Express Distribution markets CDs of the performing artist Fishe. At the beginning of October, Express had in beginning inventory 3,100 of Fishe’s CDs with a unit cost of $7. During October, Express made the following purchases of Fishe’s CDs. Oct. 3 3,875 @ $8 Oct. 19 4,650 @ $10 Oct. 9 5,425 @ $9 Oct. 25 6,200 @ $11 During October, 16,895 units were sold. Express uses a periodic inventory system. Determine the cost of goods available for sale. Cost of goods available for sale $ LINK TO TEXT Calculate cost per unit. (Round answer to 2 decimal places, e.g. 2.25.) Cost per unit $ LINK TO TEXT Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). (Round answers to 0 decimal places, e.g. 1,250. Use weighted-average unit cost rounded to 2 decimal places for computations.) FIFO LIFO AVERAGE-COST The ending inventory $ $ $ The cost of goods sold $ $ $ LINK TO TEXT Which cost flow method results in (1) the highest inventory amount for the balance sheet and (2) the highest cost of goods sold for the income statement? (1) produces the highest inventory amount, $ . (2) produces the highest cost of goods sold, $ . LINK TO TEXT

When must a company pay on invoices dated October 20 according to these credit terms?

(A) Net 30date of invoice.

(B) Net 30 end of month.

(C) Net 45date of invoice.

(D) Net 45 end of month.

The following are quantity schedule of Shelby.co (it uses Weighted Average process costing) for October 2020: units in the beginning of work in process = 250 units; units added = 1,250 units; units transferred/finished = 900 units; units in the end of work in process (50% finished) = 500 units; and units loss during production because of internal failure (100% finished) = ???. In the beginning of process Kara has = Rp.1,000,000 of cost and it added = Rp.6,500,000 into the process. Calculate the additional cost charged to Factory Overhead control because of the previous internal failure assuming that the defective product can still be sold for Rp.1,500 perunit?

Question 10 Tax administration

1. In October 201W Robert Tinte, an artist, travelled to Brussels for an art exhibition. After the exhibition he remained in Brussels for 5 days to visit friends. The total travel expenses were $8,000, which he claimed in full in his 201W-1X income tax return as a work-related deduction. In September 201X, Anna Blanche, who is also an artist and is friends with Robert, advised him that she had been audited by the ATO in relation to her work-related travel expenses. Robert is now worried that he might be audited and asks for your advice on what to do.

Required

2. Advise Robert on the best course of action in dealing with the ATO in the circumstances described above and explain the tax consequences if he takes no action.                                                                                                                                                                            

QUESTION TWO

On 1 October 2010, Pythias secured a majority equity shareholding in Sara on the following terms: an immediate payment of K4 per share on 1 October 2010 and a further amount deferred until 1 October 2011 of K5.4 million. The immediate payment has been recorded in Pythias’s financial statements, but the deferred payment has not been recorded. Pythias’s cost of capital is 8% per annum. On 1 February 2011, Pythias also acquired 25% of the equity shares of Austin paying K10 million in cash.

The summarised statements of financial position of the three companies at 30 September 2011 are:

Pythias Sara    Austin

Assets    K000 K000 K000

Non-current assets

Property, plant and equipment 40,000 31,000 30,000

Intangible assets    7,500

Investments – Sara (8 million shares at K4 each) 32,000

– Austin    10,000    nil nil

–––––– –––––– ––––––

89,500 31,000 30,000

Current assets

Inventory 11,200    8,400    10,000

Trade receivables    7,400    5,300 5,000

Bank    3,400    nil    2,000

–––––– ––––––    ––––––

Total assets    111,500    44,700    47,000

   –––––– –––––– ––––––

Equity and liabilities

Equity Equity shares of K1 each    50,000    10,000 10,000

Retained earnings – at 1 October 2010 25,700    12,000 31,800

– for year ended 30 September 2011 9,200    6,000    1,200

––––––    –––––– ––––––

   84,900 28,000 43,000

Non-current liabilities

Deferred tax    15,000    8,000 1,000

Current liabilities

Bank nil 2,500 nil

Trade payables 11,600    6,200    3,000

–––––– –––––– ––––––

Total equity and liabilities    111,500 44,700 47,000

   ––––––    ––––––    ––––––

The following information is relevant:

(i) Pythias’s policy is to value the non-controlling interest at fair value at the date of acquisition. For this purpose the directors of Pythias considered a share price for Sara of K3.50 per share to be appropriate.

(ii) At the date of acquisition, the fair values of Sara’s property, plant and equipment was equal to its carrying amount with the exception of Sara’s plant which had a fair value of K4 million above its carrying amount. At that date the plant had a remaining life of four years. Sara uses straight-line depreciation for plant assuming a nil residual value. Also at the date of acquisition, Pythias valued Sara’s customer relationships as a customer base intangible asset at fair value of K3 million. Sara has not accounted for this asset. Trading relationships with Sara’s customers last on average for six years.

(iii) At 30 September 2011, Sara’s inventory included goods bought from Pythias (at cost to Sara) of K2.6 million. Pythias had marked up these goods by 30% on cost. Pythias’s agreed current account balance owed by Sara at 30 September 2011 was K1.3 million.

(iv)Impairment tests were carried out on 30 September 2011 which concluded that consolidated goodwill was not impaired, but, due to disappointing earnings, the value of the investment in Austin was impaired by K2.5 million.

(v) Assume all profits accrue evenly through the year.

Required:

Prepare the consolidated statement of financial position for Pythias as at 30 September 2011.

1. Cashier has done reconciliation as of October 31st and looks like there are some thefts going on. Also the cashier is the only one receiving cash and doing reconciliation. If the cashier’s September 30 reconciliation is known to be accurate and you start your audit on November 10, what specific substantive audit procedures would help you detect the missing money?

On October 15, 2020, the board of directors of Ensor Materials Corporation approved a stock option plan for key executives. On January 1, 2021, 20 million stock options were granted, exercisable for 20 million shares of Ensor's $1 par common stock. The options are exercisable between January 1, 2024, and December 31, 2026, at 80% of the quoted market price on January 1, 2021, which was $15. The fair value of the 20 million options, estimated by an appropriate option pricing model, is $3 per option. Ensor chooses the option to recognize forfeitures only when they occur.

Ten percent (2 million) of the options were forfeited when an executive resigned in 2022. All other options were exercised on July 12, 2025, when the stock’s price jumped unexpectedly to $39 per share.

Required:
1. When is Ensor’s stock option measurement date?
2. Determine the compensation expense for the stock option plan in 2021. (Ignore taxes.)
3. Prepare the journal entries to reflect the effect of forfeiture of the stock options on Ensor’s financial statements for 2022 and 2023.
5. Prepare the journal entry to account for the exercise of the options in 2025.

Please provide explanation for each part

On October 1, 2017, Sharp Company (based in Denver, Colorado) entered into a forward contract to sell 130,000 rubles in four months (on January 31, 2018) and receive $54,600 in U.S. dollars. Exchange rates for the ruble follow:

harp's incremental borrowing rate is 12 percent. The present value factor for one month at an annual interest rate of 12 percent (1 percent per month) is 0.9901. Sharp must close its books and prepare financial statements on December 31.

1. Prepare journal entries, assuming that Sharp entered into the forward contract as a fair value hedge of a 130,000 ruble receivable arising from a sale made on October 1, 2017. Include entries for both the sale and the forward contract.
2. Prepare journal entries, assuming that Sharp entered into the forward contract as a fair value hedge of a firm commitment related to a 130,000 ruble sale that will be made on January 31, 2018. Include entries for both the firm commitment and the forward contract. The fair value of the firm commitment is measured by referring to changes in the forward rate.

138. Beckman Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $156,000. The asset is expected to have a salvage value of $16,400 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset's book value on December 31, Year 2 will be:

142.

A total asset turnover ratio of 3.6 indicates that:

Multiple Choice

A. For every $1 in assets, the firm paid $3.6 in expenses during the period.

B. For every $1 in sales, the firm acquired $3.6 in assets during the period.

C. For every $1 in assets, the firm produced $3.6 in net sales during the period.

D. For every $1 in assets, the firm earned gross profit of $3.6 during the period.

E. For every $1 in assets, the firm earned $3.6 in net income.