Cash Flow Budgeting - Company A is experiencing rapid growth due to the popularity of its recent hardware release. Current sales of $100,000, which increased from $80,000 the previous month, are expected to grow at a 30% rate. Cost of sales are stable 70% of sales revene, yielding a 30% gross profit. Company A sales are 15% for cash with the remaining 85% collected the following month. Inventory-on-hand is maintained at a level to support the following month's sales. Inventory is paid for at the time of receipt. Company A began the period with a cash balance of $65,000.

(a) For the current month and following three months, determine Company A's: (INCLUDE FORMULAS USED TO SOLVE PROBLEM)

- Revenue

- Cost of sales

- Gross profit

- Accounts receivable

- Inventory

- Cash collections

- Cash disbursements

(b) Is Company A gross profit increasing or declining?

(c) Is Company A cash flow increasing or declining?

(d) What is Company A cash balance at the end of the four-month period?

Cash Flow Budgeting - Company B is experiencing rapid growth due to the popularity of its recent clothing line release. Current sales of $250,000, which increased from $190,000 the previous month, are expected to grow at a 20% rate. Cost of sales are a stable 35% of sales revenue, yielding a 65% gross profit. Company B sales are 30% for cash with the remaining 70% collected the following month. Inventory-on-hand is maintained at a level to support the following two months' sales. Inventory is paid for at the time of receipt. Company B began the period with a cash balance fo $70,000.

(e) For the current month and following three months, determine Company B: (INCLUDE FORMULAS USED TO SOLVE PROBLEMS)

- Revenue

- Cost of sales

- Gross profit

- Accounts receivable

- Inventory

- Cash collections

- Cash disbursements

(f) Is Company B gross profit increasing or declining?

(g) Is Company B cash flow increasing or declining?

(h) What is Company B cash balance at the end of the four-month period?

GENERAL JOURNAL HAVE 14 ENTRIES

The investment manager of 4th National Bank invests some of the bank’s financial resources in trading securities. During the last quarter of 2018, the following transactions occurred in regard to these trading securities:

On December 31, 2018, the market values of the shares were as follows: Morgan, $87 per share; Parker, $61 per share; and Tathem, $37.25 per share. The bank held no trading securities at the beginning of the last quarter of 2018.

Required:

​(Efficiency analysis)  The Brenmar Sales Company had a gross profit margin​ (gross profitsdivided by​sales) of 32 percent and sales of $ 9.4 million last year.  74 percent of the​ firm's sales are on​ credit, and the remainder are cash sales. ​ Brenmar's current assets equal $ 1.4 ​million, its current liabilities equal $ 300 comma 900​, and it has $ 108 comma 200 in cash plus marketable securities.

a. If​ Brenmar's accounts receivable equal $ 562 comma 100​, what is its average collection​ period?

b. If Brenmar reduces its average collection period to 20 ​days, what will be its new level of accounts​ receivable?

c.Brenmar's inventory turnover ratio is 8.3 times. What is the level of​ Brenmar's inventories?

On Excel

data shows hours of experience and the corresponding quality scores for employees at a plant. The company is interested in studying the relationship between hours of experience and quality scores.

a)Compute the correlation coefficient between hours of experience and quality scores. Use Excel’s CORREL function.

b)Construct a scatter plot of quality scores vs. hours of experience. Does there appear to be a relationship? What kind?

c)Obtain a regression output that could be used to predict quality scores based on hours of experience. Based on the output, what is the regression equation?

Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,600

units. Southeastern estimates its annual holding cost for this item to be ?$26 per unit. The cost to place and process an order from the supplier is ?$74.

The company operates 300 days per? year, and the lead time to receive an order from the supplier is 2 working days.

a. what is the economic order quantity? (round to the nearest whole number)

b. what are the annual holding costs? (round to the nearest whole number)

c. what are the annual ordering costs? (round to the nearest whole number)

d. what is the reorder point? (round to the nearest whole number)

1.) Bonds payable is a(n) _________________ account.

Multiple Choice: Choose one of the following listed below

Asset, Liability, Equity, Revenue, Expense

2.) Discount on Bonds Payable is a(n) _________________ account.

Multiple Choice

Asset, Liability, Equity, Revenue, Expense

3.) Common Stock is a(n) _________________ account.

Multiple Choice

Asset, Liability, Equity, Revenue, Expense

4.) Dividends is a(n) _________________ account.

Multiple Choice

Asset, Liability, Equity, Revenue, Expense

5.) Premium on Bonds Payable is a(n) _________________ account.

Multiple Choice

Asset, Liability, Equity, Revenue, Expense

6.) Preferred Stock is a(n) _________________ account.

Multiple Choice

Asset, Liability, Equity, Revenue, Expense

7.) Treasury Stock is a(n) _________________ account.

Multiple Choice

Asset, Liability, Equity, Revenue, Expense

8.) Accounts receivable is a(n) _________________ account.

Multiple Choice

Asset, Liability, Equity, Revenue, Expense

9.) Cash is a(n) _________________ account.

Multiple Choice

Asset, Liability, Equity, Revenue, Expense

10.) Accumulated Depreciation is a(n) _________________ account.

Multiple Choice

Asset, Liability, Equity, Revenue, Expense

Question 1:

Menara Wealth Management involved the following transactions during September 2020, the first month of its operation:

Required:

1. Prepare journal entries to record all of the above transactions.

(5.75)

2. Post the journal entries to the relevant three column ledgers.

(6)

3. Prepare the trial balance as at 30 September 2020.

(2.75)

Bickel Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of November:

Required:

Prepare the company's flexible budget performance report for November. Label each variance as favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

BALEY CORPORATION PLANNING RISK ASSESSMENT

You are in the process of planning for the audit of a newly obtained client Baley Corporation, for the year ended December 31, 2017. Baley is regulated by the state utility commission and because it is a publicly traded company the audited financial statements must be filed with the Securities and Exchange Commission (SEC).

During the risk assessment you have learned the following:

Baley is considerably more profitable than many of its competitors, largely due to its extensive investment in information technologies used in its energy distribution and other key business processes. Recent growth into rural markets, however, has placed some strain on 2017 operations.

Baley expanded its investments into speculative markets and is also making greater use of derivative and hedging transactions to mitigate some of its investment risks. Because of the complexities of the underlying accounting associated with these activities, Baley added several highly experienced accountants within its financial reporting team. Internal audit, which has direct reporting responsibility to the audit committee, is also actively involved in reviewing key accounting assumptions and estimates on a quarterly basis.

Your discussions with the predecessor auditor revealed that the client has experienced some difficulty in correctly tracking existing property, plant, and equipment items. This largely involves equipment located at its multiple energy production facilities. During the recent year, Baley acquired a regional electric company, which expanded the number of energy production facilities.

You plan to staff the audit engagement with several members of the firm who have experience in auditing energy and public companies. The extent of partner review of key accounts will be extensive.

Required:

Based on the above information, discuss the risk factors in the December 31, 2017, financial statements of Baley Corporation. In your discussion, identify the audit risk model component (Audit Risk, Inherent Risk, Control Risk, or Detection Risk) affected by the risk factor and the impact on both the audit risk model component (Increase or Decrease) and the sufficiency and appropriateness of the evidence. Provide examples of evidence when appropriate (your examples can be used more than once). The best way to organize your case is to discuss each risk factor separately. For example:

Baley Corporation is a new audit client for the firm. The engagement team will be unfamiliar with the operations, personnel, and controls of Baley Corporation. When auditors are unfamiliar with the client’s business, this can cause an increase in the risk of material misstatement, specifically inherent risk. In addition, since this is a new client, the firm may wish to lower audit risk. The engagement team will need to increase both the amount of evidence and the quality of evidence. Larger sample sizes may be necessary for key accounts such as Cash, Accounts Receivable, Sales. The engagement team may want to test equipment in multiple locations. An increase in direct evidence will be required; for example, bank statements sent directly from the bank to the auditor, and accounts receivable confirmations.