Suppose you are in charge of sales at a pharmaceutical company, and your firm has a new drug that causes bald men to grow hair. Assume that the company wants to earn as much revenue as possible from this drug. If the elasticity of demand for your company’s product at the current price is 1.4, would you advise the company to raise the price, lower the price, or to keep the price the same? What if the elasticity were 0.6? What if it were 1? Explain your answer.

Madge is a sole trader who has decided to form a small proprietary company and move her business into a corporate form. Madge’s business is quite small, with some assets and modest revenue. She has paid tax personally in the past. Madge is now curious as to whether there are any requirements on the small company she is about to register. What are the procedures and reporting requirements on a small proprietary company regarding records, accounts and reports required by the Corporations Act and ASIC?

Suppose you are in charge of sales at a pharmaceutical company, and your firm has a new drug that causes bald men to grow hair. Assume that the company wants to earn as much revenue as possible from this drug. If the elasticity of demand for your company’s product at the current price is 1.4, would you advise the company to raise the price, lower the price, or to keep the price the same? What if the elasticity were 0.6? What if it were 1? Explain your answer.

Suppose you are in charge of sales at a pharmaceutical company, and your firm has a new drug that causes bald men to grow hair. Assume that the company wants to earn as much revenue as possible from this drug. If the elasticity of demand for your company’s product at the current price is 1.4, would you advise the company to raise the price, lower the price, or to keep the price the same? What if the elasticity were 0.6? What if it were 1? Explain your answer.

Suppose you are in charge of sales at a pharmaceutical company, and your firm has a new drug that causes bald men to grow hair. Assume that the company wants to earn as much revenue as possible from this drug. If the elasticity of demand for your company’s product at the current price is 1.4, would you advise the company to raise the price, lower the price, or to keep the price the same? What if the elasticity were 0.6? What if it were 1? Explain your answer.

Tiner Leasing Company purchased specialized equipment from Fred

Company on December 31, 2019 for $800,000. On the same date, it leased this equipment to Tears Company for 6 years, the useful life of the equipment. The lease payments begin January 1, 2020 and are made every 6 months. Tiner Leasing wants to earn 9% annually on its investment.

   (a) Calculate the amount of each rent. $ __________

   (b) How much interest revenue will Tiner earn in 2020? $ __________

Small Finance Ltd (SF) provides small and medium-sized personal, car and business loans to clients. It has been operating for more than 10 years and run throughout its life by Ben Stanley. Ben has been the public face of the finance company, appearing in most of its television and radio advertisements, and developing a reputation as a friend of the ‘little person’ who has been mistreated by the large finance companies and banks.

SF’s major revenue stream is generated by obtaining large amounts on the wholesale money market and lending in small amounts to retail customers. Margins are tight, and the business is run as a ‘no frills’ service. As a result of COVID-19, the demand for finance for cars has dropped off dramatically. Ben is also very concerned about the impact of COVID-19 on the recoverability of loans. Offices are modestly furnished and the mobile lenders drive small, basic cars when visiting clients. SF prides itself on full disclosure to its clients and all fees and services are explained in writing to clients before loans are finalised. However, although full-disclosure is made, clients who do not read the documents closely can be surprised by the high exit charges when they wish to make early repayments or transfer their business elsewhere.

SF’s mobile lenders are paid on a commission basis; they earn more when they write more loans. For example, they are encouraged to sell credit cards to any person seeking a personal loan. SF receives a commission payment from the credit card companies when it sells a new card and SF also receives a small percentage of the interest charges paid by clients on the credit card.

Identify the factors that would affect the preliminary assessment of inherent risk and control risk for SF’s revenue?

Explain which management assertions (refer ASA315, paragraphs A128 and A129) are at most risk

Ben Cartwright Pest Control uses   following ledgers in its chart of accounts

107. Accounts Receivable                  105.Accumulated Depreciation – Equipment   104. Spraying Equipment

201. Interest Payable                          209. Notes Payable                                                103. Prepaid Insurance      

205. Salaries Payable                          104 .Supplies                                                           208.Unearned Service Revenue

509. Depreciation Expense                405. Service Revenue                                            534. Interest Expense

510. Salary Expense                            518. Insurance   Expense                                       520. Supplies Expense      

All of the accounts have normal balances. The information below has been gathered at December 31, 2019.

1. The Cost of Equipment is $84,000 and life is estimated to be 5 years
2. Ben Cartwright Pest Control borrowed $ 24,000 by signing a 10%, one-year note on July 1, 2019, Interest is paid on the maturity of loan.
3. Ben Cartwright Pest Control paid $ 3,600 for 8 months of insurance coverage on October 1, 2019.
4. Salaries of Employees due on Dec-31, 2019 amounting $ 5,000 which is not paid yet.
5. Ben Cartwright Pest Control performed disinfecting services worth $3,000. For a client in December 2019. The client is billed for these services but no cash is received yet.
6. On December 31, 2019, Ben Cartwright Pest Control provides services worth $7,000 to customers whom cash has been received in Advance.               
7. Supplies $ 2,000 was purchased at the beginning of December, however a count of supplies on December 31, 2019, indicates that supplies of $ 950 are on hand.

Required:

1. Prepare in Journal form with narration, the adjusting entries for the seven items listed for Ben Cartwright Pest Control, keeping in mind the company has a policy of adjusting accounts on Monthly basis.

2. What would be the entry in case of a, b and c if Ben has a policy of adjusting accounts on yearly basis and the accounting year of Ben ends on December-31.

Problem 10-01A

On January 1, 2022, the ledger of Sandhill Co. contained these liability accounts.

During January, the following selected transactions occurred.

During January, the company’s employees earned wages of $60,000. Withholdings related to these wages were $4,590 for Social Security (FICA), $5,200 for federal income tax, and $1,560 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assume that wages earned during January will be paid during February. No entry had been recorded for wages or payroll tax expense as of January 31.

Journalize the January transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Round answers to nearest whole dollar amount, e.g. 5,275.)
Journalize the adjusting entries at January 31 for the outstanding note payable and for salaries and wages expense and payroll tax expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Prepare the current liabilities section of the balance sheet at January 31, 2022. Assume no change in Accounts Payable.

Holmes Cleaning Service began operation on January 1, Year 1. The company experienced the following events for its first year of operations:

Events Affecting Year 1:

1. Provided $170,000 of cleaning services on account.
2. Collected $127,500 cash from accounts receivable.
3. Paid salaries of $44,000 for the year.
4. Adjusted the accounts to reflect management’s expectations that uncollectible accounts expense would be $1,900. The expense was determined using the percent of revenue method.

c. Prepare an income statement, balance sheet, and statement of cash flows for Year 1. (Statement of Cash Flows and Balance Sheet only: Items to be deducted must be indicated with a minus sign.)