The accounting profit before tax of Subang Ltd for the year ended 30 June 2020 was $320,000.

It included the following revenue and expense items:

Legal expenses 62 500

Interest expense 10 000

Bad debt expense 15 000

Depreciation expense – Plant & equipment 26 250

Entertainment Expense 2 500 Audit fee 40 000 Interest revenue 15 000 Rent revenue 10 000 Exempt income 37 500 Additional information: 1. Interest receivable at 30 June 2020 is $12,500 (2019: $15,000). Interest payable at 30 June 2020 is $500 (2019: $3,000). Interest is assessable on receipt and deductible when paid. 2. The company raised an accrual liability of $17 500 for audit work performed and not paid by 30 June 2020 (2019: $15,000). Fees for audit work are not deductible unless the audit work has been performed and paid. 3. Rent revenue relates to a contract where the annual rent is received in advance. The unearned revenue liability at 30 June 2020 is $10,000 (2019: $7,500). Rent is assessable when received. 4. Legal expenses include $25,000 related to capital transactions that are not deductible. 5. The bad debts expense relates to an account that has been written off. 6. Plant and equipment is as follows: 30 June 2020 30 June 2019 Plant & Equipment $175 000 $75 000 Accumulated depreciation 48 750 22 500 126 250 52 500 Question 1 is continued on the next page ACCY200 (MT) / Page 4 of 6 Question 1 continued 7. Tax depreciation for 30 June 2020 is $35,000. The tax written down value of plant and equipment at 30 June 2020 is $110,000 (2019: $45,000). 8. The deferred tax balances at 30 June 2019 are; deferred tax liability $6,750 and deferred tax asset $12,300. 9. The company tax rate is 30%. Required: a) Prepare the current tax worksheet and the journal entry to recognise the current tax as at 30 June 2020. b) Prepare the deferred tax worksheet and any necessary journal entries to adjust deferred tax accounts for 30 June 2020.

Metlock Inc. sells appliances to Seasons Department Store. A recent order requires Metlock to manufacture and deliver 500 toasters at a price of $88 per unit. Metlock’s manufacturing costs are approximately $44 per unit. The following schedule summarizes the production and delivery record of Hydra:

A) Assuming that Metlock recognizes revenue when the toasters are produced, how much revenue should be recognized in each of the three years?

B) Assuming that Metlock recognizes revenue at delivery, how much revenue should be recognized in each of the three years?

C) Calculate net income for the three periods under each of the two preceding assumptions. (Assumption A and B, for all 3 years)

BIG WAVE DAVE BOARD REPAIR SERVICES LTD. Dave Scott opened Big Wave Dave Board Repair Services Ltd. in June 2020. During June the following transactions were completed:

June 1 Dave invested $24,000 cash in the business for 1,000 common shares.

June 1 Purchased used board repair equipment for $26,000, paying $4,000 cash and the balance placed on account (the equipment had a list price of $27,000).

June 1 Paid $500 for the June rent.

June 3 Purchased board repair supplies for $1,800 on account.

June 5 Purchased $2,400 on a 1-year insurance policy, effective June 1st.

June 12 Billed (invoiced) customers $3,800 for repair services done in June.

June 18 Paid $3,000 of the amount owed on equipment, and $400 of the amount owed on repair supplies.

June 20 Paid $1,600 for employee salaries.

June 21 Collected $1,400 from customers billed on June 12.

June 25 Billed customers $3,000 for repair services.

June 30 Received the utilities bill for June, $150, to be paid in July.

June 30 Declared and paid a $500 cash dividend.

- Journalize and post the June transactions in the Big Wave Dave General Journal (Done already)

- Prepare an unadjusted trial balance as at June 30,2020 (Help)

- Journalize and post the following month-end adjustments on General Journal and post into the General Ledger (Help)

1. Earned but unbilled fees at June 30 were $6909.

2. Depreciation on the equipment for the month was $600.

3. One-twelfth of the insurance expired.

4. A physical count showed $400 of repair supplies on hand at June 30.

5. Accrued but unpaid employee salaries were $400.

6. The company signed an agreement to purchase new equipment for $15,000. The equipment will be shipped in July.

Which of the following characteristics makes it easier to measure the quality of a service, relative to that of a product or facilitating good?

Select one:

A. Service portions are abstract, rather than concrete

B. Service portions are transient, rather than permanent

C. Service portions are psychological, rather than physical

D. None of the above characteristics make it easier to measure service quality

Among the best-known companies that use customer satisfaction surveys to evaluate service quality in various industries is:

Select one:

A. J.D. Power and Associates

B. McDonald’s

C. American Express

D. Alaska Airlines

Service defections are important in process control for services because:

Select one:

A. No advertising is necessary to get the business of long-term customers

B. They are equally important to organizations that produce tangible outputs

C. A customer who takes their business elsewhere is analogous to a product defect

D. Long-time customers are more likely to purchase additional products

One of the most common errors when monitoring data is to gather information that has little or no probability of changing significantly from one collection period to the next.

Select one:

True

False

There are five stages of effectiveness in terms of the role their operations play in terms of strategic business objectives.

Select one:

True

False

Departments within a stage 2 organization may exhibit a stage 3 orientation, thereby upgrading the organization to a stage 3 categorization.

Select one:

True

False

The balanced scorecard approach relies not only on financial performance measures, but includes customers, internal business processes, and organizational learning and growth.

Select one:

True

False

Benchmarking is a process that helps compare a company against its competitors on a variety of relevant indicators.

Select one:

True

False

In August 1995, Smith Company ("Smith") entered into a lease with Jones Two, Inc. ("Jones"). By the terms of the lease, Jones leased a Washington D.C. property (the "Property") that was owned by Smith for a period of ten (10) years.

In 1995, when Jones originally entered into the lease it had not filed its articles of incorporation in any state. However, it represented itself as having been incorporated in New York and Smith relied on that representation. In 1996, Smith realized that Jones was not incorporated but it continued to honor its lease with Jones.

Jones finally got around to properly incorporating in New York in 1997.

At all times, Jones conducted business as if it were a corporation and it complied with all of the terms of the Smith Lease.

By 2000, the value of the Property had increased significantly and Smith was looking for a way to get out of its lease with Jones so it could enter into a lease with a higher rent provision. Smith thought back to the 1995 creation of the lease and it recalled that Jones was not incorporated at that time.

Smith provided Jones with a notice of termination of the lease and directed Jones to vacate the Property within 90 days stating that the lease was void since Jones did not legally exist at the time it entered into the lease. Jones refused to vacated and maintained that it was entitled to use the property until 2005 under the terms of the lease.

Provide an answer to the following questions and be sure to fully explain the reasons for your answer. Be sure to use full sentences and paragraph form in providing your responses.

We know that Jones wants to keep the lease in place until 2005.

4. Could Jones use the concept of a de jure corporation to effectively counter the argument of Smith? Why or why not?

5. Could Jones use the concept of a de facto corporation to effectively counter the argument of Smith? Why or why not?

6. Could Jones use the concept of a corporation by estoppel to effectively counter the argument of Smith? Why or why not?

Each question

Summative Case Study: SRS Educational Supply Company

Part 1 – Job Order Costing / Process Costing
SRS Educational Supply Company provides educational materials and supplies to educational institutions. The company provides educational supply needs that includes workbooks, classroom visual aids, instructor support materials, art supplies, lab supplies, and administrative office supplies. Since SRS Educational Supply Company consistently produces the same service to its customers, the company uses job order costing. The company’s processing units are assigned costs. For example, the company will determine all of the costs associated with the sales/marketing in a certain period and divide the costs by the number of customers that the company currently has. The cost per customer then becomes a part of the inputs and its used to determine the cost of sales/marketing and the cost of each customer. Service industries often do not match directly the normal costing systems, but the same concepts can still be used to determine the costs per customer.

The SRS Educational Press is wholly owned by the Company. It performs the bulk of its work for the print materials that are sold to the customers. The press also publishes and maintains a stock of books for general sale. The press uses normal costing to cost each job. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead, allocated on the basis of direct manufacturing labor costs).

The following data (in thousands) pertain to 2017:

 Direct materials and supplies purchased on credit: $800  Direct materials used: $710  Indirect materials issued to various production departments: $100  Direct manufacturing labor: $1,300  Indirect manufacturing labor incurred by various production departments: $900  Depreciation on building and manufacturing equipment: $400  Miscellaneous manufacturing overhead incurred by various production departments: $550 o (Ordinarily, this would be detailed as repairs, photocopying, utilities, etc.)  Manufacturing overhead allocated at 160% of direct manufacturing labor costs: ?  Cost of goods manufactured: $4,120  Revenues: $8,000  Cost of goods sold (before adjustment for under- or overallocated manufacturing overhead): $4,020  Inventories, December 31, 2016 (not 2017):
o Materials control: $100 o Work-in-process control: $60 o Finished goods control: $500

Submission Requirements for Final Project I:

As the accountant, the company has asked you to perform the following tasks:

1. Prepare an overview diagram of the job-costing system at the SRS Educational Press. 2. Prepare journal entries to summarize the 2017 transactions. As your final entry, dispose of the year-end under- or overallocated manufacturing overhead as a write-off to cost of goods sold. Number your entries. Explanations for each entry may be omitted. 3. Show posted T-accounts for all inventories, Cost of Goods Sold, Manufacturing Overhead Control, and Manufacturing Overhead Allocated. 4. How did the SRS Educational Press perform in 2017? Should the company continue to have in-house press production?

You will submit your answers/explanations for Final Project I in a memo-style format to the company’s leadership team. Use Microsoft Word and Excel.

  1. The owner of a popular chicken restaurant, Chicken-For-Me, with many branches wanted to know if the quality of customer service at a new restaurant was acceptable. One aspect of service that was examined was the length of time that customers had to wait in line before ordering their food. The restaurant decided on acceptable probabilities for the waiting-time categories, and these are given below.
Waiting-time Category
Probability
No more than 1 minute
0.15
More than 1 minute but no more than 3 mins
0.30
More than 3 minutes but no more than 5 mins
0.24
More than 5 minutes but no more than 10 minutes
0.25
More than 10 minutes
0.06
To investigate whether the quality of customer service was acceptable, waiting times were recorded for a random sample of 100 customers at the new Chicken-for-Me. The table below shows the number of customers observed in the five waiting-time categories.
Waiting-time Category
  
Number of Customers
No more than 1 minute
20
More than 1 minute but no more than 3 mins
31
More than 3 minutes but no more than 5 mins
31
More than 5 minutes but no more than 10 minutes
15
More than 10 minutes
3
Total
100
Use the sample data for the 100 customers to conduct a statistical test to determine if the waiting times at the new Chicken-For-Me are inconsistent with the acceptable probabilities for the waiting- time categories.

2.

A randomly selected group of men and women were surveyed to investigate the association between gender and the amount of money spent at a local store, Bullseye. Results are shown in the table below:
Dollars Spent @ “Bullseye”
$0 to $50
$51 to $100
$101 to $200
more than $201
Total
Men
18
85
71
90
264
Women
35
72
98
142
347
Total
53
157
169
232
611
Is there convincing evidence that there is an association between gender and the amount of money spent at “Bullseye”?

The owner of a popular chicken restaurant, Chicken-For-Me, with many branches wanted to know if the quality of customer service at a new restaurant was acceptable. One aspect of service that was examined was the length of time that customers had to wait in line before ordering their food. The restaurant decided on acceptable probabilities for the waiting-time categories, and these are given below.
Waiting-time Category
Probability
No more than 1 minute
0.15
More than 1 minute but no more than 3 mins
0.30
More than 3 minutes but no more than 5 mins
0.24
More than 5 minutes but no more than 10 minutes
0.25
More than 10 minutes
0.06
To investigate whether the quality of customer service was acceptable, waiting times were recorded for a random sample of 100 customers at the new Chicken-for-Me. The table below shows the number of customers observed in the five waiting-time categories.
Waiting-time Category
  
Number of Customers
No more than 1 minute
20
More than 1 minute but no more than 3 mins
31
More than 3 minutes but no more than 5 mins
31
More than 5 minutes but no more than 10 minutes
15
More than 10 minutes
3
Total
100
Use the sample data for the 100 customers to conduct a statistical test to determine if the waiting times at the new Chicken-For-Me are inconsistent with the acceptable probabilities for the waiting- time categories.
Question #2
A randomly selected group of men and women were surveyed to investigate the association between gender and the amount of money spent at a local store, Bullseye. Results are shown in the table below:
Dollars Spent @ “Bullseye”
$0 to $50
$51 to $100
$101 to $200
more than $201
Total
Men
18
85
71
90
264
Women
35
72
98
142
347
Total
53
157
169
232
611
Is there convincing evidence that there is an association between gender and the amount of money spent at “Bullseye”?

R& V Hotel is consistently incurring losses for the past 2 years though the sales clerk receives customer orders, raises sales invoices at a higher price and processes payments for customers. Hotel customers have contracted prices, however online trade prices automatically loaded in to the system but the Brenda clerk used to amend manually. Mr. Zakariya an internal auditor found some deficiencies, who has taken some necessary actions to cross check those invoices and employees responsibilities and suggested the management immediately to prevent from loss of customers and good will of the hotel.
Based on the above scenario:
1. How the internal audit for R and V hotel can be helpful in resolving the issues they are confronting at the moment? Justify your answer practically
2. If you were Mr. Zakariya, prepare doable audit plan that Mr. Zakariya that you can use for the company and provide recommendations on how to overcome the deficiencies cited in the case?

The Kroger Company is one of the largest grocery retailers in the United States, with over 2,000 grocery stores across the country. Kroger uses an online customer opinion questionnaire to obtain performance data about its products and services and learn about what motivates its customers.† In the survey, Kroger customers were asked if they would be willing to pay more for products that had each of the following four characteristics. The four questions were: Would you pay more for

    products that have a brand name?

    products that are environmentally friendly?

    products that are organic?

    products that have been recommended by others?

For each question, the customers had the option of responding Yes if they would pay more or No if they would not pay more.

(a)

Are the data collected by Kroger in this example categorical or quantitative?

categorical quantitative     Correct: Your answer is correct.

(b)

What measurement scale is used?

ratio scale interval scale     ordinal scale nominal scale