Assignment1

Colleen Fernandez, president of Rhino Enterprises, applied for a $175,000 loan from First Federal Bank. The bank requested financial statements from Rhino Enterprises as a basis for granting the loan. Coleen has told her accountant to provide the bank with just the balance sheet. Colleen has decided to omit the other financial statements because there was a net loss during the past year. The accountant, Jim Long, only sent over the balance sheet to First Federal Bank Did Jim act ethically or unethically? Why?

which of the followingtaxpayers has a deductible loss from identity thief? ashen he hasnt received rent from his tenant for several months because his tenant was a victim of identity theft and had $5000 stolen geraldine she fell victim to a phone scam shegave identitythieves her personal bank account information and$8000 was taken harris he is sole proprietor and was the target of a phishing attempt he does not have a business checking account but the login information for his personal checking account was stolen and thieves took $10000 from the account jessica she owns residential rental property identity thieves impersonated her and took out a $50000 second mortage on her rental property that jessica must now repay

Helen Hernandez, president of Double H Enterprises, applied for a $175,000 loan from Great Nations Bank. The bank requested financial statements as a basis for granting the loan. Helen instructed her accountant to provide the bank with a balance sheet, but to omit the other financial statements because her business incurred a net loss last year.   Helen contends that as the owner of the business, it is her right to withhold certain financial statements from the bank.  Do you agree with Helen? Why or why not?  What type of information would banks require from a loan applicant and why would the loan officer request this information?

You joined Henderson Technology Limited as accounting manager recently.  In a management meeting, William Buckle, the managing director, expressed his concern on an amount due from Hunters Limited, which is long overdue and is unlikely to be recoverable. In a review of the aged debtors report, you found that over 40% of the debtors have overdue accounts.  You also noted that there is no control system in place.  You believe a better credit control system would help.        You are required to prepare notes for your meeting with William, to outline the objective of having a control system in place, and the key points of a credit control system that would help to reduce overdue accounts.

Colleen Fernandez, president of Rhino Enterprises, applied for a $175,000 loan from First Federal Bank. The bank requested financial statements from Rhino Enterprises as a basis for granting the loan. Colleen has told her accountant to provide the bank with a balance sheet. Colleen has decided to omit the other financial statements because there was a net loss during the past year. In groups of three or four, discuss the following questions: 2. a. What types of information about their businesses would owners be willing to provide bankers? What types of information would owners not be willing to provide? b. What types of information about a business would bankers want before extending a loan? c. What common interests are shared by bankers and business owners?

In the Why It Matters feature “Examples of Theft and FinancialReporting Frauds” at the beginning of the chapter, we introduced youto the Koss Corporation fraud. In this problem, we provide you withfurther details about that fraud. During the fall of 2009, Koss Corporation,a Wisconsin-based manufacturer of stereo headphone equipment,revealed that its vice president of finance (Sujata “Sue” Sachdeva) haddefrauded the company of approximately $31 million over a periodof at least five years. Grant Thornton LLP was the company’s auditor,and the firm issued unqualified audit opinions for the entire period in which they worked for Koss. According to reports, Sachdeva’s theftaccelerated over a period of years as follows:FY 2005 $2,195,477FY 2006 $2,227,669FY 2007 $3,160,310FY 2008 $5,040,968FY 2009 $8,485,937Q1 FY 2010 $5,326,305Q2 FY 2010 $4,917,005To give you a sense of the magnitude of the fraud, annual revenuesfor Koss Corporation are in the range of $40 to $45 million…

Janet Molly is one  most trusted employees. She never complains about herwork and rarely misses work due to illness or vacation. The company has been successful overthe years, but is now having cash flow problems. Because of the recent downturn in thecompany, you take a closer look at all the company’s financial records. When you ask Janetabout the recent cash flow problems, she responds, ‘I don’t know what is going on. I only do thereporting. Ask those who manage the company.” This behaviour differs from Janet’s normalpleasant deportment. As you continue your investigation, you discover that the reported financial results do not match what the company is doing, but you cant determine why. You decided toinvestigate Janet further. 1. What are some behaviour and lifestyle changes that you should look for? 2. What resources can you use to conduct your research?

Kingston Marina noticed an error in their financial statements after the financial statements had been submitted to their bank. The company is applying for a new loan to install a new wharf. The controller of Kingston should do nothing or resign. Ⓒ inform Kingston's management and inform the bank and provide corrected financial statements. O inform Kingston's management and assume that they will tell the bank. O wait until the bank has approved the loan to notify them of the mistake.

Identify the internal control principle that was violated in each of the following separate situations. a. The recordkeeper left town after the owner discovered a large sum of money had disappeared. An audit found that the recordkeeper had written and signed several checks made payable to his fiancée and recorded the checks as salaries expense. b. An employee was put in charge of handling cash. That employee later stole cash from the business. The company incurred an uninsured loss of $184,000. c. There is $500 in cash missing from a cash register drawer. Three salesclerks shared the cash register drawer, so the owner cannot determine who is at fault.

The case below relates to IAS 10. Indicate whether they are adjusting and non-adjusting events and how they should be treated according to the standard. On 8 January 2020, one of the accountants left Facey Company Ltd suddenly. On further investigation, the company realized that this employee had been paying himself money from the bank account in relation to false rental invoices. The amount of the overpayment was found to be $86,000. With the help of the police, the accountant was tracked down and repaid all the money on 18 January 2020.

The Lux Company experiences the following unrelated events and transactions during Year 1. The company’s existing current ratio is 2:1 and its quick ratio is 1.2:1. Lux wrote off $5,000 of accounts receivable as uncollectible. A bank notifies Lux that a customer’s check for $411 is returned marked insufficient funds. The customer is bankrupt. The owners of Lux Company make an additional cash investment of $7,500. Inventory costing $600 is judged obsolete when a physical inventory is taken. Lux declares a $5,000 cash dividend to be paid during the first week of the next reporting period. Lux purchases long-term investments for $10,000. Accounts payable of $9,000 are paid. Lux borrows $1,200 from a bank and gives a 90-day, 6% promissory note in exchange. Lux sells a vacant lot for $20,000 that had been used in its operations. A three-year insurance policy is purchased for $1,500. Separately evaluate the immediate effect of each transaction on the company’s: a.…

The Lux Company experiences the following unrelated events and transactions during Year 1. The company’s existing current ratio is 2:1 and its quick ratio is 1.2:1. Lux wrote off $5,000 of accounts receivable as uncollectible. A bank notifies Lux that a customer’s check for $411 is returned marked insufficient funds. The customer is bankrupt. The owners of Lux Company make an additional cash investment of $7,500. Inventory costing $600 is judged obsolete when a physical inventory is taken. Lux declares a $5,000 cash dividend to be paid during the first week of the next reporting period. Lux purchases long-term investments for $10,000. Accounts payable of $9,000 are paid. Lux borrows $1,200 from a bank and gives a 90-day, 6% promissory note in exchange. Lux sells a vacant lot for $20,000 that had been used in its operations. A three-year insurance policy is purchased for $1,500 Separately evaluate the immediate effect of each transaction on the company’s:…

The Lux Company experiences the following unrelated events and transactions during Year 1. The company’s existing current ratio is 2:1 and its quick ratio is 1.2:1. Lux wrote off $5,000 of accounts receivable as uncollectible. A bank notifies Lux that a customer’s check for $411 is returned marked insufficient funds. The customer is bankrupt. The owners of Lux Company make an additional cash investment of $7,500. Inventory costing $600 is judged obsolete when a physical inventory is taken. Lux declares a $5,000 cash dividend to be paid during the first week of the next reporting period. Lux purchases long-term investments for $10,000. Accounts payable of $9,000 are paid. Lux borrows $1,200 from a bank and gives a 90-day, 6% promissory note in exchange. Lux sells a vacant lot for $20,000 that had been used in its operations. A three-year insurance policy is purchased for $1,500. Separately evaluate the immediate effect of each transaction on the company’s:…

Assume you are the lead forensic investigator for a potential fraud case at AJB, Inc. After searching public records and other Internet sources, you accumulate the following financial information for the suspected fraud perpetrator, Jaleesa P. Crimin.   YEAR 1 YEAR 2 YEAR 3 Assets:       Residence #1 $243,000 $243,000 $243,000 Residence #2     138,000 Stocks and bonds 15,000 30,000 57,000 Automobiles 27,000 52,500 52,500 Boat   34,500 34,500 CD 12,000 42,000 81,000 Cash 5,670 12,150 29,160 Liabilities:       Mortgage balance #1 136,080 68,040 16,200 Mortgage balance #2     138,000 Auto loans 18,000 57,000   Boat loan   34,500 9,000 Income:       Salary   78,750 82,650 Interest/other   8,730 17,790 Expenses:       Mortgage payments   24,300 42,120 Auto loan payments   9,720 9,720 Boat…

Natalie decides that she cannot afford to hire John to do her accounting. One way that she can ensure that her cash account does not have any errors and is accurate and up-to-date is to prepare a bank reconciliation at the end of each month. Natalie would like you to help her. She asks you to prepare a bank reconciliation for June 2020 using the information below.Please refer to the image attached Additionally, take the following information into account. On June 30th, there were two outstanding checks: #595 for $238 and #604 for $297. Premier Bank made a posting error to the bank statement: Check #603 was issued for $425, not $452. The deposit made on June 20 was for $125, which Natalie received for teaching a class. Natalie made an error in recording this transaction. The electronic funds transfer (EFT) was for Natalie’s cell phone use. Remember that she uses this phone only for business. The NSF check was from Ron Black. Natalie received this check for teaching a class to Ron’s…

Frustrated at the treatment he received by the bank appointed receiver; Heath is angry with Pestwac. Heath is looking for any opportunity to get back at them. He looks over his bank statements and notices some irregular transactions. It would seem as though someone discovered Heath’s password and instead of cleaning out his personal bank account, has instead made small weekly withdrawals to avoid detection. Over the space of one year, Heath has lost $2500. In addition, he thinks back to the circumstances of his loan with Pestwac. The loan manager, Jill, was very pushy. She mentioned the bank was running an internal competition amongst its staff to see who could close the most loans. In amongst the conversation she stated ‘look I really need this to go through quickly, if you sign up today I will offer you a sweet deal of 7% interest for the first five years. But the offer is only good today as the competition finishes at midnight’. Because Heath had a savings account with Pestwac, Jill…

Natalie decides that she cannot afford to hire John to do her accounting. One way thatshe can ensure that her cash account does not have any errors and is accurate and upto-date is to prepare a bank reconciliation at the end of each month.Natalie would like you to help her. She asks you to prepare a bank reconciliation forJune 2020 using the following information.

Zelda Corp is reviewing certain events that have occurred since the end of December 31st Several days before the director of Zelda Corp approved the financial statements for this year which ended on 31 December 2018, Mr. Mickey, the director of operations of Zelda Corp, had found that one of Zelda Corp's financial staff had misused cash of CU 5 billion, which was the material amount of Zelda Corp's assets. Further investigation into the matter indicated that the money was stolen in November 2018. Zelda Corp's financial assets include 2,000,000 common shares of UMBRELLA CORP, which are categorized as "Financial assets at fair value through other comprehensive income". UMBRELLA CORP is a company listed on the Stock Exchange and the closing price is CU 1,500 per share on December 31, 2018. Subsequently, on January 12, 2019, UMBRELLA CORP's shares dropped significantly to CU 800 per share. Requested: Determine whether the above events are each an adjustment or non-adjustment event?…

The ethical reflection assignment required you to watch three videos about Barry Minkow. Which of the following is false with respect to Barry Minkow? Multiple Choice He is currently the CFO of Lennar Homebuilders After his first release from prison he started the Fraud Discovery Institute and worked with the FBI He eventually became an evangelical minister, but went back to prison again after embezzling money He was convicted at age 22 for the ZZZZ Best Fraud

You have been engaged to review the financial statements of Crane Corporation. In the course of your examination, you conclude that the bookkeeper hired during the current year is not doing a good job. You notice a number of irregularities as follows. 1.   Year-end wages payable of $3,100 were not recorded because the bookkeeper thought that “they were immaterial.” 2.   Accrued vacation pay for the year of $30,300 was not recorded because the bookkeeper “never heard that you had to do it.” 3.   Insurance for a 12-month period purchased on November 1 of this year was charged to insurance expense in the amount of $2,424 because “the amount of the check is about the same every year.” 4.   Reported sales revenue for the year is $2,301,260. This includes all sales taxes collected for the year. The sales tax rate is 6%. Because the sales tax is forwarded to the state’s Department of Revenue, the Sales Tax Expense account is debited. The bookkeeper thought that “the sales tax is a…

Mthembu is a financial accounting student at Mancosa involved in an internship at Inca Financial Company. The supervisor want to test his knowledge of the financial statements and asked him to identify which of the statements below is false? OA. The financial result of an enterprise is a measure of the profit or loss that the enterprise made over a certain period of time O B. Assels are the possessions of a business that have monetary value OC. A Statement of Comprehensive income shows the financial position of an entity on a certain date O D. Liabilities are the obligations of an entity

Your small business client, Phillip’s Computer Repair Shop, is experiencing financial difficulties and has to lay off one of its four employees in the accounting area. Phillip has asked you to determine what duties should be assigned to the three remaining employees—Abigail, Bryan, and Chris—to maintain the best separation of duties.Required:Assign the following 10 duties to each of the three employees.a. Reconcile bank statement.b. Open mail and list checks.c. Prepare checks for Phillip’s signature.d. Prepare payroll checks.e. Maintain personnel records.f. Prepare deposit and take to bank.g. Maintain petty cash.h. Maintain accounts receivable records.i. Maintain general ledger.j. Reconcile accounts receivable records to general ledger account.

On February 15, 2022, Kate Collins, owner of Kate’s Cards, asks you to investigate the cash han- dling activities in her business. She believes that a new employee might be stealing funds. “I have no proof,” she says, “but I’m fairly certain that the January 31, 2022, undeposited receipts amounted to more than $12,000, although the January 31 bank reconciliation prepared by the cashier (who works in the treasurer’s department) shows only $7,238.40. Also, the January bank reconciliation doesn’t show several checks that have been outstanding for a long time. The cashier told me that these checks needn’t appear on the reconciliation because he had notified the bank to stop payment on them and he had made the necessary adjustment on the books. Does that sound reasonable to you?” At your request, Kate shows you the following (unaudited) January 31, 2022, bank reconciliation prepared by the cashier: KATE’S CARDS Bank Reconciliation January 31, 2022 Ending balance from bank statement . . . $…

a. covered transaction b. possible suspicious transaction c. confidential transaction d. immoral transaction e. illegal transaction

You have recently been hired by Davis & Company, a small public accounting firm. One of the firm’s partners,Alice Davis, has asked you to deal with a disgruntled client, Mr. Sean Pitt, owner of the city’s largest hardwarestore. Mr. Pitt is applying to a local bank for a substantial loan to remodel his store. The bank requires accrualbased financial statements but Mr. Pitt has always kept the company’s records on a cash basis. He doesn’t see thepurpose of accrual based statements. His most recent outburst went something like this: “After all, I collect cashfrom customers, pay my bills in cash, and I am going to pay the bank loan with cash. And, I already show mybuilding and equipment as assets and depreciate them. I just don’t understand the problem.”Required:1. Explain the difference between a cash basis and an accrual basis measure of performance.2. Why, in most cases, does accrual basis net income provide a better measure of performance than net operating cash flow?3. Explain the…

You have recently been hired by Davis & Company, a small public accounting firm. One of the firm’s partners,Alice Davis, has asked you to deal with a disgruntled client, Mr. Sean Pitt, owner of the city’s largest hardwarestore. Mr. Pitt is applying to a local bank for a substantial loan to remodel his store. The bank requires accrualbased financial statements but Mr. Pitt has always kept the company’s records on a cash basis. He does not seethe purpose of accrual based statements. His most recent outburst went something like this: “After all, I collectcash from customers, pay my bills in cash, and I am going to pay the bank loan with cash. And, I already show mybuilding and equipment as assets and depreciate them. I just don’t understand the problem.”Required:1. Explain the difference between a cash basis and an accrual basis measure of performance.2. Why, in most cases, does accrual basis net income provide a better measure of performance than net operatingcash flow?3. Explain the…

You have been engaged to review the financial statements of Flint Corporation. In the course of your examination, you conclude that the bookkeeper hired during the current year is not doing a good job. You notice a number of irregularities as follows. 1.   Year-end wages payable of $3,520 were not recorded because the bookkeeper thought that “they were immaterial.” 2.   Accrued vacation pay for the year of $34,000 was not recorded because the bookkeeper “never heard that you had to do it.” 3.   Insurance for a 12-month period purchased on November 1 of this year was charged to insurance expense in the amount of $2,568 because “the amount of the check is about the same every year.” 4.   Reported sales revenue for the year is $2,213,280. This includes all sales taxes collected for the year. The sales tax rate is 6%. Because the sales tax is forwarded to the state’s Department of Revenue, the Sales Tax Expense account is debited. The bookkeeper thought that “the sales tax is a…

The bookkeeper entered an adjusting entry as DR. Depreciation Expense and CR. Cash. Further investigation indicated that the bookkeeper and the cashier colluded to withdraw $10,000 (the amount of Depreciation Expense) from the company's bank account and forged necessary documents to perpetuate this crime. At the time when this was discovered, the bookkeeper and the cashier already absconded. As the accounting software consultant, what can you recommend to avoid this event from happening again? Group of answer choices Establish pairings of account titles of certain transactions, and unsual pairings of account titles can be labeled as adjusting entries The General Manager should always monitor the entries made by the bookkeeper All of the above None of the above

You have been engaged to review the financial statements of Gottschalk Corporation. In the course of your examination, you conclude that the bookkeeper hired during the current year is not doing a good job. You notice a number of irregularities as follows. 1. Year-end wages payable of $3,400 were not recorded because the bookkeeper thought that “they were immaterial.” 2. Accrued vacation pay for the year of $31,100 was not recorded because the bookkeeper “never heard that you had to do it.” 3. Insurance for a 12-month period purchased on November 1 of this year was charged to insurance expense in the amount of $2,640 because “the amount of the check is about the same every year.” 4. Reported sales revenue for the year is $2,120,000. This includes all sales taxes collected for the year. The sales tax rate is 6%. Because the sales tax is forwarded to the state's Department of Revenue, the Sales Tax Expense account is debited. The bookkeeper thought that “the sales tax is a selling…