Determine Oasis’s cost structure. Use the information you learned in item (a) & prepare the income statement for the month of June using the variable cost-contribution margin approach How many units Oasis needs to sell to achieve the target operating income of $90,000 in the following month?

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Short cases

Case #1

Wild Wadi Co. manufactures the boards they use in their water park. Their accountant provided you with the following details showing the cost of making 1,800 units a year:

Direct Materials                                    $17,500

Direct labor                                          $  2,700

Variable overhead                                $  2,100

Fixed manufacturing overhead   $  7,400

Total manufacturing costs                      $29,700

Suppose that China Sports Suppliers Co. offered to sell Wild Wadi similar boards for $14 each delivered. If purchased Wild Wadi would add its own logo at a cost of $0.60 per board. Wild Wadi accountant predicts that purchasing the board will enable the company to avoid $2,600 of fixed costs.

Required:

  1. Assume that the facilities have no other use, prepare an analysis to show whether Wild Wadi should make or buy the boards.
  2. Assume the facilities currently used to manufacture those boards can be rented to another company at a rent of $3,000 a year. Perform the analysis again on whether Wild should make or buy.

Case #2

You are a consultant and a client of yours approached you for advice. The client (Oasis Trading Co.) is a wholesaler that distributes a single product.  Oasis’s revenues and expenses for the last two months are given below:

  May June
Sales in units………………………. 3,000 4,500
     
Sales revenue………………………… $420,000 $630,000
Less Expenses:

Cost of goods sold………………

  

168,000

  

252,000
   Advertising expense…………….. 121,000 121,000
Salaries and commissions……… 151,000 199,000
Net operating income (loss)…… ($ 20,000) $  58,000
     
     

Oasis’s management came to you and they are trying to understand their cost structure. The company is still young and is not using its full capacity yet. Oasis hopes to make an operating income of $90,000 in the coming month of July. To give them the advice, you need to determine the followings:

  1. Determine Oasis’s cost structure.
  2. Use the information you learned in item (a) & prepare the income statement for the month of June using the variable cost-contribution margin approach
  3. How many units Oasis needs to sell to achieve the target operating income of $90,000 in the following month?

Case #3  Three Independent Cases

  1. In discussing the operation of his automobile, a doctor once observed that gasoline is a fixed cost because the cost per gallon is relatively stable. Insurance, on the other hand, is a variable cost because the cost per mile varies inversely with the number of miles driven. Comment on the doctor’s observation.
  2. Define the term “relevant range” and explain its importance in understanding cost behavior.
  3. Dubai Trading Co. (DTC) has a branch in each Emirate. Your fried works as the general manager of Sharjah branch. He just finished a meeting with his superiors in Dubai where he submitted his last year report which shows:

Total Sales                   $1,280,000

Operating Income         $198,000

At the end of the meeting his superiors at Dubai Trading Co. told him that his budgeted operating for the coming year will be $207,900, an increase of 5% over last year. Your friend is wondering about the sales volume he must make to achieve his target profit. Do you think that his next year sales must be around $1,344,000, an increase of 5% over last year? Explain.

Case #4

KC Manufacturing, which began operations on January 1, 2021, produces an industrial scraper that sells for $325 per unit. By the end of 2021 KC Manufacturing provided the following Information.
KC carries its finished-goods inventory at the average unit cost of production. There was no work in process at year-end.

Required:
A. Compute the company’s average unit cost of production.

  1. Determine the cost of the December 31 Finished-Goods Inventory & Cost of Goods Sold.
  2. If next year’s production increases to 23,000 units and general cost behavior patterns do not change, what is the likely effect on:
  3. The direct-labor cost of $35 per unit? Why?
  4. The fixed manufacturing overhead cost of $400,000? Why?

Case #5

The following are relevant account balances from Brown’s comparative balance sheet and 2015 income statement.

 

  Dec. 31, 2014 Dec. 31, 2015
Cash $     9,000 $    6,000
Accounts receivable 12,000 8,000
Merchandise inventory 18,000 29,000
Prepaid rent 4,000 6,000
Equipment 80,000 100,000
Accumulated depreciation    (13,000)    (28,000)
Total assets $110,000 $121,000
     
Accounts payable $   29,000 $    15,000
Dividends Payable 2,000 0
Common stock 30,000 35,000
Additional Paid in Capital, common stock

Retained earnings

 2,000

    49,000

 3,000

68,000
Total liabilities and stockholders’ equity $110,000 $121,000
     

 

Other information:

No equipment was sold or retired during 2015. Brown’s net income for 2015 was $33,000.

Calculate depreciation expense for 2015.

Calculate the amount of dividends declared & paid during 2015.

Determine the cost of the equipment purchased during 2015.

  1. Determine the change in current assets and current liabilities over the 2 years.

Case #6

The following data are available for the month of April for Dubai Company. The physical count at the end of the month showed that 130 units are still available in the store. Assume the company uses LIFO to account for its inventories and cost of goods sold.

 

Date No. of Units / cost per unit
April 1 inventory 120 units at $8.00 each
April 10 purchase 200 units at $8.20 each
April 20 purchase 410 units at $8.50 each
April 28 purchase 110 units at $9.00 each
   

Note: Assume no spoilage of theft.

Required:

  1. Calculate the sales revenues for the month April assuming a selling price of $15 a unit.
  2. Calculate cost of goods sold & cost of ending inventories to be reported at the end of April.
  3. Calculate the gross profit for the month of April.
  4. It is the mid-day of April 30 and in few hours, you will be submitting a report of April Activities. You are concerned that you have not achieved you target gross profit for the month of April. Your accountant wanted to help and suggested that you may do that by returning the last purchase you made yesterday on April 28. Do you agree with her? Explain.

Case # 7

On January 6, 2017, Milner Company purchased a machine for $138,000. The machine cost $1,200 to deliver and $4,800 to install. The costs of operating the machine over 2017 was $4,000. At the end of 10 years estimated useful life, Milner expects to sell the machine for $12,000. Compute depreciation expense & the book value to be reported at the end of 2017 and 2018 using the following methods:

  1. Double declining method
  2. Straight line method

Assume the use of straight-line method. Assume the machine is sold at the end of 2019 for $105,000. Show the impact of sale on the financial statements.

Case #8 Independent Transactions

For each of the following transactions use the accounting equation to show the impact on the date of transaction & on Dec. 31, 2015, fiscal year-end, if any. Indicate what would be reported in each statement on Dec. 31, 2015 & how much. (Assume no adjustments were made during the year)

 Transaction #1: March 1, 2015.  We purchased a 1-year insurance policy for $8,400 cash

 

Date Assets Liabilities Owners’ Equity
Account Amount Account Amount Account Amount
March 1, 2015

 

  

 

 

          
Dec. 31, 2015 (Adjustment)

 

            

 

Indicate what would be reported in each statement on Dec. 31, 2015:

Income Statement Name of account Amount
 

 

  
Balance Sheet Name of account Amount
 

 

  

Transaction #2: We started 2015 with a balance of inventory of office supplies of $650. On Feb. 5, 2015 we bought additional office supplies for $960 on account. On Dec. 31, 2015 only $135 worth of supplies was still on hand.

 

Date Assets Liabilities Owners’ Equity
Account Amount Account Amount Account Amount
Feb. 5,  2015

 

            
Dec. 31, 2015 (Adjustment)

 

            

 

Indicate what would be reported in each statement:

Income Statement Name of account Amount
 

 

  

 

Balance Sheet Name of account Amount
 

 

  

 

Compare the forecasts from the all the models (Linear trend, trend with seasonality, moving average and exponential smoothing) generated using the MAD. Determine which model Juan should present to his boss.

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Managerial Decision Making

Team Assignment #4 – Forecasting WTI
Juan was asked by his boss to develop a forecast model for the WTI Spot crude oil price. Juan was eager to show off his regression skills and was confident he could build a model that would accurately predict the WTI spot price. After receiving a file of the Cushing OK WTI Spot Price, he got to work. Juan started by first plotting the time series data in Excel and determining if there were any trends or seasonality. He decided to start by building several models.

QUESTIONS:
1. Plot time series data (10 pts)
2. Generate linear trend model and forecast WTI for the next period. (12 pts)
3. Generate linear trend with seasonality model and forecast WTI for the next period. (12 pts)
4. Comment on the quality of these models and calculate MAD (10 pts)
5. Show the linear trend and trend with seasonality model equations (6 pts)

As Juan was reviewing the modeling results, his colleague, Mary, commented that he might want to try other forecasting methods that are simpler and may provide better forecasts. Mary suggested to try Moving Average and Exponential Smoothing models to try and generate a more accurate forecast.

QUESTIONS:
1. Generate Moving Averages of 2, 3, 5, and 10 weeks and forecast WTI for the next period. (12 pts)
2. Calculate the MAD for each Moving Average model and comment on which is the best model among these. (10 pts)
3. Generate Exponential Smoothing models with alpha of 0.2, 0.4, 0.6 and 0.8. Forecast WTI for the next period.         (12 pts)
4. Calculate the MAD for each Exponential Smoothing model and comment on which is the best model among these (10pts)
5. Plot the Moving Average models with the actual WTI on one chart AND on a separate chart plot the Exponential Smoothing models with actual WTI. (6 pts)

EXTRA CREDIT (5 pts):
1. Compare the forecasts from the all the models (Linear trend, trend with seasonality, moving average and exponential smoothing) generated using the MAD. Determine which model Juan should present to his boss

Prepare a statement of earnings, a statement of retained earnings, and a balance sheet. Explain the relationship between financial statements and why it is useful for managers to understand all three.

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Statement of earnings, a statement of retained earnings

Use the reading on preparing financial statements provided in the course pack, the course text chapter examples to prepare these statements.

Various balance sheet and statements of earnings accounts for Home Restoration Outlet Ltd. are listed below in random order. You will have to determine which account goes in which statement to solve the questions.

The balance sheet accounts are as of December 31, 2005, except as noted. The statement of earnings amounts are for the year January 1 to December 31, 2005. All accounts are shown in thousands of dollars.

1) Prepare a statement of earnings, a statement of retained earnings, and a balance sheet.

2) Explain the relationship between financial statements and why it is useful for managers to understand all three.

3) Perform a “current ratio” analysis for the company and explain the company’s liquidity position.

Balance sheet and statement of earnings accounts

Cash $40
Retained earnings, Dec 31, 2004 $255
Inventory, Dec 31, 2004 $425
Note payable, due Feb 2006 $25
Selling expenses $482
Accounts payable $85
Accounts receivable $104
Sales $2,409
Income tax rate 50%
Building and equipment, cost $150
Dividends $70
Total Long term loan, due June 2015 $110
– 2006 portion $10 ($10 of the $110)
Purchases $1,304
Income tax payable $25
Marketable securities $30
Depreciation expense, building and equipment $23
General and administrative expenses $215
Cost of goods sold $1,419
Goodwill $85
Other expenses, interest $20
Prepaid expenses $42
Common stock $130
“Accumulated depreciation,
build. & equip. Dec 31, 2004” $53

Create a PowerPoint presentation based on a company that has experienced accounting or financial fraud.

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Final Project Presentation

You will create a PowerPoint presentation (approximately 15-20 minutes, 16-18 slides) based on a company that has experienced accounting or financial fraud. Your PPT presentation should be narrated and include the following information:

1.) Overview of the company and the fraud/unethical activity that occurred.
2.) A discussion on the impact of the fraud on the company and its stakeholders.
3.) Analysis of the results of the fraud/unethical behavior.
4.) Recommendations for how the fraud could have been prevented.
5.) Conclusion that includes what accounting ethical principles you would implement within the company.

Identify at least two issues you want to change in the company and explain the impact of the change on the company’s financial reports. Identify at least two financial reports related to your proposed change and explain how your use of this report will influence your decision making.

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Number Cruncher Versus Strategic Thinker

Overview
It is one thing to be able to look at a financial report and analyze it using ratios and comparisons. However, keep in mind, when you do that, you are studying historical information. Your true value as an accountant will come if you can use that historical information to make future projections and decisions involving change.

Scenario
For this assignment, you will take a set of financial reports from a company and try to determine what would happen if something changed within the company. You will identify something you want to change and then try to determine the impact of that change. This link will take you directly to the Nexis Uni database. This database will enable you to search for a company and review its financial information.

For example, suppose you want to grow the company’s sales by extending credit to more customers. How will this impact sales, accounts receivable, cash flow, expenses (especially bad debt), and so on? Once you determine that, how will it ultimately impact the balance sheet, income statement, and statement of cash flows? How will it impact your key ratios? What non-accounting information (such as training staff in new processes) might be impacted?

Some other examples could be: what happens if you reduce payroll (a very common thing these days) or reduce inventory (to move to more of a real-time inventory system), or make a significant capital purchase? What would be impacted?

Instructions
For this assignment, write a 2–3 page paper in which you:

Identify at least two issues you want to change in the company and explain the impact of the change on the company’s financial reports. Include examples.
Identify at least two financial reports related to your proposed change and explain how your use of this report will influence your decision making. Provide examples.
Identify at least two processes not directly related to accounting and explain how they will be impacted by the proposed change. Include examples.
Use at least two quality sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment. For help with research, writing, and citation, access the library or review library guides.
This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.

The specific course learning outcome associated with this assignment is:

Analyze the influence of a financial report on decision making related to an organizational change.

What is the impact of COVID-19 on the external auditor in the practice of work ? Is there impact of COVID-19 on going concern assessment? Does remote work have an impact on the work of the external audit ?

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The impact of the Corona virus on the external audit of companies in the Kingdom of Saudi Arabia

Introduction:
The modern business environment has witnessed many dynamic developments, crises and disasters that have created more challenges for business enterprises to the extent that the continuity or survival of these companies is linked to their ability to face these challenges.

The effects of crises and disasters such as the current crisis caused by the spread of the Corona virus extend to many activities of economic life and have an impact on the preparation and audit of financial statements in accordance with the approved auditing standards. This crisis is a source of uncertainty about the future of companies and it is difficult to apply it in such circumstances because international auditing standards are based on principles

The Corona crisis affected all economic sectors around the world, but with different degrees of impact from one sector to another, whether negatively, such as the tourism and entertainment sectors, airlines, banking and insurance, or positively, such as health care and the pharmaceutical sector, each of which found in this crisis a golden opportunity to enhance its investments, especially in the areas of research
and development

The profession of external auditing in the Kingdom of Saudi Arabia has also been affected, as the Saudi external auditor faces many challenges when collecting appropriate evidence for auditing due to precautionary measures and restrictions on the movement of auditors and the need for social distancing between individuals, and considering attending the actual inventory count is not practically possible due to the danger it poses to the safety of reviewers. Auditors may encounter situations where inventory sites are closed or open with a very limited number of employees. It may be difficult to obtain sufficient appropriate audit evidence regarding the existence and condition of inventory at the balance sheet date. In addition, the delay in endorsements from banks, customers or suppliers and the difficulty of moving to review the tasks carried out by the internal auditors in subsidiaries in other countries. All these things and many more impede external audit from verifying the
sources of evidence

Research Problem:

the COVID-19 pandemic is causing a direct global destructive economic impact that is present in every area of the globe. All parties must now face what has already been obvious to many that such phenomenon are imminently possible and indeed likely. (Goodell, 2020)
The Corona crisis at the beginning of 2020 caused a health and economic crisis all over the world, and it had severe economic and financial consequences
The importance of the role of external audit has increased as a result of the covid-19 and the increase in doubts, uncertainty and ambiguity regarding the ability of the affected companies to continue, and this requires the external auditor to expand audit activities. The auditor may be compelled to perform alternative or additional audit procedures under conditions of uncertainty

Based on the foregoing, the research problem can be formulated in the following question:

What is the impact of COVID-19 on the external auditor in the practice of work ?

The following sub-questions emerge from this question:

• Is there impact of COVID-19 on going concern assessment?
• Does remote work have an impact on the work of the external audit ?
• Can the auditor obtain sufficient and appropriate audit evidence during the Covid crisis ?
• Does the COVID-19 impact on the report of external auditors ?

Write a 250-word response to your classmate. You should give a summary of the article in your own words and discuss why it is relevant to their forum topic.

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Discussion Reply Accounting

Write a 250-word response to your classmate. Your reply must make a recommendation to your classmate of a peer-reviewed journal article that provides additional information on their topic. In your response, you should give a summary of the article in your own words and discuss why it is relevant to their forum topic. It must be different from than articles they reference in their forum. Include an APA formatted citation at the bottom of the reply.

Did any of the companies recognize any impairment charges against property, plant and equipment, goodwill or other intangible assets, and if so, how much? Did the company record any reversals of prior impairment charges, and if so, how much?

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Footnote Disclosure

The purposes of the assignment are to give you hands-on experience in the following: (a) locating certain information in accounting standards, (b) examining selected disclosures of companies that use IFRS.

Use the same three companies used for Assignment 1.

Prepare a type-written response (Two pages minimum, 12 point font, double spaced, 1 inch margins, maximum length of 5 pages) – to be turned in and graded – addressing the following:

1. Where are the main disclosure requirements for PPE, intangible assets, and inventories found in IFRS and in the Accounting Standards Codification? (Provide detailed references.)

2. For each of the three companies, answer the following questions:

a. According to the footnote in which the company summarizes its significant accounting policies, what method(s) — historical cost, revaluation (fair value) — does each company use for measuring its property, plant and equipment, intangible assets other than goodwill, and goodwill? What inventory valuation method does each company use? Basically, what do the notes say about these assets?

b. In which footnote does each company make its detailed disclosures about goodwill and other intangible assets? For each company, is the footnote number indicated on the face of the balance sheet? How many pages long is the goodwill footnote and basically, what does the note say about this asset?

c. Did any of the companies recognize any impairment charges against property, plant and equipment, goodwill or other intangible assets, and if so, how much? Did the company record any reversals of prior impairment charges, and if so, how much? Basically, what does the note say about impairment.

d. Do any of the companies report a revaluation surplus for any assets, and if so, were there any changes in the revaluation surplus? If so, how much and what does the note basically say about it?

What do you understand by external environment? Take example of an organization and analyse how they are scanning the following techniques for their business?

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What do you understand by external environment

What do you understand by external environment? Take example of an organization and analyse how they are scanning the following techniques for their business?

1 ETOP
2. SAP
3. Balance scorecard

Watch the two videos below and write three to four paragraphs summarizing the contents of the video. Discuss major concepts covered in Chapter 8.

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Chapter 8 – Master Budgeting

Watch the two videos below and write three to four paragraphs summarizing the contents of the video. don’t forget to discuss major concepts (including each of the budgets) covered in Chapter 8.