1. Many analysts place more importance on the income statement than they do on the statement of cash flows. Do you think the problems at companies such as Enron would have been uncovered earlier if more emphasis was placed on the statement of cash flows? Why or why not?
Company A is a wholesale company that purchases items from manufacturers and sells them to retail establishments. On December 31, 2010 Company A had the following in ending inventory: Product Code Quantity Cost Each Current Replacement Cost Each YZ 1,970 $58 $63 CT 3,280 38 36 FA 1,640 51 57 GG 660 109 125 IR 1,3
When is a taxpayer required to pay the AMT? What are the differences between the AMT and regular tax? What are the differences between tax preferences and adjustments concerning the AMT? What are some examples of each?
Book vs. Tax (MACRS) Depreciation Elwood Inc. purchased computer equipment on March 1, 2010, for $36,000. The computer equipment has a useful life of 10 years and a salvage value of $3,000. For tax purposes, the MACRS class life is 5 years. a) Assuming that the company uses the straight-line method for book and tax purpo
Identify the following costs as fixed or variable. Costs related top plane trips between San Diego, California, and Orlando, Florida, follow. Pilots are paid on a per trip basis. a. Pilots' salaries relative to the number of trips flown. b. Depreciation relative to the number of planes in service. Cost of refreshment re
I need to understand this problem. Accept special sales orders? John Inc. is presently operating at 50% capacity and manufacturing 50,000 units of a patented electronic component. The cost structure of the component is as follows. Raw material $ 1.50 per unit Direct Labor 1.50 per unit Variable Overhead 2.00 per unit Fi
I need to describe and evaluate the various approaches for setting transfer prices. How can the use of different approaches between the selling and buying divisions be reconciled? It should be with a proper referencing as well. Thanks.
The Securities and Exchange Commission (SEC) has cracked down on what the SEC fondly refers to as "cookie jar reserves." In the eyes of the SEC, 'cookie jar reserves' are estimated liabilities that are too high and unrealistic. Then these unrealistic accruals can be dipped into during the bad times; put a cookie away in the good
Situation: Torpus is a small manufacturing company that produces and sells custom Plexiglas canopies for small airplanes and speed boats. In the most recent fiscal year, in the midst of one of the worst recession in more than 30 years, it reported a profit of about $40,000 on an asset base of $309,238. The company has been i
Case: You purchase a truck for use in your business. It will replace an older truck you currently use for the same delivery purposes but will cost less to maintain (gas & service). What are the relevant cashflows for financial analysis? 1. Determine the cashflow for 1 year . Use the following facts: a. The New Truck Costs
Calculate the standard deviation of a three-asset portfolio with the following data: Funds:............................S&P 500................Intermediate Treasury...................European Weights..............................50%.................................35%.....................................15% Mean.............
Tanner Bay Inc. has two departments, Assembly and Packaging. The company uses a job order costing system and computes a predetermined overhead rate in each department. The Assembly Department bases its rate on machine hours and the Packaging Department bases its rate on direct labor hours. At the beginning of the year, the compa
When conducting an error analysis, what must a CPA consider? Why? What might happen if these items are not taken into consideration?
See file attached. PE 2-4 THE ACCOUNTING EQUATION PE 2-6 CURRENT ASSETS PE 3-16 JOURNAL ENTRIES PE 3-20 TRIAL BALANCE PROBLEM 17 -1 CALCULATING RATIOS
Nancy Company has budgeted sales of $300,000 with the following budgeted costs: Direct materials $60,000 Direct manufacturing labor 40,000 Factory overhead Variable
Consider the following scenario: The Ski Pro Corporation, which produces and sells to wholesalers a highly successful line of water skis, has decided to diversify to stabilize sales throughout the year. The company is considering the production of cross-country skis. After considerable research, a cross-country ski line ha
After reading an article about the controversy of companies using fair value accounting, the new auditor, Kelle, comes to you with questions. You decide to provide the new hires with some information on fair value accounting. Send them a memo defining and discussing fair value accounting. This memo needs to include the follow
Perry Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. The adjusted trial balance at December 31, 2010, included the following expense accounts: Accounting and legal fees $140,000 Advertising $120,000 Freight-out $75,000 Interest $60,000 Loss on sale of long-term invest
Question 1 Trudy Company incurred the following costs. 1. Sales tax on factory machinery purchased $5,000 2. Painting of and lettering on truck immediately upon purchase 700 3. Installation and testing of factory machinery 2,000 4. Real estate broker's commission on land purchased 3,500 5. Insurance premium paid for first
I've been doing homework for hours and my brain has checked out...I need help working this problem, please. The intangible assets section of Redeker Company at December 31, 2008, is presented below. Patent ($70,000 cost less $7,000 amortization) $63,000 Franchise ($48,000 cost less $19,200 amortization) 28
A client, Mal Manley, fills out his client questionnaire for the previous year and on it provides information for the preparation of his individual income tax return. The IRS has never audited Mal's returns. Mal reports that he made over 100 relatively small cash contributions totaling $24,785 to charitable organizations. In the
(a) Make an Excel worksheet to calculate SSxx, SSyy, and SSxy. (b) Use the formulas to calculate the slope and intercept. (SEE Chart below) Part-Time Weekly Earnings by College Students Hours Worked (X) Weekly Pay (Y) 10 93 15 171 20
See attached Excel for template. E2-4 Presented below is information related to Robbins Real Estate Agency, Inc. Oct. 1 Lynn Robbins begins business as a real estate agent with a cash investment of $20,000 in exchange for common stock. Oct. 2 Hires an administrative assistant. Oct. 3 Purchases office furniture for
1. Describe the steps in the appeal process for an individual tax payer. Define the following and give examples: a. gross income b. income excluded from tax c. imputed interest d. adjusted gross income e. standard deduction f. itemized deductions g. phaseouts h. kid
Dish Network & DirecTv based business which caters to commercial & residential properties. Need specific examples related to the field. Subtopic 1: problems associated with facility location Subtopic 2: problems associated with organizational control and employee relations Subtopic 3: product or service development
Anderson Ltd. manufactures gearboxes for use in cars. At the start of the year, the management of Anderson Ltd. estimated that its costs would be: Direct labor 8% sales value Direct material 50% sales value Variable production overhead 8% sales value Fixed production overhead 12% sales value Administration overhead 5%
Please use excel and see attachment file (I understand excel better.) Lake sports sells jet skis. Customers pay 1/3 of the sales price of the jet ski when they initially purchase the ski, and then pay another 1/3 each year for the next two years. Because Lake has little information about collectibility of these
Cavos Metdolas ia a money laundering organization for a drug cartel in Wisconsin and Illinois. A money laundering method that they use is to prepay, from an Internet bank account, balances on credit cards controlled by the organization. The credit card companies will send refund checks back to the credit card holder when the pos
Question 1 Company DEF has three employees and does the payroll every Friday. Determine the gross pay, total deductions and net pay for each employee. Use the following for FICA: Cap = $100,000, rates are 6% for social security and 1.5% for Medicare. Steve--worked 45 hours and earns $30/hour. His year to date earnings