40.

According to Rostow's stages of economic development, in order to move beyond Stage 1 a poor country must improve education and health care for the masses.

True

False

41.

The official U.S. poverty standard was set in 1963 at $3,000 per year for a family of four.

True

False

44.

Developing infrastructure and ensuring that property rights will be protected can help a poor country grow more quickly according to de Soto's book The Other Path.

True

False

45.

If all developed countries were willing to meet the U.N.'s Millennium Aid Goal for foreign aid, this would eliminate global poverty.

True

False

46.

Poverty is considered to be more permanent in the United States than it is in other nations.

True

False

48.

Economic growth is the key to ending global poverty.

True

False

49.

According to the World Bank definitions, there are more people in the world living in extreme poverty than there are living in severe poverty.

True

False

50.

The World Bank defines extreme poverty as income of less than $1 per day per person.

True

False

High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:

Management is anxious to assess the profitability of the new camp cot during the month of May.

Required:

1. Assume that the company uses absorption costing.

a. Determine the unit product cost.

b. Prepare an income statement for May.

2. Assume that the company uses variable costing.

a. Determine the unit product cost.

b. Prepare a contribution format income statement for May.

(Cost, Volume, Profit Analysis) Leslie Mittelberg is considering the wholesaling of a leather handbag from Kenya. She must travel to Kenya to check on quality and transportation. The trip will cost $3000. The cost of the handbag is $10 and shipping to the United States can occur through the postal system for $2 per handbag or through a freight company which will ship a container that can hold up to a 1000 handbags at a cost of $1000. The freight company will charge $1000 even if less than 1000 handbags are shipped. Leslie will try to sell the handbags to retailers for $20. Assume there are no other costs and benefits. Required: a. What is the break-even point if shipping is through the postal system? b. How many units must be sold if Leslie uses the freight company and she wants to have a profit of $1000? c. At what output level would the two shipping methods yield the same profit? d. Suppose a large discount store asks to buy an additional 1000 handbags beyond normal sales. Which shipping method should be used and what is the minimum sales price Leslie should consider in selling those 1000 handbags?

High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:

Management is anxious to assess the profitability of the new camp cot during the month of May.

Required:

1. Assume that the company uses absorption costing.

a. Determine the unit product cost.

b. Prepare an income statement for May.

2. Assume that the company uses variable costing.

a. Determine the unit product cost.

b. Prepare a contribution format income statement for May.

On Jan 1, 2017, NSP Corporation, a calendar year, accrual basis C corporation was organized and began business operations. NSP provides network security protection services for businesses. During 2017, it had financial income (per books) before tax of $1,000,000.

The following items were expensed in the arriving at NSP’s 2017 financial income (per books):

-$20,000 of organization costs to organize the corporation; the federal tax amortization amounted to $6,000.

-$20,000 increase to its allowance for doubtful accounts; actual bad debts written off amounted to $5,000.

-$100,000 straight ling financial depreciation; total federal depreciation amounted to $500,000.

-$7,000 life insurance premium paid on a key officer of the corporation.

-$5,000 political contribution maid to a candidate running for a seat in the United States of House of Representatives.

-$20,000 of meals and entertainment expenses.

1) Identify which of NSP’s 2017 items listed above are permanent book/tax differences and which are temporary book/tax differences.

2) What is NSP Corp’s 2017 federal taxable income and federal income tax liability? Please show your work and explain your calculations

High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:

Management is anxious to assess the profitability of the new camp cot during the month of May.

Required:

1. Assume that the company uses absorption costing.

a. Determine the unit product cost.

b. Prepare an income statement for May.

2. Assume that the company uses variable costing.

a. Determine the unit product cost.

b. Prepare a contribution format income statement for May.

High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:

Management is anxious to assess the profitability of the new camp cot during the month of May.

Required:

1. Assume that the company uses absorption costing.

a. Determine the unit product cost.

b. Prepare an income statement for May.

2. Assume that the company uses variable costing.

a. Determine the unit product cost.

b. Prepare a contribution format income statement for May.

High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:

Beginning inventory          0

Units produced                 47,000

Units sold                         42,000

Selling price per unit       $ 84

Selling and administrative expenses:

Variable per unit               $ 3

Fixed (per month) $ 562,000

Manufacturing costs:

Direct materials cost per unit         $ 16

Direct labor cost per unit               $ 9

Variable manufacturing overhead cost per unit $ 1

Fixed manufacturing overhead cost (per month) $ 940,000

Management is anxious to assess the profitability of the new camp cot during the month of May.

Required:

1. Assume that the company uses absorption costing.

a. Determine the unit product cost.

b. Prepare an income statement for May.

2. Assume that the company uses variable costing.

a. Determine the unit product cost.

b. Prepare a contribution format income statement for May.

Background Information:

In this project you are to assume that you are the audit partner on the audit engagement of Earthwear Clothiers, Inc. (Earthwear). Earthwear is a U.S. publicly traded company and is subject to the rules and regulations of the Public Company Accounting Oversight Board (United States). It is classified as an “accelerated filer” under the rules of the Securities and Exchange Commission (SEC).

Your firm has been engaged to perform an audit of the financial statements of Earthwear's calendar year ended December 31, 2017. Your audit will include:

-Issuance of an Engagement Letter

-Timely quarterly reviews

-An audit of Earthwear’s internal control over financial reporting

-An audit of Earthwear’s Financial Statements for the year then ended

-Issuance of a Management Letter concerning findings and recommendations

Earthwear has an audit committee of the board of directors charged with oversight of financial reporting and disclosure. While you are conducting your audit of Earthwear, you and your audit team are expected to meet with the audit committee on several occasions.

Required Task:

Prepare a calendar of your proposed meetings with the audit committee on a month by month basis. For each meeting you should identify the information (matters) that you should communicate to the audit committee.