Williams-Santana, Inc., is a manufacturer of high-tech industrial parts that was started in 2009 by two talented engineers with little business training. In 2021, the company was acquired by one of its major customers. As part of an internal audit, the following facts were discovered. The audit occurred during 2021 before any adjusting entries or closing entries were prepared. The income tax rate is 25% for all years.

1. A five-year casualty insurance policy was purchased at the beginning of 2019 for $34,000. The full amount was debited to insurance expense at the time.
2. Effective January 1, 2021, the company changed the salvage value used in calculating depreciation for its office building. The building cost $592,000 on December 29, 2010, and has been depreciated on a straight-line basis assuming a useful life of 40 years and a salvage value of $100,000. Declining real estate values in the area indicate that the salvage value will be no more than $25,000.
3. On December 31, 2020, merchandise inventory was overstated by $24,000 due to a mistake in the physical inventory count using the periodic inventory system.
4. The company changed inventory cost methods to FIFO from LIFO at the end of 2021 for both financial statement and income tax purposes. The change will cause a $950,000 increase in the beginning inventory at January 1, 2022.
5. At the end of 2020, the company failed to accrue $16,200 of sales commissions earned by employees during 2020. The expense was recorded when the commissions were paid in early 2021.
6. At the beginning of 2019, the company purchased a machine at a cost of $700,000. Its useful life was estimated to be ten years with no salvage value. The machine has been depreciated by the double-declining balance method. Its book value on December 31, 2020, was $448,000. On January 1, 2021, the company changed to the straight-line method.
7. Warranty expense is determined each year as 1% of sales. Actual payment experience of recent years indicates that 0.75% is a better indication of the actual cost. Management effects the change in 2021. Credit sales for 2021 are $3,800,000; in 2020 they were $3,500,000.

ange, identify the type of change. For accounting errors, choose "Not applicable".
2. Prepare any journal entry necessary as a direct result of the change or error correction, as well as any adjusting entry for 2021 related to the situation described. Any tax effects should be adjusted for through Income tax payable or Refund—income tax. (should be 14 entries)

Advanced Electronics Ltd (Advanced) manufactures and sells high-end electronic components. Three major product lines, namely, HW-01, HW-02 and HW-03 are now being reviewed by the CEO. The following is the contribution margin income statement of the three products for year ended 31 December 2019: HW-01 HW-02 HW-03 $ $ $ Sales 250,000 140,000 75,000 Cost of goods sold 87,500 70,000 33,750 Variable costs 12,500 25,000 3,750 Contribution margin 150,000 45,000 37,500 Fixed costs Salaries 30,000 30,000 17,500 Marketing 10,000 7,500 5,000 Depreciation – Property, plant and equipment 15,000 12,500 5,000 Warehouse rent 11,644 6,520 3,493 Insurance 5,000 2,250 1,500 General administration 5,829 3,264 1,749 Allocated corporate-office costs 26,882 15,054 8,064 Total fixed costs 104,355 77,088 42,306 Operating income/(loss) 45,645 (32,088) (4,806) The CEO is concerned about the performances of the HW-02 and HW-03 product lines. The two product lines have been struggling with poor financial results in the past two years. Given that there is no sign of turnaround in 2020, the CEO is considering dropping the two products. The management accountant of Advanced has analyzed the costs incurred for the three product lines in 2019. The following are her findings:

1. Variable costs are distribution and other selling expenses incurred specifically for the sales of each product.

2. Salaries are paid to employees working directly on the product. All of the employees working for the product line would be laid off if the product is dropped.

3. Marketing are advertising and promotion expenses that are specific to each product line.

4. Depreciation – Property, plant and equipment are depreciation on the fixed assets acquired for manufacturing all three products. These fixed assets have a remaining useful life of around two years with zero disposal value. All unused assets will remain idle.

5. Warehouse rent expense is for rental of a warehouse under a two-year lease agreement expiring in 2021. The rental amount is allocated to the product lines on the basis of sales revenue. Advanced will continue to rent the warehouse till the lease expires as early termination will involve a significant penalty.

6. The insurance expense is for insurance carried on inventories within each of the three product lines. The insurance premium is expected to be decreased proportionately if the inventories of certain product lines are eliminated.

7. Advanced allocates general administrative expense to product lines based on sales revenue.

8. Advanced allocates corporate-office costs to product lines on the basis of sales revenue. By dropping the HW-02 product line, the company can reduce overall corporate overhead costs by $10,000 per year.

Required:

(a) Advise the CEO whether it a good decision for Advanced to drop both the HW-02 and HW-03 product lines. Explain with calculations.

(b) Which item of the costs incurred in the HW-02 and HW-03 product lines is irrelevant in the analysis? Why is it irrelevant?

(c) What other factors should the management of Advanced consider before making a decision?

John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2020, John worked as a computer technician at a local university earning a salary of $152,000, and Sandy worked part time as a receptionist for a law firm earning a salary of $29,000. John also does some Web design work on the side and reported revenues of $4,000 and associated expenses of $750. The Fergusons received $800 in qualified dividends and a $200 refund of their state income taxes. The Fergusons always itemize their deductions, and their itemized deductions were well over the standard deduction amount last year. The Fergusons had qualifying insurance for purposes of the Affordable Care Act (ACA). Use Exhibit 8-9, Tax Rate Schedule, Dividends and Capital Gains Tax Rates, 2020 AMT exemption for reference.

The Fergusons reported making the following payments during the year:

State income taxes of $4,400. Federal tax withholding of $21,000.

Alimony payments to John’s former wife of $10,000 (divorced on 12/31/2014).

Child support payments for John’s child with his former wife of $4,100.

$12,200 of real property taxes.

Sandy was reimbursed $600 for employee business expenses she incurred. She was required to provide documentation for her expenses to her employer.

$3,600 to Kid Care day care center for Samantha’s care while John and Sandy worked.

$14,000 interest on their home mortgage ($400,000 acquisition debt).

$3,000 interest on a $40,000 home-equity loan. They used the loan to pay for a family vacation and new car.

$15,000 cash charitable contributions to qualified charities.

Donation of used furniture to Goodwill. The furniture had a fair market value of $400 and cost $2,000.

Complete pages 1 and 2, Schedule 1, Schedule 2, and Schedule 3 of Form 1040 and Form 6251 for John and Sandy. Use 2020 tax rules.

The Chartered Financial Analyst (CFA) designation is fast becoming a requirement for serious investment professionals. It is an attractive alternative to getting an MBA for students wanting a career in investment. A student of finance is curious to know if a CFA designation is a more lucrative option than an MBA. He collects data on 38 recent CFAs with a mean salary of $138,000 and a standard deviation of $34,000. A sample of 80 MBAs results in a mean salary of $130,000 with a standard deviation of $46,000.

1) Calculate the value of the test statistic. Do not assume that the population variances are equal. (Round all intermediate calculations to at least 4 decimal places and final answer to 3 decimal places.)

2) At the 5% significance level, is a CFA designation more lucrative than an MBA?

B. Suppose a 48-year-old salesperson earning $50,000 a year (after taxes) is considering a career move. Specifically, this person – who plans to retire when (s)he turns 62 regardless of job – is thinking about quitting sales work for 2 years to earn an MBA degree. With MBA degree in hand, suppose this person can become an executive and earn $75,000 per year (after taxes). Suppose MBA tuition is $30,000 per year. Suppose the relevant discount rate is 3.5% per year. Based on this information, demonstrate and explain how one could reckon whether or not this change promises to be a good move. You are expected to show how one would set up and perform the calculation(s).

If you were the CEO of the Microsoft company, what strategies would you recommend, and why?

. The board of directors of a medium-sized corporation, ABC Inc, has appointed you as the Interim Chief Executive Officer. The company has had a stellar year reporting record high revenues and earnings per share that exceeded Wall Street analysts' expectation. However, the share price of your company has fallen. As Interim CEO, discuss some of the factors that may be contributing to this effect and what are some of the things you will do as CEO to rejuvenate the growth of this stock.

In this assignment assume you are a CFO of a small manufacturing company and the CEO wants your input the value of budgeting. Write a three page memo to the CEO explaining the purpose, basic components of the budget, and the benefits of a budget. As an appendix to your memo, discuss the capital budget process (purpose and value) and the various methods used to evaluate capital investment projects, including the pros and cons of each method. Include in your memo your recommendation to the CEO whether or not to prepare a budget, how long it should take and when it should begin.

Salinas Corporation acquired 20% of the outstanding common stock of Pebble Beach Corporation on December 31, 2020. The purchase price was $4,200,000 for 100,000 shares. Pebble Beach Corporation declared and paid a $.95 (cents) per share cash dividend on June 30 and on December 31, 2021. Pebble Beach reported net income of $1,720,000 for 2021. The fair market value of Pebble Beach Corporation’s stock was $30 per share at December 31, 2021.

1. Journal entries need be prepared for Salinas Corporation for 2020 and 2021, assuming Phelps is not able to exercise significant influence over Pebble Beach Corporation.
2. Journal entries need be prepared for Salinas Corporation for Salinas Corporation for 2020 and 2021, assuming that Salinas Corporation is able to exercise influence over Pebble Beach Corporation.