Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process. Sales Unit sales for November 2019 111,000 Unit sales for December 2019 103,000 Expected unit sales for January 2020 114,000 Expected unit sales for February 2020 114,000 Expected unit sales for March 2020 116,000 Expected unit sales for April 2020 127,000 Expected unit sales for May 2020 139,000 Unit selling price $12 Waterways likes to keep 10% of the next month’s unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2019, totaled $185,400. Direct Materials Direct materials cost 80 cents per pound. Two pounds of direct materials are required to produce each unit. Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2019, totaled 11,400 pounds. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $104,595. Direct Labor Labor requires 12 minutes per unit for completion and is paid at a rate of $9 per hour. Manufacturing Overhead Indirect materials 30¢ per labor hour Indirect labor 50¢ per labor hour Utilities 50¢ per labor hour Maintenance 30¢ per labor hour Salaries $41,000 per month Depreciation $18,100 per month Property taxes $2,500 per month Insurance $1,200 per month Maintenance $1,200 per month Selling and Administrative Variable selling and administrative cost per unit is $1.50. Advertising $15,000 a month Insurance $1,500 a month Salaries $71,000 a month Depreciation $2,500 a month Other fixed costs $2,900 a month Other Information The Cash balance on December 31, 2019, totaled $98,000, but management has decided it would like to maintain a cash balance of at least $700,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.70 per share for 4,740 shares outstanding. The company has an open line of credit with Romney’s Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 9% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $530,000 equipment purchase is planned for February.

For the first quarter of 2020, prepare a sales budget.

For the first quarter of 2020, prepare a production budget.

For the first quarter of 2020, prepare a direct materials budget. (Round cost per pound to 2 decimal places, e.g. 0.25 and all other answers to 0 decimal places, e.g. 2,520.)

For the first quarter of 2020, prepare a direct labor budget. (Round time per unit to nearest hour, e.g. 30 minutes will be rounded to 0.5 hours)

For the first quarter of 2020, prepare a manufacturing overhead budget. (Round overhead rate to 2 decimal places, e.g. 5.25 and all other answers to 0 decimal places, e.g. 2,520. List Variable Costs first.)

For the first quarter of 2020, prepare a selling and administrative budget. (Enter per unit expenses rounded to 2 decimal places. E.g. 1.25)

For the first quarter of 2020, prepare a schedule for expected cash collections from customers.

For the first quarter of 2020, prepare a schedule for expected payments for materials purchases. (Round answers to 0 decimal places, e.g. 2,520.)

For the first quarter of 2020, prepare a cash budget. (Round answers to 0 decimal places, e.g. 2,520.)

Background Information Note the following:

• Acme Corporation is a publicly listed company

• ACME’s Fiscal year end is December 31

• In addition to the cash account being reconcile here; ACME has a separate Revolving Credit account.

  This is a revolving credit facility where interest is accrued on the average balance outstanding during the month. The interest amount is required to be paid on a monthly basis. The correct is amount calculated and taken from the account automatically by the bank.

• The facility has an annual interest rate of 4%

• Management has set-out in the Financial Statements that the average balance outstanding in this

  revolving credit facility is normally at around $ 150,000.

• The Audit Committee has also informed the Partner that the CRA audited ACME in the previous year

  and levied a penalty of $50,000 and has informed the Board that they plan continue their audit in the new year.

  Required

  Part 1

1. a) From the information provided in EXHIBIT A, perform and document a Bank Reconciliation. - 20 marks

2. b) From the Background info. provided above, identify potential errors and disclosure requirements - 5 marks

Part 2

1. a) Identify the financial assertions relating to the Cash account addressed by the Bank Reconciliation and explain how. – 5 marks

2. b) Identify what type of activity the Bank Reconciliation is. – 5 marks

3. c) Identify the 6 possible characteristics (of the activity above) and which apply to the Bank Rec. – 5 marks

BONUS
How would the Auditor test the identified characteristics. – 4 marks

EXHIBIT A

You’ve Got Mail…and You’re Fired! The Case of RadioShack No one likes to receive bad news, and few like to give it. In what is heralded as one of the biggest human resources blunders of 2006, one company found a way around the discomfort of firing someone face-to-face. A total of 400 employees at the Fort Worth, Texas, headquarters of RadioShack Corporation (NYSE: RSH) got the ultimate e-mail message early one Tuesday morning. The message simply said, “The work force reduction notification is currently in progress. Unfortunately, your position is one that has been eliminated.” Company officials argued that using electronic notification was faster and allowed more privacy than breaking the news in person, and additionally, those employees who were laid off received generous severance packages. Organizational consultant Ken Siegel disagrees, proclaiming, “The bottom line is this: To almost everyone who observes or reads this, it represents a stupefying new low in the annals of management practice.” It’s unclear what, if any, the longterm effect will be for RadioShack. It isn’t just RadioShack that finds it challenging to deal with letting employees go. Terminating employees can be a painful job for many managers. The communication that takes place requires careful preparation and substantial levels of skill. BusinessWeek ethics columnist Bruce Weinstein suggests MAN 1163_2 (April 4 th, 2020) © 2020 LAMBTON COLLEGE IN TORONTO that anyone who is involved with communicating with downsized employees has an ethical responsibility to do it correctly, which includes doing it in person, doing it privately, giving the person your full attention, being honest but sensitive, and not rushing the person. Some organizations outsource the job of letting someone go to “terminators” who handle this difficult task for them. In fact, Up in the Air, the 2009 movie starring George Clooney that was nominated for six Oscars, chronicles changes at a workforce reduction firm and highlights many of these issues. Downsizing has been referred to using many euphemisms (language that softens the sound of the word) for termination. Here are just a few ways to say you’re about to lose your job without saying you’ve been fired: • Career alternative enhancement program • Career-change opportunity • Dehiring staff • Derecruiting resources • Downsizing employment • Employee reduction activities • Implementing a skills mix adjustment • Negative employee retention • Optimizing outplacement potential • Rectification of a workforce imbalance • Redundancy elimination • Right-sizing employment • Vocation relocation policy Regardless of how it’s done or what it’s called, is downsizing effective for organizations? Jeffrey Pfeffer, a faculty member at Stanford and best-selling author, argues no: “Contrary to popular belief, companies that announce layoffs do not enjoy higher stock prices than peers—either immediately or over time. A study of 141 layoff announcements between 1979 and 1997 found negative stock returns to companies announcing layoffs, with larger and permanent layoffs leading to greater negative effects. An examination of 1,445 downsizing announcements between 1990 and 1998 also reported that downsizing had a negative effect on stock-market returns, and the negative effects were larger the greater the extent of the downsizing. Yet another MAN 1163_2 (April 4 th, 2020) © 2020 LAMBTON COLLEGE IN TORONTO study comparing 300 layoff announcements in the United States and 73 in Japan found that in both countries, there were negative abnormal shareholder returns following the announcement.” He further notes that evidence doesn’t support the idea that layoffs increase individual company productivity either: “A study of productivity changes between 1977 and 1987 in more than 140,000 U.S. companies using Census of Manufacturers data found that companies that enjoyed the greatest increases in productivity were just as likely to have added workers as they were to have downsized.” Please Answer the Following 5 Questions: 1. What communication barriers did RadioShack likely experience as a result of terminating employees via the communication method used? 2. What do you think RadioShack’s underlying motivation was in using this form of communication? 3. What suggestions for the future would you give RadioShack when faced with the need to dismiss a large number of employees? 4. How has technology enhanced our ability to communicate effectively? In what ways has it hindered our ability to communicate effectively? 5. What ethical challenges and concerns do you think individuals involved in downsizing have?

Explain glycogenolysis, insulin level, fate of lactate, pyruvate, and alanine during the early and late fasting states

I NEED JUST EXPLAINATION FOR LATE FASTING STATES

As a process executes, it changes states. Explain what are ready state, running state, and waiting state. Also, describe when a process moves between these three states

Sandhill Corp., which uses IFRS, signs non-renewable, non-cancellable lease agreement to lease robotic equipment from Xiu Inc. The following information concerns the lease agreement.

Using (1) factor tables, (2) a financial calculator, or (3) Excel functions, calculate the amount of the right-of-use asset and lease liability.

Prepare the initial entry to reflect the signing of the lease agreement. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Prepare an amortization schedule for the term of the lease to be used by Sandhill. Use Excel. (Round answers to 0 decimal places, e.g. 5,275.)

Prepare the journal entries on Sandhill Corp.’s books to record the payments related to this lease for the years 2020 and 2021 as well as any adjusting journal entries at its fiscal year ends of December 31, 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

The Shamrock Pub provides catering services to local businesses. The following information was available for The Shamrock Pub for the years ended December 31, 2019 and 2020.

Shamrock management is preparing for a meeting with its bank concerning renewal of a loan and has collected the following information related to the above balances.

1.The cash reported at December 31, 2020, reflects the following items: petty cash $1,560 and postage stamps $120. The other current assets balance at December 31, 2020, includes the checking account balance of $3,900.

2.On November 30, 2020, Shamrock agreed to accept a 6-month, $4,940 note bearing 12% interest, payable at maturity, from a major client in settlement of a $4,940 bill. The above balances do not reflect this transaction.

3.Shamrock factored some accounts receivable at the end of 2020. It transferred accounts totaling $10,000 to Final Factor, Inc. with recourse. Final Factor will receive the collections from Shamrock's customers and will retain 2% of the balances. Final Factor assesses Shamrock a finance charge of 3% on this transfer. The fair value of the recourse liability is $360. However, management has determined that the amount due from the factor and the fair value of the resource obligation have not been recorded, and neither are included in the balances above.

4.Shamrock charged off uncollectible accounts with balances of $1,570. On the basis of the latest available information, the 2020 provision for bad debts is estimated to be 2.5% of accounts receivable.

Based on the above transactions, determine the balance for (1) Accounts Receivable and (2) Allowance for Doubtful Accounts at December 31, 2020. (Round answers to 0 decimal places, e.g. 125.)

Accounts receivable ending balance$

Allowance for doubtful ending balance$

Prepare the current assets section of The Shamrock Pub's balance sheet at December 31, 2020. (Round answers to 0 decimal places, e.g. 125.) and,

Compute Shamrock's current ratio and accounts receivable turnover for December 31, 2020. The accounts receivable turnover in 2019 was 4.37.

On January 1, 2020, Blossom Inc. agrees to buy 3 kg of gold at $32,000 per kilogram from Golden Corp on April 1, 2020, but does not intend to take delivery of the gold. On the day that the contract was entered into, the fair value of this futures contract that trades on the Futures Exchange was zero. On January 1, 2020, Blossom is required to deposit $66 with the stockbroker as a margin. The fair value of the futures subsequently fluctuated as follows:

On the settlement date, the spot price of gold is $33,000 per kilogram. Assume that Blossom complies with IFRS.

QUESTION:

1) Prepare the journal entry for the day the futures contract was signed.

2) Prepare the journal entries to recognize the changes in the fair value of the futures contract.

3) Prepare the journal entry that would be required if Blossom settled the contract on a net basis on April 1, 2020.

A 14 yr. old Caucasian female presents at the clinic complaining of ugly patches of skin on her elbows and knees. Patient states skin has been this way for years but gets worse with stress. Patient states concern that her Rheumatoid Arthritis has increased her stress level. She has no complaints of itching, or drainage. Patient states she does not have any allergies that she knows of.

Assessment: Bilateral elbows and knees have scaly, erythematous patches. There are silvery scales showing. There is no drainage or broken skin present. Patient states lesions are not painful.

5. What is the possible disease process ?