Jack Construction Supplies Ltd.

Jack Construction Supplies Ltd. (Jack) is a retail and commercial building supply dealer. Until recently, Jack was part of a national chain of stores, but the chain decided to sell off stores that weren’t in its core business. Several local investors purchased Jack. The purchasers believe that Jack will be successful, but that it wasn’t well managed by the chain. The new investors paid $1,000,000 in cash for Jack. Jack will also pay 25% of net income before unusual or non-recurring items that Jack earns in excess of $500,000 for each of the next three years (including fiscal 2019), as reported in Jack’s general purpose financial statements.

It’s now late January 2020. Jack has just provided its financial statements for the fiscal year ended December 31, 2019 to the national chain as required by the agreement of purchase and sale. The CFO of the company that sold Jack has asked you to examine the financial statements, discuss any issues with Jack’s new management, and identify any problems that might affect net income end the amount the national chain is due as part of the agreement. In your review, you identified the following issues:

1. Jack reported net income before unusual or non-recurring items of $510,000 for the year ended December 31, 2019.
2. Jack’s business with most customers is transacted in cash or on credit cards. Jack offers credit terms to builders and contractors, allowing them up to 90 days to pay. The revenue on these sales is recognized at the time of the exchange. Jack has also given extended credit terms to a number of struggling home builders in its community. The builder began construction of new homes, but sales have been slower than expected. Jack has agreed to accept payment each time a builder sells one of its homes. To date, none of these builders have defaulted on any amounts they owe. Jack recognizes these sales on collection of cash from a builder. As of the end of December 31, 2019, these builders owe $275,000. The costs associated with these sales are $150,000. These costs were expensed as incurred.
3. During 2019, Jack’s management discovered that certain assets purchased several years ago hadn’t been depreciated. The amount of depreciation that should have been expensed to date on these assets, $175,000, was fully expensed in 2019.
4. In mid-2015, Jack obtained an exclusive dealership for a line of high-quality kitchen cabinets. The dealership rights were for an initial five-year period, with five-year renewals possible at the option of the manufacturer. At the time of signing the initial agreement, Jack was assured that a renewal was virtually certain. Jack spent $210,000 to set up displays to promote the line. These costs were capitalized and are being amortized over 10 years. In December 2019, Jack learned that the exclusive dealership arrangement will not be renewed because it’s no longer part of the national chain. Jack won’t be able to sell the products beyond April 2020. Jack wrote off the unamortized portion of the costs in 2019.
5. Jack purchased some heavy equipment for use in the lumberyard at an auction for $225,000. The equipment was fairly old and in poor condition and required $125,000 to get it in working condition. Jack’s management believes the equipment will be usable for at least 10 years. Jack capitalized the purchase price of the equipment and expensed the $125,000 as a repair cost.
6. In May 2019, Jack opened a large plumbing department. Because management had little expertise in plumbing but wanted to provide for customers’ plumbing needs, it contracted with SEH Plumbing Ltd. (SEH) to own and operate the plumbing department. SEH paid Jack a $200,000 non-refundable fee on July 15, 2019 and will pay 5 percent of net sales (sales after returns and bad debts) per year. SEH is getting the plumbing department ready for business. The contract between SEH and Jack is for 10 years. Jack capitalized the $200,000 fee as a long-term deposit and will recognize it as revenue over the term of the contract on a straight-line basis.

REQUIRED: Prepare a report to your CFO on your findings and recommendations regarding Jack.

QUESTION 11

In any given year, one in three Americans over the age of 65 will experience a fall.  If you have three living grandparents over the age of 65, and assuming that the probability of a fall for each grandparent is independent:

What is the probability that none of the three grandparents will experience a fall?  Provide your answer as a decimal between 0 and 1.

4 points   

QUESTION 12

What is the probability that one or more grandparents will experience a fall?  Provide your answer as a decimal between 0 and 1.

4 points   

QUESTION 13

Below are the data (n=100) from a randomized trial designed to evaluate the effectiveness of a newly developed pain reliever designed to reduce pain in patients following joint replacement surgery. The trial compared the new pain reliever to the pain reliever currently in use (called the standard of care).  The outcome of interest was reduction of pain rating (3 or more scale points are considered a clinically meaningful reduction).

What is the probability of experiencing a clinically meaningful reduction in pain given that the patient received the new pain reliever? (express this probability as a decimal between 0 and 1)

4 points   

QUESTION 14

What is the probability that a patient in this trial received the new pain reliever, given that they experienced a clinically meaningful reduction in pain? (express this probability as a decimal between 0 and 1)

Sue’s Flowers Revenue Business Process Project Sue Hernandez is the owner and operator of a small flower shop, Sue’s Flowers. She has decided to develop a database system to track her sales, inventory, accounts receivable and cash receipts. This system is used for large orders that are arranged in advance. However, she does not have time to do the development herself. Therefore, she has hired you to design and implement the system for her. She describes the requirements of her revenue system for processing wedding orders as follows: Whenever a customer comes in to place an order, a sales clerk enters a Sales Order directly into the computer system. The sales order lists all of the floral inventory items the customer wishes to purchase. The clerk then prints the sales order and gives a copy to the customer. If this is a new customer, before entering the sales document, the clerk must enter the customer's basic information such as name, address, etc. Additionally, credit for new customers must be approved by Sue.In addition to transaction information, Sue tracks history information for each customer, showing all of the flowers purchased by each customer, and quantities of each type. This allows her to target market specials to each customer, and more quickly assess each customer’s needs when they come into the shop.This information is updated automatically by the computer system when the goods are delivered to the customer.When Sue completes delivery of the sales order, an accounts receivable clerk records the delivery on a special screen. When delivery entry is completed, Sue prints the invoices and sends them to customers. When customers send in their payments, a sales clerk records the cash receipts on a special input screen. Sue takes the all of the cash receipts for a day and prepares a single deposit slip form and makes the deposit. Sue later enters the deposit information from the paper form into the computer.

Prepare an ER diagram describing Sue's database. (State any assumptions you believe you have to make in order to develop a complete diagram). Sue would like for you to consider that, eventually, as new stores are opened, she will have store managers in each store that will perform the tasks she now performs. As a result, the system should be planned to always store information about the employee associated with transactions, whether that employee enters information, performs a task (such as delivery) or formally authorizes the transaction.

Hints:

1. A particular sales order is always delivered and invoiced all at the same time. Deliveries include information for only one Sales Order.

2. A single cash receipt may pay for several deliveries. A single delivery may be paid for with several different cash receipts. List and describe all of the recording, maintenance and reporting information processes that are described in the narrative.

Please do it by type not pics.

The Early Break Restaurant (EBR) is a privately owned restaurant open seven days a week from 5:00 AM to 2:00 PM. EBR specializes in breakfast and lunch. It is owned and operated by Rose Marie. Rose acts as hostess (seating customers, maintaining a waiting list) and the only cashier. Her trusted friend, Morey Fennel, is the restaurant manager.  

Morey also prepares a weekly list of supplies that are needed by EBR and verifies each vendor order when it is delivered. Morey is very particular about these supplies and does not hesitate to have items returned to vendors. Sally's nephew, Andy, makes all the needed entries in the accounting information system (AIS). Rose seats customers at tables and servers greet customers and ultimately take their orders.  

The servers write customer orders on paper tickets which they bring to the kitchen for the line cooks to use in preparing the food. When the order is ready, the server picks up the food and the paper ticket. The server delivers the food, totals the ticket and when the customer is ready leaves it with the customer at the table. When ready to leave, the customer takes the ticket to Rose at the cash register. Rose takes the ticket, enters it into the cash register, takes the customer’s payment and makes the change as needed. On very rare occasions a customer refuses to pay all or part of their ticket due to perceived poor service or food. Rose writes the amount of the discount or nonpayment on the ticket.

At the end of the day, Andy makes all needed entries in the accounting information system and prepares a bank deposit daily which Rose takes to the bank.  

Morey prepares a list of inventory to order each week and gives it to Andy who places the order and records it in the accounting information system. When the order arrives from the vendor, Morey does a physical count of the items received and verifies this count to the delivery list or packing list. Morey inspects each of the items for quality and on occasion requests that received items be returned to the vendor. When this happens, he completes an item return form and places the items to be returned in a special place in the cooler or storeroom. The physical count, verified packing/delivery list, any discrepancies, and an item return form (if there is one) are left in the office for Rob. If there is an item return form, Andy contacts the vendor for permission to return the item. When the invoice arrives, Andy compares the invoice to the annotated packing or delivery list done by Buddy. He notifies the vendor of any needed changes to the invoice (e.g., return not reflected or a vendor mistake in the order) and prepares the check to make payment and makes all the needed entries in the accounting information system. After Rose signs the check, Andy mails it to the vendor.

1.Focusing on the revenue cycle, identify the sub-processes found in the Early Break Restaurant case?

2.For each of the revenue sub-processes identified list the activities that make up that sub-process, list activities in order of performance?

Entity A is a local construction company, which provides construction services to different types of customers. On 16 December 2017, Entity A ordered a concrete plant from Entity B. The listed price of the plant is $650,000 for general customers. However, Entity B offers a 10% trade discount to Entity A because it is one of its loyal customers. The plant was delivered to Entity A on 1 January 2018. According to the contract, Entity B provides a 2-month credit period to Entity A. Finally, Entity A fully settled the outstanding amount on 1 February 2018.

Installation and testing services are required to make the plant ready for use. On 1 January 2018, Entity C, the installation and testing service provider completed the concrete plant installation and testing services and certified the plant was really for use by Entity A. The cost of installation and testing services are $5,000 and it was settled with Entity C by cheque on 1 January 2018. At the inception stage, Entity A expected the useful life of the concrete plant is 5 years.

According to the local environmental protection regulation, Entity A is required to remove the concrete plant at the end of the reporting period in the Year 2022. The removal cost of $5,100 and the plant residual value of $4,013 was estimated at the inception of the contract respectively.

Finally, on 31 December 2022, the removal cost incurred was the same as the estimated amount and it will be paid in the first week of the Year 2023. However, the residual of the concrete plant can be sold by $1,900 only. A cheque was received on the same date.

Entity A always applies to discount with a rate of 8.05%.

REQUIRED:

According to relevant accounting standards, prepare journal entries to record the transactions of Entity A on 16 December 2017, 31 December 2017, 1 January 2018, 1 February 2018, 31 December 2018, 1 January 2020 and 31 December 2020, 1 January 2022 and 31 December 2022.

ACCOUNT NAMES FOR INPUT:

| PPE | Bank | Inventory | Revenue | Cost of sales | Payable | Receivable |

| Restoration liability | Interest expense | Interest revenue | Depreciation | Accum. depreciation |

| Loss on disposal | Gain on disposal | Share capital | Retained earnings | No entry |

ANSWERS:

Journal Entries:

Heidi Jara opened Jara's Cleaning Service on July 1, 2017. During July, the following transactions were completed. July  1 Stockholders invested $20,000 cash in the business in exchange for common stock. 1 Purchased used truck for $9,000, paying $4,000 cash and the balance on account. 3 Purchased cleaning supplies for $2,100 on account. 5 Paid $1,800 cash on a 1-year insurance policy effective July 1. 12 Billed customers $4,500 for cleaning services. 18 Paid $1,500 cash on amount owed on truck and $1,400 on amount owed on cleaning supplies. 20 Paid $2,500 cash for employee salaries. 21 Collected $3,400 cash from customers billed on July 12. 25 Billed customers $6,000 for cleaning services. 31 Paid $350 for the monthly gasoline bill for the truck. 31 Paid a $5,600 cash dividend. The chart of accounts for Jara's Cleaning Service contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation—Equipment, No. 201 Accounts Payable, No. 212 Salaries and Wages Payable, No. 311 Common Stock, No. 320 Retained Earnings, No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 631 Supplies Expense, No. 633 Gasoline Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries and Wages Expense. Instructions (a) Journalize and post the July transactions using the general journal tab in Excel (b) Prepare a trial balance at July 31 using the trial balance tab in Excel (b) Trial balance $34,700 (c) Journalize and post the following adjusting entries using the general journal for adjustments tab in Excel. Prepare an adjusted trial balance using the adjusted trial balance tab in Excel. 1. Unbilled and uncollected revenue for services performed at July 31 were $2,700. 2. Depreciation on equipment for the month was $500. 3. One-twelfth of the insurance expired. 4. An inventory count shows $600 of cleaning supplies on hand at July 31. 5. Accrued but unpaid employee salaries were $1,000. (c) Adjusted trial balance $38,900 (d) Prepare an income statement and a retained earnings statement for July and a classified balance sheet at July 31, using the financial statements tab in Excel. (d) Net income $7,200 Total assets $26,800 (e) Journalize and post closing entries using the general journal for closing ent tab in Excel. (g) Prepare a post-closing trial balance at July 31 using the post closing trial balance tab in Excel. (g) Post-closing trial balance $27,300

I need help with the income statement after the adjusting entries are made. I am not getting what my professor says i'm suppose to and cant not figure out why.

Can an answer, complete with workings please be provided for Problem 32E, Chapter 15 from the Business Statistics: Communicating with Numbers (2nd Edition) be made available?

The manager of a local Costo store is in the process of making hiring decisions for selling mobile phone contracts. She believes that the sale of mobile phone contracts depends crucially on the number of hours clocked by male and female employees. She collects the weekly data on last year’s sales of mobile phone contracts (Sale) along with work hours of male (Hours Males) and female (Hours Females) employees. A portion of the data is shown in the accompanying table.

1-Frogs are often considered a good indicator species. Explain what characteristics of frogs make them such good indicators of the health of their environment.

2-Ernie is strictly carnivorous, ignoring all health warnings. Ernie consumes 74 000 kJ of meat every day. Agricultural land can support this type of diet at 835.0 kJ/m2 of land used. Determine how much land it takes to support Ernie’s lifestyle.

A pizza pan is removed at 4:00 PM from an oven whose temperature is fixed at 450 degrees F into a room that is a constant 74 degrees F. After 5​ minutes, the pizza pan is at 300 degrees F.

a. At what time is the temperature of the pan 125 Degrees F

b. Determine the time that needs to elapse before the pan is 200 Degrees F

c. What do you notice about the temperature as time passes?