Chapter 13, Problem 6DYS

Choose the correct. A company’s management has uncovered events that indicate that substantial doubt exists that the company can pay its debts as they come due over the following year. Management studies the plans created to address this risk. How can the company avoid disclosing that this substantial doubt exists?a. The plans must be reviewed by the chief financial officer. b. It must be probable that the plans will be implemented and it must be probable that the plans will mitigate the conditions that raised substantial doubt. c. Disclosure of the substantial doubt is required regardless of the availability of the plans. d. The plans must have been tested before the end of the financial year.

TebonManufacturing is considering seeking relief under Chapter 7 of the Bankruptcy Code. However, the company would prefer to engage in out-of-court activities that would allow for a restructuring of debts in an orderly manner. Before approaching its creditors, the company is attempting to estimate the amount of consideration that would be received by various classes of creditors if the company did liquidate. The company’s assets and liabilities are as follows:(attached)Of the accounts payable, $130,000 is secured by inventory which has a net realizable value of $150,000. Note A is secured by the balance of the inventory and receivables. Note B is secured by equipment with a net realizable value of $300,000, and the mortgage payable and accrued interest are secured by the land. All of the other liabilities are unsecured, although $10,000 is unsecured with priority over the balance.Prepare a schedule that sets forth the classes of claims (fully secured, partially secured, unsecured) and…

An example of a Type I subsequent event would be  A. a sudden change in senior management after the financial statement date B. a filing with the Securities and Exchange Commission (SEC) of an amended form 10K after the financial statement date C. the bankruptcy of a client’s customer after year-end as a result of poor financial condition that existed as of the balance sheet date D. the bankruptcy of a client’s customer after year-end as a result of poor financial condition that existed after the balance sheet date

Describe the audit procedures you would use to learn about each of the situations listed.   Begin by identifying all of the audit procedures you would use to learn about situation 1. ​(Select the 4 choices that​ apply.)     A.Analyze legal expense for the period under audit and review invoices and statements of legal counsel for indications of contingent liabilities.   B.Review records for unusual journal entries made to the equity accounts​ (Common stock and Retained​ earnings) subsequent to​ year-end.   C.​Discuss, specifically, any related party transactions with management and include information in letter of representation.   D.Obtain letters from all major attorneys performing legal services for the client as to the status of pending litigation or other contingent liabilities.   E.Confirm details of stock transactions with registrar and transfer agent.   F.Review financial statements of​ affiliate, and where related party transactions are​ apparent, make direct…

Assume that you have finished your MBA program and have applied for a position in the FinancialAccounting Department of a large multinational company. The company is struggling with itsaccounting reporting matters and several accounting reports are under regulatory scrutiny. In theinterview board, the recruitment committee members have asked you the following question i. What have you learnt in the BUS 505 (Accounting Principles) course relating to financial accounting?

3. In the audit of loans payable, which of the following audit procedure would be most likely performed to validate the existence assertion?  Group of answer choices  a. Review loan contracts  b. Sending loan confirmations  c. Vouching of subsequent payments of loans  d. Performing analytical procedures    4. You are auditing the December 31, 2021, accounts payable balance of one of your firm’s divisions. The division controller’s office has provided you with a schedule listing the creditors and the amount owed to each at December 31, 2021. Which of the following audit procedures would be your best choice for determining that no individual account payable has been omitted from the schedule?  Group of answer choices  a. Send confirmation requests to a randomly selected sample of creditors listed on the schedule  b. Examine support for selected 2022 payments to creditors, ascertaining that those relating to 2022 are not on the schedule.  c. Send confirmation requests to creditors that…

Choose the correct. A company’s management has uncovered events that indicate that substantial doubt exists that the company can pay its debts as they come due over the following year. What should management do next?a. Management should disclose that substantial doubt exists that the company can remain in existence.b. Management should examine the plans created to address the concern.c. Management should adjust all asset balances to fair value.d. Management should adjust all liabilities to expected settlement amounts.

Define each when dealing with financial responsibility: Accounting and financial reporting matters Bankruptcy Buyouts Downsizing Failure to maintain accurate expense reports Financial fraud ("cooking the books") Fraud Inflated earnings reports Insider information Insider trading

Assume that you have finished your MBA program and have applied for a position in the FinancialAccounting Department of a large multinational company. The company is struggling with itsaccounting reporting matters and several accounting reports are under regulatory scrutiny. In theinterview board, the recruitment committee members have asked you the following questions. i. What have you learnt in the BUS 505 course relating to financial accounting?