-You are an auditor at a public accounting firm. You and your team are…
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-You are an auditor at a public accounting firm. You and your team are entrusted by Partner to handle clients engaged in the home appliance retail business. Your client is a company that has go public. The client’s financial statement in the previous year reported a loss, however this year reported a material gain. After you check, it turns out that the client reports income that is not much different from the previous year, however, there can be a profit due to the decrease in Cost of Goods Sold (COGS). The client reports that the amount of inventory has increased drastically, even though sales have not increased and the account payable balance is almost the same as in previous years, this has led to suspicion of a double counting scheme in the client’s inventory. In addition, when a random check was carried out incidentally at one of the client’s warehouses, it was found that many inventory were out of date but the client did not make adjustments. Question: -If you wanted to perform an analytical procedure to check the suspected occurrence of this double counting scheme, what ratio would you calculate? Explain your answer! (10%) -What assertions are related to the above case? Explain your answer! (10%)
Questoin) It is common for common exhibiting indicators of impairment not to recognise an asset impairment in the financial statements.
Questoin) It is common for common exhibiting indicators of impairment not to recognise an asset impairment in the financial statements. This is identified in the academic literature (e.g., Bond, Govendir and Wells, 2016) and it has been identified as a concern by ASIC.Required:1. Discuss the reasons why firms might not be recognising asset impairments
Networks facilitate the sharing of files between connected computers. Online storage systems such as Dropbox, Google Drive, and OneDrive take
Networks facilitate the sharing of files between connected computers. Online storage systems such as Dropbox, Google Drive, and OneDrive take advantage of using the Internet to share files. Alternatively, people still use flash drives to physically transport files from one location to another. Discuss advantages and disadvantages of the various options of sharing and transporting files between devices.
QUESTION NUMBER 1 1. Below are the following events that happened to your client. Consider that all events have a
QUESTION NUMBER 1 1. Below are the following events that happened to your client. Consider that all events have a material effect on the client’s financial statements. The auditor is currently auditing the financial statements for the year ended 31 December 2019 and is completing the audit on 15 March 2020.a. On January 10, 2020, the auditors found that the clients overstatemented their inventory account statements in the year-end 2019 financial statements.b. On 14 January 2020, the court ruling said that the client had to pay compensation for the accident that occurred on 20 August 2019c. On January 31, 2020, the client announced that they were doing a 2-for-1 split across all of their common sharesd. Clients purchase raw materials received before the end of the year. Purchases are recorded based on their estimated value. Invoices were not received until February 5, 2020, and the fees were much different than expectede. On February 20, 2020, the client’s main customer went bankruptf. On April 1, 2020, a fire accident destroyed the client’s warehouse and caused material lossQuestion:1) For points a to f above, determine whether it includes:- Subsequent event type 1- Subsequent event type 2- Not a subsequent eventFor points a to f, determine whether to adjust, disclose or not, both2) What will you do, if the client refuses to make the appropriate adjustments or disclosures even after your request to them and you have provided working papers and evidence to support your advice? What are you going to do next?QUESTION NUMBER 22. Audit reportAt each point a to c below, provide what type of audit opinion, whether an explanatory paragraph is required or not, and provide the reasons for your answer.a. Your client is a public company engaged in the property business. Their inventory accounts consist of real estate units and unsold apartments; the amount of material. After being audited, you find that some of the real estate units are overstated. The client agrees to resolve the problem by restating their financial statements.b. When you calculate the current ratio from your client’s financial statements, you find that current assets are only 10% of your client’s current liabilities. But all financial reports are presented in accordance with accounting standards.c. You discover that your client is involved in the law in a dispute over non-current assets. According to the results of your investigation with the client’s attorney, you find that it is possible that the client will lose out on future court decisions. But the client refuses to reveal this contingent even after you have convinced them.
Custom Designs, Inc. uses the allowance method to estimate and record bad debt expense. It has an accounts receivable balance
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Custom Designs, Inc. uses the allowance method to estimate and record bad debt expense. It has an accounts receivable balance of $90,000 and an allowance for uncollectible accounts credit balance of $6,200. Suppose an account receivable balance of $1,200 from one customer is determined to be uncollectible and is written off. What was the net accounts receivable amount before and after the write off?On January 1, 20X1, Mechanical Engineers, Inc. had an accounts receivable balance of $506,000 and a credit balance in the allowance for uncollectible accounts of $45,000. During January, the company had credit sales of $2,150,000, collections on credit sales of $1,950,000, and write offs of uncollectible accounts receivable totaling $41,000. All of the company’s sales are credit sales.a) Prepare journal entries to record the credit sales, cash collections, and accounts receivable write offs for January.b) Mechanical Engineers, Inc. estimates bad debt expense at 2.5% of credit sales. Prepare the journal entry for bad debt expense.c) Show the balance sheet presentation of accounts receivable.
In the current year H Ltd., an HST registrant, disposed of a passenger vehicle (cost $36,000; UCC $17,000) for $12,000.
In the current year H Ltd., an HST registrant, disposed of a passenger vehicle (cost $36,000; UCC $17,000) for $12,000. At the same time H purchased a new passenger vehicle for $41,000 plus HST. What is the maximum CCA deduction that H can claim in the current year?
Pronghorn Inc. owns and operates a number of hardware stores in the New England region. Recently, the company has decided
Pronghorn Inc. owns and operates a number of hardware stores in the New England region. Recently, the company has decided to locate another store in a rapidly growing area of Maryland. The company is trying to decide whether to purchase or lease the building and related facilities.Purchase: The company can purchase the site, construct the building, and purchase all store fixtures. The cost would be $1,856,100. An immediate down payment of $406,000 is required, and the remaining $1,450,100 would be paid off over 5 years at $360,700 per year (including interest payments made at end of year). The property is expected to have a useful life of 12 years, and then it will be sold for $502,100. As the owner of the property, the company will have the following out-of-pocket expenses each period.Property taxes (to be paid at the end of each year)$40,550Insurance (to be paid at the beginning of each year)26,650Other (primarily maintenance which occurs at the end of each year)16,660$83,860Lease: First National Bank has agreed to purchase the site, construct the building, and install the appropriate fixtures for Pronghorn Inc. if Pronghorn will lease the completed facility for 12 years. The annual costs for the lease would be $266,600. Pronghorn would have no responsibility related to the facility over the 12 years. The terms of the lease are that Pronghorn would be required to make 12 annual payments (the first payment to be made at the time the store opens and then each following year). In addition, a deposit of $104,400 is required when the store is opened. This deposit will be returned at the end of the 12th year, assuming no unusual damage to the building structure or fixtures.Click here to view factor tablesCompute the present value of lease vs purchase. (Currently, the cost of funds for Pronghorn Inc. is 9%.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)LeasePurchasePresent value $$
I need help to figure out these questions – all of them and especially number 2 where it has 50
I need help to figure out these questions – all of them and especially number 2 where it has 50 – (20% x 50) = 40 and then the next line for 40 says assets. these are all conceptual questions so the information should all be here. thanks!
Outsourcing (Make-or-Buy) Decision Mountain Air Limited manufactures a line of room air purifiers. Management is currently evaluating the possible production
Outsourcing (Make-or-Buy) Decision Mountain Air Limited manufactures a line of room air purifiers. Management is currently evaluating the possible production of an air purifier for automobiles. Based on an annual volume of 10,000 units, the predicted cost per unit of an auto air purifier follows.Direct materials$8.00Direct labor1.50Factory overhead9.00Total$18.50 These cost predictions include $60,000 in facility-level fixed factory overhead averaged over 10,000 units.One of the component parts of the auto air purifier is a battery-operated electric motor. Although the company does not currently manufacture these motors, the preceding cost predictions are based on the assumption that it will assemble such a motor. Mini Motor Company has offered to supply an assembled battery-operated motor at a cost of $5.50 per unit, with a minimum annual order of 5,000 units. If Mountain Air accepts this offer, it will be able to reduce the variable labor and variable overhead costs of the auto air purifier by 50 percent. The electric motor’s components will cost $2.00 if Mountain Air assembles the motors.(a) Determine whether Mountain Air should continue to make the electric motor or outsource it from Mini Motor Company.Calculate the net advantage (disadvantage) of outsourcing the electric motors from Mini Motor Company.Use a negative sign with your answer to indicate a net disadvantage (if applicable).$Answer(b) If it could otherwise rent the motor-assembly space for $24,000 per year, should it make or outsource this component?Calculate the net advantage (disadvantage) of outsourcing the motors, assuming the space could be rented.Use a negative sign with your answer to indicate a net disadvantage (if applicable).$Answer(c) Management should consider which of the following nonquantitative factors in deciding whether to make or buy the motors.The quality of their own and the supplier’s motors.The dependability of the supplier.Whether Mini Motor has a track record of meeting its commitments.Whether they can depend on Mini Motor to supply motors for a number of years or whether it is attempting to use some temporarily idle capacity.All of these.
Bush Manufacturing has the following labor hours available for producing M and N: 26,000 Total Direct labor hours available Consider
Bush Manufacturing has the following labor hours available for producing M and N: 26,000 Total Direct labor hours available Consider the following information: M N Required Labor per unit in hours 3 2 Maximum demand in units 8,000 7,000 Contribution Margin per unit 12 6 Required: What is the optimal product mix(how many M and N should be produced)? Explain your answer and show computations.
Exercise 1Calculate the contribution margin per unit for the Model 101.Exercise 2 A company sells small motors as a component
Exercise 1Calculate the contribution margin per unit for the Model 101.Exercise 2 A company sells small motors as a component part to automobiles. The Model 101 motor sells for $850 and has per-unit variable costs of $400 associated with its production. The company has fixed expenses of $90,000 per month. In August, the company sold 425 of the Model 101 motors.Calculate the contribution margin ratio of the Model 101.James Motors sells a single product with a selling price of $400 with variable costs per unit of $160. The company’s monthly fixed expenses are $36,000.What is the company’s break-even point in units?What is the company’s break-even point in dollars?How many units will James need to sell in order to realize a target profit of $48,000?What dollar sales will James need to generate in order to realize a target profit of $48,000?
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