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Relationships of audits

In comparing services that auditors provide, you will notice a variety of both services and topics they cover. The last slide above in the Audit PowerPoint gives factors that contribute to fraud in companies. Notice that since the Sarbanes-Oxley Act in 2001, fraud from lack of internal controls has decreased dramatically. How

Equity Securities Entries: Capriati Corp

AE17-11 Journal entries for equity securities for Capriati Corp in 2012, their first year of business, including unrealized gains or losses in 2012: 2012: Jan 15: Purchased 13,500 shares of Gonzalez Company's stock at $50.25 per share and commission of $2,970. Apr 1: Purchased 7,500 shares of Belmont Co.'s stock at $78.00

Gregory Inc: Fair Value and Equity Method Compared

AE17-16 (Fair Value and Equity Method Compared)   Gregory Inc. acquired 20% of the outstanding common stock of Handerson Inc. on December 31, 2012. The purchase price was $1,260,000 for 50,000 shares. Handerson Inc. declared and paid an $0.88 per share cash dividend on June 30 and on December 31, 2013. Handerson reported net

Gator Co: Equity method of reporting Investment in Subsidiary

AE17-13 (Equity Method)   Gator Co. invested $1,120,000 in Demo Co. for 25% of its outstanding stock. Demo Co. pays out 40% of net income in dividends each year.   Use the information in the following T-account for the investment in Demo to answer the following questions.   Investment in Demo Co.   1,120,000

Jones Company: JE for call options, unrealized holding gains

AE17-22 (Call Option) On January 2, 2012, Jones Company purchases a call option for $420 on Merchant common stock. The call option gives Jones the option to buy 1,000 shares of Merchant at a strike price of $50 per share. The market price of a Merchant share is $50 on January 2, 2012 (the intrinsic value is therefore $0). On

FASB: Liabilities, Equity, Revenue, Expenses

The goal of this research assignment is to become more familiar with the FASB Accounting Standards Codification website, as you will be using it in future chapters to find the answers to Research Exercises and Cases that reflect situations often arising in practice. Please answer the following 3 multi-part questions that are di

Business memo: Winnie Manufacturing Company

You have recently been hired as accounting staff at Winnie Manufacturing Company. The company is preparing its December 31, 2012 financial statements and there were a number of unusual transactions that occurred during the past year. The accounting department needs to determine the appropriate Income Statement classification f

Applications to Attend a Special Program

I have to fill out an application to attend a special program that gives students opportunities to attend workshops and possibly get an internship and I am having trouble with a question. What is the best way to answer this question? Give me an example of tough problem you could not solve. What was tough about it, what did

CPA Responsibility

Molly, a CPA in public practice is on the board of directors of a local bank. One of Molly's clients has a $100,000 ninety day loan from the bank. Molly, while preparing the clients tax return finds that the client's revenues from their business is down significantly. Any further deterioration may very well result in the clie

Constructing a Gantt chart for activities

1, 3, 5 and 7 1. construct a Gantt chart for the following set of activities and indicate the project completion time: activity activity predecessor time(weeks) 1 5 2 4 3 1

Crystal, Incorporated: Acquisition Cost, Goodwill, Net Asset Book Value

Crystal, Incorporated acquired 100 percent of the assets and liabilities of Design, Inc. by issuing its common stock in a business combination. At the time of the combination, the fair values of Design's net assets and Crystal's common stock were $440,000 and $410,000, respectively; the book value of Design's net assets was $320

Costs associated with risk

Amanda and Chris McDermott own a small business, Plastic Dollars, that produces and maintains stored value cards for retailers. Most of the cards they sell are gift cards, such as those available in various restaurants and stores. They just started their business two years ago, but this year they hope to sell about four million

Internal Control Case Scenario

The Popkin Umbrella Manufacturing Company maintains an inventory of miscellaneous supplies (e.g., pen, pencils, paper, floppy disks, and envelopes) for its clerical workers. The company stores these supplies on shelves at the back of the office facility, easily accessible to all company employees. The company's accountant,

Variance analysis in the service industry

17. Detailed variance analysis. The following are planned and actual revenues for Cutting Edge Surgery Center. Because they are one of four surgery centers in the community, the administrator is concerned with his rates in relation to those of his competitors. Planned Actual Surgical volume 1,500 1,700 Gift shop reven

A parent company does not have to file a consolidated tax return

A parent company does not have to file a consolidated tax return even if it owns more than 80% of a subsidiary. Required: a) Why might a parent want to file a consolidated tax return? b) Why might a parent not want to file a consolidated tax return? Please answer with sufficient detail and references.

Financial Statements: Fill In The Blanks

I need to provide 4 financial statement, income statement, retained earnings, balance sheet, and cash flows, based off of the following numbers: Item Year2 Year1 Accounts Receivable 1190 1182 Accruals 429

Controlled Groups and Brother-Sister Corporations

Which of the following groups constitute a controlled group? (Any stock not listed below is held by unrelated individuals each owning less than 1% of the outstanding stock). For brother-sister corporations, which definition applies? a. Mark owns 90% of the single classes of stock of Hot and Ice Corporations. b. Johnson and C

Balance Sheet for Raider Corporation

Monte and Allie each own 50% of Raider Corporation, an S corporation. Both individuals actively participate in Raider's business. On January 1, Monte and Allie have adjusted bases for their Raider stock of $80,000 and $90,000 respectively. During the current year, Raider reports the following results: Ordinary loss

PepsiCo Inc. Coca-Cola Company annual report analysis

Review the 2005 and 2004 annual reports for PepsiCo Inc and The Coca-Cola Company. Compare the two companies and provide recommendations to improve their financial status. Include an introduction, a vertical and horizontal analysis and classic ratios for liquidity, solvency, and profitability in your analysis for 2005 and 2

Sales and Exchanges of Real Estate

Please check my answers to the following questions. Question 1: When real estate is sold and a mortgage is involved, how is the amount realized on the sale determined? Answer: Amount realized. The amount realized from a sale or exchange is the total of all money received plus the FMV of all property or services received

Reebook Realflex Activity-based Cost first stage allocation

Activity-based Costing (ABC) ReebookRealflex produces shoes for circuit training and walking. Recently, the management of the company has decided to adopt the activity-based costing system and has identified three activity cost pools. Information on its annual overhead costs and the activity cost pools are as follows: Activ

Determining corporate strategy from annual reports

Review an annual report of a popular company ie. Target, Kohl's Bass Pro shops, and answer the following questions with references: 1. From the annual reports you previewed, what is the company's corporate strategy? What are their company goals and were they successful in achieving those goals? 2. Would you invest in the


Enron Corporation's 2001 third-quarter 10-Q report disclosed the following transaction with LJM2, a nonconsolidated special purpose entity (SPE) that was formed by Enron: In June 2000, LJM2 purchased dark fiber optic cable from Enron for a purchase price of $100 million. LJM2 paid Enron $30 million in cash and the balance i

Manufacturing costs, labour costs and budgeting

A) At The Peak, Inc., manufactures scientific calculators. Costs incurred in making 25,000 scientific calculators in April included $ 85,000 of fixed manufacturing overhead. The total absorption cost per scientific calculator was $ 12.50. Required: a. Calculate the variable cost per scientific calculator. b. The ending in

Impacts of Unethical Behavior

Research a company that has been in the news for unethical practices, such as Enron, Tyco, Global Crossing, or WorldCom. Summarize your ideas about the following: What was the nature of the controversy regarding this company's practices? How were accounting practices involved? If you had been an accountant for this com

Debts and Equity Securities

You have just joined a CPA firm. Your manager is impressed with the recommendations that you provided on the reporting of securities for the client. He comes in and says "You did a great job! The client was thrilled with the recommendations." Your manager has another consulting assignment. He asked you to prepare for him the en