Question 1
Q1) General Journal Entries Following are the December transactions of Cerullo Electrical Contractors. Dec. 1 Purchased supplies for $300. Dec. 3 Paid $250 electricity bill for November that had been properly recorded with an adjusting entry on November 30. Dec. 9 Paid employee salaries for first week of December, $1,200. No salaries had been previously accrued. Dec. 16 Received $600 for interest that had been earned in November on a bank account. An appropriate adjusting journal entry had been recorded for this item on November 30. Dec. 22 Received $1,700 from customer in payment account receivable. Dec. 26 Paid January rent on leased office space, $400. Dec 30 Received $2,500 advance payment from a customer for work to be performed in January. Dec. 31 Purchased wwquipment on credit for $3,000. Required: (a) prepare general journal entries for these transactions. (b) Identify which accounts affected by the journal entries prepared in part (a) are deferred expenses, deferred revenues, accrued assets, or accrued liabilities. Q2) Trial Blance Following are the general ledger account balances of Balcones Company, Inc (BCI), as of September 30, 2009: Cash $50,000 Account Receivable 300,000 Inventory 250,000 Equipment 450,000 Accumulated Depreciation-Equipment 110,000 Account Payable 350,000 Income Taxes Payable 50,000 Common Stock 95,000 Retained Earnings 100,000 Sales Revenue 600,000 Operating Expenses 255,000 Required: (a) Prepare a trial balance for BCI as of sptember 30, 2009. (b) Even if a trial balance is in balance, one or more general ledger accounts of a business may contain errors. Provide three examples of accounting errors that would not cause a business's trail balance to be out-of-balance. (c) What steps could the management of BCI take to help ensure that its accounts are error free? Write a brief memo to the company's management listing your recommendations. Q3) Adjusting Journal Entries The following information pertains to the operations of Wilke Investogating, a private detective agency, for December 2009. - Wilke's employees earn $420 of salary collectively each day. The employees work Monday through Friday and are paid each Friday for the week just worked. December 31 falls on a Tuesday. -On December 31, the owner estimated that December's electricity bill will be $240. -The owner also estimates that the firm will have income tax expense of $800 for December. This amount will be paid in March 2010. -On December 1, Wilke received and recorded a $300 payment from a customer for services to be rendered by Wilke evenly durning December, January, and February. Wilke's principal revenue account is Fees Revenue. -Wilke received $680 cash from a new client on December 28; this amount was properly recorded. No. services had been provided to this client as of December 31. -Bonocher, Inc. owes Wilke $1,400 for services provided during December. No entry pertaining to these services has been recorded in Wilke's accounting records. Required: (a) For each bulleted item, prepare any necessary adjusting journal entry as of December 31 in Wilke's accounting records. (b) Suppose that Wilke investigating uses the cash basis of accounting instead of the accrual basis. Analyze each bulleted item and determine how Wilke's revenues and expenses for December would be affected by using the cash rather than accrual basis of accounting. (c) Write a brief memo indicating whether the cash basis or accrual basis of accounting provides a more appropiate measure of Wilke's net income each accounting period. Thank you, I know I this will not be free.
Question 2
1. The Sarbanes-Oxley Act of 2002 was passed by Congress due to the public outcry after the financial scandals of the early 2000s. (Points: 1) True False 2. There are two internal control objectives and they are to ensure accurate financial reports, and ensure compliance with applicable laws. (Points: 1) True False 3. The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures. (Points: 1) True False 4. The control environment in an internal control structure is the attitude and awareness of internal control by all employees. (Points: 1) True False 5. Separating the responsibilities for purchasing, receiving, and paying for equipment is an example of the control procedure: separating operations, custody of assets, and accounting. (Points: 1) True False 6. Internal control is enhanced by separating the control of a transaction from the record-keeping function. (Points: 1) True False 7. A customer's check received in settlement of an account receivable is considered cash. (Points: 1) True False 8. Businesses who have several bank accounts, petty cash, and cash on hand, would maintain a separate ledger account for each type of cash. (Points: 1) True False 9. For strong internal control system over cash, it is important to have the duties related to cash receipts and cash payments divided among different employees. (Points: 1) True False 10. If the balance in Cash Short and Over at the end of a period is a credit, it indicates that cash shortages have exceeded cash overages for the period. (Points: 1) True False 11. The bank often informs the company of bank service charges by including a credit memo with the monthly bank statement. (Points: 1) True False 12. Bank customers are considered creditors of the bank so the bank shows their accounts with credit balances on the bank's records. (Points: 1) True False 13. Depositing all cash, checks, etc. in a bank and paying with checks is an internal control procedure over cash. (Points: 1) True False 14. In preparing a bank reconciliation, the amount of outstanding checks is added to the balance per bank statement. (Points: 1) True False 15. In preparing a bank reconciliation, the amount indicated by a debit memo for bank service charges is added to the balance per company's records. (Points: 1) True False 16. In preparing a bank reconciliation, the amount of a check omitted from the journal is added to the balance per company's records. (Points: 1) True False 17. In establishing a petty cash fund, a check is written for the amount of the fund and is recorded as a debit to Accounts Payable and a credit to Petty Cash. (Points: 1) True False 18. Expenditures from a petty cash fund are documented by a petty cash receipt. (Points: 1) True False 19. When the petty cash fund is replenished, the petty cash account is credited for the total of all expenditures made since the fund was last replenished. (Points: 1) True False 20. Money market accounts, commercial paper, and United States Treasury Notes are examples of cash equivalents. (Points: 1) True False
Question 3
Audit of revenues and receipts cycle Introduction: The chartered accounting firm for which you work,has been appointed as the auditor of Efektif Sport Attire Bhd,a company that manufactures and distributes sports clothing.The company's year end is 31 May 2013.The company has a manufacturing plant,a warehouse and a head office.Upon manufacture,the attires are stored in the warehouses until they are dispatched to ratailers.The company does not have an internal audit department. the audit senior has prepared the following notes on the company's system for revenues,receivables and receipts. Sale and Shipping Goods are sold only on receipt of a written order from customers.On receipt of an order,Miss Cheng in the sales department makes out pre-numbered three-part shipping document.The three copies are sent to Encik Anuar,the officer in-charge of warehouse.The orders are packed and then shipped by the company's vans.The top copy of the shipping document is sent with the goods,the second copy is sent to the accounts department and the third copy is retained in the warehouse.If goods are temporarily out of stock,Encik Anuar sends the shipping document to the customer stamped "BACKORDER-YOUR ORDER CANNOT BE CURRENTLY SHIPPED".he then shredded the second copy and retains the third copy on an unfulfilled order file.When the goods are available,Encik Annuar makes out a new three-part shipping document from a per-numbered set kept in the storeroom and processes this in the usual way. Invoicing When the second copy of shipping document arrives in the accounts department,Cik Sham makes out a two-copy invoice,which is checked for details by Encik Baharum,the account executive.The top copy is sent to the customer and the second copy is retained in the accounts department where Cik Sham records in the sales journal and posts to the accounts receivable.Each week Encik Baharum posts the total of sales invoices for the week to the accounts receivable control account. Cash Receipts customer can only settle their account balance by cheque and these are received along with all the company's mail in the general office.the cheques are listed in the general office.Both the listing and cheques are passed to Cik Sham who posts the individual payments to the appropriate accounts receivable.Each day,Encik Baharum deposited the cheques into the company's bank account and enters the total cash received from the debtors in the cash book.Each week he posts the total cash received from debtors to the accounts receivable control account.Each month,Encik Rashid,the chief accountant.check for the agreement of the accounts receivable and accounts receivable control account. After the office hours,any documents that are not attended yet,will be filed and placed on the table of the respective staff. On reviewing these narrative notes you agree with the strength in the Efektif Sport Attire's system for revenues,receivables and receipts,but also concern of the weaknesses. required: i.State five strength of the system ii.state five weaknesses in the system,and also the possible effect of each weakness. iii.For each of the weakness identified in (ii),suggest a control procedure to correct the deficiency as to prevent it from occurring on a continuing basis. iv.Explain how you would substantiate the company's inventory as at 31 May 2013.
Question 4
Problem 1: (50 points) This Problem may look a bit familiar (I used much of the information provided in one of your online homework problems but it is not identical so be careful and read through the problem thoroughly). On December 31, 2010, The Walsh Company had the following balances in its balance sheet accounts: Paid-in Capital $ 100,000 Gross Accounts Receivable $ 151,000 Accumulated Depreciation on PPE $ 613,000 Mortgage Notes Payable $ 560,000 Income Taxes Payable $ 230,000 Prepaid Expenses (Taxes/Insurance) $ 30,000 Retained Earnings $ 297,000 Cash $ 73,000 Inventory $ 689,000 Allowance for Doubtful Accts. $ 12,000 Plant/Property/Equipment (PPE) $ 912,000 Trade Accounts Payable $ 123,000 Other Long-term Debt $ 115,000 Land $ 195,000 The following information pertains to the Walsh Company and its operations during calendar year 2011: 1) The company purchased $ 1,125,000 worth of inventory during the year, all on credit. Its ending inventory on December 31, 2011 totaled $ 667,000. 2) The company had sales totaling $1,900,000. All sales were on credit. 3) Company management assumed for the year that 1% of its credit sales would be uncollectible and recorded these credit sales as bad debt. 4) For the year, the company paid $1,150,000 total cash towards its trade accounts payable. 5) During the year, $30,000 worth of accounts receivable were determined to be uncollectible. 6) The company collected cash on accounts receivable totaling $1,890,000. 7) The company recognized $20,000 worth of property tax expense and $10,000 worth of insurance expense for the year. Both of these expenses had previously been recognized as prepaid expenses. 8) Salary expenses totaled $190,000; Office expenses totaled $55,000; and Selling/Administrative Expenses totaled $89,000. All of these expenses were paid with cash. 9) Interest expense, paid with cash, totaled $70,000. 10) The company made principal payments of $45,000 on its mortgage note and $15,000 on other long-term debts it owes. 11) The company recognized $42,000 of straight-lined depreciation expense. 12) The company paid off its income taxes payable totaling $230,000 using cash. 13) The income tax expense for the year 2011 is $100,000. The 2011 income taxes will be paid in 2012. (2011 income taxes are recorded as ?Income Taxes Payable? in 2011.) 14) The company declared and paid $80,000 in cash dividends to its owners. 15) Net Income for 2011 is $158,000. Complete the items below using the information presented above and on the preceding page,. Watch the dates for the items that I am requesting!! Show how you arrived at your answer for partial credit!! A) Prepare and attach a properly formatted Balance Sheet for the Walsh Company dated December 31, 2010. (25 points) B) Determine the balance for ?Cash? as of December 31, 2011. Show how you arrived at your answer. To solve this, IT IS NOT NECESSARY to develop/create a cash flow statement but be sure you show me how you arrived at your answer for partial credit in the event you arrive at an incorrect answer. (20 points) C) Determine the balance for Retained Earnings as of December 31, 2011. There is no partial credit for this one ? you either get it right and get five points or you get it wrong and get zero. (5 points) Problem 2: (50 points) The CFO for Fin Tackle Company, a retailer of fishing supplies, has provided you the following information from the company's accounting records. From the information presented, prepare a properly formatted, multi-step Income Statement (i.e. showing ALL of the appropriate intermediate profit point lines). Per share presentation of income data is not being requested. Balance sheet account information is as of the close of business for December 31, 2011 unless otherwise indicated. Income statement information is applicable for the entire calendar year 2011 unless otherwise indicated. The company's income tax rate is 35%. The company did not purchase or dispose of any depreciable long-term assets. (Watch out - you may have more information than is needed to complete this problem). Sales/Revenues $600,000 Property Tax Expense 80,000 Cash 10,000 Selling Expenses 20,000 Unearned Revenues 15,000 Prepaid Insurance 10,000 General and Administrative Expenses 15,000 Purchases of Goods for sale 75,000 Inventory available for sale as of 1/1/2011 100,000 Inventory available for sale as of 12/31/2011 95,000 Accum. Depreciation on Plant, Property, Equipment (as of 1/1/11) 120,000 Accum. Depreciation on Plant, Property, Equipment (as of 12/31/11) 160,000 Plant, Property and Equipment 500,000 Long-term debt 50,000 Dividends declared and paid to shareholders 40,000 Dividend Income 45,000 Interest Income 3,000 Interest Expense 12,000 Net Accounts Receivable 15,000 Retained Earnings 60,000 Infrequent expense associated with a weather event 3,000 Accounts Payable 15,000 Bad Debt Expense 10,000
Question 5
Describe a company in detail. This can be the company you work for or any other company. Your choice. (If you chose a non-profit, treat it as a for-profit.) Detail what this company does ? how does it make its profits? What is its marketplace and competitors? Where is this organization going in the future? What issues might it be currently facing? List 4 strategic objectives of this company. (These will be used for Unit 5.) Include a Reference page for all sources used A minimum of 3 sources is required Sources ? there are multiple sources you can go to find the necessary information Company documents such as an Annual Report, news releases Interview supervisory level employees Financial Analysts reports Business Journals WSJ Note: Wikipedia is not an acceptable source, nor blogs Document Requirements A minimum of 3 pages, double spaced, not including the Reference page Maximum of 12 pt. font Use paragraphs to break up thoughts and use bulleted lists where appropriate for easy of reading Each strategy must be a bullet point and called out, specifically, as one of the 4 required strategies. Don?t make the reader work to figure out what is a strategy Do not write in the first person
