The XR Company's Financial Year Ended on December 31, 2021. However, before the completion of the audit in February 2023 it was determined the company lost a case that was at court before the end of the financial year, but the outcome was uncertain. The auditor will disclosed this information as: a. A subsequent event. O b. O c. A tax liability for the company O d. An annual expense An unusual occurrence
Q: Madison Company sells its product for $6 a unit. Next year, fixed expenses are expected to be…
A: Break-even point (BEP): Breakeven is the point where total expenses are equal to total revenue. at…
Q: Consolidated amounts when affiliate's debt is acquired from non-affiliate Assume that a Parent…
A: Consolidation It refers to the merging of two or more financial items such as assets, liabilities or…
Q: Sandhill Corporation ("Sandhill") manufactures equipment with an estimated economic life of 14…
A: The lease contains no bargain purchase option and at the end of the lease the asset is supposed to…
Q: Cash flows from operating activities Net income Adjustments to reconcile net income to net cash…
A: Cash Flow Statement - A cash flow statement is a financial statement that includes the inflow and…
Q: Which of the following would be in the work in process inventory of a company making ice cream?…
A: Lets understand the basics. Inventory is divided into various parts like, (1) Raw material inventory…
Q: please answer with working 1 . Record the year-end adjusting entry for the depreciation expense…
A: The depreciation expense is charged on fixed assets as reduction in the value of fixed assets with…
Q: Harris Company manufactures and sells a single product. A partially completed schedule of the…
A: MARGINAL COSTING INCOME STATEMENT Marginal Costing Income Statement is One of the Important Cost…
Q: Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income…
A: Contribution margin is the amount that an entity has, as its earnings after deducting the variable…
Q: Prepare journal entries to record the following merchandising transactions of Brown's, which uses…
A: A perpetual inventory system helps the business to keep a real-time account of inventory in hand and…
Q: From the following, calculate the cost of ending inventory and cost of goods sold for the LIFO…
A: LIFO method stands for the last in first out method. Here it is assumed that the units sold will…
Q: Match the following terms with the word or phrase that describes it. Paid by the employee in…
A: Questions similar to the one given are called matching questions which need to be evaluated and…
Q: An example of investment income that would be subject to the net investment income tax is: A. Rental…
A: Answer:- Net investment income:- For the taxation purpose net investment income is the total…
Q: Which of the following statements is true related to the conversion of a regular corporation to a…
A: An American corporate structure called a limited liability company (LLC) shields its owners from…
Q: Coronado Company began operations in 2024 and determined its ending inventory at cost and at…
A: The most of the business holds inventory. The inventory is presented in balance sheet as current…
Q: Colt Company owns a machine that can produce two specialized products. Production time for Product…
A: Sales mix refers to the method which is used for the calculation of the proportion of each product…
Q: Allerton & Company purchased a motor vehicle for $50,000. Maintenance of the motor vehicle cost…
A: The fixed assets are the assets which are used by business for long run. The costs incurred till the…
Q: M1) Joan Myers is a designer for a clothing company named "Whitesnow Ltd" incorporated…
A: To calculate Joan's Benefit in Kind (BIK), we need to consider the following benefits provided by…
Q: Required information [The following information applies to the questions displayed below.] Shadee…
A: The budgeted income statement is prepared based on estimates. The budgeted income statement shows…
Q: On 31 December 2022, the Cash at Bank ba a debit balance of $11,766. The bank stater credit balance…
A: Bank reconciliation is the process of comparing the transactions recorded in a company's bank…
Q: Select the best answer. Which of the following statements regarding various entities is true? O O O…
A: A partnership is a type of business entity in which two or more individuals, entities, or…
Q: Sandy Bank, Incorporated, makes one model of wooden canoe. And, the information for it follows:…
A: The break even sales are the sales where business earns no profit no loss. The margin of safety is…
Q: Match the following terms with the word or phrase that describes it. Gross pay plus employee…
A: Questions similar to the one given are called matching questions which need to be evaluated and…
Q: please dont provide answer in image format thank you Great Lakes Manufacturing Inc. comparative…
A: Cash flow statement :— It is one of the financial statement that shows change in cash and cash…
Q: Wells Company reports the following budgeted sales: September, $53,000; October, $63,000; and…
A: Lets understand the basics. Management prepares budget in order to estimate future profit and loss…
Q: Prepare any necessary adjusting entries relative to depreciation (use straight-line) and…
A: Journal Entry is the primary step to record the transaction in the books of accounts. The increase…
Q: Please do not provide answer in image formate thank you. A local dental practice decides to run a…
A: To calculate the breakeven revenue for a new Groupon customer, we need to find out the total revenue…
Q: On April 1, 2020, Bond Corporation issued 9% debentures dated January 1, 2020. The debentures had a…
A: The question is related to accounting and involves the calculation of the amount of cash that should…
Q: The budget director of Gold Medal Athletic Co., with the assistance of the controller, treasurer,…
A: Budgeted income statement is the statement which shows the budgeted profit for the period. The…
Q: Queen Energy Inc. issued bonds on January 1, 2023, that pay interest semiannually on June 30 and…
A: Bonds are long-term debt securities that a company or organization or governments issues to borrow…
Q: Problem 12-20 (AICPA Adapted) On January 1, 2022, Condor Company purchased a new machine for…
A: Since you have posted two different questions, we will do the first one for you. Please post the…
Q: Eckert Company uses the absorption costing approach to cost-plus pricing to set prices for its…
A: Desired Profit :— It is calculated by multiplying investment with % return on investment. Target…
Q: In the Caribbean Region, the regulatory body for Accountants is: a. The institute of Chartered…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Portland Inc. (Portland) owns 80% of Seattle Inc. (Seattle) and uses the cost method to account for…
A: The Financial statements are the statements in written that are to be provided to the firm's…
Q: When Patey Pontoons issued 6% bonds on January 1, 2024, with a face amount of $840,000, the market…
A: Bonds payable is a long term liability and by issuing bonds payable organizations collect money for…
Q: 1. Prepare a flexible budget performance report for July that includes revenue and spending…
A: A budget can be defined as a financial plan that is prepared and used by managers in order to…
Q: Carry-forward tax losses create: a. A deductible temporary difference and therefore a deferred tax…
A: Tax loss carryovers refer to tax losses that a company incurs in a tax year that it can't use to…
Q: Company B is a manufacturing company. The production process is divided into two production…
A: Overhead is the amount of money incurred by the entity on the making of the goods. It includes the…
Q: Information related to plant assets, natural resources, and intangible assets at the end of 2022 for…
A: Balance sheet is the statement which is prepared by the entity for the purpose of determining the…
Q: c. IAS 1
A: IAS 1, or International Accounting Standard 1, sets out the overall requirements for the…
Q: Elijah and Rona are both 50-percent partners in the Thakkar Partnership. At the start of the current…
A: A partnership is a form of joint operation carried out by two or more people in order to serve a…
Q: Acme Company's balance sheet shows three inventory accounts-raw materials, work in process, and…
A: The presence of three inventory accounts for raw materials, work in process, and finished goods on…
Q: had $3,800 in medical expenses and paid an additional $8,009 for medical insurance. The insurance…
A: The expenses done on the medical can be used in the income tax filing and can be deducted from…
Q: Ayayal Company produces one product, a putter called GO-Putter. Ayayal uses a standard cost system…
A: Predetermined Overhead Rate :— It is the rate used to allocate manufacturing overhead cost to cost…
Q: frames at two different plants. How many hours should each plant be scheduled to operate to exactly…
A: Production cost refers to the cost which is incurred for manufacturing the products or services…
Q: Which one of the following are NOT period costs? a) Advertising costs. b) Indirect…
A: Product costs are those costs which are incurred in the making of the product. Eg. Direct Material,…
Q: The company estimates that it can sell 850 units of each product per month. The same raw material is…
A: This is a case of cost volume profit analysis. Contribution margin is computed by deducting the…
Q: ABC Company's budgeted sales for June, July, and August are 14,000, 18,000, and 16,000 units…
A: Expense budget is the statement which is prepared to estimate the expenses of the entity. It include…
Q: Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as…
A: The variance is the difference between the actual and standard cost of production. The revenue and…
Q: Depreciation continues to be one of the most controversial, difficult and important areas of…
A: In general terms, depreciation is the normal wear and tear of assets over their useful life.…
Q: Tom and Wilma are working on the audit of internal control for Progress Enterprises and are…
A: Segregation of duties is an important control in ensuring an effective system of internal controls.…
Step by step
Solved in 3 steps
- It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019 (which will be issued in March 2020). You read in the newspaper that Travis Corporation, a major customer of Davenport, is in financial difficulty. Included in Davenports accounts receivable is 50,000 (a material amount) owed to it by Travis. You approach Jim Davenport, president, with this information and suggest that a reduction of accounts receivable and recognition of a loss for 2019 might be appropriate. Jim replies, Why should we make an adjustment? Ted Travis, the president of Travis Corporation, is a friend of mine; he will find a way to pay us, one way or another. Furthermore, this occurred in 2020, so lets wait and see what happens; we can always make an adjustment later this year. Our 2019 income and year-end working capital are not that high; our creditors and shareholders wouldnt stand for lower amounts than they already are. Required: From financial reporting and ethical perspectives, prepare a response to Jim Davenport regarding this issue.The XR Company’s Financial Year Ended on December 31, 2021. However, before the completion of the audit in February 2023 it was determined the company lost a case that was at court before the end of the financial year, but the outcome was uncertain. The auditor will disclosed this information as: a. An unusual occurrence b. A tax liability for the company c. A subsequent event. d. An annual expenseProblem 1. You were engaged for the first time to audit the FS of Bebeko Corporation for the period ended December 31, 2020. The company started its operation in 2018. In reviewing the books, the auditor discovered that certain adjustments had either been overlook or improperly recorded at the end of years to 2020. Omissions and other failures for each year are summarized below: December 31 2018 2019 2020 1. Omissions of the following year-end accruals/deferrals: a. Accrued utilities expense b. Accrued interest income c. Prepaid rent expense d. Unearned royalty income |2. Delivery of merchandise at year-end to customers, recorded as sales upon collection the following year. 3. Receipt of merchandise at year-end from suppliers, recorded as purchases upon payment the following year. 4. Cash received from customers at year-end, recorded as sales deliveries yet to be made the following year. In the year of collection, corresponding 5000 7000 6000 2000 4000 3000 2000 1000 8000 3000 5000…
- You were first appointed auditor of the RST Corporation in 2020. You completed the audit for 2020 and prepared audited financial statements directly from the audit working papers. You have returned to make the 2021 audit and discovered that the client's bookkeeper failed to record the adjusting entries you made in 2020 audit working papers, which entailed adjustments for the following items The December 31, 2020 inventory was understated by P5,000. No entry was made for accrued utilities expense of P2,500 as of year-end. Ordinary motor repairs of P3,200 were charged to Accumulated Depreciation during 2020. The company failed to record the provision for uncollectible accounts in the amount of P6,000. Your examination of the 2021 entries in the accounts uncovered the following: An expenditure of P10,000 for repairs of office equipment had been charged to furniture and Equipment. The company records depreciation at 10% of the December 31 balance of the Property and Equipment accounts.…A corporation filed its Annual Income Tax Return for the taxable year 2018 on April 15, 2019 together with its required attachments such as the Audited Annual Financial Statements. On March 17, 2020, the company’s accountant discovered an error for excluding a sales amounting to Php7.5M which comprises a 30% under declaration of sales. What necessary action must be done by the company in relation to its discovery? Assume that the company was subjected to a BIR audit or was issued a Letter of Authority (LOA) prior to the amendment of its Annual Income Tax Return, is the company allowed to make any amendment?Dibiasky Corporation is a trading company based in Laguna. The auditor in charge for 2020 audit is examining the company’s liabilities as part of their procedures. The following accounts as of December 31, 2020 are relevant in the tests being performed by the auditor: Accounts payable 1. The balance in the company’s accounts payable account as of December 31, 2020 is P600,000 and this was before any necessary year-end adjustments relating to the following: a) On December 31, 2020, the company has a P50,000 debit balance in its accounts payable to Mindy, a supplier, resulting from a P50,000 advance payment for goods ordered by the company. b) On December 28, 2020, the company purchased and received goods for P40,000, terms 2/10, n/30. The company records purchases and accounts payable at net amounts. The invoice was recorded and paid January 3, 2021. c) Goods were in transit to the company from a vendor on December 31, 2020. The invoice cost was P50,000. The goods were shipped f.o.b.…
- A corporation filed its Annual Income Tax Return for the taxable year 2018 on April 15, 2019 together with its required attachments such as the Audited Annual Financial Statements. On March 17, 2020, the company’s accountant discovered an error for excluding a sales amounting to Php7.5M which comprises a 30% under declaration of sales. Assume that the company was subjected to a BIR audit or was issued a Letter of Authority (LOA) prior to the amendment of its Annual Income Tax Return, is the company allowed to make any amendment?A corporation filed its Annual Income Tax Return for the taxable year 2018 on April 15, 2019 together with its required attachments such as the Audited Annual Financial Statements. On March 17, 2020, the company’s accountant discovered an error for excluding a sales amounting to 7,500,000 which comprises a 30% under declaration of sales. a. What necessary action must be done by the company in relation to its discovery? b. Assume that the company was subjected to a BIR audit or was issued a Letter of Authority (LOA) prior to the amendment of its Annual Income Tax Return, is the company allowed to make any amendment? Justify your answerYou are auditing Crown Corporation for the year ended 2022. Its reported net income for the year 2021 and 2022 were P 3,000,000 and P 4,000,000, respectively. During your audit, the following errors were revealed: 1. The inventory at the end of 2022 and 2023 were P 20,000 understated and P 18,000 overstated, respectively. 2. Recalculating the depreciation charges for 2023, you found out it was short by P 4,000. 3. The 15,000 insurance premium for three years was recorded using the income statement approach on January 1, 2021. No expense amount was extracted from the balance at the end 2021 and 2022. 4. An equipment was sold on December 31, 2022 for P 32.000. Its related cost was P 200,000 with zero carrying value on date of sale. The sale transaction was recorded on January 10, 2023. QUESTIONS: 1. What is the correct net income for the year 2022? 2. What is the correct net income for the year 2023?
- You are auditing the financial statements of A Company for the year ended December 31, 2023. The Company's income statements indicated the following net income:2021: P1,200,0002022: P1,490,0002023: P1,325,000An examination of the accounting records for the year ended December 31, 2023 indicates that several errors were made. The following errors were discovered:A. Unused supplies at the end of each year were consistently omitted:2020: P95,000; 2022: P100,000; 2023: P140,000B. The footings and extensions showed that the inventory on December 31, 2022 was understated by P80,000C. P105,000 worth of inventories were received on January 5, 2022 and were not included in the physical count as of December 31, 2021. Upon investigation, however, you discovered that these goods were shipped free-alongside by the supplier on December 28, 2021. The invoice for the goods were received and recorded in the purchase journal on December 29, 2021.D. The following advance payments to suppliers at the…A corporation filed its Annual Income Tax Return for the taxable year 2018 on April 15, 2019 together with its required attachments such as the Audited Annual Financial Statements. On March 17, 2020, the company’s accountant discovered an error for excluding a sales amounting to Php7.5M which comprises a 30% under declaration of sales. What necessary action must be done by the company in relation to its discovery?(a) Lara Croft has been hired as a new auditor for Jolie Inc. Ms. Croft has suggested thefollowing accounting changes in regards to the company’s financial statements.1. At December 31, 2019, Jolie Inc. had a receivable of $500,000 from Relic Inc. on its statement of financial position. Relic had gone bankrupt, and no recovery is expected. Jolie proposes to write off the receivable as a prior period item.2. The client proposes the following changes in depreciation policies. (a) For office furniture and fixtures, it proposes to change from a 10-year useful life to an 8-year life. If this change had been made in prior years, retained earnings at December 31, 2019, would have been $250,000 less. The effect of the change on 2020 income alone is a reduction of $60,000. (b) For its equipment in the leasing division, the client proposes to adopt the sum-of-the-years’-digits depreciation method. The client had never used SYD before. The first year the client operated a leasing division was…