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 ?

Find the interest paid on a 2-year lease for a $29,334 car if the car's residual value is $18,469 and the lease has an annual interest rate of 5.3%.

Round your answer to the nearest dollar.

Find the interest paid on a 2-year lease for a $29,537 car if the car depreciates at an annual rate of 13% and the lease has an annual interest rate of 3.7%.

Round your answer to the nearest dollar.

At the beginning of 2019, its first year of operations, Cooke Company purchased an asset for $100,000. This asset has an 8-year economic life with no residual value, and it is being depreciated by the straight-line method for financial reporting purposes. For tax purposes, however, the asset is being depreciated using the MACRS (200%, 5-year life) method.

During 2019, Cooke reported pretax financial income of $51,500 and taxable income of $44,000. The depreciation temporary difference caused the difference between the two income amounts. The tax rate in 2019 was 30%, and no change in the tax rate had been enacted for future years.

Required:

What is the operating cash flow for year 4 of project A that Platinum Water Banking should use in its NPV analysis of the project? The tax rate is 10 percent. During year 4, project A is expected to have relevant revenue of 76,000 dollars, relevant variable costs of 25,000 dollars, and relevant depreciation of 11,000 dollars. In addition, Platinum Water Banking would have one source of fixed costs associated with the project A. Yesterday, Platinum Water Banking signed a deal with Jabari Advertising to develop a marketing campaign. The terms of the deal require Platinum Water Banking to pay Jabari Advertising either 26,000 dollars in 4 years if project A is pursued or 12,000 dollars in 4 years if project A is not pursued. Finally, the equipment purchased for the project would be sold in 4 years for an expected after-tax cash flow of 12,000 dollars.

The following are extracts from an income statement for the year ended 30^th June 2018:

What is profit before tax?

Assume that you are the president of your company and paid a year-end bonus according to the amount of net income earned during the year. When prices are rising, would you choose a FIFO or weighted average cost flow assumption? Explain, using an example to support your answer. Would your choice be the same if prices were falling?

There are on average 12.0 small airplane crashes in the US each year.

1.What is the standard deviation of the number of small airplane crashes that will happen in the US in the next 3 years?

2.What is the probability that there will be exactly 10 small airplane crashes in the US in 2021?

3.We will find the probability that there will be fewer than 14 small airplane crashes in the US in 2021, using normal approximation. In the process, we will need to use a table or app to find P(Z ≤ z) for Z standard normal, and letting z be what?