SOLUTIONS FOR MULTIPLE‑CHOICE QUESTIONS 6.24 a. Correct Risk is high when the company always estimates the inventory but never takes a complete physical count. b. Incorrect Risk is low when the petty cash box is always locked in the desk of the custodian. c. Incorrect Risk is low when management has published a company code of ethics and sends frequent communication newsletters about it. d. Incorrect Risk is low when the board of directors reviews and approves all investment transactions. 6.25
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Question 11. In early 2003 Bristol-Myers Squibb announced that it would have to restate its financial statements as a result of stuffing as much as $3.35 billion worth of products into wholesalers’ warehouses from 1999 through 2001. The company’s sales and cost of sales during this period was as follows: 2001 2000 1999 Net sales $18‚139 $17‚695 $16‚502 Cost of products sold 5‚454 4‚729 4‚458 The company’s marginal tax rate during the three years was
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Problem 6-36 1. Machine supplies: $102‚000 / 34‚000 DLH = $3/hr January: 23‚000 DLH x $3 = $69‚000 Depreciation: Fixed at $15‚000 2. Plant maintenance cost: | March | January | | (34‚000 hrs) | (23‚000hrs) | Total cost*Less: Machine Supplies DepreciationPlant maintenance | $ 586‚000(102‚000) (15‚000)$ 469‚000 | $ 454‚000(69‚000) (15‚000)$ 370‚000 | *Excludes supervisory labor cost Variable maintenance cost
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Week 6 Homework Solutions Question 3 Explain how built-in (or automatic) stabilizers work. What are the differences between proportional‚ progressive‚ and regressive tax systems as they relate to an economy’s built-in stability? Answer In a phrase‚ “net tax revenues vary directly with GDP.” When GDP is rising‚ so are tax collections‚ both income taxes and sales taxes. At the same time‚ government payouts—transfer payments such as unemployment compensation and welfare—are decreasing. Since net
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Q Suppose we are thinking about replacing an old computer with a new one. The old one cost us 650‚000; the new one will cost 780‚000. The new machine will be depreciated straight-line to zero over its five-year life. It will probably be worth about 140‚000 after five years. The old computer is being depreciated at a rate of 130‚000 per year. It will be completely written off in three years. If we do not replace it now‚ we will have to replace it in two years. We can sell it now for 230‚000; in two
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Case Study 3 a) What events or condition above may cause substantial doubt about the entity’s ability to continue as a going concern? Events or condition that may cause substantial doubt about the entity’s ability to continue as a going concern are the first one‚ because of the high competition in the industry‚ it has affected the sales of the Fast Go. The effect of vigorous competition in the markets has makes it difficult for Fast Go to attract and retain customers and to grow their customer
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show that the loss suffered by the claimant was reasonably foreseeable. In the case of Hedly Byrne and Co vs Hedler and Partners Ltd‚ where there was a special relationship between parties‚ there could be a duty of care for financial loss caused by a negligent misstatement. However‚ there was a valid disclaimer as the advice given by Heller was headed without responsibility and the defendant was not liable. In this case‚ Aiman & Co were not liable since there is no special relationship between parties
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Accreditation Audit AFT Task 4. A1. Compliance Status The ongoing survey readiness audits that are conducted in the hospital on a daily basis have identified areas we will focus on to ensure that our accreditation survey results are exceptional. Audits are performed on an ongoing basis with a focus on trends that are most commonly cited by the Joint Commission. Nightingale hospital has proven to have made great improvements over prior survey findings in Emergency Management‚ Human Resources
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importance of strategic management to a small business. 2. Explain why and how a small business must create a competitive advantage in the market. 3. Develop a strategic plan for a business using the nine steps in the strategic planning process. 4. Discuss the characteristics of three basic strategies: low cost‚ differentiation‚ and focus‚ and know when to employ them. 5. Understand the importance of controls such as the balanced scorecard in the planning process. Part 2: Class Instruction
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PTL was not an organization registered with the SEC; the partner still has to follow the professional code of conduct that is integral to his profession and the public’s trust in it. 2. There are numerous procedures that an audit firm must perform before accepting an audit client: a. Firstly‚ review the reason why the company is looking for a new auditor or why it needs to start being audited. b. Review business structure of the client (look for red flags) c. Review client’s past history‚ including
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