The statement of cash flows would disclose the payment of a dividend: nowhere on the statement. in the operating activities section. in the investing activities section. in the financing activities section.

The statement of cash flows would disclose the payment of a dividend:

•               nowhere on the statement.
•               in the operating activities section.
•               in the investing activities section.
•               in the financing activities section.                                        

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Borrowing money is an example of a(n): delivering activity. financing activity. investing activity. operating activity.

Borrowing money is an example of a(n):

•               delivering activity.
•                financing activity.
•               investing activity.
•               operating activity.                                         

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External users want answers to all of the following questions except: Is the company earning satisfactory income? Will the company be able to pay its debts as they come due? Did the company use a budget to plan its expenses? How does the company compare in profitability with competitors?

External users want answers to all of the following questions except:

•           Is the company earning satisfactory income?
•           Will the company be able to pay its debts as they come due?
•            Did the company use a budget to plan its expenses?
•           How does the company compare in profitability with competitors?

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LJB Company, a local distributor, has asked your accounting firm to evaluate their system of internal controls because they are planning to go public in the future. The President wants to be aware of any new regulations required of his company if they go public so he met with a colleague of yours at a local restaurant. The President of the company explained the current system of internal controls to your colleague. Your colleague has since been promoted to a tax position so she has passed on the information below so you can generate recommendations for the partner at your accounting firm to share with the President of LJB Company. Since LJB Company is a relatively lean organization, they have a lot of faith in their long-term employees. They have one accountant who serves as Treasurer and Controller which streamlines many of their processes. In this dual role, he purchases all of the supplies and pays for these purchases. He also receives the checks and completes the monthly bank reconciliation. The accountant is so busy that the company handles petty cash a bit differently. All employees have access to the petty cash in a desk drawer and are asked to only place a note if they use any of the cash. The accountant has recently started using pre-numbered invoices and wants to buy an indelible ink machine to print their checks. The President is waiting to hear from you if this is a necessary purchase before authorizing. On payday, the checks are picked up by the accountant and left in his office for pick-up. Before he leaves for the weekend, he will move the checks into a safe in his office. The President is still quite embarrassed because he had to fire one of his employees for viewing pornography on a company computer. He later found out this individual was a convicted felon who served time for molesting children. The company had a hard time getting the employee to admit it was him because the company does not assign individual passwords. The President expressed his frustration because both he and the accountant both interview and approve all of the new hires. Required: Based on the above information, prepare a Word document to address the following: 1. Inform the President of any new internal control requirements if the company decides to go public. (7 points) 2. Advise the President of what the company is doing right (they are doing some things well) and also recommend to the President whether or not they should buy the indelible ink machine. When you advise the President, please be sure to reference the applicable internal control principle that applies. (13 points) 3. Advise the President of what the company is doing wrong (they are definitely doing some things poorly). Please be sure to include the internal control principle that is being violated along with a recommendation for improvement. (20 points) You must prepare a formal report for the partner to distribute to the President so no abbreviations or short-hand answers. You also must cite your references. At a minimum, your textbook should be cited.

LJB Company, a local distributor, has asked your accounting firm to evaluate their system of internal controls because they are planning to go public in the future.  The President wants to be aware of any new regulations required of his company if they go public so he met with a colleague of yours at a local restaurant. The President of the company explained the current system of internal controls to your colleague. Your colleague has since been promoted to a tax position so she has passed on the information below so you can generate recommendations for the partner at your accounting firm to share with the President of LJB Company. 

Since LJB Company is a relatively lean organization, they have a lot of faith in their long-term employees. They have one accountant who serves as Treasurer and Controller which streamlines many of their processes. In this dual role, he purchases all of the supplies and pays for these purchases. He also receives the checks and completes the monthly bank reconciliation. The accountant is so busy that the company handles petty cash a bit differently. All employees have access to the petty cash in a desk drawer and are asked to only place a note if they use any of the cash.

The accountant has recently started using pre-numbered invoices and wants to buy an indelible ink machine to print their checks. The President is waiting to hear from you if this is a necessary purchase before authorizing.

On payday, the checks are picked up by the accountant and left in his office for pick-up. Before he leaves for the weekend, he will move the checks into a safe in his office.

The President is still quite embarrassed because he had to fire one of his employees for viewing pornography on a company computer. He later found out this individual was a convicted felon who served time for molesting children. The company had a hard time getting the employee to admit it was him because the company does not assign individual passwords. The President expressed his frustration because both he and the accountant both interview and approve all of the new hires.

Required: 

Based on the above information, prepare a Word document to address the following:

1.      Inform the President of any new internal control requirements if the company decides to go public. (7 points)

 

2.      Advise the President of what the company is doing right (they are doing some things well) and also recommend to the President whether or not they should buy the indelible ink machine.  When you advise the President, please be sure to reference the applicable internal control principle that applies. (13 points)

 

3.      Advise the President of what the company is doing wrong (they are definitely doing some things poorly). Please be sure to include the internal control principle that is being violated along with a recommendation for improvement. (20 points)

 

You must prepare a formal report for the partner to distribute to the President so no abbreviations or short-hand answers. You also must cite your references. At a minimum, your textbook should be cited.

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The LBJ Company has budgeted sales revenues as follows: April May June Credit sales $94,000 $89,500 $75,000 Cash sales 48,000 75,000 57,000 Total sales $142,000 $164,500 $132,000 Past experience indicates that 30% of the credit sales will be collected in the month of sale and the remaining 70% will be collected in the following month. Purchases of inventory are all on credit and 40% is paid in the month of purchase and 60% in the month following purchase. Budgeted inventory purchases are $195,000 in April, $135,000 in May, and $63,000 in June.

The LBJ Company has budgeted sales revenues as follows:

 

                                                                        April               May             June

Credit sales                                                   $94,000           $89,500          $75,000

Cash sales                                                      48,000            75,000            57,000

Total sales                                                  $142,000         $164,500        $132,000

 

Past experience indicates that 30% of the credit sales will be collected in the month of sale and the remaining 70% will be collected in the following month.

 

Purchases of inventory are all on credit and 40% is paid in the month of purchase and 60% in the month following purchase. Budgeted inventory purchases are $195,000 in April, $135,000 in May, and $63,000 in June.

 

Other budgeted cash receipts:  (a) sale of plant assets for $33,000 in May, and (b) sale of new common stock for $50,000 in June.  Other budgeted cash disbursements:  (a) operating expenses of $15,000 each month, (b) selling and administrative expenses of $10,150 each month, (c) purchase of equipment for $19,000 cash in June, and (d) dividends of $20,000 will be paid in June.

 

The company has a cash balance of $20,000 at the beginning of May and wishes to maintain a minimum cash balance of $20,000 at the end of each month.  An open line of credit is available at the bank and carries an annual interest rate of 10%.  Assume that all borrowing is done on the first day of the month in which financing is needed and that all repayments are made on the last day of the month in which excess cash is available.  Also assume that there is no outstanding financing as of May 1.

 

Requirements:

 

1.  Use this information to prepare a Cash Budget for the months of May and June, using the template provided in Doc Sharing.

 

2.  What are the three sections of a Cash Budget, and what is included in each section?

 

3.  Why is a Cash Budget so vital to a company?

 

4.  What are the five basic principles of cash management that a company can follow in order to improve its chances of having adequate cash?

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Detta corporation purchased new equipment on October 1,2010, for $575,000, the machine was expted to have usefull life for 4 years, or 1,400 prating hours, and a salvage value of $5,000. The equipment was operated for 600hours during 2010 and 4,000 hours in 2011. Calculate the depreciation expense for calendar year 2010 and 2011. Under each following four methods : (1)Straight Line: 2010 ___________ 2011________________ (2) Units of production 2010_______________ 2011_______________ (3) SYD 2010________________ 2011_________________ (4) DDB 2010_______________ 2011__________________ Problem #2 On December 1,2010 company acquired a new delivery truck in exchange for each and a old delivery truck that it had acquired in 2001. The old truck was purchased for $20,000 and had an updated book value of $7,600 on the date of the exchange. At the date the old truck had a market value of $8,000, In addition High paid $26,000 cash for the new truck, which had a list price of $36,000.

Detta corporation purchased new equipment on October 1,2010, for $575,000, the machine was expted to have usefull life for 4 years, or 1,400 prating hours, and a salvage value of $5,000. The equipment was operated for 600hours during 2010 and 4,000 hours in 2011.
Calculate the depreciation expense for calendar year 2010 and 2011.
Under each following four methods :
(1)Straight Line:
2010 ___________ 2011________________

(2) Units of production
2010_______________ 2011_______________
(3) SYD
2010________________ 2011_________________
(4) DDB
2010_______________ 2011__________________








Problem #2
On December 1,2010 company acquired a new delivery truck in exchange for each and a old delivery truck that it had acquired in 2001. The old truck was purchased for $20,000 and had an updated book value of $7,600 on the date of the exchange. At the date the old truck had a market value of $8,000, In addition High paid $26,000 cash for the new truck, which had a list price of $36,000.

* Required- prepare the journal entry necessary to record this equipment trade in.

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Costello Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials—2 pound plastic at $6.88 per pound $ 13.76 Direct labor—1.50 hours at $12.00 per hour 18.00 Variable manufacturing overhead 8.25 Fixed manufacturing overhead 9.75 Total standard cost per unit $49.76

Costello Corporation manufactures a single product. The standard cost per unit of product is shown below.

Direct materials—2 pound plastic at $6.88 per pound		$ 13.76
Direct labor—1.50 hours at $12.00 per hour		18.00
Variable manufacturing overhead		8.25
Fixed manufacturing overhead		9.75
Total standard cost per unit		$49.76

The predetermined manufacturing overhead rate is $12 per direct labor hour ($18.00 ÷ 1.50). It was computed from a master manufacturing overhead budget based on normal production of 7,950 direct labor hours (5,300 units) for the month. The master budget showed total variable costs of $43,725 ($5.50 per hour) and total fixed overhead costs of $51,675 ($6.50 per hour). Actual costs for October in producing 3,800 units were as follows.

Direct materials (7,770 pounds)		$ 55,478
Direct labor (5,580 hours)		68,578
Variable overhead		52,187
Fixed overhead		18,203
Total manufacturing costs		$194,446

The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.

(a) Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.)

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