Issue: It is the end of an accounting year for Juliet Kravetz, controller of a medium- sized, publicly held corporation specializing in toxic waste cleanup. Within the corporation, only Kravetz and the president know that the firm has been negotiating for several months to land a very large contract for waste cleanup in Western Europe. The president has hired another firm with excellent contacts in Western Europe to help with the negotiations. The outside firm charges an hourly fee plus expenses, but has agreed not to submit a bill until the negotiations are in their final stages (expected to occur in another three to four months). Even if the contract falls through, the outside firm is entitled to receive payment for its services. Based upon her discussion with a member of the outside firm, Kravetz knows that its charge for services provided to date will be $150,000. This is a material amount for the company. Kravetz knows that the president wants the negotiations to remain as secret as possible so that competitors will not learn of the European contract that the company is pursuing. Indeed, the president recently stated to her, "This is not the time to reveal our actions in Western Europe to other staff members, our auditors, or readers of our financial statements; securing this contract is crucial to our future growth." No entry has been made in the accounting records for the cost of the contract negotiations. Kravetz now faces an uncomfortable situation. The company's outside auditor has just asked her if she knows of any year-end adjustments that have not yet been recorded. Questions to be Answered: 1) What are the ethical considerations that Kravetz faces in answering the auditor's question? 2) How should she respond to the question?

A Pirate's Life for Me, Inc. has been doing business for years in New York State providing boat building services. This year is the first year it was able to expand its business to another state, North Carolina. During the year the company had $1,000,000 of sales in New York State and $1.200,000 of sales in North Carolina, A Pirate's Life for Me, Inc. had payroll and property only in New York in the amount of $1,500,000 and $5,000,000, respectively. NC applies a single sale factor apportionment formula. Please explain the tax impact to the company of doing business in North Carolina and where the company will have to file corporate tax returns this year.

As the auditor of Komsu Air Limited (KAL) that manufactures and installs large commercial airconditioning systems. KAL typically has two or three large contracts (ranging from $6 million to $10million each) in progress at any one time. The contracts usually take up to six months to complete,although unexpected on-site difficulties can result in lengthy delays in completion (of up to 12months). KAL finances its operations with a mixture of equity, long-term debt (secured by fixed assets)and short-term bank loans.It is now May 2017 and your planning of the audit of KAL for the year ended 30 June 2017 is nearingcompletion. You have met with the management of KAL and, from those discussions and a review ofthe preliminary information provided by KAL, you have identified several issues that may haveimplications for the company’s ability to continue as a going concern. The relevant issues are asfollows: Competition in the industry is becoming more intense, with some customers now installing…

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Required information [The following information applies to the questions displayed below.] This year Elizabeth agreed to a three-year service contract with an engineering consulting firm to improve efficiency in her factory. The contract requires Elizabeth to pay the consulting firm $1,500 for each instance that Elizabeth requests its assistance. The contract also provides that Elizabeth only pays the consultants if their advice increases efficiency as measured 12 months from the date of service. This year Elizabeth requested advice on three occasions and she has not yet made any payments to the consultants. (Leave no answers blank. Enter zero if applicable.) b. How much should Elizabeth deduct this year under this service contract if she uses the cash method of accounting? Deductible amount

Newtake Records Ltd owns three shops selling rare jazz and classical recordings to serious collectors. At the beginning of June, the business had an overdraft of £35,000 and the bank has asked for this to be eliminated by the end of November of the same year. As a result, the directors of the business have recently decided to review their plans for the next six months in order to comply with this requirement.The following forecast information was prepared for the business some months earlier:   May June July August September October November   £000 £000 £000 £000 £000 £000 £000 Expected Sales 180 230 320 250 140 120 110 Purchases 135 180 142 94 75 66 57 Admin. expenses 52 55 56 53 48 46 45 Selling expenses 22 24 28 26 21 19 18 Tax payment       22       Finance payments 5 5 5 5 5 5 5 Shop refurbishment   - - 14 18 6 - -…

102. Subject  :- Accounting