 1,100,000

       Equipment ................................................................................................................... 85,000

       Gain from transactions in foreign currencies (pre-tax)................................................... 220,000

       Inventory.................................................................................................................... 120,000  

       Loss on sale of equipment .......................................................................................... 350,000  

       Loss from early debt repayment .................................................................................. 340,000

       Loss resulting from calculation error on depreciation charge in 2019.............................. 460,000

       Other expenses........................................................................................................... 120,000

       Other revenues............................................................................................................ 180,000  

       Proceeds from issue of Halifax common shares............................................................... 60,000

       Retained earnings, January 1, 2020.............................................................................. 800,000

       Sales........................................................................................................................ 1,900,000

       Selling and administrative expenses............................................................................. 290,000

       Unrealized Gain FV-NI ........................................................................................           20,000

Additional information to be included:

       On September 1, 2020, Halifax sold one of its segments (product line) to Best Industries for a gain (pre-tax) of $550,000. During the period January 1 to August 31, the discontinued segment incurred an operating loss (pre-tax) of $480,000. This loss is not included in any of the numbers shown above.

Instructions

In good form, prepare a multiple-step income statement for 2020. Assume a 20% income tax rate and that 20,000 common shares were outstanding during the year. Include Earnings Per Share.

E16.10 (LO 3) (Issuance and Exercise of Stock Options) On November 1, 2020, Columbo Company adopted a stock-option plan that granted options to key executives to purchase 30,000 shares of the company's $10 par value common stock. The options were granted on January 2, 2021, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $40, and the fair value option-pricing model determines the total compensation expense to be $450,000.

All of the options were exercised during the year 2023: 20,000 on January 3 when the market price was $67, and 10,000 on May 1 when the market price was $77 a share.