Williams-Santana, Inc., is a manufacturer of high-tech industrial parts that was started in 2009 by two talented engineers with little business training. In 2021, the company was acquired by one of its major customers. As part of an internal audit, the following facts were discovered. The audit occurred during 2021 before any adjusting entries or closing entries were prepared. The income tax rate is 25% for all years.

1. A five-year casualty insurance policy was purchased at the beginning of 2019 for $36,500. The full amount was debited to insurance expense at the time.
2. Effective January 1, 2021, the company changed the salvage value used in calculating depreciation for its office building. The building cost $612,000 on December 29, 2010, and has been depreciated on a straight-line basis assuming a useful life of 40 years and a salvage value of $100,000. Declining real estate values in the area indicate that the salvage value will be no more than $25,000.
3. On December 31, 2020, merchandise inventory was overstated by $26,500 due to a mistake in the physical inventory count using the periodic inventory system.
4. The company changed inventory cost methods to FIFO from LIFO at the end of 2021 for both financial statement and income tax purposes. The change will cause a $975,000 increase in the beginning inventory at January 1, 2022.
5. At the end of 2020, the company failed to accrue $16,700 of sales commissions earned by employees during 2020. The expense was recorded when the commissions were paid in early 2021.
6. At the beginning of 2019, the company purchased a machine at a cost of $750,000. Its useful life was estimated to be ten years with no salvage value. The machine has been depreciated by the double-declining balance method. Its book value on December 31, 2020, was $480,000. On January 1, 2021, the company changed to the straight-line method.
7. Warranty expense is determined each year as 1% of sales. Actual payment experience of recent years indicates that 0.75% is a better indication of the actual cost. Management effects the change in 2021. Credit sales for 2021 are $4,300,000; in 2020 they were $4,000,000.

Required:
For each situation:
1. Identify whether it represents an accounting change or an error. If an accounting change, identify the type of change. For accounting errors, choose "Not applicable".
2. Prepare any journal entry necessary as a direct result of the change or error correction, as well as any adjusting entry for 2021 related to the situation described. Any tax effects should be adjusted for through Income tax payable or Refund—income tax.

Question 1:

Assume that it is now January 1, 2010. ABC is experiencing is using all the earnings for expansion and therefore, has no dividends. The company will pay a dividend of $1.5 coming 4 years from today. The dividends are expected to grow at a super-normal growth rate of 20% for year 5 and year 6, after which the company achieves a long run growth rate of 6%. Stockholders require a return of 12%.

a. Calculate ABC's non-constant dividends from year 1 to year 6. Also make a time-line.

b. Calculate ABC's horizon value.

c. Calculate the value of the stock today, P̂0.

d. Calculate the expected dividend yield, capital gains yield, and total return expected for 2010.

Question 1:

Assume that it is now January 1, 2010. ABC is experiencing is using all the earnings for expansion and therefore, has no dividends. The company will pay a dividend of $1.5 coming 4 years from today. The dividends are expected to grow at a super-normal growth rate of 20% for year 5 and year 6, after which the company achieves a long run growth rate of 6%. Stockholders require a return of 12%.

a. Calculate ABC's non-constant dividends from year 1 to year 6. Also make a time-line.

b. Calculate ABC's horizon value.

c. Calculate the value of the stock today, P̂0.

d. Calculate the expected dividend yield, capital gains yield, and total return expected for 2010.

Haley is worried that Troy will be without health insurance after he graduates from college with his B.S./B.A. degree in a few years. Her primary worry is that he may not immediately find employment or be eligible for employer-provided coverage for an extended period of time, such as ninety days. Given these concerns, which of the following are examples of appropriate insurance coverage recommendations for Troy once he graduates?

a. Purchase no coverage; Haley’s concerns are not valid as the Affordable Care Act (ACA) of 2010 extends coverage under a parental policy until young adults reach the age of twenty-six.
b. Purchase no coverage; Haley’s concerns are not valid as the Affordable Care Act (ACA) of 2010 extends coverage under a parental policy until the age of twenty-six as long as the young adult does not have coverage available through an employer plan. When available, he will have coverage.
c. Extend his current coverage through a COBRA extension.
d. Purchase insurance through an Affordable Care Act (ACA) of 2010 high-risk pool.

The accompanying data set provides the closing prices for four stocks and the stock exchange over 12 days:

Using Excel's Data Analysis Exponential Smoothing tool, forecast each of the stock prices using simple exponential smoothing with a smoothing constant of 0.3.

For example, help me to understand how to complete the exponential smoothing forecast model for Stock A.

Date Forecast A

9/3/2010 ____

9/7/2010 ____

9/8/2010 ____

9/9/2010 ____

9/10/2010 ____

9/13/2010 ____

9/14/2010 ____

9/15/2010 ____

9/16/2010 ____

9/17/2010 ____

9/20/2010 ____

9/21/2010 ____

Exercise 13-13 - Topic - Non Financial and Current Liabilities

Ayayai Corporation offers enriched parental benefits to its staff. While the government provides compensation based on Employment Insurance legislation for a period of 12 months, Ayayai increases the amounts received and extends the period of compensation. The benefit program tops up the amount received to 100% of the employee’s salary for the first 12 months, and pays the employee 70% of his or her full salary for another 6 months after the EI payments have stopped.
Zeinab Jolan, who earns $52,000 per year, announced to her manager in early June 2020 that she was expecting a baby in mid-November. On October 29, 2020, 9 weeks before the end of the calendar year and Ayayai’s fiscal year, Zeinab applied for and began her 18-month maternity leave. Assume that the Employment Insurance program pays her a maximum of $720 per week for 52 weeks.
For the purpose of this question, ignore any tax, CPP, and EI deductions when making payments to Zeinab.

A.) Prepare all entries that Ayayai Corporation must make during its 2020 fiscal year related to the parental benefits plan in regard to Zeinab Jolan.

B.) Prepare one entry to summarize all entries that the company will make in 2021 relative to Zeinab Jolan’s leave.

C.) Calculate the amount of parental benefits payable at December 31, 2020, and 2021.

Explain how these amounts will be shown on Ayayai’s SFP. (Round answers to 0 decimal places, e.g. 5,275.)

How do innovation, technology, and the concept of “going green” all pertain to the concepts of strategies for organizational change? Are innovation, technology and “green” efforts important considerations in the study of change? Why or why not? Use and cite a minimum of three scholarly references beyond the texts used in the course to defend your reasoning.

Is big data analytics used for service innovation at Amazon? If so, please write a brief description. Feel free to use any publicly available documents and internal information for the case organization background description in terms of the BDA infrastructures, data strategies, and current practices that were related to service innovation.

Pro forma income statement The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $ 1.64 million. Interest expense is expected to remain unchanged at $ 38 comma 000 , and the firm plans to pay $ 74 comma 000 in cash dividends during 2020. Metroline Manufacturing's income statement for the year ended December 31, 2019 , is given LOADING... , along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components. a. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2020. b. Use fixed and variable cost data to develop a pro forma income statement for the year ended December 31, 2020. c. Compare and contrast the statements developed in parts a. and b. Which statement probably provides the better estimate of 2020 income? Explain why.

Pro forma income statement   The marketing department of Metroline Manufacturing estimates that its sales in 2020 will be $1.53 million. Interest expense is expected to remain unchanged at $34,000, and the firm plans to pay $74,000 in cash dividends during 2020. Metroline Manufacturing's income statement for the year ended December31, 2019i is given (See belong Graph) ,along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components. a. Use the percent-of-sales method to prepare a pro forma income statement for the year ended December 31, 2020 b. Use fixed and variable cost data to develop a pro forma income statement for the year ended December 31, 2020. c. Compare and contrast the statements developed in parts a. and b. Which statement probably provides the better estimate of 2020 income? Explain why.

Metroline Manufacturing Breakdown of Costs and Expenses into Fixed and Variable Components for the Year Ended December 31, 2019

Cost of goods sold:

Fixed cost $202,000

Variable cost 700000

Total cost $902,000

Operating expenses Fixed expenses $39,000

Variable expenses 80000

Total expenses $119,000

Metroline Manufacturing Income Statement for the Year Ended December 31, 2019

Sales revenue $1,396,000

Less: Cost of goods sold 902000

Gross profits $494,000

Less: Operating expenses 119000

Operating profits $375,000

Less: Interest expense 34000

Net profits before taxes $341,000

Less: Taxes (rate = 40%) 136400

Net profits after taxes $204,600

Less: Cash dividends 63000

To retained earnings $141,600