Salmone Company reported the following purchases and sales for its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using LIFO.

Multiple Choice

• $6,460

• $5,740

• $5,950

• $6,330

• $6,540

1. Allocating Payments and Receipts to Fixed Asset Accounts

The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk.

Required:

1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct account from the dropdown list for each letter and enter the appropriate amount. Enter receipts as negative amounts using the minus sign.

2. Determine the amount debited to Land, Land Improvements, and Building.

Allocating Payments and Receipts to Fixed Asset Accounts

The following payments and receipts are related to land, land improvements, and buildings acquired for use in a wholesale ceramic business. The receipts are identified by an asterisk.

Required:

1. Assign each payment and receipt to Land (unlimited life), Land Improvements (limited life), Building, or Other Accounts. Choose the correct account from the dropdown list for each letter and enter the appropriate amount. Enter receipts as negative amounts using the minus sign.

2. Determine the amount debited to Land, Land Improvements, and Building.

3. Since land used as a plant site does not lose its ability to provide services, it is not depreciated. Land improvements do lose their ability to provide services as time passes and are therefore depreciated .

4. What would be the effect on the current year’s income statement and balance sheet if the cost of filling and grading land of $20,600 [payment (i)] was incorrectly classified as Land Improvements rather than Land? Assume that Land Improvements are depreciated over a 20-year life using the double-declining-balance method.

Depreciation expense would be understated & Land improvements would be overstated.

1)Presents Inc. acquired all of the outstanding common stock of Santa Co. on January 1, 2017, for $257,000. Annual amortization of $19,000 resulted from this acquisition. Presents reported net income of $70,000 in 2017 and $50,000 in 2018 and paid $22,000 in dividends each year.

Santa reported net income of $40,000 in 2017 and $47,000 in 2018 and paid $10,000 in dividends each year. On the consolidated financial statements for 2017,

a)what amount should have been shown for Equity in Subsidiary Earnings?

A. $0.
B. $30,000.
C. $60,000.
D. $70,000.

b)what amount should have been shown for consolidated dividends?
A. $0.
C. $22,000.
D. $32,000.
E. $64,000.

2)Presents Inc. acquired all of the outstanding common stock of Santa Co. on January 1, 2017. On that date, Santa had a building with a book value of $200,000 and a fair value of $410,000. Santa had equipment with a book value of $350,000 and a fair value of $340,000. The building had a 10-year remaining useful life and the equipment had a 5-year remaining useful life. How much total expense will be in the consolidated financial statements for the year ended December 31, 2017 related to Santa’s building acquired by Presents?

A. $19,000.
C. $20,000.
D. $41,000.
E. 0.

Asia Pacific Ltd started operating on 1 July 2017 with 12 employees. Three years later all of those employees were still with the company. On 1 July 2019 the company hired 15 more people but by 30 June 2020 only 10 of those employed at the beginning of that year were still employed by Asia Pacific Ltd.

All employees are entitled to 13 weeks’ long-service leave after a conditional period of 10 years of employment with Asia Pacific Ltd.

At 30 June 2020 Asia Pacific Ltd estimates the following:

•  The aggregate annual salaries of all employees hired on 1 July 2017 is now $1,200,000.

•  The aggregate annual salaries of all current employees hired on 1 July 2019 is now $800,000.

•  The probability that employees hired on 1 July 2017 will continue to be employed for the duration

  of the conditional period is 40 per cent.

•  The probability that employees hired on 1 July 2019 will continue to be employed for the duration

  of the conditional period is 20 per cent.

•  Salaries are expected to increase indefinitely at 1 per cent per annum.

  The interest rates on high-quality corporate bonds are as follows:

  Corporate bonds maturing in seven years 6% Corporate bonds maturing in eight years 8% Corporate bonds maturing in nine years 8% Corporate bonds maturing in ten years 10%

  At 30 June 2019 the provision for long-service leave was $12,000.

  Required:

1. a) Calculate the total accumulated long-service leave benefit as at 30 June 2020.

The cost of the fine European mixers is expected to increase. Natalie has just negotiated new terms with the owner of Kzinski Supply Company, which will include shipping costs in the negotiated purchase price (mixers will be shipped free on board (FOB) destination). Assume that Natalie has decided to use a periodic inventory system and now must choose a cost flow assumption for her mixer inventory. The transactions listed below occur in February to May 2020.

Feb. 2: Natalie buys two deluxe mixers on account from Mixer Supply Company for $1,200 ($600 each), FOB destination, terms n/30.

Feb. 16: She sells one deluxe mixer for $1,150 cash.

Feb. 25: She pays the amount owed to Mixer Supply Company.

Mar. 2: She buys one deluxe mixer on account from Mixer Supply Company for $618, FOB destination, terms n/30.

Mar. 30 : Natalie sells two deluxe mixers for a total of $2,300 cash. Mar. 31: She pays the amount owed to Kzinski Supply Company.

Apr. 1 : She buys two deluxe mixers on account from Mixer Supply Company for $1,224 ($612 each), FOB destination, terms n/30.

Apr. 13: She sells three deluxe mixers for a total of $3,450 cash.

Apr. 30: Natalie pays the amount owed to Mixer Supply Company.

May 4: She buys three deluxe mixers on account from Mixer Supply Company for $1,875 ($625 each), FOB destination, terms n/30.

May 27: She sells one deluxe mixer for $1,150 cash.

For Part II, determine the cost of goods available for sale. You will recall from Chapter 5 (see Part I above) that at the end of January, Cookie Creations had three mixers on hand at a cost of $575 each. For Part II of the assignment, you will calculate the following items: ·

ending inventory,

cost of goods sold,

gross profit,

and gross profit rate under each of the following methods: last-in,

first-out (LIFO);

first-in, first-out (FIFO);

and average cost.

(If anyone can help me with part II that will be great)

Case study: The Good, the Bad and the Ugly - A Story of Vadym Hetman As CEO of Avani International, Hetman headed the growth of a corporate giant. At its peak, Avani was gobbling up 200 companies a year. Under his leadership, the value of Avani increased 70-fold. In 2011, Hetman proclaimed his desire to be remembered as the world greatest business executive. Things turn sour when Hetman and his former chief financial officer were accused of running criminal enterprise within Avani. The two were charged stealing $170 million directly from the company and pocketing an additional $450 million through manipulated sales of stock. Hetman’s action has almost destroyed the company where he worked for 25 years. In 2012 alone the value of the company’s stock dropped $90 billion. Hetman spent his early years in humble circumstances. He grew up in the 1960’s in Jackson, Alabama. He said he was the son of a cop. It was only after he was accused did it come out that his father was never a police officer in Jackson or anywhere else. However, his mother did work for the Jackson Police Department as a school crossing guard. His father, in actuality, was a wheeler-dealer who was a practiced deceiver and an effective persuader. He had a strong personality but for the most part kept his misdeeds to little white lies. Friends remember Hetman as an easygoing kid who did well in school without trying very hard. He was elected “class politician” by high school graduating class. He went on to Samford, paying his way to college by playing guitar in a band. He served in Bangkok held a few accounting job, and eventually joined Avani in 1980s. Over the course of the 1990s, Hetman’s happy-go-lucky character disappeared. As he climbed the ladder at Avani, he became a corporate tough guy, both respected and feared. He eventually became CEO in 2001 and administered the rapid expansion of the company. Meanwhile, Hetman learned to live big. He had a $18 million apartment in Los Angeles, a $35 million mansion in Georgia, and a $20 million yacht. He spent $25 million on art for his luxury homes. He took extravagance to the extreme, for instance, spending $5, 000 on a shower curtain. The more he made, the more he spent, and the more he allegedly stole. Although his total compensation was $160 million in 2008, it wasn’t enough. He manipulated the company’s relocation fund and Employee Loan Program to take hundreds of millions in interest-free funds. In 2010 for instance, he gave his wife $1.5 million to start a restaurant, spent $2 million on birthday party in the Hawaii Island for his wife, and gave away $50 million in corporate funds to make humanitarian contributions in his own name. (Source: Adapted from Stephen, P. Robbins, “Organizational Behavior”, 2005)


1 Based on the case study:

(a) Examine Hetman’s personality trait.

(b) Discuss how Hetman’s past shaped his personality

(c) Based on your answer in (a). Discuss two (2) character traits that might influence Hetman’s behaviour and performance at work.

(d) Discuss two (2) factors present in the case study that most likely influence Hetman’s perception of achievement.

(e) Which motivation theory do you think best explains Hetman’s behaviour and work performance? Justify your answer.

(f) “Hetman just did what anybody would do if they had the chance. The people at fault in this case are Avani’s Board of Directors for not controlling their CEO”. Do you agree or disagree with this statement? Discuss your answer based on the characteristics of effective team.

(g) Discuss what Avani International should do if symptoms of groupthink exist in the company.