Question 1
1. The Enron debacle created what one public official reported was a ?crisis of confidence? on the part of the public in the accounting profession. List the parties who you believe are most responsible for that crisis. Briefly justify each of your choices (20 Marks). 2. List three types of consulting services that audit firms have provided to their audit clients in recent years. For each item, indicate the specific threats, if any, that the provision of the given service can pose for an audit firm?s independence (40 Marks). 3. Identify and list five recommendations that have been made recently to strengthen the independent audit function. For each of these recommendations, indicate why you support or do not support the given measure (40 Marks). overall 2300 words,Dear tutor, May I ask when the answer will be ready?,Thank you very much!,Dear tutor, Thank you for the effort. But I think a few changes need to be made based on the current answer. from my third question, it require only five recommendations, but for each one, need to indicate why you support or do not support the given measure. And, the question weight 40marks, means it deserves 900 -1000words, and with some reference. Could you please amend the answer? The new deadline will be today anytime. Thank you.
Question 2
Read the passage below.; It is a fictitious editorial piece that could have been published in a popular online news source. Then answer the questions below: Evaluating Claims for Truth, Bias, Error, or Falsity 1. What is the claim? Evaluate the claim. Is it true or a claim without reason? 2. Is the author an expert or an authority? Why or why not? 3. Is the source of the claim credible? Why or why not? 4. How credible is the evidence used to support the claim? Your response should be one-two pages in length and follow these guidelines: ? Double-spaced ? 12 point Times New Roman font ? One inch margins ? Correct spelling, grammar, and punctuation ? Use class text terms and concepts The Money is in the Medicine, not the Cure By Jerry Spencer, Esq. (Fictitious author) I must first disclose that I don?t practice medicine nor do I work in the healthcare finance field. Yet there is enough information out there to plainly see that health care companies don?t want you to be cured. They want to keep you hooked on their medicine. They are the modern day drug dealers who hide behind fancy degrees and white coats?but they can reveal who their supplier is, and his name is Big Pharma. There are more deaths due to prescription pain killer overdoses annually than heroin and cocaine combined. Why doesn?t the government declare a War on Opiates? Simple?there are 15 pharmaceutical lobbyists for every one person on Capitol Hill. The Pharmaceutical Industry has been the most profitable industry in the history of the world. Pain clinics in Florida commonly prescribe 200 Oxycontin pills based solely upon the patient paying 300 dollars and saying that they are in pain. In fact, 80 percent of the painkillers in the country originate from Florida. Why doesn?t the Sunshine State enforce regulation? As the Wu-Tang Clan stated, ?Cash rules everything around me, CREAM get the money, dolla dolla bill ya?ll.? The money is in keeping addicts hooked on painkillers and not in the needed regulation that could easily bring the national abuse epidemic to a quick halt. I was in the military and worked as an Intelligence Officer. I often worked with various government branches. One time, while working a joint operation with the CIA, one of their officers confided in me that the government has a cure for cancer, yet will not let it out because it would take away too many jobs and be too costly for Big Pharma. This is a classified secret and I could be killed just writing about it. Think about it: If there was a cure for cancer, all of the oncology centers, research universities, oncologists, and drugs to treat cancer would no longer be needed. Big Pharma is so profitable that they won?t release a known cure because they put profits before people. In the end, the government wants us to get hooked on drugs, spend all of our income at the pharmacy, and then we are only allowed to die in a bed if we have the expensive new government-mandated health insurance. They give us the leftovers and keep the truth to themselves. Remember-never ask a barber if you need a haircut, a psychologist if you have a mental disorder, or the doctor if a pill is bad for you.
Question 3
Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. 1/ The current price of a stock is $22, and at the end of one year its price will be either $27 or $17. The annual risk-free rate is 6.0%, based on daily compounding. A 1-year call option on the stock, with an exercise price of $22, is available. Based on the binominal model, what is the option's value? a. $2.43 b. $2.70 c. $2.99 d. $3.29 e. $3.62 2/. An analyst wants to use the Black-Scholes model to value call options on the stock of Ledbetter Inc. based on the following data: The price of the stock is $40. The strike price of the option is $40. The option matures in 3 months (t = 0.25). The standard deviation of the stock?s returns is 0.40, and the variance is 0.16. The risk-free rate is 6%. Given this information, the analyst then calculated the following necessary components of the Black-Scholes model: d 1 = 0.175 d 2 = -0.025 N(d 1) = 0.56946 N(d 2) = 0.49003 N(d 1) and N(d2) represent areas under a standard normal distribution function. Using the Black-Scholes model, what is the value of the call option? a. $2.81 b. $3.12 c. $3.47 d. $3.82 e. $4.20,Thank you. the answers is 1/ $2.99 2/$3.47 Please Explain how you reached the answer or show your work if a mathematical calculation is needed, or both.
Question 4
Comprehensive Problem 4 Part 1: Selected transactions completed by Everyday Products Inc. during the fiscal year ending December 31, 2012, were as follows: 1. Journalize the selected transactions. If no entry is required, select "No Entry Required" from the dropdown and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank. a. Issued 12,500 shares of $25 par common stock at $32, receiving cash. b. Issued 2,000 shares of $100 par preferred 5% stock at $105, receiving cash. c. Issued $400,000 of 10-year, 6% bonds at 105, with interest payable semiannually. d. Declared a quarterly dividend of $0.45 per share on common stock and $1.25 per share on preferred stock. On the date of record, 85,000 shares of common stock were outstanding, no treasury shares were held, and 17,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 5,500 shares of Kress Corp. at $22 per share, plus a $275 brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 6,500 shares of treasury common stock at $35 per share. h. Purchased 36,000 shares of Lifecare Co. stock directly from the founders for $18 per share. Lifecare has 112,500 shares issued and outstanding. Everyday Products Inc. treated the investment as an equity method investment. i. Declared a 2% stock dividend on common stock and a $1.25 quarterly cash dividend per share on preferred stock. On the date of declaration, the market value of the common stock was $40 per share. On the date of record, 85,000 shares of common stock had been issued, 6,500 shares of treasury common stock were held, and 17,000 shares of preferred stock had been issued. j. Issued the stock certificates for the stock dividends declared in (h) and paid the cash dividends to the preferred stockholders. k. Received $24,500 dividend from Lifecare Co. investment in (h). l. Purchased $62,000 of Nordic Wear Inc. 10-year, 6% bonds, directly from the issuing company at par value, plus accrued interest of $550. The bonds are classifed as a held-to-maturity long-term investment. m. Sold, at $42 per share, 2,600 shares of treasury common stock purchased in (g). n. Received a dividend of $0.65 per share from the Kress Corp. investment in (f). o. Sold 500 shares of Kress Corp. at $26.50, including commission. p. Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for six months. The amortization was determined using the straight-line method. q. Accrued interest for three months on the Nordic Wear Inc. bonds purchased in (l). r. Lifecare Co. recorded total earnings of $205,000. Everyday Products recorded equity earnings for its share of Lifecare Co. net income. s. The fair value for Kress Corp. stock was $18.50 per share on December 31, 2012. The investment is adjusted to fair value using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments had a beginning balance of zero. Comprehensive Problem 4 Part 2: Note: You must complete part 1 before part 2. After all of the transactions for the year ended December 31, 2012, had been posted [including the transactions recorded in part (1) and all adjusting entries], the data below were taken from the records of Everyday Products Inc. On your own paper, in the working papers, or using a spreadsheet, prepare the following: a. Prepare a multiple-step income statement for the year ended December 31, 2012, concluding with earnings per share. In computing earnings per share, assume that the average number of common shares outstanding was 84,000 and preferred dividends were $85,000. (Round earnings per share to the nearest cent.) Save your calculations and enter the requested amounts below. b. Prepare a retained earnings statement for the year ended December 31, 2012. Save your calculations and enter the requested amounts below. c. Prepare a balance sheet in report form as of December 31, 2012. Save your calculations and enter the requested amounts below. If required, only use the minus sign to indicate net loss before income tax, net loss, or a deficit balance in retained earnings. Gross profit $ Total Selling expenses $ Total Administrative expenses $ Total operating expenses $ Income from operations $ Net Other expenses and income $ Income tax $ Net income $ Earnings per common share (rounded to the nearest cent) $ Retained earnings, January 1, 2012 $ Total current assets $ Investment in Nordic Wear Inc. bonds $ Total property, plant, and equipment $ Total assets $ Total current liabilities $ Net Long-term liabilities $ Total liabilities $ Total Paid-in capital Preferred 5% stock $ Total Paid-in capital Common stock, $25 par $ Total paid-in capital $ Retained earnings, December 31, 2012 $ Total stockholders' equity $,A:the selecetions are 1.Cash, common stock, no entry, paides in capital excess of par-common stock or retained earings. I have enable the drop downs through active x. Let me know if you can see them.,Also the time has been extended to 6 pm,here are just the drop downs
Question 5
4. One year ago, you purchased a 5 percent coupon bond with a face value of $1,000 when it was selling for 101.2 percent of par. Today, you sold this bond for 99.8 percent of par. What is your total dollar return on this investment? a. $36 b. $60 c. $64 d. $74 e. $82 6. Fig Newton Industries is considering a project and has developed the following estimates: unit sales = 7,300, price per unit = $149, variable cost per unit = $91, fixed costs = $216,400. The depreciation is $94,700 a year and the tax rate is 40 percent. What effect would an increase of $1 in the selling price have on the operating cash flow? a. $4,380 b. $4,823 c. $5,316 d. $5,448 e. $7,300 7. The Shoe Box is considering adding a new line of winter footwear to its product lineup. Which of the following are relevant cash flows for this project?I. Decreased revenue from products currently being offered if this new footwear is added to the lineupII. Revenue from the new line of footwearIII. Money spent to date looking for a new product line to add to the store's offeringsIV. Cost of new counters to display the new line of footwear a. I and IV only b. II and IV only c. II and III only d. I, II, and IV only e. II, III, and IV only 8. To accurately reflect the costs associated with a project, you should exclude interest expenses in the computation of operating cash flows. a. True b. False 11. A cost-cutting project will decrease costs by $58,500 a year. The annual depreciation on the project's fixed assets will be $10,300 and the tax rate is 34 percent. What is the amount of the change in the firm's operating cash flow resulting from this project? a. $24,552 b. $26,791 c. $25,805 d. $38,610 e. $42,112 12. Custom Tailored Shirts is a specialty retailer offering T-shirts, sweatshirts, and caps. Its most recent annual sales consisted of $14,000 of T-shirts, $11,000 of sweatshirts, and $1,300 of caps. The company is adding polo shirts to the lineup and projects that this addition will result in sales next year of $14,000 of T-shirts, $8,000 of sweatshirts, $7,800 of Polo shirts, and $1,300 of caps. What sales amount should be used when evaluating the Polo shirt project? a. $0 b. $4,800 c. $4,900 d. $5,000 e. $9,100 13. Which of the following should be included in the analysis of a proposed investment?I. Financing costsII. Opportunity costsIII. Sunk costsIV. Side effects (erosion) a. I only b. II only c. II and IV only d. I, II, and IV only e. I, II, III, and IV 15. One year ago, LaTresa purchased 600 shares of Outland Co. stock for $3,600. The stock does not pay any regular dividends but it did pay a special dividend of $0.30 a share last week. This morning, she sold her shares for $7.25 a share. What was the total return on this investment? a. 18.00 percent b. 20.83 percent c. 22.50 percent d. 25.83 percent e. 28.24 percent 20. One year ago, Peyton purchased 3,600 shares of Broncos stock for $101,124. Today, he sold those shares for $26.60 a share. What is the total return on this investment if the dividend yield is 1.9 percent? a. -3.98 percent b. -3.40 percent c. -2.29 percent d. 1.10 percent e. 3.40 percent
