Peter Gitman is the Senior Relationship Manager at the ABC Wealth Management Company which provides financial planning advice to high net worth customers. One of his customers Linda Scott told him that she is thinking of giving approximately HKD500,000 to charity to reduce her income taxes. Peter is also a member of the executive committee of the ‘Lovely Home for Seniors’, a charity organization providing services to the elders. The organization is planning its fundraising activity for the year. Peter recommends that the President of the ‘Lovely Home for Seniors’ call on Linda and ask for a donation in a similar range.

Comment the action taken by Peter Gitman according to the professional and ethical standards.

Peter Gitman is the Senior Relationship Manager at the ABC Wealth Management Company which provides financial planning advisory to high net worth customers. One of his customers Linda Scott told him that she is thinking of giving approximately HKD500,000 to charity to reduce her income taxes. Peter is also the member of the executive committee of the ‘Lovely Home for Seniors’, a charity organization providing services to the elders. The organization is planning its fundraising activity for the year. Peter recommends that the President of the ‘Lovely Home for Seniors’ call on Linda and ask for a donation in similar range.

Comment the action taken by Peter Gitman according to the professional and ethical standards.

Campbell Corporation has three divisions, each operating as a responsibility center. To provide an incentive for divisional executive officers, the company gives divisional management a bonus equal to 15 percent of the excess of actual net income over budgeted net income. The following is Atlantic Division’s current year’s performance:

**What is requirement B2? Please assist & how did you get the answer***

The president has just received next year’s budget proposal from the vice president in charge of Atlantic Division. The proposal budgets a 3 percent increase in sales revenue with an extensive explanation about stiff market competition. The president is puzzled. Atlantic has enjoyed revenue growth of around 8 percent for each of the past five years. The president had consistently approved the division’s budget proposals based on 3 percent growth in the past. This time, the president wants to show that he is not a fool. “I will impose a 13 percent revenue increase to teach them a lesson!” the president says to himself smugly.

Assume that cost of goods sold and selling and administrative expenses remain stable in proportion to sales.

Required

a. Prepare the budgeted income statement based on Atlantic Division’s proposal of a 3 percent increase.

b-1. Prepare income statement with 8% growth.

b-2. If growth is actually 8 percent as usual, how much bonus would Atlantic Division’s executive officers receive if the president had approved the division’s proposal?

c. Prepare the budgeted income statement based on the 13 percent increase the president imposed.

d. If the actual results turn out to be a 8 percent increase as usual, how much bonus would Atlantic Division’s executive officers receive since the president imposed a 13 percent increase?

Requirement A

Requirement B1

Requirement B

If growth is actually 8 percent as usual, how much bonus would Atlantic Division’s executive officers receive if the president had approved the division’s proposal?

What is the Bonus??????

Requirement C & D

Luke Corporation produces a variety of products, each within their own division. Last year, the managers at Luke developed and began marketing a new chewing gum, Bubbs, to sell in vending machines. The product, which sells for $5.25 per case, has not had the market success that managers expected, and the company is considering dropping Bubs.

The product-line income statement for the past 12 months follows:

Table 1

All products at Luke receive an allocation of corporate overhead costs, which is computed as 5 percent of product revenue. The 5 percent rate is computed based on the most recent year's corporate cost as a percentage of revenue. Data on corporate costs and revenues for the past two years follow:

Table 2

  Assume the fixed corporate overhead is $1,454,000 in each year. None of these fixed costs are specifically traceable to Bubbs.

Roy O. Andre, the product manager for Bubbs, is concerned about whether the product will be dropped by the company and has employed you as a financial consultant to help with some analysis. In addition to the information given above, Mr. Andre provides you with the following data on product costs for Bubs:

Table 3

Table 4 - Regression Analysis of Table 3 Data

Adjusted R-squared               0.957

QUESTION: Assume the variable allocated corporate costs are $0.192 per case of Bubbs. Given methods used to compile Table 1, what would the price per case of Bubbs have to be for the product line margin to break-even. Assume no change in the number of units sold. You should apply allocated corporate overhead at the rate used by Lukes. Round to the nearest 0.001 per case.

A new accountant at Sheridan Ltée is trying to identify which of the following amounts should be reported as cash and cash equivalents in the April 30 year-end statement of financial position:

What amount should Sheridan report as its cash balance at April 30?

1. The benefits of market segmentation includes

A. To search attractive marketing options

B. To determine the product mix

C. To select the target market

D. All of the above

E. None of the above

2. The objective of market segmentation includes

A. To find out the new markets

B. To make real customers to the prospects customers of the company

C. To make customer-oriented to marketing activities of the firm

D. All of the above

E. None of the above

3. Which is the basis of market segmentation as per Philip Kotler?

A. Psychographic basis

B. Behavioural Basis

C. Geographical basis

D. Demographic basis

E. All of the above

4. Why will firms adopt corporate environmental initiatives?

A.Competitiveness

B.Ecological concern

C.All of the above

5. A firm, which tied up with Environmental Defense Fund to minimize its waste and to use recycled packaging?

A.Coke

B.McDonalds

C.Pepsi

6. Which is not an environmental group?

A.Greenpeace

B.Haribon

C.None of the above

7. A growing worldwide consciousness particularly in developed countries of the need to promote the environment is known as

A.Societal marketing

B.Green marketing

C.Relationship marketing

Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2018 with an allowance for sales returns of $380,000. During 2018, Halifax sold merchandise on account for $12,300,000. This merchandise cost Halifax $8,610,000 (70% of selling prices). Also during the year, customers returned $603,000 in sales for credit. Sales returns, estimated to be 5% of sales, are recorded as an adjusting entry at the end of the year.

Required:

1. Prepare an entry to record actual merchandise returns as they occur (not adjusting the allowance for sales returns), and then record a year-end entry to adjust the allowance for sales returns to its appropriate balance.
2. What is the amount of the year-end allowance for sales returns after the adjusting entry is recorded?

Journal Entry Worksheet

1.Record the actual sales returns.

2.Record the return of merchandise to stock.

3.Record the year-end adjusting entry for estimated returns.

4.Record the adjusting entry for the estimated return of merchandise to inventory.

You meet with Elizabeth and discuss the expected revenue and costs related to the Cookie Shop that she is planning on opening. Elizabeth has done her marketing research of customer demand and what customers are willing to pay for a dozen cookies. Elizabeth provides the Revenue and Cost information below and states you that she thinks that the shop will only be able to sell 1,000 dozen of cookies in a month based on this data.

Quantity of cookies sold (in dozens) 1,000

Selling price for a dozen cookies $17.50

Variable Cost to bake a dozen cookies $9.75

Monthly Fixed Expenses of the shop

Rent for the shop $3,000.00

Lease cost for baking equipment $1,200.00

Utilities and Maintenance $500.00

Wages paid to 1 part-time employee $1,000.00

Total Monthly Fixed Expenses $5,700.00

Elizabeth said that she will be quitting her job to work full-time in the Cookie Shop. She says that her monthly living expenses total $4,000 per month (including payments for her college loans, car payment, apartment rent and food and other living expenses). So she needs you to help her determine how many dozens of cookies will she have to sell in a month to have the Cookie Shop make $4,000 in Net income.

Monthly Target Profit $4,000.00

You discuss with Elizabeth the following 3 options that could be implemented

Option # 1 Increase the selling price of a dozen cookies by 20%. This will casue a 10% decrease in the monthly unit (dozen) sales.

# 2 Increase the selling price of a dozen cookies by 20% and spend $750 monthly for a social media marketing campaign. This is expected to keep the monthly unit sales at 1,000 dozen

# 3 Move home and live with her parents and save $2,000 per month in living expenses. This would allow the monthly target income to be reduced from $4,000 to $2,000. Use the original revenue and cost assumptions.

1. What is the momentum of a photon of light that has a frequency of 2.9 x 10^14 Hz?

a) 1.5 x 10^-28 kg m/s

b) 2.1 x 10^-28 kg m/s

c) 4.4 x 10^-28 kg m/s

d) 6.3 x 10^-28 kg m/s

e) 6.2 x 10^-28 kg m/s

ANSWER E

2. What is the momentum of a photon of light that has a wavelength of 480nm?

a) 1.1 x 10^-27 kg m/s

b) 2.2 x 10^-27 kg m/s

c) 1.8 x 10^-27 kg m/s

d) 1.4 x 10^-27 kg m/s

e) 2.0 x 10^-27 kg m/s

ANSWER: D

Greg Norman is the auditor in charge of the Rogers Pharmaceutical Company audit. In assessing the internal controls for the company, Greg finds that the company bills customers and receives payments at three offices in three separate states using three different and incompatible software systems for tracking payments. Rogers’s terms of sale varies with the customer and varies from 30 days to 90 days. Open invoices are aged based on when they were booked to the receivables, but cash, chargebacks, or rebates are aged based on when they were applied to the account. Thus, a credit could be posted to the customer’s account when it was received, but the related invoice(s) remains open as a receivable and continues to age. Chargebacks are significant and linked to batch of product rather than invoice. Most similar companies have credit limits or credit checks but Rogers’s does not because all wholesalers are board certified M.D.’s, like the company’s founder.

Rogers’s total accounts receivable was $25,276,025.

Rogers’s total accounts receivable past due over 61 days was $17,434,500.

Rogers’s past top-five wholesalers had accounts receivable of $13,457,516.

Rogers’s top-five wholesale customers had $5,428,850 past due over 61 days.

Rogers’s allowance for doubtful accounts of $266,000 did not include any estimates for the top-five wholesale customers because it was management’s belief at the time that the top-five wholesalers did not present a collection risk.

Required:

Based on these control issues and findings, explain some of the most likely sources of misstatement that exist.