Question 21

1. 21) How would an increase in the demand for labor occur:

   		a. when there is an increase in labor productivity
   		b. when there is an increase in the demand for the product labor produces
   		c. when there is an increase in the supply of labor
   		d. both (a) and (b)

3 points

Question 22

1. 22) What determines the quantity supplied of labor?

   		a, the wage rate
   		b. the demand for labor
   		c. the marginal revenue product of labor
   		d. the marginal revenue product of capital

3 points

Question 23

1. 23) What will lead to an increase in the wage rate?

   		a. a decrease in the demand for labor
   		b. an increase in the demand for labor
   		c. an increase in the supply of labor
   		d. a decrease in demand for the product labor produces

3 points

Question 24

1. 24) What will lead to a decrease in the wage rate?

   		a. an increase in the demand for labor
   		b. an increase in the supply of labor
   		c. a decrease in the supply of labor
   		d. an increase in demand for the product labor produces

3 points

Question 25

1. 25) Efficiency wage theory states:

   		a, it is efficient to pay labor the lowest wage rate possible
   		b. it is efficient to only pay labor the market wage rate
   		c. it is efficient to supply labor with the least amount of fringe benefits as possible
   		d. it is efficient to pay labor a higher than average wage rate (including benefits) as this will elicit a better work effort from labor and increase the firm's profits

Question 3.3                              (Total: 45 marks; part 1: 24 marks; part 2: 15 marks; part 3: 6 marks)

Star Finder Inc. has provided the following information for the year ended December 31, 2021:

The effective tax rate is 25% on all items. Star Finder Inc. prepares financial statements in accordance with IFRS. The FV-OCI equity investments trade on the stock exchange. Gains/losses on FV-OCI investments are not recycled through net income.

Required:

1.      Prepare a multi-step statement of financial performance for 2021, showing expenses by function. Ignore calculation of EPS.

2.      Prepare the retained earnings section of the statement of changes in equity for 2021.

3.      Prepare the journal entry to record the depreciation expense omitted by mistake in 2020.

SBS Ltd is the world’s leading internet-based media services provider. Both OzTV and RockTV invested millions in SBS Ltd. However, accounting scandals and fraud allegations had caused the company’s stock crashing, and forced the company to seek bankruptcy protection in Singapore and Malaysia. You are the auditor for SBS Ltd for the year ended 30 June 2019.

The following information pertains to SBS’s sales and accounts receivable:

The consolidated revenue has increased by 184 percent from the year 2017 to 2019.
Revenue in Singapore, which has a reputation as a difficult market for foreign companies to enter, had increased from $97,000 in the first quarter of 2018 to approximately $59 million in the first quarter of 2019.
In the second quarter of 2019, sales have grown by 104 percent but accounts receivable grew by 128 percent.
The average collection days outstanding has increased from 138 days in 2018 to 160 days for the six-month period ended 30 June 2019.
Required:

a) Based on the above information, explain one (1) assertion for sales that you should be most concerned with.

b) Based on the above information, explain two (2) assertions for accounts receivable that you should be most concerned with.

c) Explain one (1) audit procedure that you should perform in order to verify the assertion identified in (a) for sales and one (1) audit procedure for the assertion identified in (b) for accounts receivable.

The following information is related to Stellar Company for 2017. Retained earnings balance, January 1, 2017 $993,230 Sales Revenue 26,284,300 Cost of goods sold 16,139,200 Interest revenue 79,400 Selling and administrative expenses 4,749,600 Write-off of goodwill 824,400 Income taxes for 2017 1,303,600 Gain on the sale of investments 119,300 Loss due to flood damage 397,000 Loss on the disposition of the wholesale division (net of tax) 451,900 Loss on operations of the wholesale division (net of tax) 88,730 Dividends declared on common stock 264,100 Dividends declared on preferred stock 87,850 Stellar Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Stellar sold the wholesale operations to Rogers Company. During 2017, there were 492,800 shares of common stock outstanding all year. Prepare a multiple-step income statement. (Round earnings per share to 2 decimal places, e.g. 1.49.) STELLAR COMPANY Income Statement $ $ $ : $ $ $ SHOW LIST OF ACCOUNTS Prepare a retained earnings statement. (List items that increase retained earnings first.) STELLAR COMPANY Retained Earnings Statement $ : : $ $ Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS Question Attempts: 0 of 3 used SAVE FOR LATER SUBMIT ANSWER

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 64 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:

For example, administrative expenses should be $3,600 per month plus $42 per course plus $4 per student. The company’s sales should average $880 per student.

The company planned to run four courses with a total of 64 students; however, it actually ran four courses with a total of only 58 students. The actual operating results for September appear below:

Required:

Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September.

**11 spots in the journal

Using the allowance method of accounting for uncollectible receivables.

Required:

Here are selected items from Corona Co.’s Trial Balance (not all items are presented so it does not have to balance) as of December 31, 2020. The point of this problem is to see if you can put things in their proper place and leave them out if they do not belong on the parts of the Balance Sheet you are asked about below.

Instructions

Compute each of the following:

1.   Total current assets

2.   Total property, plant, and equipment

3.   Total assets

4.   Total liabilities

Question 2 ch 10

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

Data concerning the pizzeria’s costs appear below:

In November, the pizzeria budgeted for 2,040 pizzas at an average selling price of $15 per pizza and for 220 deliveries.

Data concerning the pizzeria’s operations in November appear below:

Required:

1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

On January 1, 2021, Ithaca Corp. purchases Cortland Inc. bonds that have a face value of $330,000. The Cortland bonds have a stated interest rate of 5%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.): January 1, 2021 11.0 % June 30, 2021 12.0 % December 31, 2021 14.0 %

Required: 1. Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2021 (ignoring brokerage fees), and prepare a journal entry to record the purchase.

2. Prepare all appropriate journal entries related to the bond investment during 2021, assuming Ithaca accounts for the bonds as a held-to-maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds.

3. Prepare all appropriate journal entries related to the bond investment during 2021, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds.