1. Issued $26,000 of common stock for cash.
2. Provided $95,600 of services on account.
3. Provided $52,000 of services and received cash.
4. Collected $85,000 cash from accounts receivable.
5. Paid $54,000 of salaries expense for the year.
6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 4 percent of the ending accounts receivable balance will be uncollectible.
7. Closed the revenue account.
8. Closed the expense account.

Year 2:

1. Wrote off an uncollectible account for $750.
2. Provided $104,000 of services on account.
3. Provided $48,000 of services and collected cash.
4. Collected $97,000 cash from accounts receivable.
5. Paid $81,000 of salaries expense for the year.
6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 4 percent of the ending accounts receivable balance will be uncollectible.

b. Prepare the income statement, statement of changes in stockholders’ equity, 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.)
  

balance sheet chart

statement of cash flows chart

13-Those auditing standards require that the auditor plans and performs an audit to obtain reasonable assurance whether the financial statements are free of: to SOX the in USA is responsible to prepare additional report about:

        a – material misstatement           b- errors             c- fraud              d-none of the above  

14-“In my opinion, these financial statements present fairly, in all material respects, the financial position of the company as at  .........., 19..... and the results of its  operations and the changes in its financial position for the year then ended in accordance with generally accepted accounting principles” this opinion is:

        a – qualified        b- unqualified       c- adverse             d-disclaimer  

15-“In my opinion, these financial statements don’t present fairly, in all material respects, the financial position of the company as at  .........., 19..... and the results of its  operations and the changes in its financial position for the year then ended in accordance with generally accepted accounting principles” this opinion is:

        a – qualified        b- unqualified       c- adverse             d-disclaimer  

16-There are two reasons for ………… audit opinion: departure from GAAP or IFRS and scope limitation

        a – qualified        b- unqualified       c- adverse             d-disclaimer  

17- The …….. limitation means extent of audit work has been limited) inability to obtain sufficient evidence

         a – GAAP        b- GAAS       c- scope             d- none of the above  

18- If the Management’s deliberate refusal to let auditors perform some procedures, then the auditor’s opinion is:

a – qualified        b- unqualified       c- adverse             d-disclaimer  

Merline Manufacturing makes its product for $55 per unit and sells it for $141 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows.

Management expects December’s results to be repeated in January, February, and March of 2018 without any changes in strategy. Management, however, has an alternative plan. It believes that unit sales will increase at a rate of 10% each month for the next three months (beginning with January) if the item's selling price is reduced to $126 per unit and advertising expenses are increased by 10% and remain at that level for all three months. The cost of its product will remain at $55 per unit, the sales staff will continue to earn a 10% commission, and the remaining expenses will stay the same.

Required:
Prepare budgeted income statements for each of the months of January, February, and March that show the expected results from implementing the proposed changes. (Enter your final answers in whole dollars.)

1. The "business cycle" refers to

short-run fluctuations in macroeconomic activity.

a long-run increase in GDP.

changes in the economy between winter and summer.

2. Which of these would be counted as part of official GDP measures?

earnings made by Uber and Lyft drivers

casual jobs that are paid in cash "under the table"

measures of happiness among a country's citizens

the damage to an environment measured in terms of deforestation

3.The U.S. gross domestic product is equal to the total market value of all

final goods and services produced by U.S. citizens in the United States.

intermediate goods and services produced by citizens in the United States.

intermediate goods and services produced by resources in the United States.

final goods and services produced by resources in the United States.

changes in the economy over the course of the four seasons.

4.

(Table) According to the table, net domestic product is

properitors income 300

capital consumption allowance 440

federal gov't purchases goods and servises 200

compensation of employees 800

personal consumption expendentiures 950

corporate profits 90

exports 60

gross private domestic investment 500

rental income 30

state and local gov't purchases of goods and services 150

net interest 100

federal govt deficit 250

imports9 0

$1,580 billion.

$1,080 billion.

$1,770 billion.

$1,330 billion.

Reno, Inc., is considering a project to establish a plant for producing and selling consumer goods
in an under developed country. Assume that the host country’s economy is very dependent on
oil prices, the local currency of the country is very volatile, governance standards are quite
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compromised with a high pedigree of unfair practices and the sovereign or country risk is
considered to be high. It is known that the host country’s economic conditions are un-related to
U.S. economy and the global economy other than material changes that relate and/or emanate
in external environment due to oil price changes.
Required:
a) Should the required rate of return (and therefore the risk premium) on the project be
higher or lower than that of other alternative projects in the i) United States; ii) any
other G-7 country; iii) Pakistan? Explain with cogent reasons.
b) Assume that the required rate of return is 20% in the first year of operations and
increases by 2% every year for 5-years. Based on financial projections and estimated
cash flows, return on equity (ROE) is expected to be in the ball park of 18% in Year-1,
whereas moving forward in Year-2 through Year-5 it is expected to remain in range of
30% per annum. Based on these numbers, would you recommend that Reno should
move ahead with this new investment? Why or why not? Explain with cogent reasons.

The following cost functions apply to X Company's regular production and sales during the year:

  Cost of goods sold:   $6.05 (X) + $131,670

  Selling and administrative expenses:   $1.02 (X) + $81,130

where X is the number of units produced and sold. During the year, X Company sold 66,500 units for $17.00 each. At the end of the year, a company offered to buy 4,620 units but was only willing to pay $12.00 each. X Company had the capacity to produce the additional 4,620 units.

5. If X Company had accepted the special order, firm profits would have increased by

6. Consider the following three changes. Direct material costs on the special order would have increased by $0.86 per unit, direct labor costs on the special order would have decreased by $0.46 per unit, and X Company would have had to rent special equipment for $1,500. Independent of your answer to (5), the effect of these changes would have been to reduce profit on the special order by

7. In order to retain all of X Company's regular customers, it would have had to reduce the regular selling price by $0.43. If the selling price were reduced and next year's unit sales turned out to be the same as this year's sales, firm profits would have fallen by

The following cost functions apply to X Company's regular production and sales during the year: Cost of goods sold: $6.05 (X) + $146,520 Selling and administrative expenses: $1.05 (X) + $69,960 where X is the number of units produced and sold. During the year, X Company sold 66,000 units for $18.00 each. At the end of the year, a company offered to buy 4,460 units but was only willing to pay $12.00 each. X Company had the capacity to produce the additional 4,460 units.

5. If X Company had accepted the special order, firm profits would have increased by

6. Consider the following three changes. Direct material costs on the special order would have increased by $0.71 per unit, direct labor costs on the special order would have decreased by $0.42 per unit, and X Company would have had to rent special equipment for $1,000. Independent of your answer to (5), the effect of these changes would have been to reduce profit on the special order by

7. In order to retain all of X Company's regular customers, it would have had to reduce the regular selling price by $0.37. If the selling price were reduced and next year's unit sales turned out to be the same as this year's sales, firm profits would have fallen by

Scroll down to complete all parts of this task.

Select from the option list provided the inventory cost flow assumption for each explanation below. Each choice may be used once, more than once, or not at all.

Scroll down to complete all parts of this task.

Select from the option list provided the inventory cost flow assumption for each explanation below. Each choice may be used once, more than once, or not at all.

Item Answer

1. Results in the highest cost of goods sold if prices are rising.

2. Unaffected by whether a perpetual or periodic system is used if goods are not specifically identified.

3. Reflects the actual physical flow of goods.

4. Determines cost only at period end but usable in a perpetual system that records only quantities.

5. Ending inventory approximates current replacement cost.

6. Requires an estimate of price-level changes for specific inventories.