Parker, Inc., acquires 70 percent of Sawyer Company for $420,000. The remaining 30 percent of Sawyer’s outstanding shares continue to trade at a collective value of $174,000. On the acquisition date, Sawyer has the following accounts:

The buildings have a 10-year remaining life. In addition, Sawyer holds a patent worth $140,000 that has a five-year remaining life but is not recorded on its financial records. At the end of the year, the two companies report the following balances:

1. Assume that the acquisition took place on January 1. What figures would appear in a consolidated income statement for this year?

2. Assume that the acquisition took place on April 1. Sawyer’s revenues and expenses occurred uniformly throughout the year. What amounts would appear in a consolidated income statement for this year?

Parker, Inc., acquires 70 percent of Sawyer Company for $420,000. The remaining 30 percent of Sawyer’s outstanding shares continue to trade at a collective value of $174,000. On the acquisition date, Sawyer has the following accounts:

The buildings have a 10-year remaining life. In addition, Sawyer holds a patent worth $140,000 that has a five-year remaining life but is not recorded on its financial records. At the end of the year, the two companies report the following balances:

1. Assume that the acquisition took place on January 1. What figures would appear in a consolidated income statement for this year?

2. Assume that the acquisition took place on April 1. Sawyer’s revenues and expenses occurred uniformly throughout the year. What amounts would appear in a consolidated income statement for this year?

Josephine worked part-time, in substantially the same position, for two nursing homes—St. Pats and West End Villa. She asked West End Villa for significant accommodations and provided a medical note indicating that she could not perform a large majority of her duties there. While investigating her accommodation request, West End Villa contacted St. Pats, asking for information on Josephine’s attendance and work restrictions. St Pats responded, and also sent them a copy of the medical note Josephine had previously provided to St. Pats indicating that she could perform all of the duties of her job without accommodation. Upon finding out about this unauthorized disclosure of her medical information, Josephine—a unionized employee—filed a grievance against St. Pats, seeking monetary damages for breach of her privacy. St. Pats responded that while the disclosure was not permitted under the collective agreement, the information it sent to West End Villa was innocuous since the medical note did not contain any actual diagnosis. In fact, it referred to an absence of medical restrictions.

Is the employer, St Pats, liable for breach of privacy in these circumstances?

Three page article critique on

Hurd, R. W. (2013). Moving beyond the critical synthesis: Does the law preclude a future for US unions? Labor History, 54(2), 193-200.

This article is a reflective essay that assesses the strength of comments made by Christopher L. Tomlins in his book The State and Unions (1985), which looks back over the past quarter century. Various predictions were made concerning union decline and failed revival efforts as well as counterfeit rights offered to the U.S. working class.

Article critique should address the questions below.

• What are the author’s main points?
• Do the arguments presented by the author support the main point?
• What evidence supports the main point? For example, if Tomlin’s thesis that the New Deal offered only a counterfeit liberty to labor is true, what effect does that have on employee morale?
• Briefly describe two collective bargaining strategies companies use when dealing with unions. How can these strategies affect employee morale?
• What is your opinion of the article?
• What evidence, either from the textbook or from additional sources, supports your opinion?

Consider each of the following independent and material situations. In each case:

• the financial report date is 31 December 2019;

• the field work was completed on 12 February 2020;

• the directors declaration and the audit report were signed on 19 February 2020; and

• the completed financial report accompanied by the signed audit report were mailed to shareholders on 18 March 2020

A. You are an auditor pf PP Limited (PP), a company specialising in industrial property development. On 10 February 2020, you become aware that a major overseas investor has informed the management of PP of their intention to withdraw their investment in a proposed major development. On the basis of its discussions with the investor and previously pledged funds from them, PP has incurred substantial costs in feasibility studies, structural engineering reports and architectural plans. A significant portion of these costs has been capitalised. The management is dependent on finding a new investor to be able to meet these expenses and to continue with the project.

B. You are the auditor of XY Limited (XY), a manufacturing client. XY has plans to upgrade its manufacturing process and plans to finance this by a sale of property which is superfluous to its needs, situated next to its head office. The property has been subdivided for the purposes of the sale and placed on the market in December 2019. On 25 January 2020, the state government approved a plan for the construction of an express freeway. The plan will result in the appropriation of a portion of the property owned by XY and subdivided for the purpose of sale. Construction of the freeway will begin in late 2020. No estimate of the compensation payment is available.

C. You are an auditor of Q limited (Q), a major public company involved in the property development industry. Prior to signing your audit report you sought a letter of comfort from Q’s bankers that the bank would continue to support Q by providing finance over the coming year. The bank agrees that it would continue to provide finance. It was your view that without such support Q had severe cash flow problems and the financial report would need to be modified with respect to a going concern assumption. On 15 March 2020, the company’s bankers wrote to you advising that the company had breached its loan covenant with the bank in February 2020 and that the loan facility was now due and payable and would not be renewed.

D. You are the auditor of Turbo Limited (Turbo), a professional services client. On 15 January 2020, Turbo settled and paid a personal injury claim to a former employee as the result of an accident that occurred in September 2017. The company had not previously recorded a liability for the claim.

E. You are the auditor of Charge Limited (Charge), an automobile parts manufacturer. On 2 February 2020, Charge agreed to purchase for cash the outstanding shares of Electronic Fuel Injection Limited. The acquisition is likely to double the sales volume of Charge.

Required: For each of the events A to E:

1. Outline the required treatment in the financial report, if any. Justify your answer. (5 X 2 Marks = 10 Marks)

2. Determine whether additional audit evidence needs to be obtained. If so, describe the nature of the audit evidence to be obtained and the audit procedures used to obtain it. (5 X 2 Marks = 10 Marks)

3. If no action is taken by management, determine the most appropriate audit report to be issued.

Beniluz Company was formed on July 1, 2016. It was authorized to issue 1,000,000 shares of $5 par value common stock and 200,000 shares of 4% $100 par value, cumulative and nonparticipating preferred stock. Beniluz Company has a July 1-June 30 fiscal year. The following information relates to the stockholders’ equity accounts of Penn Company: Common Stock Prior to the 2020-21 fiscal year, Beniluz Company had 304,000 shares of outstanding common stock issued as follows: 1. 220,000 shares were issued for cash on July 1, 2016, at $24 per share. 2. On August 4, 2018, 24,000 shares were exchanged for an office building and warehouse which had a book value in the seller’s book of $431,000 and had an estimated fair value of $627,000 on August 4, 2018. 3. 60,000 shares were issued on November 1, 2019, for $29 per share. During the 2020-21 fiscal year, the following transactions regarding common stock took place: 1. August 31, 2020 - Beniluz purchased 5,000 shares of its own stock on the open market at $30 per share. Beniluz uses the cost method for treasury stock. 2. December 1, 2020 - Beniluz declared a 6% stock dividend for stockholders of record on December 20, 2020, to be issued on January 15, 2021. Beniluz was having a liquidity problem and could not afford a cash dividend at the time. Beniluz ‘s common stock was selling at $28 per share on December 1, 2020. 3. June 20, 2021 - Beniluz sold 1,500 shares of its own common stock that it had purchased on August 31, 2020 for $36,000. Preferred Stock Beniluz issued 20,000 shares of preferred stock at $105 per share on October 1, 2019. 2 Cash Dividends Beniluz has followed a schedule of declaring cash dividends in December and June, with payment being made to stockholders of record in the following month. The cash dividends which have been declared since inception of the company through June 30, 2021, are shown below. Date Common Preferred 6/1/2018 $ 0.50 $ 2.00 12/1/2019 $ 0.50 $ 2.00 6/1/2020 $ 0.40 $ 2.00 12/1/2020 - $ 2.00 Dividend per Share No cash dividends were declared during June 2021 due to the company’s liquidity problems. Retained Earnings As of June 30, 2020, Beniluz Retained Earnings account had a balance of $824,000 and the Accumulated Other Comprehensive Income account had a credit balance of $136,000. For the fiscal year ending June 30, 2021, Beniluz reported net income of $32,000 and an unrealized loss correctly recorded as Other Comprehensive Income for the amount of $12,000. Instructions Prepare, in good form, the Stockholders’ Equity section of the Balance Sheet, including appropriate notes, for Beniluz Company as of June 30, 2021, as it should appear in its annual report to the shareholders.

1. In a system design the electrons are accelerated from rest through a potential difference of 250 V. The electrons travel along a curved path because of the magnetic force exerted on them, and the radius of the path is measured to be 5 cm long. If the magnetic field is perpendicular to the beam what is the linear speed of the electrons, what is the angular speed of the electrons and what is the magnitude of the magnetic field in this system, respectively?

A. 9.4 x 106 m/s, 188 x 106 rad/s, 107.5 x 10-6 T
B. 2.4 x 103 m/s, 2.61 x 105 rad/s, 13.6 x 10-4 T
C. 6.8 x 107 m/s, 1.82 x 107 rad/s, 22.7 x 10-3 T
D. 1.2 x 107 m/s, 214 x 107 rad/s, 9.4 x 10-4 T

2. What is the direction of magnetic force created by a moving particle?
A. Same direction with the velocity of the particle
B. Same direction with the magnetic field
C. Direction of the vectoral product of charge of the particle and the magnetic field
D. Direction of the vectoral product of velocity of the particle and the magnetic field

3.

What is the magnetic force created by a current carrying wire? (Please choose two corrert answers)

A. Different than zero on a closed loop  
B. Zero on a closed loop  
C. Depends on the angle between the length vector and magnetic field lines  
D. Depends on the angle between the length vector and velocity vector

4.

What did Oersted discovered?

A. Magnetic force created by a closed loop
B. Magnetic force of a charged particle
C. Compass needle is deflected by a current carrying wire
D. Magnetism of a charged particle

The following transactions occurred for White Rock Ltd during year ended May 31, 2020.

As of the start of the year, June 1, 2019, White Rock had $3,500 of automotive

supplies on hand. During the year, it purchased $9,100 in automotive supplies. At

year end, $1,300 of automotive supplies were on hand.

On October 31, 2019, White Rock purchased $88,000 of automotive repair

equipment on account. The equipment has an 8-year useful life.

White Rock signed an agreement to rent warehouse space, starting on February 1,

2020. White Rock paid $8,250 to its new landlord on that date, for six months of

rent paid in advance.

White Rock sold equipment it doesn’t need to another business for $45,000 (e.g.

credit equipment) on March 1, 2020. The buyer paid $5,000 in cash and signed a

9%, 9-month promissory note for the remaining $40,000. The amount owed plus

accrued interest will be received from the buyer on November 30, 2020.

White Rock is open seven days a week. Employees are paid $4,900 in salaries

every two weeks. Employees were last paid on Friday, May 25 (up to and

including Friday of that week). Employees will next be paid on Friday, June 8.

For journal entries, write all your calculations instead of explanations. Record the

journal entries in proper form using the attached blank general journal sheets. Do

not abbreviate the names of the ledger accounts. Marks may be deducted for any

journal entries that do not show calculations.

REQUIRED

(a) Prepare the journal entries to record transactions on October 31, 2019, and

March 1, 2020.

(b) Prepare year-end adjusting journal entries that should be made on May 31,

2020.

(c) Show the presentation of the automotive repair equipment on the May 31,

2020 classified balance. sheet in proper form (e.g. don’t forget the

classification name).

(d) Prepare the journal entry to record payment of employee salaries on Friday,

June 8th

Vaughn Corp. is a medium-sized corporation specializing in quarrying stone for building construction. The company has long dominated the market, at one time achieving a 70% market penetration. During prosperous years, the company’s profits, coupled with a conservative dividend policy, resulted in funds available for outside investment. Over the years, Vaughn has had a policy of investing idle cash in equity securities. In particular, Vaughn has made periodic investments in the company’s principal supplier, Norton Industries. Although the firm currently owns 12% of the outstanding common stock of Norton Industries, Vaughn does not have significant influence over the operations of Norton Industries.

Cheryl Thomas has recently joined Vaughn as assistant controller, and her first assignment is to prepare the 2020 year-end adjusting entries for the accounts that are valued by the “fair value” rule for financial reporting purposes. Thomas has gathered the following information about Vaughn’ pertinent accounts.