Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2016, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,000,000. Curtiss concludes that the contract does not qualify for revenue recognition over time. The building was completed on December 31, 2018. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows:
At 12-31-2016 At 12-31-2017 At 12-31-2018
Percentage of completion 10% 60% 100%
Costs incurred to date $350,000 $2,500,000 $4,250,000
Estimated costs to complete 3,150,000 1,700,000 0
Billings to Axelrod, to date 720,000 2,170,000 3,600,000
Required:
1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years.
Year Gross Profit (Loss) Recognized
2016
2017
2018
Total project profit (loss)
2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years.
Year Gross Profit (Loss) Recognized
2016
2017
2018
3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2016 and 2017 as either cost in excess of billings or billings in excess of costs.
Balance Sheet (Partial) 2016 2017
Current assets:
Current liabilities:

Answer:

Please see attached solution

Explanation:

Please find attached detailed solution to the above questions ; 1 , 2 and 3.

Identify which control activity is violated in each of the following situations, and explain how the situation creates an opportunity for fraud or inappropriate accounting practices.

1. Once a month, the sales department sends sales invoices to the accounting department to be recorded.

2. Leah Hutcherson orders merchandise for Rice Lake Company; she also receives merchandise and authorizes payment for merchandise.

3. Several clerks at Great Foods use the same cash register drawer

Below is the Retained Earnings account for the year 2020 for Swifty Corp. Retained earnings, January 1, 2020 $261,300 Add:_______.
Gain on sale of investments (net of tax) $44,900
Net income 88,200
Refund on litigation with government, related to the year 2017 (net of tax) 25,300
Recognition of income earned in 2019, but omitted from income statement in that year (net of tax) 29,100 187,500 448,800
Deduct:
Loss on discontinued operations (net of tax) 38,700
Write-off of goodwill (net of tax) 63,700
Cumulative effect on income of prior years in changing from LIFO to FIFO inventory valuation in 2020 (net of tax) 26,900
Cash dividends declared 35,700 165,000
Retained earnings, December 31, 2020 $283,800
Prepare a corrected retained earnings statement. Waterway Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2020 to compute net income. (List items that increase adjusted retained earnings first.)

An internal control system consists of the policies and procedures managers use to protect assets, ensure reliable accounting, promote efficient operations, and uphold company policies. It can prevent avoidable losses and help managers both plan operations and monitor company and human performance. Principles of good internal control include establishing responsibilities, maintaining adequate records, insuring assets and bonding employees, separating recordkeeping from custody of assets, dividing responsibilities for related transactions, applying technological controls, and performing regular independent reviews.
Sarbanes-Oxley Act requires each of the following: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark willl be automatically graded as incorrect.)
An effective internal control
Light penalties for violators
Auditors must evaluate internal controls
Auditor's work overseen by Public Accounting Board

ogan Products computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 40,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $466,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Logan's actual manufacturing overhead for the year was $713,400 and its actual total direct labor was 41,000 hours.
Required:
Compute the company's pre-determined overhead rate for the year.

Larkspur Incorporated factored $124,300 of accounts receivable with Cullumber Factors Inc. on a without-recourse basis. Cullumber assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable for possible adjustments.

Required:
Prepare the journal entry for Larkspur Incorporated and Cullumber Factors to record the factoring of the accounts receivable to Cullumber.

O’Hara Associates sells golf clubs, and with each sale of a full set of clubs provides complementary club-fitting services. A full set of clubs with the fitting services sells for $1,400. O’Hara estimates that it incurs $50 of staff compensation and other costs to provide the fitting services, and normally earns 20% over cost on similar services. Assuming that the golf clubs and the club-fitting services are separate performance obligations, estimate the stand-alone selling price of the club-fitting services using the expected cost plus margin approach.

Example 1: Alex began putting money in his 401(k) in his early 20s; consequently, he will have financial security when he retires.
Example 2: Louise is the most qualified candidate for the position; therefore, we should hire her.

Identify the correctly written compound sentences. Check all that apply.

a. All e-mail, even once deleted, is retrievable and, therefore, you should avoid sending sensitive information in an e-mail.
b. E-mail facilitates collaboration between people in remote locations; however, when collaboration requires the exchange of large data files, it is often easier to use web-based collaboration software.
c. Many people prefer e-mail over phone conversations, they leave a written record.
d. E-mail can be an efficient way to communicate, and it makes communicating across time zones much easier.

The Dean of Admissions at Pace University is considering a survey of high school seniors in order to design better promotional materials for Pace. Discuss the issues to be considered, the different methods of conducting this survey, and the advantages and disadvantages of each.

Money is to an economy what language is to communication. What does this statement mean?

For a program to be successful, readiness for training should be assessed on two dimensions: employee characteristics and work environment. The employee characteristics that are relevant to training are the ability to learn the subject matter, attitudes toward training, and motivation to learn. Even if these are present, however, training will not be effective unless there is a positive work environment—an environment that encourages learning and eliminates obstacles for trainee success.

An important characteristic of employee readiness is having basic learning skills, especially cognitive ability that includes using written and spoken language, solving math problems, and using logic to solve problems. If employees lack certain basic skills, they may have to attend some remedial classes before participating in job-related training. Seeing potential benefits from training programs may increase employee motivation to participate. Readiness for training also depends on work environment characteristics called situational constraints and social support. Constraints can include the limits of training's effectiveness from within the organization, such as lack of money or lack of time for training and practicing. Social support refers to the ways that the organization encourages training by expressing positive attitudes toward its training programs. The goal of this activity is to evaluate employee readiness for training.

Read each statement, then select the appropriate category

1. When new employees arrive on the sales floor after training at Hamilton Department Store, experienced employees have a tendency. Forget what you learned. This is how we really do it.
2. Time and again, Brooke's employees complained that the statistical quality control training was too difficult to be useful.
3. As much as she would like to. Elizabeth really doesn't think top management is going to allocate enough money to train everyone on the new software this year.
4. Although Jane really wanted to participate in the diversity training program, she knew it was impossible to get away from the office for three days in order to participate.
5. Ed was excited to hear about the new technical training program, but disappointed when he heard his boss say that he really didn't think the training was the time and effort

a. Social Support
b. Situational Constraints
c. Employee Readiness

Chance company had two operating divisions, one manufacturing farm equipment and other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on Sept. 1, 2016, the company adopted a plan to sell the assets of the division.
The actual sale was completed on Dec. 15, 2016, at the price of $600,000. The book value of the division's assets was $1,000,000, resulting in a before-tax loss of $400,000 on the sale. The division incurred a before-tax operating loss from operations of $130,000 from the beginning of the year through Dec. 15. The income tax rate is 40%. Chances after-tax income from its continuing operations is $350,000.
Required:
Prepare an income statement for 2016 beginning with income from continuing operations. Include appropriate EPS disclosures assuming that 100,000 shares of common stock were outstanding throughout the year.

Hussein got a call yesterday from First Bank, the company that issued his credit card inquiring about an $105.00 charge made in Buenos Aires, Argentina. Upon learning that Hussein was in Detroit and had not made this purchase, the bank quickly took steps to cancel the card and issue a new one. Given the circumstances that Hussein's credit card number had an illegal transaction, he may also want to:____________.
A) check his computer's firewall to make sure it's working.
B) cancel his account and eliminate credit cards from his life.
C) change his passwords and store them in a password manager.
D) diversify his spending habits by using one of several credit cards when making purchases.

The following information is available for Mergenthaler Corporation for the year ended December 31, 2022:

Collection of principal on long-term loan to a supplier $16,000
Acquisition of equipment for cash 10,000
Proceeds from the sale of long-term investment at book value 22,000
Issuance of common stock for cash 20,000
Depreciation expense 25,000
Redemption of bonds payable at carrying (book) value 34,000
Payment of cash dividends 6,000
Net income 30,000
Purchase of land by issuing bonds payable 40,000

In addition, the following information is available from the comparative balance sheet for Mergenthaler at the end of 2022 and 2021:

2021 2022
Cash $148,000 $91,000
Accounts receivable (net) 25,000 15,000
Prepaid insurance 19,000 13,000
Total current assets $192,000 $119,000
Accounts payable $30,000 $19,000
Salaries and wages payable 6,000 7,000
Total current liabilities $36,000 $26,000

Required:
Prepare Mergenthaler's statement of cash flows for the year ended December 31, 2014, using the indirect method.

Kim is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now Kim is living at home and works in a shoe store, earning a gross income of $1,760 per month. Her employer deducts $199 for taxes from her monthly pay. Kim also pays $189 on several credit card debts each month. The loan she needs for chiropractic school will cost an additional $172 per month. Help Kim make her decision by calculating her debt payments-to-income ratio with and without the college loan.

Required:
a. Carl’s house payment is $1,640 per month and his car payment is $482 per month. If Carl's take-home pay is $3,250 per month, what percentage does Carl spend on his home and car?
b. Suppose that your monthly net income is $2,850. Your monthly debt payments include your student loan payment and a gas credit card. They total $1,140. What is your debt payments-to-income ratio?

connecting u dropped its price from $20 to $16 per gigabyte of data. Joe according to the midpoint formula, Connecting U reduced its price by what percentage?

Sara’s Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family Style for home use. Salsa is prepared in department 1 and packaged in department 2. The activities, overhead costs, and drivers associated with these two manufacturing processes and the company’s production support activities follow.

Process Activity Overhead cost Driver Quantity
Department 1 Mixing $4,500 Machine hours 1,500
Cooking 11,250 Machine hours 1,500
Product testing 112,500 Batches 600
$128,250

Department 2 Machine calibration $250,000 Production runs 400
Labeling 12,000 Cases of output 120,000
Defects 6,000 Cases of output 120,000
$268,000

Support Recipe formulation $90,000 Focus groups 45
Heat, lights, and water 27,000 Machine hours 1,500
Materials handling 65,000 Container types 8
$182,000

Additional production information about its two product lines follows.

Extra Fine Family Style
Units produced 20,000 cases 100,000 cases
Batches 200 batches 400 batches
Machine hours 500 MH 1,000 MH
Focus groups 30 groups 15 groups
Container types 5 containers 3 containers
Production runs 200 runs 200 runs

Required:
Using ABC, compute the total cost per case for each product type if the direct labor and direct materials cost is $6 per case of Extra Fine and $5 per case of Family Style.

Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2018. Edison purchased the equipment from International Machines at a cost of $139,107.

Related Information:

Lease term 2 years (8 quarterly periods)
Quarterly rental payments $18,000 at the beginning of each period
Economic life of asset 2 years
Fair value of asset $139,107
Implicit interest rate 4% (Also lessee’s incremental borrowing rate)

Required:
Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1, 2019. Edison’s fiscal year ends December 31.

Suppose government spending is cut. Other things being equal, the aggregate demand for national production will
rise.


remain constant.


fall.


All of the above

Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transaction. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
1. Stockholders invest $40,000 in cash in starting a real estate office operating as a corporation.
2. Purchased $500 of supplies on credit.
3. Purchased equipment for $25,000, paying $3,500 in cash and signed a 30-day, $21,500, note payable.
4. Real estate commissions billed to clients amount to $4,000.
5. Paid $700 in cash for the current month's rent.
6. Paid $250 cash on account for office supplies purchased in transaction 2.
7. Received a bill for $800 for advertising for the current month.
8. Paid $2,500 cash for office salaries.
9. Paid $1,200 cash dividends to stockholders.
10.Received a check for $2,000 from a client in payment on account for commissions billed in transaction 4.

At the beginning of the year, Monroe Company estimates annual overhead costs to be $500,000 and that 250,000 machine hours will be operated. Using machine hours as a base, the amount of overhead applied during the year if actual machine hours for the year was 150,000 hours is A.$500,000. B.$300,000. C.$600,000. D.$150,000.

Question # 5

Multiple Select

Aside from distributing investments and savings, the primary tasks of the financial service system

are (Select all that apply.)

U providing avenues to borrow money

growing the country's economy

aiding in the creation of capital formation

U managing and mitigating the risks

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Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed, the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows.

Work in Process, May 1 (54,000 units, 100% complete for direct materials, 35% complete with respect to conversion costs; includes $78,500 of direct material cost; $42,050 of conversion costs).

Units started in May 233,000
Units completed in May 208,000

Work in Process, May 31 (79,000 units, 100% complete for direct materials; 15% complete for conversion costs).

Costs incurred in May

Direct materials $391,440
Conversion costs $401,900

Required:
If Pitt Enterprises uses the FIFO method of process costing, compute the cost per equivalent unit for direct materials and conversion costs respectively for May.

Cash flows from operations may not be sufficient for a firm to keep up with growth-related financing needs, or the firm may not be able to always generate enough cash flow to maintain a surplus of cash. Firms prefer to borrow now to fulfill their capital requirements through means of short-term financing or long-term financing. Both methods have their advantages and disadvantages.

The following statement identifies a possible characteristic of short-term financing.

Consider this case:
Short-term loans usually have a lower cost than long-term loans. Identify whether the preceding statement is true or false.

a. This statement is false and a disadvantage of short-term financing.
b. This statement is true and an advantage of short-term financing.

Firms use a variety of short-term financing sources to support working capital. Use the descriptions in the following table to identify the short-term financing source.

Description Short-Term Financing Source
A formal, committed line of credit extended by a bank or other lending institution.
An obligation backed by collateral, often inventories or accounts receivable.

A University is offering a charitable gift program. A former student who is now 50 years old is consider the following offer: The student can invest $8,900.00 today and then will be paid a 9.00% APR return starting on his 65th birthday (i.e For a $10,000 investment, a 9% rate would mean $900 per year). The program will pay the cash flow for this investment while you are still alive. You anticipate living 21.00 more years after your 65th birthday. The former student wants a return of 6.00% on his investments, but would like to consider this opportunity.

Required:
Using the student's desired return, what is the value of this deferred annuity today on his 50th birthday?

Lipscomb Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for 1,000 USD. The firm could sell, at par, 100 USD preferred stock which pays a 12 percent annual dividend, but flotation costs of 5 percent would be incurred. Libscomb is a constant-growth firm which just paid a dividend of $2.00, sells for 27.00 USD per share, and has a growth rate of 8 percent. The firm's marginal tax rate is 40.

Required:
a. What is Rollins' cost of common stock using the bond-yield-plus-risk-premium approach?
b. What is Rollins' WACC?

Porter theorizes that the four attributes in his diamond model may promote or impede the creation of competitive advantage. Factor endowments are a nation's position in factors of production such as skilled labor or infrastructure necessary to compete in a given industry. Demand conditions are the nature of home demand for the industry's product or service. Related and supporting industries are the presence or absence of supplier industries and related industries that are internationally competitive. Firm strategy, structure, and rivalry are the conditions governing how companies are created, organized, and managed and the nature of domestic rivalry.

Required:
What is the most appropriate attribute of national competive advaritage from Porter's theory?

Which of the following is a key role that a human resource manager can play in a company?

A. Public Relations officer
B. Marking Analyst
C. Training specialist
D. Sales supervisor

Carmel Corporation is considering the purchase of a machine costing $38,000 with a 4-year useful life and no salvage value. Carmel uses straight-line depreciation and assumes that the annual cash inflow from the machine will be received uniformly throughout each year. In calculating the accounting rate of return, what is Carmel's average investment?

Bank Reconciliation and Entries The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $12,270. The bank statement indicated a balance of $15,440 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items: Checks outstanding totaled $5,560. A deposit of $5,790, representing receipts of July 31, had been made too late to appear on the bank statement. The bank had collected $3,010 on a note left for collection. The face of the note was $2,860. A check for $800 returned with the statement had been incorrectly recorded by Stone Systems as $880. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account. A check drawn for $400 had been incorrectly charged by the bank as $40. Bank service charges for July amounted to $50.

Required:
Prepare a bank reconciliation.

Skidmore Music Company had the following transactions in March:
a. Sold instruments to customers for $16, 700, received $10, 700 in cash and the rest on account. The cost of the instruments was $7, 100.
b. Purchased $4, 900 of new instruments inventory; paid $1, 700 in cash and owed the rest on account.
c. Paid $720 in wages for the month.
d. Received $3, 100 from customers as deposits on orders of new instruments to be sold to the customers in April.
e. Received a $280 bill for March utilities that will be paid in April.
Required:
Complete the following statements:
1. Cash basis Income Statement
2. Accrual basis Income Statement