11The Russian wireless market became saturated in 2005. A battle ensued between shareholders Telenor and Alfa Group over expansion into Ukraine. Telenor already had a JV with one of the major existing operators in Ukraine and opposed VimpelCom entering the Ukraine market to compete with it. Alfa insisted that VimpelCom should pursue the Ukraine market. What would be the best way for the CEO to handle this conflict?
In: Economics
In: Statistics and Probability
Miss Misha, the CEO of Alamaya Cosmetic (M) Sdn. Bhd. Plans to hold a second meeting with all her supervisors to discuss the launch of new cosmetic product, ‘Booster Serum’. The meeting will be held on Sunday, 30 June 2019, 10:30 a.m. at Kenanga Conference Room, Level 3. As a secretary to Miss Misha, write a notice and agenda of the meeting to be sent to all supervisors.
In: Operations Management
CONTINUOUS CASE CHAPTER FIVE
The world has been hit by the Coronavirus that is believed to have originated in China. Suppose
you, are the CEO and have set up an automobile factory in the affected area (in China). How
would you deal with the ethical issues that might arise from continuing to operate the factory?
What do you think would be your responsibility to your employees, customers and to society?
In: Operations Management
The following condensed income statements of the Jackson Holdings company are presented for the two years ended December 31, 2021 and 2020.
2021 2020
Sales Revenue $15,900,00 $10,500,000
Cost of goods sold 9,650,000 6,450,000
Gross profit 6,250,000 4,050,000
Operating expenses 3,560,000 2,960,000
operating income 2,690,000 1,090,000
gains on sale of divison 690,000 -
3,380,000 1,090,000
Income tax expenses 845,000 272,500
Net income 2,535,000 817,500
On October 15, 2021 Jackson entered into a tentative agreement to seel all the assets of one of its divisons. the divison qualifies as a component of an entity as defined by GAAP. the division was sold on december 31, 2021 for $5,270,000. Book value of the divisions assets was $4,580,000. The division's contribution to Jackson's operating income before-tax for each year was as follows:
2021 $445,000
2020 $345,000
Assume an income tax rate of 25%
Required
1. Prepare revised income statements according to GAAP, beginning with income from continuing operations before income taxes, Ignore EPS disclosures.
2. Asume that by december 31,2021 the divions had not yet been sold but was considered held for sale. The fair value of the divisons assets on december 31 was $5,270,000. prepare revised income statements accoring to GAAP, beginning with income from continuing operations before income taxes. ignore EPS disclosures.
3. Assume that by december 3, 2021, the division had not yet been sold but was considered held for sale. The fair value of the divisions asets on December 31 was $3,990,000. Prepare revised income statements according to GAAP, beginning with income from continuing operations before income taxes, ignore EPS disclosures.
In: Accounting
The following condensed income statements of the Jackson Holdings company are presented for the two years ended December 31, 2021 and 2020.
2021 2020
Sales Revenue $15,900,00 $10,500,000
Cost of goods sold 9,650,000 6,450,000
Gross profit 6,250,000 4,050,000
Operating expenses 3,560,000 2,960,000
operating income 2,690,000 1,090,000
gains on sale of divison 690,000 -
3,380,000 1,090,000
Income tax expenses 845,000 272,500
Net income 2,535,000 817,500
On October 15, 2021 Jackson entered into a tentative agreement to seel all the assets of one of its divisons. the divison qualifies as a component of an entity as defined by GAAP. the division was sold on december 31, 2021 for $5,270,000. Book value of the divisions assets was $4,580,000. The division's contribution to Jackson's operating income before-tax for each year was as follows:
2021 $445,000
2020 $345,000
Assume an income tax rate of 25%
Required
1. Prepare revised income statements according to GAAP, beginning with income from continuing operations before income taxes, Ignore EPS disclosures.
2. Asume that by december 31,2021 the divions had not yet been sold but was considered held for sale. The fair value of the divisons assets on december 31 was $5,270,000. prepare revised income statements accoring to GAAP, beginning with income from continuing operations before income taxes. ignore EPS disclosures.
3. Assume that by december 3, 2021, the division had not yet been sold but was considered held for sale. The fair value of the divisions asets on December 31 was $3,990,000. Prepare revised income statements according to GAAP, beginning with income from continuing operations before income taxes, ignore EPS disclosures.
In: Accounting
Gundagai Ltd was incorporated on June 30, 2019. On July 1, 2019, the company issued a prospectus offering 300,000 ordinary shares at an issue price of $10, payable on the following terms.
A summary of the applications and allotments register follows.
|
Amount paid per share on application |
Number of shares applied for |
Number of shares allotted |
|
$3.00 |
200,000 |
150,000 |
|
$6.00 |
100,000 |
100,000 |
|
$10.00 |
50,000 |
50,000 |
The application process was completed on August 31, 2019, and the shares were allotted to all applicants on September 1, 2019. All money received more than the amounts due on application where applied to amounts due on allotment and calls. Where appropriate, refunds of application money were made. All allotment money was received by September 30, 2019.
On November 1, 2020, Gundagai Ltd’s directors made a call of 42c per share, payable by November 30, 2020. By December 31, call money had not been received from holders of 25,000 shares.
Required:
Prepare journal entries to record the above events. No Post Ref required. Refer to the provided Chart of Accounts for the appropriate account names.
|
Date |
Account |
Post Ref |
Debit |
Credit |
|
2019 |
||||
|
To record application money received |
||||
|
To record the issue of shares on allotment |
||||
|
To record the transfer of cash received on allotment |
||||
|
To record transfer to allotment and calls in advance of the excess application money |
||||
|
To record receipt of allotment monies |
||||
|
2020 |
||||
|
To record the first call of ordinary shares |
||||
|
To record the transfer of calls in advance money |
||||
|
To record receipt of first call monies. |
||||
In: Accounting
Gundagai Ltd was incorporated on June 30, 2019. On July 1, 2019, the company issued a prospectus offering 300,000 ordinary shares at an issue price of $10, payable on the following terms.
A summary of the applications and allotments register follows.
|
Amount paid per share on application |
Number of shares applied for |
Number of shares allotted |
|
$3.00 |
200,000 |
150,000 |
|
$6.00 |
100,000 |
100,000 |
|
$10.00 |
50,000 |
50,000 |
The application process was completed on August 31, 2019, and the shares were allotted to all applicants on September 1, 2019. All money received more than the amounts due on application where applied to amounts due on allotment and calls. Where appropriate, refunds of application money were made. All allotment money was received by September 30, 2019.
On November 1, 2020, Gundagai Ltd’s directors made a call of 42c per share, payable by November 30, 2020. By December 31, call money had not been received from holders of 25,000 shares.
Required:
Prepare journal entries to record the above events. No Post Ref required. Refer to the provided Chart of Accounts for the appropriate account names.
|
Date |
Account |
Post Ref |
Debit |
Credit |
|
2019 |
||||
|
To record application money received |
||||
|
To record the issue of shares on allotment |
||||
|
To record the transfer of cash received on allotment |
||||
|
To record transfer to allotment and calls in advance of the excess application money |
||||
|
To record receipt of allotment monies |
||||
|
2020 |
||||
|
To record the first call of ordinary shares |
||||
|
To record the transfer of calls in advance money |
||||
|
To record receipt of first call monies. |
||||
In: Accounting
Question 6 Audit Report
Before the audit report was signed, the audit team encountered the following situation. Treat each situation independently and assume the remaining financial statements are fine.
1) A property owned by Cook’s Furniture Ltd was sold to Lidia Preston, the wife of Howard Cook in June 2020 (refer to case description in part A). The property has a market value of four million and was sold at 3.2 million. Management did not disclose this in the financial statement because they believed this was a private matter. The disposal of this asset has been appropriately accounted for on the financial statements (e.g. the asset was removed from PPE and the loss of disposal was correctly recognized as an expense).
2) The subsequent selling price of the ready-made furniture range suggests the inventory valuation as of 30 June 2020 should be written down by $48,000 but management only wrote $38,000 off as per the financial statements because they were confident that they can increase the selling price again in 2021 after people settling back to normality.
3) Carl Cook decided to retire in 2021 due to health reasons, Carl is willing to sell his shareholding to the remaining shareholders. However, the BoD decided to explore the potential of selling the business. By the time to sign the 2020 financial statements, the company has not commenced negotiations with any potential buyer. The BoD said to the auditor that they may not sell the business if they cannot get a good deal. Carl’s retirement decision is disclosed on the financial statements, but not the intention to sell the business.
REQUIRED: For each of the above situation:
a) Discuss the audit procedure that the auditor needs to perform in relation to each situation.
b) Explain which audit opinion is appropriate for each situation.
In: Accounting
The comparative balance sheets for Pronghorn Corporation show
the following information.
|
December 31 |
||||
|
2020 |
2019 |
|||
| Cash |
$33,400 |
$12,900 |
||
| Accounts receivable |
12,200 |
10,000 |
||
| Inventory |
11,800 |
9,100 |
||
| Available-for-sale debt investments |
–0– |
2,900 |
||
| Buildings |
–0– |
29,800 |
||
| Equipment |
45,200 |
20,200 |
||
| Patents |
5,000 |
6,300 |
||
|
$107,600 |
$91,200 |
|||
| Allowance for doubtful accounts |
$3,000 |
$4,600 |
||
| Accumulated depreciation—equipment |
2,000 |
4,500 |
||
| Accumulated depreciation—building |
–0– |
5,900 |
||
| Accounts payable |
5,000 |
2,900 |
||
| Dividends payable |
–0– |
4,900 |
||
| Notes payable, short-term (nontrade) |
3,000 |
4,000 |
||
| Long-term notes payable |
31,000 |
25,000 |
||
| Common stock |
43,000 |
33,000 |
||
| Retained earnings |
20,600 |
6,400 |
||
|
$107,600 |
$91,200 |
|||
Additional data related to 2020 are as follows.
| 1. | Equipment that had cost $11,000 and was 40% depreciated at time of disposal was sold for $2,500. | |
| 2. | $10,000 of the long-term note payable was paid by issuing common stock. | |
| 3. | Cash dividends paid were $4,900. | |
| 4. | On January 1, 2020, the building was completely destroyed by a flood. Insurance proceeds on the building were $30,000 (net of $2,100 taxes). | |
| 5. | Debt investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past. | |
| 6. | Cash was paid for the acquisition of equipment. | |
| 7. | A long-term note for $16,000 was issued for the acquisition of equipment. | |
| 8. | Interest of $2,000 and income taxes of $6,400 were paid in cash. |
Prepare a statement of cash flows using the indirect method.
(Show amounts that decrease cash flow with either a -
sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
In: Accounting