An investor or creditor
Q: The following information is taken from the inventory records of the CNB Company for the month of…
A: Periodic inventory method is the one wherein the costs and inventory units are determined at the end…
Q: Salespersons' Report and Analysis Walthman Industries Inc. employs seven salespersons to sell and…
A: "Contribution margin tells you the aggregate amount of revenue available after variable costs to…
Q: Inventory Write-Down Palmquist Company has five different inventory items and applies the inventory…
A: FIFO is an abbreviation for first in, first out. It is a method for handling data structures where…
Q: O'Reilly Incorporated makes and sells many consumer products. The firm's average contribution margin…
A: Variable Cost :— It is the cost that changes with change in units. It is constant in per unit for…
Q: Periodic inventory using FIFO, LIFO, and weighted average cost methods The units of an item…
A: The question is based on the concept of Cost Accounting. As per the cost accounting valuation of…
Q: Account Mountain Top Hardware Adjusted Trial Balance Cash "Nate's reciverble Account's recirable…
A: Income statement is the financial statement which is prepared to depict the entity's profits. It is…
Q: Paul Williams recently joined XYZ2 Limited as the head of the accounting department. Williams spent…
A: Audit involves an independent examination of financial records with a view to provide an opinion on…
Q: A machine has a first cost of P50,000 with interest rate of 10% annually. Expected salvage value…
A: Depreciation is the loss in value of an asset over a period of time. Value of an asset keeps on…
Q: ssed planning budgets that are based on standards. How are standards developed and are they only…
A: Standard costing refers to the concept of assigning an estimated cost instead on applying the actual…
Q: Bondholders are _______________________ rather than owners of the corporations. A. creditors…
A: A bond is issued by the company for raising finance for the business working. It is considered a…
Q: Following are unadjusted balances along with year-end adjustments for Quinlan Company. Complete the…
A: The adjustment entries are prepared to adjust the revenue and expenses of the current period. The…
Q: Prepare a journal entry for the purchase of a truck on April 4 for $71,750, paying $5,900 cash and…
A: INTRODUCTION: Every transaction that your company does necessitates the creation of journal entries.…
Q: The demand for aloe vera hand lotion, one of numerous products manufactured by Smooth Ski Products…
A: As per the multiple sub-parts we can solve only first three part for you if you want to get answer…
Q: Charles and his two friends were driving back from a football game in the snow and crashed into an…
A: The 25 in 25/50/10 refers to $25,000 and is the maximum amount that the insurer will pay out for…
Q: A manufacturer of cedar shingles has supplied the following data: Bundles of cedar shakes produced…
A: A contribution margin is an excess value of sales revenue over the variable cost. It is also an…
Q: define non assurance services
A: Assurance services are less formal than a financial statements auditor attestation services. Non…
Q: A machine has a first cost of P67,231.71 and has an expected salvage value after 10 years P9,584.87.…
A:
Q: Richard Gaziano is a manager for Health Care, Incorporated. Health Care deducts Social Security,…
A: INTRODUCTION: Net pay, often known as take-home pay, is an employee's total compensation less all…
Q: Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.4% ×…
A: Retirement payments refer to the payment that is to be paid when the person retires following the…
Q: Problem 1 A schedule of machinery owned by Trust Company is presented below: Machine A Machine B…
A: INTRODUCTION: A composite rate is an insurance plan based on the average riskiness of a group rather…
Q: On October 17, Nikle Company purchased a building and a plot of land for $419,600. The building was…
A: In this case, Building and Land are purchased against Partial Cash and the rest Notes Payable in…
Q: onEct is a retailer of mobile phones. All of its revenue comes from a percentage of the sales value…
A: The income statement is the one prepared by the company to depict the financial performance of the…
Q: 3. The operating revenues of the three largest business segments for Time Warner, Inc., for a recent…
A: Contribution margin = Selling price - Variable cost
Q: The income from operations and the amount of invested assets in each division of Shiner Industries…
A: Formula Return on Investment = (Income from operations / Invested Assets) * 100 Division of income…
Q: Crow inc. had revenues of $45,000 and net income of $3,400. What are the company's expenses ?
A: calculation of company's expenses are as follows
Q: Factory Overhead Volume Variance Bellingham Company produced 1,400 units of product that required…
A: Fixed Overhead Volume Variance means to find out whether fixed overheads are absorbed more or less…
Q: FIFO and LIFO costs under perpetual inventory system The following units of an item were available…
A: A perpetual inventory system means inventory is valued continuously that is after every transaction.…
Q: The controller of Crane Production has collected the following monthly cost data for analyzing the…
A: Mixed-cost problems are solved using the High -Low-cost method. Variable cost per unit = (Highest…
Q: Ken invested $200,000 for a 30% interest in a partnership in which he is a material participant. The…
A: INTRODUCTION: A partnership is a type of business in which two or more people share ownership as…
Q: V PROBLEM COST OF SALES / COST OF GOODS MANUFACTURED Long-ganisa Corporation, a manufacturer of Hot…
A:
Q: What is information risk when it pertains to auditing?
A: Audit involves risk that the auditor expresses an inappropriate audit opinion when the financial…
Q: Question: Delta Company issued $1,000,000, 4%, 10-year, bonds. Interest to be paid semiannually. The…
A: Bond valuation is a method that is used to determine the theoretical value that should be assigned…
Q: After all of the account balances have been extended to the Balance Sheet columns of the…
A: Introduction: Net income is the amount that an individual or business makes after expenses,…
Q: Father, age 67, owns 84% of the common shares of Opco. Mother owns 8%. The remaining 8% is owned by…
A: Dividend refers to the amount of money or the rewards that are paid to the shareholders of the…
Q: what is the importance of ethical conduct for auditors
A: The moral code that guides employees' behavior in terms of what is right and wrong in terms of…
Q: The Blending Department for Westiana Paints started October with 1,200 gallons in process and…
A: Weighted Average Method :— Under this method, equivalent units is calculated by adding equivalent…
Q: machine costing $210,200 with a four-year life and an estimated $19,000 salvage value is installed…
A: Depreciation per unit as per units of production method = (Total cost - salvage value)/Estimated…
Q: Sales Mix and Break-Even Sales Sports Inc. manufactures and sells two products, baseball bats and…
A: When a firm manufactures more than one product, a problem arises as to which product mix yield…
Q: Margin of Safety The Whitehead Company has sales of $200,000, and the break-even point in sales…
A: The margin of safety (MoS) is the difference between the sales level in the company and the…
Q: 2. Weightless Inc. produces a Bath and Gym version of its popular electronic scale. The anticipated…
A: Production Budget :— This budget is prepared to estimate the number of units to be produced during…
Q: 01/01 Balance 12/04 Shipments to branch 12/28 Expense Allocation 12/28 Shipments to branch 12/28…
A: Introduction: Reciprocal: Reciprocal account is an arrangement under the this one credit institution…
Q: Solve for the missing information designated by "?" in the following table. (Use 365 days in a year.…
A: Calculation of missing figure are as follows
Q: LO.6 Harvey is a self-employed accountant with earned income from the business of $120,000 (after…
A: Calculation of maximum amount Havey can contributed to his retirement plan are as follows
Q: Ese Corporation has the following seles mix for its ever products A, 20% 30% and C. 50% Fed costs…
A: When a company sells more than one product it uses sales mix method to know proportion of different…
Q: A person buys a phone for $88 and signs up for a single line phone plan with 2000 monthly anytime…
A: Total cost is made up of two cost one is fixed cost and other is variable cost that depends on use…
Q: Cox Electric makes electronic components and has estimated the following for a new design of one of…
A: Answer:- Profit model:- A profit model will take into account all expenses and income related to a…
Q: Contributions to FSAs in excess of what annual amount (as of 2021) a are treated as taxable income?
A: FSA refers to flexible savings account. This is a type of savings account through which employees…
Q: After all of the account balances have been extended to the Income Statement columns of the…
A: Net income is the amount of income earned by an entity after deducting the expenses from the…
Q: The following information is regarding the first process for the month of November. a. All…
A: The total cost of producing a product, including raw materials and operating costs, is detailed in a…
Q: 15 Required information [The following information applies to the questions displayed below.] Preble…
A: FLEXIBLE BUDGET A flexible budget is a budget that changes as per the activity level or production…
An investor or creditor believes that they have suffered harm due to the unexpected the bankruptcy of a large corporation:
Required:
- Can that investor or creditor sue the auditor of the large corporation under contract law? Explain.
- If the investor or creditor chooses to sue the auditor of the large corporation under tort law, what must they prove before their claim can succeed?
- How can the auditor contest a claim of negligence?
Step by step
Solved in 2 steps
- Individuals who believe they relied on misstated financial statements to make a decision andhave suffered losses as a result will issue an action known as aa. Breach of contract.b. Tort.c. Securities litigation.d. Constructive fraud.What does a third-party user of financial statements have to prove under common law in a suit against an auditor for the auditor's negligence? Explain each item with an exampleWhich of the following statements is false? A) In bankruptcy, management is given the opportunity to reorganize the firm and renegotiate with debt holders. B) Because a corporation is a separate legal entity, when it fails to repay its debts, the people who lent to the firm, the debt holders are entitled to seize the assets of the corporation in compensation for the default. C) As long as the corporation can satisfy the claims of the debt holders, ownership remains in the hands of the equity holders. D) If the corporation fails to satisfy debt holders' claims, debt holders may lose control of the firm.
- When creditors who relied on an entity’s audited financial statements suffer monetary lossesafter a customer (the auditors’ client) goes bankrupt, what must the plaintiff creditors in alawsuit for damages show in a court that follows the doctrine in Credit Alliance?a. The auditors knew and specifically acknowledged identification of the creditors.b. The auditors could reasonably foresee them as beneficiaries of the audit because entitiessuch as this client use financial statements to obtain credit from vendors.c. The plaintiffs were foreseen users of the audited financial statements because they werevendors of long standing.d. All of the aboveWhat does a third-party user of financial statements have to prove under common law in a suit against an auditor for the auditor's negligence?Auditors may be held liable to both their clients and third parties under common law. a. What must a client prove to recover its losses from the auditors under common law? b. In a court that adheres to the precedent set by the Ultramares v. Touche case, what must an ordinary third party prove to recover losses from the auditors under common law
- In comparison to the burden of proof required of plaintiffs in civil lawsuits against independent auditors under common law, section 10(b) of the Securities Exchange Act of 1934a. Is the same regarding plaintiffs’ need to prove damages or losses.b. Is the same regarding plaintiffs’ need to establish privity or a beneficiary relationshipwith auditors.c. Does not require that plaintiffs prove their reliance on materially misstated financialstatements.d. Does not require that plaintiffs prove that relying on the materially misstated financialstatements caused their losses.When a corporation is dissolved due to fraud, graft, and corruption, can innocent employees and stockholders have claims over the asset of the corporation after satisfying all its liabilities?LO 3 An auditor was sued and found guilty of negligence. For each of the following situations, indicate the likelihood the plaintiff would win if the plaintiff is: A financial institution that the auditor knew was the primary beneficiary of the audit, suing under common law. A stockholder suing under common law. A financial institution that was unknown to the auditor loaned money to the client based on the audit financial statements, but the auditor knew only that the client would use the statements to obtain a loan from some financial institution. The plaintiff is suing under common law. An investor suing under the 1934 Securities Exchange Act. An investor suing under the 1933 Securities Act.
- If either party fails to perform their contractual obligations according to the contract terms, it will usually result in a breach of contract. The scope and nature of an auditor's contractual obligation to a client ordinarily is established in the: Select one: a. Corporations Act 2001. b. Management letter. c. Client’s constitution. d. Engagement letter.Under common law, which of the following statements most accurately reflects the liability of a CPA who fraudulently gives an opinion on an audit of a client's financial statements? A. The CPA is liable only to third parties in privity of contract with the CPA B. The CPA is liable only to known users of the financial statements C. The CPA probably is liable to any person who suffered a loss as a result of the fraud D. The CPA probably is liable to the client even if the client was aware of the fraud and did not rely on the opinionWhy would a creditor of a corporation consider suing shareholders of that corporation for a debt owed by the corporation to the creditor?A. The corporation has gone out of business.B. The debt is for a lot of money.C. The shareholder is usually liable for the corporation’s debts.D. The creditor had a contract with the corporation.