ACC 497 Week 1 Discussion For more course tutorials visit
www.tutorialrank.com What's your understanding of ethics and do you think it's critical to perform ethical behavior in the accounting field? Why or why not?
Financial Statement analysis If you are a banker, what would you consider the most when performing a loan application? You understand there is risk involved with loan application and you’d like to minimize that risk.
If you get the recent financial statements of the applicant company, what specific information you will be looking at and why?
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ACC 497 Week 1 Knowledge Check (2019 Syllabus) (3 Set) For more course tutorials visit
www.tutorialrank.com 1.Refer to the following selected financial information from McCormik, LLC. Compute the company's current ratio for Year 2.
2. Powers Company reported Net sales of $1,280,000 and average Accounts Receivable, net of $70,500. The accounts receivable turnover ratio is: 1. Refer to the following selected financial information from McCormik, LLC. Compute the company's working capital for Year 2.
3. A company reports basic earnings per share of $4.20, cash dividends per share of $1.60, and a market price per share of $65.10. The company's dividend yield equals:
4. Which of the following is NOT a primary source of GAAP? Accounting sections of the CPA Handbook, PART I. FASB accounting standards. Accounting sections of the CPA Handbook, PART II.
Accounting Guidelines issued by the AcSB.
5. Which of the following is NOT a primary motivator for maximizing net income? To positively influence users' assessment of management performance. To enhance managers' performance-based compensation. To minimize the company's income tax liability. Compliance with debt covenants.
6. Private placements refer to: indirect negotiation with the one or more creditors. shares that form part of a control block. debt or equity securities issued to individuals or organizations without being listed with a securities commission. funds not disclosed by private companies. 2. If cash flow prediction is a company's primary reporting objective, this would likely result in: Fewer accruals and deferrals.
Lower earnings. Higher earnings. Poor matching. 3. Refer to the following selected financial information from McCormik, LLC. Compute the company's inventory turnover for Year 2. 4. Selected current year company information follows:
5. Choose the correct statement about audits of corporations: Outside auditors are paid by the government for auditing the financial statements of corporations. Revenue Canada performs audits of corporations' financial statements. It is the employees of the firm being audited who perform the annual audit of the financial statements of that firm. Public corporations (those whose stock are traded on exchanges) are subject to annual audit as to their compliance with GAAP. 6.
Refer to the following selected financial information from McCormik, LLC. Compute the company's accounts receivable turnover for Year 2. 7. A corporation reported cash of $28,400 and total assets of $468,000 on its balance sheet. Its common-size percent for cash equals: 7. A corporation reported cash of $25,800 and total assets of $455,000 on its balance sheet. Its common-size percent for cash equals:
Use the following selected information from Wheeler, LLC to determine the 2017 and 2016 common size percentages for operating expenses using Net sales as the base.
The stewardship function refers to: Disclosing management's use of funds and other financial information to absentee shareholders. A company's corporate citizenship track record. The collection of information to help present and potential investors and creditors and other users in assessing the amounts, timing and uncertainty of prospective cash receipts. The collection of information for planning the future of the entity, implementing those plans, and for controlling daily operations.
Refer to the following selected financial information from McCormik, LLC. Compute the company's days' sales uncollected for Year 2. (Use 365 days a year.)
The conceptual framework of accounting should have many positive effects as new accounting standards are developed. Which of the following is not one of those effects? Financial statements among companies and industries should be more consistent and comparable. Management should have greater latitude in choosing among accounting alternatives. Standard setting should be more consistent with an overall statement of the objectives and concepts of financial reporting. Accountants should be better able to assess the validity of different accounting alternatives for similar and dissimilar transactions and events. Users' understanding and confidence in financial statements should increase. 8. General-purpose financial statements report financial information relevant to: investors only. creditors only. investors, creditors and government users.
government users only.
9. A corporation reports the following year-end balance sheet data. The company's current ratio equals:
10. Which of the following statements regarding cash flows is not accurate?
Information about the balances of current liabilities, long-term debt and stockholders' equity can be found in the statement of cash flows. Before the present cash flow statement standard became effective, companies had a choice of whether to report cash flow from operating activities or working capital from operating activities. Information about past cash flows is useful in predicting an entity's future cash flows. The reported cash flow from operating activities has been found useful in evaluating a firm's ability to make interest payments and repay debt. Studies have shown that a cash flows report is more relevant to investor decisions than a working capital report.
1. Powers Company reported Net sales of $1,280,000 and average Accounts Receivable, net of $70,500. The accounts receivable turnover ratio is: 2. Which of the following financial statements are required for companies adhering to IFRS but NOT ASPE (private entity GAAP)? Statement of Comprehensive income. Statement of Retained Earnings. Statement of Cash Flows. Statement of financial position. 3. The stewardship function is reflected by: Full disclosure and minimizing interperiod allocations. Minimizing interperiod allocations only. Full disclosure only. Performance evaluation and minimizing interperiod allocations. Performance evaluation.
4. A corporation reports the following year-end balance sheet data. The company's debt-to-equity ratio equals: 5. Refer to the following selected financial information from McCormik, LLC. Compute the company's days' sales uncollected for Year 2. (Use 365 days a year.)
6. A corporation reports the following year-end balance sheet data. The company's current ratio equals:
7. The conceptual framework of accounting should have many positive effects as new accounting standards are developed. Which of the following is not one of those effects? Accountants should be better able to assess the validity of different accounting alternatives for similar and dissimilar transactions and events. Management should have greater latitude in choosing among accounting alternatives. Standard setting should be more consistent with an overall statement of the objectives and concepts of financial reporting.
Users' understanding and confidence in financial statements should increase. Financial statements among companies and industries should be more consistent and comparable.
8. The organization created to develop accounting standards in Canada, the AcSB, is NOT concerned about: reporting financial position. reported comparability of results. reported earnings. reported cash flows. All of these answers are correct. 9. The essential characteristic(s) of accounting is (are): identification, measurement, and communication of financial information. communication of financial information to interested persons. communication of financial information about economic entities. communication of financial information to interested persons, communication of financial information about economic entities,
and identification, measurement, and communication of financial information. 10. Selected current year company information follows: ==============================================
ACC 497 Week 2 Discussion For more course tutorials visit
www.tutorialrank.com International Financial Reporting Standards, Part 1 Note: This is a custom book pulling chapters from various books. This course references chapter numbers in the table of contents; the chapter preview shows the original book chapter. International Financial Reporting Standards, Part 2 Note: This is a custom book pulling chapters from various books. This course references chapter numbers in the table of contents; the chapter preview shows the original book
Appendix: Profitability Analysis
Note: This is a custom book pulling chapters from various books. This course references chapter numbers in the table of contents; the chapter preview shows the original book chapter.
Flexible Budgets and Performance Analysis Note: This is a custom book pulling chapters from various books. This course references chapter numbers in the table of contents; the chapter preview shows the original book chapter.
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ACC 497 Week 2 Knowledge Check (2019 Syllabus) For more course tutorials visit
www.tutorialrank.com 1. The St. Lucia Blood Bank, a private charity partly supported by government grants, is located on the Caribbean island of St. Lucia. The blood bank has just finished its operations for September, which was a particularly busy month due to a powerful hurricane that hit neighboring islands causing many injuries. The hurricane largely bypassed St. Lucia, but residents of St. Lucia willingly donated their blood to help people on other islands. As a
consequence, the blood bank collected and processed over 20% more blood than had been originally planned for the month. A report prepared by a government official comparing actual costs to budgeted costs for the blood bank appears below. Continued support from the government depends on the blood bank’s ability to demonstrate control over its costs.
The managing director of the blood bank was very unhappy with this report, claiming that his costs were higher than expected due to the emergency on the neighboring islands. He also pointed out that the additional costs had been fully covered by payments from grateful recipients on the other islands. The government official who prepared the report countered that all of the figures had been submitted by the blood bank to the government; he was just pointing out that actual costs were a lot higher than promised in the budget. The following cost formulas were used to construct the planning budget:
Required: 1. Complete the performance report for September using the flexible budget approach. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations and round your final answers to nearest whole dollar.)
2.
Heritage Watercraft makes reproductions of classic wooden boats. The bottleneck in the production process is fitting wooden planks to build up the curved sections of the hull. This process requires the attention of the shop’s most experienced craftsman. A total of 3,300 hours is available per year in this bottleneck operation. Data concerning the company’s four products appear below:
ata concerning the pizzeria’s costs appear below:
In November, the pizzeria budgeted for 1,620 pizzas at an average selling price of $17 per pizza and for 240 deliveries. Data concerning the pizzeria’s operations in November appear below:
Required: 1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
1.
Via Gelato is a popular neighborhood gelato shop. The company has provided the following data concerning its operations:
While gelato is sold by the cone or cup, the shop measures its activity in terms of the total number of liters of gelato sold. For example, wages should be $5,900 plus $1.70 per liter of gelato sold and the actual wages for June were $15,900. Via Gelato expected to sell 6,000 liters in June, but actually sold 6,200 liters.
Required: Complete the report showing Via Gelato revenue and spending variances for June
2. Heritage Watercraft makes reproductions of classic wooden boats. The bottleneck in the production process is fitting wooden planks to build up the curved sections of the hull. This process requires the attention of the shop’s most experienced craftsman. A total of 3,400 hours is available per year in this bottleneck operation. Data concerning the company’s four products appear below:
No fixed costs could be avoided by modifying how many units are produced of any product or even by dropping any one of the products. Required:
1a. Calculate the total hours required in the bottleneck operation to satisfy demand for all the products. 3. Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made. Data concerning the pizzeria’s costs appear below:
In November, the pizzeria budgeted for 2,250 pizzas at an average selling price of $22 per pizza and for 210 deliveries. Data concerning the pizzeria’s operations in November appear below:
Required: 1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November.
4. Jake’s Roof Repair has provided the following data concerning its costs:
For example, wages and salaries should be $21,400 plus $15.00 per repair hour. The company expected to work 2,700 repair-hours in May, but actually worked 2,600 repair-hours. The company expects its sales to be $52.00 per repair-hour.
Required: Compute the company’s activity variances for May.
5. Advanced Pharmaceuticals, Inc., is a wholesale distributor of prescription drugs to independent retail and hospital-based pharmacies. Management believes that top-notch customer representatives are the key factor in determining whether the company will be successful in the future. Customer representatives serve as the company’s liaison with customers—helping pharmacies monitor their stocks, delivering drugs when customer stocks run low, and providing up-to-date information on drugs from many different companies. Customer representatives must be ultrareliable and are highly trained. Good customer representatives are hard to come by and are not easily replaced. Customer representatives routinely record the amount of time they spend serving each pharmacy. This time includes travel time to and from the company’s central warehouse as well as time spent replenishing stocks, dealing with complaints, answering questions about drugs, informing pharmacists of the latest developments and newest products, reviewing bills, explaining procedures, and so on. Some pharmacies require more hand-holding and attention than
others and consequently they consume more of the representatives’ time. Recently, customer representatives have made more frequent complaints that it is impossible to do their jobs without working well beyond normal working hours. This has led to an alarming increase in the number of customer representatives quitting for jobs in other organizations. As a consequence, management is considering dropping some customers to reduce the workload on customer representatives. Data concerning a representative sample of the company’s customers appears below:
Customer service costs include all of the costs—other than the costs of the drugs themselves—that could be avoided by dropping the customer. These costs include the hourly wages of the customer representatives, their sales commissions, the mileage-related costs of the customer representatives’ company-provided vehicles, and so on.
Required: 1. Rank the four customers in terms of their profitability.
Carlsville Company, which began operations in 2015, invests its idle cash in trading securities. The following transactions are from its short-term investments in trading securities. 2015
Jan. 20 Purchased 800 shares of Ford Motor Co. at $26 per share plus a $125 commission. Feb. 9 Purchased 2,200 shares of Lucent at $44.25 per share plus a $578 commission. Oct. 12 Purchased 750 shares of Z-Seven at $7.50 per share plus a $200 commission. Dec. 31 Fair value of the short-term investments in trading securities is $130,000.
2016 Apr. 15 Sold 800 shares of Ford Motor Co. at $29 per share less a $285 commission. July 5 Sold 750 shares of Z-Seven at $10.25 per share less a $102.50 commission. July 22 Purchased 1,600 shares of Hunt Corp. at $30 per share plus a $444 commission. Aug. 19 Purchased 1,800 shares of Donna Karan at $18.25 per share plus a $290 commission. Dec. 31 Fair value of the short-term investments in trading securities is $160,000.
2017
Feb. 27 Purchased 3,400 shares of HCA at $34 per share plus a $420 commission. Mar. 3 Sold 1,600 shares of Hunt at $25 per share less a $250 commission. June 21 Sold 2,200 shares of Lucent at $42 per share less a $420 commission. June 30 Purchased 1,200 shares of Black & Decker at $47.50 per share plus a $595 commission. Nov. 1 Sold 1,800 shares of Donna Karan at $18.25 per share less a $309 commission. Dec. 31 Fair value of the short-term investments in trading securities is $180,000.
Required: 1. Prepare journal entries to record these short-term investment activities for the years shown. On December 31 of each year, prepare the adjusting entry to record any necessary fair value adjustment for the portfolio of trading securities.
7. [The following information applies to the questions displayed below.]
Doering Company, a U.S. corporation with customers in several foreign countries, had the following selected transactions for 2015 and 2016.
2015
Apr. 8 Sold merchandise to Salinas & Sons of Mexico for $5,938 cash. The exchange rate for pesos is $0.1043 on this day. July 21 Sold merchandise on credit to Sumito Corp. in Japan. The price of 1.5 million yen is to be paid 120 days from the date of sale. The exchange rate for yen is $0.0094 on this day. Oct. 14 Sold merchandise for 19,000 pounds to Smithers Ltd. of Great Britain, payment in full to be received in 90 days. The exchange rate for pounds is $1.4566 on this day. Nov. 18 Received Sumito’s payment in yen for its July 21 purchase and immediately exchanged the yen for dollars. The exchange rate for yen is $0.0092 on this day. Dec. 20 Sold merchandise for 17,000 ringgits to Hamid Albar of Malaysia, payment in full to be received in 30 days. On this day, the exchange rate for ringgits is $0.4501. Dec. 31 Recorded adjusting entries to recognize exchange gains or losses on Doering’s annual financial statements. Rates for exchanging foreign currencies on this day follow.
2016
Jan. 12 Received full payment in pounds from Smithers for the October 14 sale and immediately exchanged the pounds for dollars. The exchange rate for pounds is $1.4699 on this day. Jan. 19 Received Hamid Albar’s full payment in ringgits for the December 20 sale and immediately exchanged the ringgits for dollars. The exchange rate for ringgits is $0.4420 on this day.
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ACC 497 Week 3 Discussion For more course tutorials visit
www.tutorialrank.com An Introduction to Tax Note: This is a custom book pulling chapters from various books. This course references chapter numbers in the table of contents; the chapter preview shows the original book chapter. Tax research
Have you ever been involved in tax research and if so, what's your experience? There are various projects on tax research and examples will be great. Tax planning Have you ever done your tax planning? Do you still remember filling out the W-4 form when you first started at your current working place? There is one line related to the number of allowance which is related to personal income tax withholding. Have you ever changed that information for tax purpose? How about paying estimated quarterly taxes or the estimation for your organization? Do you think it's important to conduct tax planning? Why or why not? Tax Planning Strategies and Related Limitations Note: This is a custom book pulling chapters from various books. This course references chapter numbers in the table of contents; the chapter preview shows the original book chapter.
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ACC 497 Week 3 Knowledge Check (2 Set) (2019 Syllabus) For more course tutorials visit
www.tutorialrank.com
1 The estate of Monique Chablis earned $450 of income this year. Is the estate required to file an income tax return? 2. Paula could not reach an agreement with the IRS at her appeals conference and has just received a 90-day letter. If she wants to litigate the issue but does not have sufficient cash to pay the proposed deficiency, what is her best court choice? 3. Jonah has the choice of paying Rita $7,000 today or $14,000 in 10 years. Assume Jonah can earn a 4 percent after-tax rate of return. Which should he choose? Use Exhibit 3.1.
4. Congress would like to increase tax revenues by 16 percent. Assume that the average taxpayer in the United States earns $51,000 and pays an average tax rate of 30 percent.
a. If the income effect is in effect for all taxpayers, what average tax rate will result in a 16 percent increase in tax revenues? (Round your answer to 2 decimal places.) b. This is an example of what type of forecasting? Dynamic
5. Molto Stancha Corporation had zero earnings this fiscal year; in fact, they lost money. Must they file a tax return? 6. The estate of Monique Chablis earned $450 of income this year. Is the estate required to file an income tax return? 7. Scot and Vidia, married taxpayers, earn $96,500 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. (Use the U.S. tax rate schedule for married filing jointly). (Do not round intermediate calculations. Round your answer to 2 decimal places.)
a. If Scot and Vidia earn an additional $91,250 of taxable income, what is their marginal tax rate on this income? 8. Song earns $180,000 taxable income as an interior designer and is taxed at an average rate of 30 percent (i.e., $54,000 of tax).
a. If Congress increases the income tax rate such that Song’s average tax rate increases from 30 percent to 40 percent, how much more income tax will she pay assuming that the income effect is descriptive? (Round your intermediate calculations and final answer to 2 decimal places.)
b. If the income effect is descriptive, the tax base and the tax collected will increase. 9 Fergie has the choice between investing in a State of New York bond at 7.5 percent and a Surething bond at 10.6 percent. Assuming that both bonds have the same nontax characteristics and that Fergie has a 30 percent marginal tax rate, in which bond should she invest? Fergie Should Invest in: State of New york Bond
10. Manny, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed $26,000 of legal services for a client. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny’s marginal tax rate is 40 percent this year and next year, and that he can earn an after-tax rate of return of 9 percent on his investments.
a. What is the after-tax income if Manny sends his client the bill in December? b. What is the after-tax income if Manny sends his client the bill in January? Use Exhibit 3.1. c. Based on requirement a and b, should Manny send his client the bill in December or January? 1.
The estate of Monique Chablis earned $450 of income this year. Is the estate required to file an income tax return? 2. Congress would like to increase tax revenues by 5 percent. Assume that the average taxpayer in the United States earns $40,000 and pays an average tax rate of 20 percent.
a. If the income effect is in effect for all taxpayers, what average tax rate will result in a 5 percent increase in tax revenues? (Round your answer to 2 decimal places.)
b. This is an example of what type of forecasting? 3. Molto Stancha Corporation had zero earnings this fiscal year; in fact, they lost money. Must they file a tax return? 4. Scot and Vidia, married taxpayers, earn $187,500 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. (Use the U.S. tax rate schedule for married filing jointly). (Do not round intermediate calculations. Round your answer to 2 decimal places.)
a. If Scot and Vidia earn an additional $82,750 of taxable income, what is their marginal tax rate on this income?
b. How would your answer differ if they, instead, had $82,750 of additional deductions?
5. Juanita, a Texas resident (5th Circuit), is researching a tax question and finds a 5th Circuit case ruling that is favorable and a 9th Circuit case that is unfavorable. Which circuit case has more “authoritative weight�? 6. Hyundai is considering opening a plant in two neighboring states. Option 1: One state has a corporate tax rate of 10 percent. If operated in this state, the plant is expected to generate $1,435,000 pretax profit. Option 2: The other state has a corporate tax rate of 2 percent. If operated in this state, the plant is expected to generate $1,360,000 of pretax profit.
a. What is the after state taxes profit in the state with the 10% tax rate? b. What is the after state taxes profit in the state with the 2% tax rate? Which state should Hyundai choose? 7.
Song earns $130,000 taxable income as an interior designer and is taxed at an average rate of 25 percent (i.e., $32,500 of tax).
a. If Congress increases the income tax rate such that Song’s average tax rate increases from 25 percent to 35 percent, how much more income tax will she pay assuming that the income effect is descriptive? b. If the income effect is descriptive, the tax base and the tax collected will increase. 8. Dennis is currently considering investing in municipal bonds that earn 4.05 percent interest, or in taxable bonds issued by the CocaCola Company that pay 5.4 percent. a. If Dennis’s tax rate is 20 percent, which bond should he choose? b. Which bond should he choose if his tax rate is 30 percent? c. At what tax rate would he be indifferent between the bonds? d. What strategy is this decision based upon? 9. Jonah has the choice of paying Rita $15,000 today or $75,000 in 10 years. Assume Jonah can earn a 4 percent after-tax rate of return. Which should he choose? Use Exhibit 3.1. 10.
Melinda invests $200,000 in a City of Heflin bond that pays 6 percent interest. Alternatively, Melinda could have invested the $200,000 in a bond recently issued by Surething Inc., that pays 8 percent interest with similar risk and other nontax characteristics to the City of Heflin bond. Assume Melinda’s marginal tax rate is 25 percent. (Leave no cells blank - be sure to enter "0" wherever required.) a. What is her after-tax rate of return for the City of Heflin bond? ==============================================