5-61 (Internal Controls-Office Service Client) Brown Company provides the following office support services for more than 100 small clients: 1. Supplying temporary personnel 2. Providing monthly bookkeeping services 3. Designing and printing small brochures 4. Copying and reproduction services 5. Preparing tax reports
Compute the missing amount for each of the following notes: Principal Annual Interest Rate Time Total Interest ???????????????????????????????????? (a) $10,000 10% 2.5 years ? ???????????????????????????????????? (b) $120,000 ? 9 months
The corporate charter of Gordon Corporation allows the issuance of a maximum of 2,000,000 shares of $1 par value common stock. During its first three years of operation, Gordon issued 1,200,000 shares at $15 per share. It later acquired 30,000 of these shares as treasury stock for $20 per share. Based on the above informati
Instructions Journalize the transactions. On January 1, 2002, John Diego Company had Accounts Receivable $146,000, Notes Receivable of $15,000, and Allowance for Doubtful Accounts of $13,200. The note receivable is from Trudy Borke Company. It is a 4-month, 12% note dated December 31, 2001. John Diego Company prepares financ
(See attached file for full problem description) 1. Which of the following transactions would be considered a financing activity in preparing a statement of cash flows? a. Amortizing a discount on bonds payable b. Recording net income from operations c. Selling common stock d. Purchasing inventory 2. The net i
(See attached file for full problem description) --- PROBLEM 6-18 Basic CVP Analysis (LO1, LO3, LO4, LO5, LO6, LO8) Marjolein & Co, make a designer alarm clock that sells for $20 per unit. Variable costs are $6 per unit, and fixed costs total $210,000 per year. Required: Answer the following independent questions:
16. The deferred tax expense is the a. increase in balance of deferred tax asset minus the increase in balance of deferred tax liability. b. increase in balance of deferred tax liability minus the increase in balance of deferred tax asset. c. increase in balance of deferred tax asset plus the increase in balance of deferred t
1. What is the fundamental issue surrounding capitalization versus expensing? 2. Which approach do you believe management would prefer? 3. Which approach do you believe auditors would prefer? Why? In addition can you list your references, because I also read the articles, websites, etc. for my information. Than
Layt Clock Company has developed the following flexible budget for its overhead costs. Manufacturing overhead at Layt is applied to production on the basis of standard machine-hours: (see chart in attached file) Layt was expecting to produce 22,000 clocks last year. The actual results for the year were as follows
How do you do the payroll calculations for Betty's wages: groww earnings, FICA taxes, federal and state income taxes withheld and net pay.
ED-1 Betty Williams' regular hourly wage rate is $14.00, and she receives a wage of 11⁄2 times the regular hourly rate for work in excess of 40 hours. During a March weekly pay period Betty worked 42 hours. Her gross earnings prior to the current week were $6,000. Betty is married and claims three withholding allowances. H
The amount of salable merchandise a company buys during the period is called a. beginning inventory. b. purchases. c. goods available for sale. d. ending inventory. Cost of goods sold is computed by a. begnning inventory plus purchaes. b. goods available for sale less beginning i
If Reneta's CDs purchases a new cash register for $2,700 and plans to use it for three years before disposing of it for an estimated $300, how much depreciation will Renata recognize the first year under the double-declining-balance method? a. $1,800 b. $ 900 c. $1,600 d. $ 800 Tanner owns and o
The combined governmental fund balance sheet of the town of Paris is presented below. Per schedules included in the notes to the financial statements, the town had $1450 of capital assets (net of accumulated depreciation) and $1314 in long-term liabilities associated with the capital assets.
What would you pay for a share of ABC Corporation stock today if the next dividend will be $2 per share, your required return on equity investments is 12%, and the stock is expected to be worth $110 one year from now?
It is proposed at a stockholders' meeting that the firm slow its rate of payments on accounts payable in order to make more funds available for operations. It is contended that this procedure will enable the firm to expand inventory, which will in turn enable the firm to generate more sales. Comment on this propsosal.
An entry for depreciation has what effect on the financial statements: a) increases assets and decreases liabilities. b) decreases net income and increases assets. c) increases expenses and decreases assets d) decreeases assets and increases liabilities The primary difference between deferred and accrued expense
Internal Control CheckPoint SE1: Ann Mogen owns a gourmet coffee shop. Identify four ways in which good internal controls can help her operate her business. SE2: Schell Company is a men's clothing store. Indicate whether each of the following components of internal control is part of the: a. control environment b. risk
Pacific Corporation conducted its operations in San Diego, California. It was a dominant player in the surfboard industry. Pacific was started in the late 1900's, and its customers were remarkably loyal. The mom-and-pop shop was steadily growing in an industry continually saturated by thousands of start ups. The loyalty of i
A company estimates that to build a new company it would cost $300 million in present value terms or they could purchase an existing company. The book value of the company's they are looking at purchasing has assets of $200 million and its EBIT is $40 million. Similar companies are selling around 10 times current earnings. The
An asset is acquired at a cost of $10,000 with a five-year life and no anticipated salvage value. Straight-line depreciation is considered appropriate. The asset was acquired on January 2, 2000. Price indexes for the five years are: First, prepare data for each given year. Second, answer the questions below.
Compare the after-tax rates of return for a corporate investor from the following two investments: A twenty-year, corporate bond that sells for par and offers a 9% coupon versus an investment in preferred stock that sells for $40.00 per share and pays a $2.40 dividend. The corporation has a 35% tax rate
How would you determine how much EBIT could fall before a company would be unable to make interest payments out of operating income?
The CEO wants an update on risk and feels believes the best way to do this is to discuss the relationship between risk and return and explain it in the context of the company's cost of capital. Here is the information that we have: The company's beta is 1.2. The risk-free rate is 3%. The required market return is 8%.
(See attached file for full problem description) --- E1 The lettered items below represent a classification scheme for the concepts of financial accounting. Match each number term with the letter of the category in which it belongs. a. Decision makers (users of accounting information) b. Business activities or entitie
I have an inheritance in Lebanon that is estimated around 200,000 (between cash and property). It was from my uncle who have no children. I know that inheritance of such a small amount is not taxable in the US, but what if the inheritance is from another country, like Lebanon? Does it make a difference? How about the fact that i
Please answer the questions on the sheet provided. I have attached the balance sheet and income statement. --- 1. Refer to the financial statements to answer the following questions. Work all problems out on this page. Show work. How profitable was ABC Company when comparing their Gross Margin to total sales?
Gators Corp. sold an investment on an installment basis. The total gain of $60,000 was reported for financial reporting purposes in the period of sale. The company qualifies to use the installment sales method for tax purposes. The installment period is 3 years; one-third of the sale price is collected in the period of sale. The
Jill's Wigs Inc. had the following balance sheet last year: Cash $800 Accounts Payable $350 Accounts receivable 450 Accrued wages 150 Inventory 950 Notes Payable 2000 Net fix
Keller Best Manufacturing produces a single product. The following data pertain to the company's last operating month: **TABLE INCLUDED IN ATTACHMENT** Questions: 1. What was the total Contribution Margin for the month using the variable costing approach? 2. What was the Gross Margin for the month under the absorption
Question 17 Mystic Trolling, Inc., has just purchased a new fishing boat for $5,000 cash. The entry that Mustic Trolling will record includes a a. debit to Boat-Fishing; credit to Cash. b. debit to Cash; credit to Boat-Fishing. c. debit to Boat-fishing; credit to Accounts Payable. d. debit to Ca