Which enhancing quality best describes the business scenario below? Target Corporation issues its quarterly (10Q) report immediately after each quarter ends. Home Depot has used straight-line depreciation since it began operations General Mills and Kellogg’s both use the FIFO cost flow assumption Ford Motor Company’s annual reports are audited by certified public accountants.
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- Which enhancing quality best describes the business scenario below?
- Target Corporation issues its quarterly (10Q) report immediately after each quarter ends.
- Home Depot has used straight-line depreciation since it began operations
- General Mills and Kellogg’s both use the FIFO cost flow assumption
- Ford Motor Company’s annual reports are audited by certified public accountants.
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- Identify which qualitative characteristic of accounting information is best described in each item below. (Do not use relevance and faithful representation.) a. The annual reports of Best Buy Co. are audited by certified public accountants. b. Black & Decker and Cannondale Corporation both use the FIFO cost flow assumption. c. Starbucks Corporation has used straight-line depreciation since it began operations. d. Motorola issues its quarterly reports immediately after each quarter ends.Mason, Durant, and Westbrook (MDW) is a tax services firm. The firm is located in Oklahoma City and employs 15 professionals and eight staff. The firm does tax work for small businesses and well-to-do individuals. The following data are provided for the last fiscal year. (The Mason, Durant, and Westbrook fiscal year runs from July 1 through June 30.) Required: 1. Prepare a statement of cost of services sold. 2. Refer to the statement prepared in Requirement 1. What is the dominant cost? Will this always be true of service organizations? If not, provide an example of an exception. 3. Assuming that the average fee for processing a return is 850, prepare an income statement for Mason, Durant, and Westbrook. 4. Discuss three differences between services and tangible products. Calculate the average cost of preparing a tax return for last year. How do the differences between services and tangible products affect the ability of MDW to use the last years average cost of preparing a tax return in budgeting the cost of tax return services to be offered next year?Classify each of the following actions as either being associated with the financial accounting information system (FS) or the cost management information system (CMS): a. Determining the total compensation of the CEO of a public company b. Issuing a quarterly earnings report c. Determining the unit product cost using TDABC d. Calculating the number of units that must be sold to break even e. Preparing a required report for the SEC f. Preparing a sales budget g. Using cost and revenue information to decide whether to keep, or drop, a product line h. Preparing an annual statement of financial position that conforms to generally accepted accounting principles (GAAP) i. Using cost and revenue information to decide whether to invest in a new production system or not j. Reducing costs by improving the overall quality of a product k. Using a debt-equity ratio and liquidity ratios from a balance sheet to assess the likelihood of bankruptcy l. Using a public companys financial statements to decide whether or not to buy its stock
- Elitz and Van Aken, CPAs, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been estimated for the year ending December 31, 2020: Service Billable Hours Audit Department: Staff 22,400 Partners 7,900 Tax Department: Staff 13,200 Partners 5,500 Small Business Accounting Department: Staff 3,000 Partners 600 The average billing rate for staff is $160 per hour, and the average billing rate for partners is $350 per hour. Prepare a professional fees earned budget for Elitz and Van Aken, CPAs, for the year ending December 31, 2020, using the following column headings and showing the estimated professional fees by type of service rendered and add additional rows in the table as needed:Select from the following list the qualitative characteristic of useful information that best describes each of the following items: 1. 2. 3. 4. 5. In order to keep the financial statements simple, Carlaw Consulting shows three items on its income statement: Revenue, Expenses and Net income. The financial statements of Belbach Industries are audited on an annual basis by public accountants. Rydell Corporation is contemplating an investment in Fryan Ltd. Rydell has requested a copy of the company's year-end financial statements to assist them in their investment decision. Chemical Reaction Inc. operates in both the US and Canada and restates its US financial statements according to Canadian GAAP for its Canadian investors. The Controller for Location Inc. emphasizes that factual and unbiased information prevails in the preparation of the company financial statements. Predictive value Confirmatory value Materiality Completeness Neutrality Freedom from error Verifiability Comparability 2Bisbee Health Products invests heavily in research and development (R&D), although it must currently treat its R&D expenditures as expenses for financial accounting purposes. To encourage investment in R&D, Bisbee evaluates its division managers using EVA. The company adjusts accounting income for R&D expenditures by assuming these expenditures create assets with a two-year life. That is, the R&D expenditures are capitalized and then amortized over two years. Western Division of Bisbee shows after-tax income of $8.4 million for year 2. R&D expenditures in year 1 amounted to $3.8 million and in year 2, R&D expenditures were $4.9 million. For purposes of computing EVA, Bisbee assumes all R&D expenditures are made at the beginning of the year. Before adjusting for R&D, Western Division shows assets of $30.6 million at the beginning of year 2 and current liabilities of $680,000. Bisbee computes EVA using divisional investment at the beginning of the year and a 14 percent cost of capital.…
- For the purpose of process analysis, which of the following measures would be considered an appropriate flow unit for analyzing the main operation of a local accountingfirm? Instructions: You may select more than one answer.a. Number of accountants working each weekb. Number of tax returns completed each weekc. Number of customers with past-due invoicesd. Number of reams of paper received from suppliersRoundtree Manufacturing Co. is preparing its year-end financial statements and is considering the accounting for the following items. 1. The vice president of sales had indicated that one product line has lost its customer appeal and will be phased out over the next 3 years. Therefore, a decision has been made to lower the estimated lives on related production equipment from the remaining 5 years to 3 years. 2. The Hightone Building was converted from a sales office to offices for the Accounting Department at the beginning of this year. Therefore, the expense related to this building will now appear as an administrative expense rather than a selling expense on the current year's income statement. 3. Estimating the lives of new products in the Leisure Products Division has become very difficult because of the highly competitive conditions in this market. Therefore, the practice of deferring and amortizing preproduction costs has been abandoned in favor of expensing such costs as they…Ginnian and Fitch, a regional accounting firm, performs yearly audits on a number of different for-profit and not-for-profit entities. Two years ago, Luisa Mellina, Ginnians partner in charge of operations, became concerned about the amount of audit time required by not-for-profit entities. As a result, she instituted a series of training programs focusing on the auditing of not-forprofit entities. Now, she would like to see if the training seemed to work. So, she ran a multiple regression on 22 months of data for Ginnian for three variables: the total monthly cost of audit professional time, the number of not-for-profit audits, and the hours of training in the audit of not-for-profit entities. The following printout was obtained: Required: 1. Write out the cost equation for Ginnians audit professional time. 2. If Ginnian expects to have 9 audits of not-for-profits next month and expects that audit professionals will have a total of 130 hours of not-for-profit training, what is the anticipated cost of professional time? 3. Are the hours spent auditing not-for-profit entities positively or negatively correlated with audit professional costs? Is percentage of experienced team members positively or negatively correlated with audit professional cost? 4. What does R2 mean in this equation? Overall, what is your evaluation of the cost equation that was developed for the cost of audit professionals?
- A hotel corporation is preparing its end of year financial statements. Management has informed the accountant that in six weeks it will begin to close 12 of its properties. The accountant will provide information related to these future actions on the current end of year financial statements because of the ______________ principle. Choices: a. Full disclosure principle b. Time period assumption c. Materiality constraint d. Cost Principle e. Revenue recognition principle f. Conservatism Constraint g. Matching principle h. Economic entity assumption i. Monetary unit j. Going concern k. Some other answersObtain the latest two Ford and General Motors Annual Reports online, like you have been doing for other companies in previous Module discussions. Please make sure the Annual Report you obtain is the latest two years. A particularly important financial accounting and financial statement measure is a company’s ability to use its assets efficiently and effectively to generate sales. Calculate the total asset turnover for both Ford and General Motors for the latest two fiscal years ending. Show the bases for your calculation at the start of your initial response for both companies. Answer the following questions as part of your initial response: What is Ford’s trend for the total asset turnover ratio the past two years? What is General Motors' trend for the total asset turnover ratio the past two years? Comparing the trend in the total asset turnover for Ford and General Motors to each other the past two years, what do the trends tell us? Is there any reason(s) they are or may be…Your company is considering acquiring a private company (New Co., Inc.). The CFO has asked you to review the financial statements, look for key trends, and develop financial/operational questions to ask the management of New Co. when you meet next week. Calculate average collection period, total asset turnover, inventory turnover, and days in inventory. Calculate average collection period, total asset turnover, inventory turnover, and days in inventory for the four years. Assess the trends in activity of the firm, using your calculations in part 1, over the four year period. Calculate the gross profit margin, operating margin, and net profit margin. Assess the profitability trends of the firm, using your calculations in part 3, over the four- year period. Develop three or four questions to ask the management of New Co. to help your management team understand trends uncovered by the ratio analysis. New Co., Inc. Income Statement 12/31/22 12/31/21 12/31/20 12/31/19 Revenue…