Why do you think a “smart” company makes “dumb” mistakes?
A company is to be liquidated and has the following liabilities:Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,000Notes payable (secured by land) . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,000Salaries payable (evenly divided between two employees) . . . . . . . . . 6,000Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000Administrative expenses for liquidation . . . . . . . . . . . . . . . . . . . . . . 20,000The company has the followingassets:
A company is to be liquidated and has the following
As an expert witness, the forensic accountant should have an understanding of:
a. Business valuations
b. Commercial litigation
d. Courtroom terminology
e. All of the above
Moth Company has the following account balances at December 31, 2010.
Notes payable ($60,000 due after 12/31/11)
Unearned revenue . 70,000
Other long-term debt ($90,000 due in 2011) .. 250,000
Salaries payable 32,000
Utilities payable 13,000
Accounts payable . 50,000
In addition, Moth is involved in a lawsuit. Legal counsel feels it is probable Moth will pay damages of $85,000 in 2011.
(a) Prepare the current liability section of Moths 12/31/10 balance sheet.
(b) Moths current assets are $570,000. Compute Moths working capital and current ratio.
A partial balance sheet and income statement for King Corporation follow:KING CORPORATIONPartial Balance SheetDecember 31, 2009AssetsCurrent assets:Cash …………………….$ 33,493Marketable securities ………………215,147Trade receivables, less allowance of $6,000 ………255,000Inventories, LIFO ………………..523,000Prepaid expenses ………………..26,180Total current assets …………….$1,052,820LiabilitiesCurrent liabilities:Trade accounts payable …………….$ 103,689Notes payable (primarily to banks) and commercial paper ….210,381Accrued expenses and other liabilities ………..120,602Income taxes payable ………………3,120Current maturities of long-term debt ………….22,050Total current liabilities ………………$ 459,842KING CORPORATIONPartial Income StatementFor Year Ended December 31, 2009Net sales ……………….$3,050,600Miscellaneous income …………..45,060$3,095,660Costs and expenses:Cost of sales ……………..$2,185,100Selling, general, and administrative expenses …….350,265Interest expense ……………….45,600Income taxes ……………….300,000 2,880,965Net income ……………….$ 214,695Required Compute the following:a. Working capitalb. Current ratioc. Acid-test ratiod. Cash ratioe. Days’ sales in receivablesf. Accounts receivable turnover in daysg. Days’ sales in inventoryh. Inventory turnover in daysi. Operating cycleView Solution:
A partial balance sheet and income statement for King Corporatio
(Learning Objective 2: Compare various inventory costing methods) The records of Parker Aviation include the following accounts for inventory of aviation parts at October 31 of the current year:
As technology and costs change, hospitals continue to innovate The reduced costs of computers means some hospitals have moved from a central computer at the nurse’s station to computers in the room or on carts What changes in overall hospital layout would these innovations suggest?
Heizer, J, Render, B, & Munson, C (2017)Principles of Operations Management: Sustainability and Supply Chain Management(10th ed)
Barra Concrete (XOR Encryption) Barra Concrete specializes in creating driveways and curbs for the residential market. Its accounting software uses exclusive OR (XOR) operations to convert the individual bits of a plaintext message into cyphertext. The rules are as follows:
Exclusive OR rules
Bit in key
In other words, exactly one of the bits must be a 1 and the other a 0 for the result of an exclusive OR operation to be a 1. To illustrate, suppose that the bits representing a single plaintext character were 1010 0101 and the secret key used just the four bits 1110.
Here are the results of the XOR operation, using this key:
Cypher text result
The encrypted bits are the cypher text, or 0100 1011 as shown. These (encrypted) bits are what the software would transmit to the recipient.
1. Decrypting the cipher text created by an XOR operation is easyjust use the same XOR operation on the encrypted bits! Demonstrate this for the example above.
2. Suppose the secret key were longerthe eight bits 1100 0011. Using this key and an exclusive OR, what is the cipher text for the plaintext message Go, team if the bit configuration for these letters is as shown below. (Hint: the final answer consists of seven sets of data, each containing eight bits.)
Assum e tha t Bes t Bu y mad e a Decembe r 3 1 adjustin g entr y t o debi t Salarie s an d W age s Expense and credit Salaries and Wages Payable for $4,200 for one of its departments. On January 2, Best Buy paid the weekly payroll of $7,000. Prepare Best Buy’s (a) January 1 reversing entry; (b) January 2 entry (assum- ing the reversing entry was prepared); and (c) January 2 entry (assuming the reversing entry was not prepared).
Lummus Management Services opens for business and completes these transactions in September. Sept. 1 Rhonda Lummus, the owner, invests $28,000 cash along with office equipment valued at $25,000 in the company. 2 The company prepaid $10,500 cash for 12 months’ rent for office space. (Hint: Debit Prepaid Rent for $10,500.) 4 The company made credit purchases for $9,000 in office equipment and $1,200 in office supplies. Payment is due within 10 days. 8 The company completed work for a client and immediately received $2,600 cash. 12 The company completed a $13,400 project for a client, who must pay within 30 days. 13 The company paid $10,200 cash to settle the payable created on September 4. 19 The company paid $5,200 cash for the premium on an 18-month insurance policy. (Hint: Debit Prepaid Insurance for $5,200.) 22 The company received $7,800 cash as partial payment for the work completed on September 12. 24 The company completed work for another client for $1,900 on credit. 28 Lummus withdrew $5,300 cash from the company for personal use. 29 The company purchased $1,700 of additional office supplies on credit. 30 The company paid $460 cash for this month’s utility bill.
1. Prepare general journal entries to record these transactions (use account titles listed in part 2).
2. Open the following ledger accounts—their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); R. Lummus, Capital (301); R. Lummus, Withdrawals (302); Service Fees Earned (401); and Utilities Expense (690). Post journal entries from part 1 to the ledger accounts and enter the balance after each posting.
3. Prepare a trial balance as of the end of September.