You are an accountant at a local CPA firm that is auditing the accounting records of ABC Company. You have been asked to educate the accounting department about the limitations of the internal control system in preparation for an upcoming audit. During your audit, you have identified that because of a weak internal control syste
What are several conditions that can lead to fraud and to what type of fraud can they lead?
At December 31, 2008, the trial balance of Worcester Company contained the following amounts before adjustment. Debits Credits Accounts receivable $385,000 Allowance for doubtful accounts $
Beka Company owns equipment that cost $50,000 when purchased on January 1, 2005. It has been depreciated using the straight-line method based on estimated salvage value of $5,000 and an estimated useful life of 5 years. Instructions Prepare Beka Company's journal entries to record the sale of the equipment in these four ind
Bliny Corporation makes a product with the following standard costs for direct material and direct labor: Direct material: 1.20 meters at $5.30 per meter $6.36 Direct labor: .40 hours at $14.00 per hour $5.60 ________________________________________ During the most recent month, 8,300 units were produced. The c
What is the need for elimination in the consolidation process? What accounts must be eliminated and why? Discuss the ramifications of not eliminating journal entries.
26. James Equipment Company sells computers for $1,500 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2008, the company sold 700 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $30
ACCT 731 P22 Equipment that cost $80,000 and has accumulated depreciation of $63,000 is exchanged for similar equipment with a fair value of $35,000 and $15,000 cash is received. The exchange lacked commercial substance. Directions: Respond to these questions on a separate Excel spreads
Problem Two (Chapter 11): On January 1, 2011, Morrow Inc. purchased a spooler at a cost of $40,000. The equipment is expected to last eight years and have a residual value of $4,000. During its eight-year life, the equipment is expected to produce 250,000 units of product. In 2011 and 2012, 42,000 and 76,000 units respectively
*E11-19 Siburo Company issued $300,000, 11%, 10-year bonds on January 1, 2008, for $318,694. This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semi-annually on July 1 and January 1. Siburo uses the effective-interest method to amortize bond premium or discount. Instructions: Prepare
Kelsey Gunn is the only employee of Arsenault Company. His pay rate is $23.00 per hour with an overtime rate of 1 and 1/2 times for hours over 40 in a work week. For the week ending March 31,2010, he worked 48 hour. Calculate the gross pay for the week using the overtime premium approach to calculate gross pay. Since rthe compa
On December 31, 2010 Karmansky Co. needed to record its accrued wages for year-end. December 31 is a Tuesday, and Karmansky Co. must account for two days of wages. The company operates on a five-day workweek, the prior week's gross pay(December 26 payday) was $32,650, and the net pay was $21,330. Journalize the adjusting entry
E12-4 F. Calvert and G. Powers have capital balances on January 1 of $50,000 and $40,000 , respectively. The partnership income-sharing agreement provides for (1) annual salaries of $20,000 for Calvert and $12,000 for Powers, (2)interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 60% by
Explain the purposes of special journals. What are the types of special journals that are typically used in merchandising companies? Explain the uses of special journals.
20-11 Shown below are the job cost related accounts for the law firm of Barnes, King, and Morton and their manufacturing equivalents: Law Firm Accounts Manufacturing Firm Accounts Supplies Raw Materials Salaries Payable Factory Wages Payable Operating Overhead Manufacturing Overhead Work
The stockholder's equity accounts of Lawrence Company have the following balance on December 31, 2010. Common stock, $10 par, 274,000 shares issued and outstanding $2,740,000, Paid-in capital in excess of par $1,200,000, Retained Earnings $5,600,000. Shares of Lawrence Company stock are currently selling on the Midwest Stock Ex
E17-12 (Journal Entries for Fair Value and Equity Methods) Situation 1 Conchita Cosmetics acquired 10% of the 200,000 shares of common stock of Martinez Fashion at a total cost of $13 per share on March 18, 2007. On June 30, Martinez declared and paid a $75,000 cash dividend. On December 31, Martinez reported net income of
Jacobs Company manufactures refrigerators. The company uses a budgeted indirect-cost rate for its manufacturing operations and during 2005 allocated $1,000,000 to work-in-process inventory. Actual overhead incurred was $1,100,000. Ending balances in the following accounts are: Work in Process $100,000 Finished Goo
Ex 14-19 Ingalls Company. sells $300,000 of 10% bonds on February 1, 2003. The bonds pay interest on August 1 and February 1. The due date of the bonds is August 1, 2006. The bonds yield 12%. The company has a year end of December 31. Show the journal entries required on the following dates: a. February 1, 2003 b. August 1
The differences between the book basis and tax basis of the assets and liabilities at the end of 2008 are as follows: Book Basis Tax Basis AR $50,000 -0- Litigation Liab 30,000 -0- It is esti
On May 1, 2007, Friendly Company issued 2,000 $1,000 bonds at 102. Each bond was issued with one detachable stock warrant. Shortly after issuance, the bonds were selling at 98, but the market value of the warrants cannot be determined. a. Prepare the entry to record the issuance of the bonds and warrants. b. Assume
ABC Corporation has 10,000 shares of $100 par value, 8%, preferred stock and 50,000 shares of $10 par value common stock outstanding at December 31, 2008. a. If the preferred stock is cumulative and dividends were last paid on the preferred stock on December 31, 2005, what are the dividends in arrears that should be reported
Prepare a paper discussing the case and incorporating answers to the questions below. It is important to address each of the questions presented. Use the APA format in writing course papers. Therefore, the APA rules for formatting, quoting, paraphrasing, citing, and listing of sources are to be followed. The Reference List is no
Please choose the right answer and explain in a few words why: 1. The effect of an adjustment is: a.To correct an entry that was not in balance. b.To increase the accuracy of the financial statements. c.To close the books. d. To record transactions not previously recorded. 2. A debit entry to an account will:
On January 2, 2011, Sanborn Tobacco, Inc., bought 5% of Jackson Industry's capital stock for $90 million as a temporary investment. Sanborn realized that these securities normally would be classified as available-for-sale, but elected the fair value option to account for the investment. Jackson Industry's net income for the year
Prepare the entry to record the interest earned. Prepare the journal entry to record collection of the note and interest at maturity. Agrico, Inc., accepted a 10-month, 13.8% (annual rate), $4,500 note from one of its customers on June 15; interest is payable with the principal at maturity. Prepare the entry to record the in
See attached file. Write the journal entry, for each of the following transactions that occurred during the first year of operations at Kissick Co. (Omit the "$" sign in your response.) a. Issued 250,000 shares of $6-par-value common stock for $1,500,000 in cash. b. Borrowed $500,000 from Oglesby National Bank and signed
P 11-11 Collins Corporation purchased office equipment at the beginning of 2009 and capitalized a cost of $2,000,000. This cost figure included the following expenditures: The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to deter
E 11-32 Howarth Manufacturing Company purchased a lathe on June 30, 2007, at a cost of $80,000. The residual value of the lathe was estimated to be $5,000 at the end of a five-year life. The lathe was sold on March 31, 2011, for $17,000. Howarth uses the straight-line depreciation method for all of its plant and equipment. Parti
E 11-24 General Optic Corporation operates a manufacturing plant in Arizona. Due to a significant decline in demand for the product manufactured at the Arizona site, an impairment test is deemed appropriate. Management has acquired the following information for the assets at the plant: Cost