The following transactions occurred in April and May. Both companies use a perpetual inventory system.

Prepare the journal entries to record the above transactions for DeVito Company. (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. Record journal entries in the order presented in the problem.)

Calculate the gross profit earned by DeVito on these transactions.

Topic:   Revenue & Misrepresentation by Clients

Characters: Rachel Hanson, Senior in CPA firm

Jim Thompson, Owner/manager of Fashion Line

Sharon, part-time bookkeeper of Fashion Line

In addition to the usual mix of compilation, review and audit clients for which Rachel Hunt

serves as a senior in a small office of a regional CPA firm, she has been assigned a new

client that recently engaged the firm. Fashion Line, an incorporated retail outlet, is a thriving

local store. The business is run by a single owner/manager, Jim Thompson, who makes

all major decisions. The business has not previously used the services of a CPA firm. In

addition to preparation of financial statements, the CPA firm will handle tax returns for the

business.

At her Line visit to the client’s office, Rachel is introduced to Sharon, the part-time

bookkeeper who is also a full-time accounting student at the local university. At a

subsequent meeting, Sharon confides to Rachel that she found the job at the beginning of the

semester after an extensive search. Sharon really needs the money to help finance her

education, and feels lucky to have found a good-paying job during the current economic

downturn. Feeling that Rachel is someone she can talk to and get advice from, Sharon

describes a situation that has been on her mind for some time now.

Sharon’s concern relates to the handling of sales revenues. When monies from sales revenues

are counted and deposited on a weekly basis, a chart is filled out with categories carefully

delineating the type of payment: cash, checks, American Express, or Visa/Mastercard.

Sharon’s employer, after depositing the weekly total, brings this chart back with his own

written-in total of the actual amount deposited.

After looking over some of these weekly deposit chats, Sharon noticed that $500 cash was

missing from each deposit. After a more thorough inspection of monthly tax documents that

Jim Thompson has filled out, Sharon noticed that the reported monthly gross revenue was

$2,000 less than what had been actually counted.

The employer is the only person handling the money after it has been counted. He is also the

only one to deposit the money. When Sharon asked Mr. Thompson about revenue not being

reported for tax purposes, he assured her that every dollar of income was reported on the tax

forms. Furthermore, Jim asserted, since Sharon wasn’t the person who signed the forms,

she shouldn’t be concerned.

1) What is the situation and the accounting issue(s)

2) Describe at least one ethical principle from the AICPA Code of Conduct and at least one accounting code rule (e.g.

independence, integrity, confidentiality, acts discreditable, etc.) that should be considered when analyzing the case?

3) What are your recommendations for the people involved?

Addressing the Risk

Supporting Lecture:

Review the following lecture:

Social Determinants of Health

Using data gathered from the text, South University Online Library resources, and websites, write an annotated bibliography related to potential interventions to address the risk and protective factors that lead you to your chosen health topic or concern.

On the basis of your research, create a 2- to 3-page report containing an annotated bibliography that includes at least three references for at least two protective and two risk factors associated with your health topic or concern. The information for each topic cannot be from the same article. There should be a total of twelve articles reviewed.

Be sure to support your points for each of the components in parentheses with data from the program and outside research.

Your firm has been hired to develop new software for the? university's class registration system. Under the? contract, you will receive

$505,000

as an upfront payment. You expect the development costs to be

$433,000

per year for the next

33

years. Once the new system is in? place, you will receive a final payment of

$834,000

from the university

44

years from now.

a. What are the IRRs of this? opportunity???? (Hint: Build an Excel model which tests the NPV at? 1% intervals from? 1% to? 40%. Then zero in on the rates at which the NPV changes? signs.)

b. If your cost of capital is

10 %

is the opportunity? attractive?

Suppose you are able to renegotiate the terms of the contract so that your final payment in year

44

will be

$ 1.2

million.??

c. What is the IRR of the opportunity? now?

d. Is it attractive at the new? terms?

Your firm has been hired to develop new software for the​ university's class registration system. Under the​ contract, you will receive $501,000 as an upfront payment. You expect the development costs to be $436,000 per year for the next 3 years. Once the new system is in​ place, you will receive a final payment of $847,000 from the university 4 years from now. a. What are the IRRs of this​ opportunity?  ​(Hint​: Build an Excel model which tests the NPV at​ 1% intervals from​ 1% to​ 40%. Then zero in on the rates at which the NPV changes​ signs.) b. If your cost of capital is 10% ​, is the opportunity​ attractive? Suppose you are able to renegotiate the terms of the contract so that your final payment in year 4 will be $1.2 million. c. What is the IRR of the opportunity​ now? d. Is it attractive at the new​ terms?

2) Using the excel data file “shopping” which shows the reasons American and East Asian students from a large Midwestern university may buy from catalogs.

a) (10 pts) For the Asian students make a pie chart of the reason they buy using a catalog. (Hint you will need to weigh cases by Asian)

b) (10 pts) Make a bar chart showing the counts for the reasons American students buy using a catalog. (Hint you will need to

weigh cases by American)

[Shopping Excel Data]

Meredith Shomers manages scholarship endowments for a major public university. Presently, she is trying to determine how much scholarship money may be awarded from an endowment with a current balance of $538,000. The endowment’s funds are invested in a portfolio whose annual return varies and may be represented as a normally distributed random variable with a mean of 6% and standard deviation of 2%. The legal terms of the endowment require Meredith to determine a constant scholarship payment amount from the endowment that, if made in each of the next 10 years, would result in only 5% chance of the endowment’s ending value drop- ping below its current value. Assume scholarship payments are withdrawn from the fund at the end of each year.
a. Create a spreadsheet model for this problem.

b. What is the maximum scholarship payment that should be made in the current
year?

Your firm has been hired to develop new software for the​ university's class registration system. Under the​ contract, you will receive $492,000 as an upfront payment. You expect the development costs to be $439,000 per year for the next 33years. Once the new system is in​ place, you will receive a final payment of $865,000 from the university 4 years from now.

a. What are the IRRs of this​ opportunity?  ​(Hint​: Build an Excel model which tests the NPV at​ 1% intervals from​ 1% to​ 40%. Then zero in on the rates at which the NPV changes​ signs.)

b. If your cost of capital is 10 ,is the opportunity​ attractive Suppose you are able to renegotiate the terms of the contract so that your final payment in year 4will be $1.2million.  

c. What is the IRR of the opportunity​ now?

d. Is it attractive at the new​ terms?

Your firm has been hired to develop new software for the​ university's class registration system. Under the​ contract, you will receive $ 510,000 as an upfront payment. You expect the development costs to be $ 444,000 per year for the next 3 years. Once the new system is in​ place, you will receive a final payment of $ 862,000 from the university 4 years from now.

a. What are the IRRs of this​ opportunity?(Hint: Build an Excel model which tests the NPV at​ 1% intervals from​ 1% to​ 40%. Then zero in on the rates at which the NPV changes​ signs.)

b. If your cost of capital is 10 %​, is the opportunity​ attractive?

Suppose you are able to renegotiate the terms of the contract so that your final payment in year 4 will be $ 1.2 million.  

c. What is the IRR of the opportunity​ now?

d. Is it attractive at the new​ terms?

Commonly used measures of globalisation of markets and production are the following ratios: World Exports/world GDP and World Inward FDI/World Gross Capital Formulation. There are also other measures to consider such as university students, patents, venture capital, internet traffic, equity investments, news media, bank deposits and many more which are expressed as a percentage of world totals. Identify six different countries: two from the Southern African Development Community (SADC), two from the East African Community (EAC), and two from the Common Market for Eastern and Southern Africa (COMESA), and use globalisation measures to analyse the most globalised of the six countries in the three economic trade regions. Use the analysis to write an expository essay that illustrates the extent to which the six countries are globalised