Question 1
(1) An item of stock costing $60,000 was written down to its realizable value of $35,000.
(2) School fees paid to the proprietor's son was debited to the Drawings account.
(3) $2,500 paid for a printer was written off as expense(instead of being capitalized).
(4) Assets like inventory are valued in dollars, not units, for the financial statements.
(5) Company reports revenue when it is earned instead of when the cash is collected.
(6) Assets will normally be recorded at their historical cost in balance sheet.

Required:

Identify the name of the concept or principle for the above events.

1.

T/F/Explain

Price elasticity of demand is measured using the slope of the demand curve.

2.

Our company, Slim ‘N Trim, Inc. sells pants for $40 a pair. After a successful year, you decide to try raising the price to $60. Your observation: sales drop from 50 pairs to 40. What is your price elasticity of demand calculated using the midpoint formula?

3.

After observing the value of your elasticity, does increasing your price increase, decrease, or have no effect on your total revenue? Why?

Suppose that the average annual revenue of a small business is $150,000 with a standard deviation of $40,000.

Assume that the revenue distribution is normal.

1. What is the probability that one business selected at random makes less than $120,000?

2. What is the probability that the average annual revenue of a random sample of 4 businesses is less than $120,000?

3. Why are your answers to the previous two questions different?

Suppose the monthly market for an agricultural commodity is characterized by the following equations: QS =–35+35P QD =100–10P

(a) where QS and QD are quantities in units and P is the price per unit. Graph the supply and demand curves. Be sure to calculate the P and Q intercepts for demand and the P intercept for supply. Calculate and illustrate the equilibrium price and quantity. [Hint: Show your work.

(b) Calculate both the demand and supply elasticity around the equilibrium point. [Hint: you can use either the point method or the average arc (midpoint) method.

(c) Would the entry of new producers increase or decrease total spending on the good? Explain with reference to your answer from part (b). Would the entry of new demanders lead to an increase or decrease in total revenue to producers?

(d) Suppose the government institutes a supply management program that restricts the quantity to 60. It enforces this by granting quotas for 60 units of output to existing producers. What is the new price and quantity traded? Does this policy create deadweight loss (DWL) in the market? Briefly explain and identify any DWL in your diagram.

(e) What is the value of a unit of quota? Illustrate in your diagram. What is the total value of all units of the quota?

Calculates the tax benefits of switching the business to a s corporation for each of the stakeholders involved and the business entity

For a s corporation lets say the company Is worth $100 million dollars and $17.5 million in revenue.

Bob owns 50% of the company

Mark owns 20% of the company

Tony owns 25% but his selling his portion of the company

Steve owns 5 %

tax benefits of switching the business to a s corporation?

Question No 2: (2x5=10 Marks)

Assume that you are a newly appointed junior auditor in Delloite, an auditing firm. After a 3-month
rigorous training on the job, you have been awarded the certificate of completion and is now ready to
embark on your very first assignment. Today, your first job was to evaluate the audit evidence
gathered by your team from Sohar Trading and see if they are reliable or not based on ISA 500. The
following are the evidences gathered in various forms:
a) One auditor from your team sent letters to customers to confirm their payment to Sohar
Trading. Today, you received back the letter from the customers with their confirmation and
signature.
b) You are analyzing the cash balance and bank balance of the company. You have prepared
bank reconciliation to see where the difference on cash balance is. After you finished
analyzing, you include the bank reconciliation in your audit evidence file.
c) One key official sent an email to the audit team as a reply to your inquiry about the
company’s building construction.
d) The bookkeeper submitted to the audit team the original official receipt as support to the
company’s payment of the furniture purchased.
e) The accountant gave verbal confirmation to your inquiry about the suppliers dealing with the
company.
Required:
Evaluate the reliability of each of the documents above and identify the one that is considered the
most reliable and least reliable. (2 marks each)

Assume that you are a newly appointed junior auditor in Delloite, an auditing firm. After a 3-month
rigorous training on the job, you have been awarded the certificate of completion and is now ready to
embark on your very first assignment. Today, your first job was to evaluate the audit evidence
gathered by your team from Sohar Trading and see if they are reliable or not based on ISA 500. The
following are the evidences gathered in various forms:
a) One auditor from your team sent letters to customers to confirm their payment to Sohar
Trading. Today, you received back the letter from the customers with their confirmation and
signature.
b) You are analyzing the cash balance and bank balance of the company. You have prepared
bank reconciliation to see where the difference on cash balance is. After you finished
analyzing, you include the bank reconciliation in your audit evidence file.
c) One key official sent an email to the audit team as a reply to your inquiry about the
company’s building construction.
d) The bookkeeper submitted to the audit team the original official receipt as support to the
company’s payment of the furniture purchased.
e) The accountant gave verbal confirmation to your inquiry about the suppliers dealing with the
company.
Required:
Evaluate the reliability of each of the documents above and identify the one that is considered the
most reliable and least reliable.

The following is the balance sheet of Korver Supply Company at December 31, 2020 (prior year).

Transactions during 2021 (current year) were as follows:

Additional Information:

The notes payable are dated June 30, 2020, and are due on June 30, 2022. Interest at 8% is payable annually on June 30. Depreciation on the furniture and fixtures for 2021 is $36,000. The furniture and fixtures originally cost $460,000.

Required:
Prepare a classified balance sheet at December 31, 2021, by updating ending balances from 2020 for transactions during 2021 and the additional information. The cost of furniture and fixtures and their accumulated depreciation are shown separately. (Amounts to be deducted should be indicated by a minus sign.)

The following is the balance sheet of Korver Supply Company at December 31, 2020 (prior year). KORVER SUPPLY COMPANY Balance Sheet At December 31, 2020 Assets Cash $120,000 Accounts receivable 300,000 Inventory 200,000 Furniture and fixtures (net)  150,000 Total assets $770,000 Liabilities and Shareholders’ Equity Accounts payable (for merchandise) $190,000 Notes payable 200,000 Interest payable 6,000 Common stock 100,000 Retained earnings  274,000 Total liabilities and shareholders’ equity $770,000 Transactions during 2021 (current year) were as follows: 1. Sales to customers on account $800,000 2. Cash collected from customers 780,000 3. Purchase of merchandise on account 550,000 4. Cash payment to suppliers 560,000 5. Cost of merchandise sold 500,000 6. Cash paid for operating expenses 160,000 7. Cash paid for interest on notes 12,000 Additional Information: The notes payable are dated June 30, 2020, and are due on June 30, 2022. Interest at 6% is payable annually on June 30. Depreciation on the furniture and fixtures for 2021 is $20,000. The furniture and fixtures originally cost $300,000.

Required: Prepare a classified balance sheet at December 31, 2021, by updating ending balances from 2020 for transactions during 2021 and the additional information. The cost of furniture and fixtures and their accumulated depreciation are shown separately.

please work on this assignment

Twenty-five percent of the customers entering a grocery store between 5 P.M. and 7 P.M. use an express checkout. Consider five randomly selected customers, and let x denote the number among the five who use the express checkout.

(a) What is p(3), that is, P(x = 3)? (Round the answer to five decimal places.)
p(3) =

(b) What is P(x ≤ 1)? (Round the answer to five decimal places.)
P(x ≤ 1) =

(c) What is P(2 ≤ x)? (Round the answer to five decimal places. Hint: Make use of your computation in Part (b).)
P(2 ≤ x) =

(d) What is P(x ≠ 3)? (Round the answer to five decimal places.)
P(x ≠ 3) =