cant amount of inventory shrinkage was discovered. The amount is so large that it will result in a significant drop in earnings this period. The decrease in earnings will hurt the company's chance at getting a much needed loan at
Q: What are the effects on creditors, including secured creditors during voluntary administration? Expl...
A: creditors are those person supply goods or services to the company, provide loan to the company, pay...
Q: 2 On June 1, 20X1, the firm bought supplies for $7,750. The $7750 was debited to the Supplies accoun...
A: Adjusting entries are prepared by management to ensure the accrual basis accounting system. It is pr...
Q: QUESTION 33 Possession (not ownership) to real property is commonly acquired by an agreement called ...
A: Possession (not ownership) to real property is acquired by an agreement called lease
Q: Which of the following will give you the most accurate allocation between a cost's fixed component a...
A: Total cost consists of a fixed cost component and a variable cost component. In accounting we often ...
Q: The unit cost… a. is the total conversion costs divided by the number of units produced. b. is the t...
A: Solution A unit cost is a total expenditure incurred by a company to produce , store and sell one un...
Q: The business manufactures custom patios made of concrete, brick, fiberglass, and lumber- depending u...
A: answers Direct material Work in process Finished goods Beginning inventory 4200 5540...
Q: on Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets ...
A: solution concept common size balance sheet The vertical common size balance sheet ex...
Q: Black Widow Corporation engaged you for the first time to audit their financial statements as of and...
A: Intangibles as of 31.12.2020 Life Balance as of 31.12.2020 Patent A 10 years 1,317,500 Patent B...
Q: Massy Company issued $4,000,000 of 10-year, 11% bonds on January 4, 2021. The bonds pay interest sem...
A: Introduction:- A journal entry is the act of recording or keeping track of any financial or non-fina...
Q: Win Corporation is considering the purchase of a P100,000 machine that i expected to result in a dec...
A: Accounting rate of return = Average net income / Average investment where, Average investment = (Cos...
Q: THE SMITH COMPANY Using the business transactions below, complete T-accounts for the Smith Company. ...
A: It is pertinent to note that T-accounts/Ledger accounts are the second step in a double-entry bookke...
Q: Choose the letter of the correct answer: 1. In which of the following situations would an investor ...
A: Solution Equity method is used to account for an organisation's investment on another entity (invest...
Q: Expense approach. Required: Prepare the journal entries required for 2020 using the Expense approach...
A: Journal entries refer to the process of collecting and documenting all the data of a company in its ...
Q: a project that will last for a long period of time. years from now, annual maintenance would b 0,000...
A: As we can see that the cost part comes only within the 4th year and we only have 5 years once the...
Q: The Harriott manufacturing company uses job order costing system. The company uses machine hours to ...
A: Those goods which complete or incomplete and about to get manufactured into final goods are ready to...
Q: Prepare an income statement for China Tea Company for the year ended December 31, 2018 Debit 10,900 ...
A: Income statement means the statement which show the cost of goods sold and selling price and give ou...
Q: Stephanie's Bridal Shoppe sells wedding dresses. The average selling price of each dress is $1,000, ...
A: Contribution = Sales - Variable costs Sales = Number of units * Selling price per unit Variable cost...
Q: The five criteria of lease classification in US GAAP do not include: A) The agreement specifies that...
A: Answer) option B The present value of the lease payments exceeds half of the fair value of the asset...
Q: Year 1 Year 2 S01,000 $72.500 $18,500 Year 3 NOI S4,640 S08,426 DS $72.500 S2,500 Cash flow $72,140 ...
A: solution concept dividend rate It is known as the rate of dividend or dividend y...
Q: The following production estimates were made for the coming year: Total quilts to be produced 5 A. 2...
A: Manufacturing overhead, also known as indirect costs, which are incurred during the process of produ...
Q: Identify those activities in which a limited partner may engage without forfeiting limited liability...
A: Partnership is the association of two or more individuals who collaborate with a view to conduct a l...
Q: When net profit margin is low, must be high in order to achieve on acceptable return on assets.*
A: In accounting we know that ROA = net income/total assets
Q: what amount should hairy report for sales revenue in its income statement for the month of December
A: Sales revenue refers to the amount received by the company from selling goods and services to the cu...
Q: Non-statistical sampling is commonly used in audit practice. Describe each of the four items require...
A: Audit sampling is a method of investigation in which a sample of less than 100% of the total items i...
Q: Macy's was selling Calvin Klein jean shirts that were originally priced at $41.00 a. What was the am...
A: Amount of markdown is the difference between original selling price and actual selling price. Markdo...
Q: Following are the merchandising transactions of Dollar Store. Nov. 1 Dollar Store purchases merchand...
A: The journal entries are prepared to record day to day transactions of the business. Under perpetual ...
Q: From the information given below, complete the corrected trial balance of C. Canada Manufacturers. T...
A: Trial balance refers to the third step in accounting process, which signifies the summarisation of f...
Q: On February 1, 2020, SEC authorized TINY INC. to issue 100,000 shares with par value of P10 per shar...
A: Potential stockholders subscribe for stock with partial payment upfront and balance is due at future...
Q: Use the following information for the Exercises below. Textra produces parts for a machine manufact...
A: The overhead rate is calculated as estimated overhead cost divided by estimated base activity.
Q: Calculate the breakeven point and contribution margin. Breakeven point Fixed cost Contribution margi...
A: Break even point = Fixed costs / Contribution margin per unit where, Contribution margin per unit = ...
Q: On February 1, 2022, Mr. X promised to pay Ms. Y the amount of ₱10,000.00 at an annual rate of 6%. M...
A: Note payable is a form of promissory note which is a promise given by one person to another person. ...
Q: PREPARE AN INCOME STATEMENT MARIE SWIFT Company reported the given information for the month of Octo...
A: 1. Cost of goods manufactured - Cost of Goods Manufactured is the total cost incurred to manufacture...
Q: Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two type...
A: Present value is the current value of a future amount (sum of money). It also can be cash flows with...
Q: THE SMITH COMPANY Using the business transactions below, complete T-accounts for the Smith Company. ...
A: answers CASH ACCOUNT HEADS DEBIT CREDIT BALANCE CAPITAL 120,000 120,000 ...
Q: s for the year ended December 31, 20X1. Account Title Debits Cash $37,500
A: The income statement explains the financial performance of the company for a particular period of ti...
Q: What amount should Draco Malfoy report as earnings from subsidiary in its 2020 income statement? а. ...
A: Business combination is the merger of two or more than two companies into a single company or even o...
Q: Vita Water purchased a used machine for $117,200 on January 2, 2020. It was repaired the next day at...
A: The depreciation expense is charged on fixed assets as reduction in the value of fixed assets with u...
Q: 10%? Provide p
A: Net Present Value = $12,118.6 Year Cash flows = CF Working capital adjustment = WC Net cas...
Q: Mr Zoo is planning to set up a mini Zoo in Howick. The following relates to different pricing pl...
A: As the question has more than 3 sub-parts, the first 3 subparts are answered as per guidelines. If y...
Q: ABC Ltd has the following land and buildings in its financial statements as at 30 June 2022: Residen...
A: Revaluation process refers to adjustment of book value of any asset to its fair value or current mar...
Q: On January 1, Year 1, Amira’s Stables Corp., which reports its financial results in accordance with ...
A: answers CLASSIFICATION OF LEASE WITH THE FIVE TESTS : 1. Transfer Ownership Test - to transfer ow...
Q: Subject- Audit SUMMARIZE THE CORE ISSUES for the following topic:- • ISA 805, Special Considerations...
A: An auditor is a person with the authority to examine and verify financial documents for authenticity...
Q: Which of the following techniques can be used by management to overstate long-lived assets? * A. Al...
A: Long lived assets are also known as Non-current assets which provides economic benefits for a period...
Q: The following pre-closing accounts and balances were drawn from the records of Carolina Company on D...
A: Lets understand the basics. Retained earning is a earning retained which is earned during the previo...
Q: Fill in the blanks below: Driver Usage Activity Cost Activity Driver Activity Cost: Activity Cost: P...
A: Activity based costing refers to a method a costing which is used by the companies to assign the ind...
Q: What is the difference in a data and findings?
A: Data is the combination of raw facts which is used for providing information and conclusions to the ...
Q: A project is expected to create operating cash flows of $30,000 a year for three years. The initial...
A: The question is based on the concept of Financial Management. Net present value is the difference be...
Q: 1. What is the company's single plantwide overhead rate based on direct labor hours? 2. What is the ...
A: Overheads are the necessary indirect expenses incurred during cost of production to ascertain the co...
Q: Ms. B, spouse of the decedent who died in a bus accident, received P2,500,000 broken down as follows...
A: P900,000 From a life insurance taken out by the decedent designating his wife as revocable beneficia...
Q: beginning of the process. How much is the materials cost per unit if ending work in process was 30% ...
A: Process costing refers to an accounting system which is used by manufacturing companies who are prod...
Nancy Thomas is the chief accountant at Company C, a manufacturer of medical equipment. The company is under pressure from creditors to increase its earnings. Shortly after the end of the fiscal year, the company performed a physical count of the inventory. A significant amount of inventory shrinkage was discovered. The amount is so large that it will result in a significant drop in earnings this period. The decrease in earnings will hurt the company's chance at getting a much needed loan at a low interest rate. Nancy is thinking of not reporting the shrinkage until next period, after the company gets its loan.
What should Nancy do in this situation? Why?
The term "code of conduct and ethics" refers to the broad principles or set of norms established by governing authorities to protect the rights of investors, entities, and all bookkeepers or working professionals.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Bryce Company manufactures pet supplies. However, Bryces electronic accounting system recently crashed and, unfortunately, only a partial recovery of the companys year-end accounting records (which included several profitability ratios) was possible. As a result, Bryces controller, a bright young CMA named Jeanette, must compute various lost financial account balances using the recovered information listed below. Long-term liabilities: 1,500,000 Ending inventory is the same as beginning inventory. Gross margin: 3,000,000 Net sales: 8,000,000 Accounts receivable turnover: 50 Ending accounts receivable is the same as beginning accounts receivable. Total liabilities: 2,000,000 Current ratio: 2.5 Cash: 600,000 Quick ratio: 2.0 Inventory turnover in days: 3.65 Required: 1. Calculate current liabilities. 2. Calculate current assets. 3. Calculate average accounts receivable 4. Calculate marketable securities. 5. Calculate average inventory.Margie Johnson is a staff accountant at ToolEx Company, a manufacturer of tools and equipment. The company is under pressure from investors to increase earnings, and the president of the company expects the accounting department to "make this happen." Margie's boss, who has been a mentor to her, is concerned that if earnings do not increase, he will be terminated. Shortly after the end of the fiscal year, the company performs a physical count of the inventory. When Margie compares the physical count to the balance in the inventory account, she finds a significant amount of inventory shrinkage. The amount is so large that it will result in a significant drop in earnings this period. Margie's boss asks her not to make an adjusting entry for shrinkage this period. He assures her that he will get "caught up" on shrinkage in the next period, after the pressure is off to reach this period's earning goal. Margies boss asks her to do this as a personal favor for him. What should Margie…Ethics in Action Margie Johnson is a staff accountant at ToolEx Company, a manufacturer of tools and equipment. The company is under pressure from investors to increase earnings, and the president of the company expects the accounting department to “make this happen.” Margie's boss, who has been a mentor to her, is concerned that if earnings do not increase, he will be terminated. Shortly after the end of the fiscal year, the company performs a physical count of the inventory. When Margie compares the physical count to the balance in the inventory account, she finds a significant amount of inventory shrinkage. The amount is so large that it will result in a significant drop in earnings this period. Margie's boss asks her not to make the adjusting entry for shrinkage this period. He assures her that they will get “caught up” on shrinkage in the next period, after the pressure is off to reach this period's earnings goal. Margie's boss asks her to do this as a personal favor to him.…
- Company E is a retailer of commercial and residential plumbing products. Steven Owens, the company’s staff accountant, is in the process of making year-end adjusting entries for uncollectible accounts receivable. Recently, the company has experienced an increase in accounts that have become uncollectible. As a result, Owens believes that the company should increase the percentage used for estimating doubtful accounts from 2% to 5% of credit sales. This change will significantly increase bad debt expense, resulting in a drop in earnings for the first time ever for the company. The company president, Thomas Williams, is under considerable pressure to meet the earnings goals for the fiscal year. He suggests to Steven that this is “not the proper time” to change the estimate. He instructs Steven to keep the estimate at 2%. Steven is confident that 2% is way too low, but he follows Thomas' instructions. Evaluate the decision to use the lower percentage to improve earnings. Are Thomas and…Guthrie Company receives orders from customers and records revenue at that time, even though it has not yet delivered products or services to the customers. what accounting assumption violate and how it should be done? Because of inflation, Cross Company adjusts its financial statements each year to show the current purchasing power for all items.what accounting assumption violate and how it should be done? David Thomas combines his personal transactions and business transactions when he prepares his company’s financial statements so that he can tell how well he is doing on an “overall” basis.what accounting assumption violate and how it should be done? At the end of each year, Vann Company reports its economic resources on a liquidation basis even though it is likely to operate in the future. what accounting assumption violate and how it should be done?Otis is the CEO of Bay Corp. The company has been struggling for the last few years and is in danger of defaulting on several of its bank loan covenants. Otis is facing significant pressure from the board of directors to turn the company around. Unless he meets all of the financial goals for the year, he will be out the door without a golden parachute. To improve the financial appearance of the company, Otis undertakes a scheme to boost the balance sheet by faking inventory. The analysis of what financial ratio would most likely bring this scheme to light? Inventory turnover Quick ratio Collection ratio Profit margin
- Bud Lighting Co. is a retailer of commercial and residential lighting products. Gowen Geter, the company’s chief accountant, is in the process of making year-end adjusting entries for uncollectible accounts receivable. In recent years, the company has experienced an increase in accounts that have become uncollectible. As a result, Gowen believes that the company should increase the percentage used for estimating doubtful accounts from 2% to 4% of credit sales. This change will significantly increase bad debt expense, resulting in a drop in earnings for the first time in company history. The company president, Tim Burr, is under considerable pressure to meet earnings goals. He suggests that this is “not the right time” to change the estimate. He instructs Gowen to keep the estimate at 2%. Gowen is confident that 2% is too low, but he follows Tim’s instructions. Evaluate the decision to use the lower percentage to improve earnings. How would raising the percentage change the financial…As the controller of Take No Prisoners Perfume Company, you discover a misstatement that overstated net income in the prior year’s financial statements. The misleading financial statements appear in the company’s annual report, which was issued to banks and other creditors less than a month ago. After much thought about the consequences of telling the president, Jeb Wilde, about this misstatement, you gather your courage to inform him. Jeb says, “Hey! What they don’t know won’t hurt them. But, just so we set the record straight, we’ll adjust this year’s financial statements for last year’s misstatement. We can absorb that misstatement better in this year than in last year anyway! Just don’t make such a mistake again.” Instructions Who are the stakeholders in this situation? What are the ethical issues in this situation? What would you do as a controller in this situation?Terry House, the controller for MicroTech Software Company, is responsible for preparing the company’s financial statements. He learns that sales for the first quarter of the year have dropped so dramatically that the company is in danger of bankruptcy. As a result, he applies for an accounting position with another software company that competes with MicroTech. During his job interview, Terry is asked why he wants to leave MicroTech. He replies truthfully, “The company’s sales are down another 10% this quarter. I fear they will go out of business.” At that time, MicroTech had not released its sales results to the public. Discuss the ethics of this situation.
- Late in 2017, Joan Seceda and four other investors took the chain of Becker Department Stores private, and the company has just completed its third year of operations under the ownership of the investment group. Andrea Selig, controller of Becker Department Stores, is in the process of preparing the year-end financial statements. Based on the preliminary financial statements, Seceda has expressed concern over inventory shortages, and she has asked Selig to determine whether an abnormal amount of theft and breakage has occurred. The accounting records of Becker Department Stores contain the following amounts on November 30, 2020, the end of the fiscal year. Cost Retail Beginning inventory $ 68,000 $100,000 Purchases 255,000 400,000 Net markups 50,000 Net markdowns 110,000 Sales revenue 320,000 According to the November 30, 2020, physical inventory, the actual inventory at retail is $115,000. Instructions a. Describe the circumstances under which the…Digital Depot Company, which operates a chain of 40 electronics supply stores, has just completed its fourth year of operations. The direct write-off method of recording bad debt expense has been used during the entire period. Because of substantial increases in sales volume and the amount of uncollectible accounts, the firm is considering changing to the allowance method. Information is requested as to the effect that an annual provisionof ¼% of sales would have had on the amount of bad debt expense reported for each of the past four years. It is also considered desirable to know what the balance of Allowance for Doubtful Accounts would have been at the end of each year. The following data have been obtained from the accounts:Diamond Computers, which is owned and operated by Dale Diamond, manufactures and sells different types of computers. The company has reported profits every year since its inception in 2002 and has applied for a bank loan near the end of 2021 to upgrade manufacturing facilities. These upgrades should significantly boost future productivity and profitability. In preparing the financial statements for the year, the chief accountant, Sandy Walters, mentions to Dale that approximately $80,000 of computer inventory has become obsolete and a write-down of inventory should be recorded in 2021. Dale understands that the write-down would result in a net loss being reported for company operations in 2021. This could jeopardize the company’s application for the bank loan, which would lead to employee layoffs. Dale is a very kind, older gentleman who cares little for his personal wealth but who is deeply devoted to his employees’ well-being. He truly believes the loan is necessary for the company’s…
