14.16 Zero-balance account Union Company is considering establishment of a zerobalance account. The firm currently maintains an average balance of $420,000 in its disbursement account. As compensation to the bank for maintaining the zerobalance account, the firm will have to pay a monthly fee of $1,000 and maintain a $300,000
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What is one contingency that would concern an auditor and how would the auditor become aware of this contingency?
Will Federal tax cuts for entrepreneurs stimulate growth and investment in new ventures?
Discuss contingencies and how they are reported on financial statements. What conditions must be met before a contingency can be charged against income? 163 word response
Problem 6 - 5A Internal Control Abbott Inc. is expanding and needs to hire more personnel in the accounting office. Barbara Barker, the chief accounting clerk, knew that her cousin Cheryl was looking for a job. Barbara and Cheryl are also roommates. Barbara offered Cheryl a job as her assistant. Barbara will be responsible for
Colt Inc. has two types of handbags, standard and custom. The controller has decided to use a plantwide overhead rate (DL costs). The president wants to see what activity-based costing results might be. Estimated overhead costs are $270,000. Machine pool is $170,000 and Setup pool is $100,000. Compute overhead rates under b
The auditors of Annaly mortgage discovered that a lot of fictitious employees were on the payroll system and were being paid salaries. Neither the CFO nor the payroll manager was aware of the fraud. What could be the possible reasons for the fictitious employees being added on the payroll system? Suggest one reason.
Upon studying its statement of cash flows, you note that over the last three years a firm has consistently reported negative cash flow from operating activities, positive cash flow from investing activities, and negative cash flow from financing activities. What does this combination of cash flows suggest to you about the firm?
What is the rationale that would lead to a desire to speed production in the face of increasing costs and declining productivity?
During the late 1970s, Harley-Davidson, the motorcycle manufacturer, was losing money and was very close to bankruptcy. Management believed that one of the problems was low productivity and as a result, asked middle managers to speed up the production. The employees who made the motorcycles were told that the priority was to g
Rust Inc. manufactures a variety of desks for retail sale. The desks are normally distributed through several wholesalers. Energen Inc., a mid-size retailer, has offered to purchase 60,000 custom desks over the next three months, to be sold under the retailer's house brand. Energen offers to pay $190/unit, which is much less
Snow Cleaners, Inc., had net income of $494,592 for its fiscal year ended November 30, 2009. During the year, the company had outstanding 64,000 shares of 12 percent $40 par value preferred stock, and 37,280 shares of common stock. Calculate the earnings per share of common stock for the 2009 fiscal year.
Purposes of national income accounting and the components of GDP in the output (expenditures) approach and in the income approach. Also, the economic costs of unemployment.
1) State the purposes of national income accounting. List the components of GDP in the output (expenditures) approach and in the income approach. 2) Identify the economic costs of unemployment and the groups that bear unusually heavy unemployment burdens. Response is 1,108 words
Unless otherwise indicated, each of the following parts is independent. In all cases, show computations to support your answer. A. Andrews Home Center has two departments, Bath and Kitchen. The most recent income statement for the company follows: Department Total Bath Kitchen
Four (4) tax questions: S Corporation vs C Corporation, sale of company, s-election, operating loss carry forward and stock options.
Tax questions 1. Joe has received an offer to sell his company to Microsoft Inc. for $40 million. The selling price will consist of 20% cash and the balance in Microsoft stock. Joe asks your advice on the different tax structure possibilities for the sale of the company and your recommendation for which method he should consi
As the CPA for a large organization, your manager has asked you to provide information to outside CPAs who are examining a subsidiary that has been set up as a corporation. As part of their review, the CPAs have asked you to provide them with the following explanations: - The methodology used to determine deferred taxed -
The following information relates to Jorgensen Manufacturing for calendar year 2011, the company's first year of operation: Units produced 8,000 Units sold 7,000 Selling price per unit $ 4,500 Direct material per unit $ 2,000 Direct labor per unit $ 1,200 Variable manufacturing overhead per unit $ 900 Variable selling
Campus Copy & Printing wants to predict copy machine repair expense at different levels of copying activity (number of copies made). The following data have been gathered: Copy Machine Month Repair Expense Copies Made May $ 8,500 300,000 June 12,500 500,000 July 20,500 900,000 August 16,500 700,000 September 10,500
What is a flow-through entity? What advantages do flow-through entities have over a regular corporation? Compare and contrast the tax characteristics of an S corporation and a partnership. 860 words
Can a partnership be traded as a publicly traded organization? How can you find one? Give example.
Mize Company classifies its selling and administrative expense budget into variable and fixed components. Variable expenses are expected to be $ 25,000 in the first quarter, and $5,000 increments are expected in the remaining quarters of 2008. Fixed expenses are expected to be $40,000 in each quarter. Prepare the selling and
For Justus, Inc. Variable manufacturing overhead costs are expected to be $20,000 in the first quarter of 2010 with $ 4,000 increments in each of the remaining three quarters. Fixed overhead cost are estimated to be $35,000 in each quarter. Prepare the manufacturing overhead budget by quarters and in total for the year.
46. Elaine exchanges a van that is used exclusively for business purposes for another van that also is used exclusively for business. The adjusted basis for the old van is $18,000 and its FMV is $14,500. a. Calculate Elaines recognized gain or loss on the exchange. b. Calculate Elaine's basis for the va
Distinguish between a sampling error and a non sampling error and "how can each be reduced".
1. Hagar, Inc. is a retail chain with 125 stores organized into 5 regions. The most recent annual income statement for the Snert, ND store is given below (in $000). It is typical of recent years, and Hagar is considering closing the store because of chronic losses. What factors should Hagar consider in making the decision?
The Walter Jewelry Company produces a bracelet which normally sells for $79.95. The company produces 1,500 units annually but has the capacity to produce 2,000 units. A special order for manufacturing and selling 200 bracelets at $49.95 has been received which would not disrupt current operations. Current costs for the bracel
Many accounting writers have emphasized the effect that the allocation of fixed overhead can have on managerial incentives to overproduce. When fixed overhead is allocated to product, the greater the production level, the lower the fixed cost per unit. The lower fixed cost per unit might increase perceived profitability, but is
If you want to find out about a public company's foreign operations, where in the annual report do you go and what information is disclosed? Check out a multinational's annual report on a company's website particularly ones with very heavy international exposure like Coke, McDonalds, Intel, JNJ, Colgate, Avon, Cisco, Microso
Would you be able to help me to provide background on different fraudulent schemes?
Tiger, Inc., has developed the following standard cost data based on 60,000 direct labor hours, which is 75% of capacity ...see file attached... During the last period, the company operated at 80% of capacity and produced 128,000 units. Actual costs were: ...see file attached... Determine the direct mate
Waterson Company makes all sales on account. Normally, 40% of accounts are collected in the month of sale, 50% in the following month, 5% in the second following month, and 5% are uncollectible. Recent sales have been: $100,000 in March, $120,000 in April, $110,000 in May, and $150,000 in June. What are expected cash collections