The following information is available for two different types of businesses for the 2016 accounting year. Hopkins CPAs is a service business that provides accounting services to small businesses. Sports Clothing is a merchandising business that sells sports clothing to college students. Data for Hopkins CPAs 1. Borrowed $41,000 from the bank to start the business. 2. Provided $31,000 of services to clients and collected $31,000 cash. 3. Paid salary expense of $19,800. Data for Sports Clothing 1. Borrowed $41,000 from the bank to start the business. 2. Purchased $20,000 inventory for cash. 3. Inventory costing $16,800 was sold for $30,000 cash. 4. Paid $2,400 cash for operating expenses.

Person A has to immunize a series of payments going to customers in Year 1 $450,000 , in Year 2 $350,000 Year 3 $600,000 The market yield for the cash flows corresponding to the required payments is 7%. Person A hires Person B to immunize the fund...Person B pursues an immunization strategy by investing in 1-year Zeroes and perpetuities, which have a yield of 9%.

A.What is the Duration of the pension fund?

B.What is the % of zeros will Person B suggest the Person A to invest?

C.What will  percentage of perpetuities be?

You are engaged to examine the financial statements of Lauzon Inc. for the year ended December 31.On October 1, Lauzon Inc. borrowed $250,000 from a local bank to finance a plant expansion. The loan agreement provided for the annual payment of principal and interest over three years. Lauzon’s existing plant was pledged as security for the loan.
Unfortunately, Lauzon ran into some difficulties in acquiring the new plant site. Thus, the plant expansion was delayed. Lauzon then proceeded to “plan B,” which was to invest the borrowed funds in stocks and bonds. As a result, on October 20, the entire amount borrowed was invested in securities.

What relevant evidence needs to be obtained to support the audit of investments in securities? (more than one correct answers)

Evidence that securities are legitimate and held by Lauzon to ascertain existence.

Evidence the $250,000 is the amount actually owed on the loan to ascertain the disclosure assertion has been met.

Evidence the securities are owned by Lauzon to ascertain the ownership rights.

Evidence of the cost and market value of the securities held at December 31st to determine the completeness of the balance.

Evidence the loan transaction and securities purchase transactions actually took place during the year to ensure occurrence.

Determine if any write-downs to market are required to determine if the balance is accurate and valued properly.

This year Noah transferred $7 million to an irrevocable trust established for the benefit of his niece. The trustee
is directed to accumulate income for the next five years before distributing the before distributing the trust corpus to
Noah’s niece. In past years Noah has made taxable gifts of $6 million and used an applicable credit on an exemption
equivalent of $5 million. What amount of gift tax, if any, must Noah remit?

Please show work if possible! thanks

You are engaged to audit Buttfuski Alcohol Distribution Company for the year ended 12.31.18 and to reduce the workload at year end, the company, upon your recommendation took its annual physical inventory at 11.30.18. You observed the taking of the inventory and did test counts throughout the physical observation. The company’s inventory account includes raw materials and work in process maintained on a perpetual basis and valued at FIFO cost. There is no finished goods inventory.

The company’s physical inventory revealed that the inventory of $1,695,960 was understated by $84,000. To avoid delay in completing its monthly financial statements, the company decided not to adjust the inventory until year end except for some obsolete inventory amounting to $7,000 that was charged to cost of goods sold. You noted the following: pricing tests revealed inventory overstated by $61,000; an understatement of physical inventory of $4,200 because of mathematical errors; cost of goods sold amounted to $10,000,000.

Required:

Calculate the adjusted amount of inventory at 11.30.18

Calculate the adjusted amount of cost of goods sold at 11.30.18, assuming the effect of the above transactions would flow through cost of goods sold.

The following are the cash flows of two projects:

If the opportunity cost of capital is 12%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.)

Project Profitability Index:

A

B

Inventory Valuation under Absorption and Variable Costing

At the end of the first year of operations, 5,100 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:

Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept.

Fajar Factory wants to build a rice processing factory that will take a year to build. $5 million is spent right away and another $5 million is spent next year. The company CEO is expecting that the factory will lose $1 million in its first year of operation and lose another half a million in its second year of operation. with that initial investment, the factory is expected to produce 8000 rice packs per month and sold fo $30 per unit for nest 20 years. meanwhile, the production cost for pack is $20.

If the discount rate is 4% ,what is the net present value of the investment ?

What if discount rate is 2%? Whould your decision different ?