An accounting firm has 780 hours of staff time and 272 hours of reviewing time available each week. The firm charges $1500 for an audit and $200for a tax return. Each audit requires 60 hours of staff time and 16 hours of review time. Each tax return requires 10 hours of staff time and 4 hoursof review time. What numbers of audits and tax returns will yield an optimal revenue?auditstax returnsWhat is..the..optimal revenue?x|Submit Answer

The objective of the question is to find the optimal number of audits and tax returns that the…

Answered: An accounting firm has 780 hours of…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter3: Computing The Tax

Section: Chapter Questions

Problem 6RP

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Company has implemented a new “bonus scheme” during the year, whereby the directors would be awarded a bonus of a percentage of the profits for the current year if they could exceed the previous year’s profit by 25%. Required: i). Which component of the Audit Risk Model (ARM) would be affected, and how? ii). Discuss how your audit plan would be affected.
35 * A public accounting firm like SGV & Co., can legally hire engineers, lawyers and other non-CPAS and offer them a big salary. h. A CPA practitioner can ethically compute his professional fee at 10% of the client's 8. True or False. Write true if the statement is correct; or false if the statement is incorrect. audited net income. If true, explain in one(1) or two(2) complete sentences, and if false, correct the statement in at least one(1) complete sentence. i. A CPA practitioner can ethically compute his professional fee at 10% of the company's refundable tax adjustment. a. The name of one or more previous partner may still be included in the name of the j. A CPA practitioner cannot ethically compute his professional fee on the basis of a contingency like a bank loan approval for the client who requested the audit. present partnership. b. A partner surviving the death or withdrawal of all other partners may continue to k. Non-CPAS can ethically share in the profits of the MAS…
Compute: 1. The minimum required return by Cross-Ocean’s preferred shareholders 2. The overall minimum required return for Cross-Ocean’s stakeholders
Assessment task:Collect the latest annual report of an ASX listed company for the last 2 financial years. Please read the financialstatements (balance sheet, income statement, cash flow statement) and notes attached to financialstatements on income tax issues very carefully. Please remember some aspects of your firm’s treatment of itstax – can be a very complicated area, particularly for some firms. Based on your understanding of the topic“accounting for income tax” and based on your reading of the collected annual reports, do the following tasks.i Briefly explain the concepts of accounting profit, taxable profit, temporary difference, taxable temporarydifference, deductible temporary difference, deferred tax assets and deferred tax liability.ii Briefly explain the recognition criteria of deferred tax assets and deferred tax liability.iii What is your firm’s tax expense in its latest financial statements?iv Is this figure the same as the company tax rate times your firm’s accounting…
there are 5 seperate scenarios by the way. Thank you! #1. Tana Thorne works in a public accounting firm and hopes to eventually be a partner. The management of Allnet Company invites Thorne to prepare a bid to audit Allnet’s financial statements. In discussing the audit fee, Allnet’s management suggests a fee range in which the amount depends on the reported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne’s firm. Required1. Identify the parties potentially affected by this audit and the fee plan proposed.2. What are the ethical factors in this situation? Explain.3. Would you recommend that Thorne accept this audit fee arrangement? Why or why not?4. Describe some ethical considerations guiding your recommendation. ______________________________________________________________________________________ #2 Amy Martin is a student who plans to attend approximately four professional events a year at her college. Each event necessitates payment of $100…
How much is the understatement or overstatement?
4. Comment( ethical or unethical) on the following computations of the auditor's professional fee: a. 10% of the client's tax adjustment b. 10% of the client's audited net income c. waiving of professional fee 5. What is the primary objective of the audit engagement letter? Give two(2) possible reasons why the auditor should be initiating the audit engagement letter similar to pages 27-28 Why should the audit engagement letter be renewed periodically? 6. Luzon, Inc., a publicly held company wishes to engage J. Cruz, a CPA, to examine its financial statements. Luzon was generally pleased with the services provided by its prior CPA, Dizon, but though the audit work performed was too detailed and interfered excessively with Luzon's normal office routines, Cruz asked Luzon to inform Dizon of the decision to change auditors, but Dizon did not wish to do so. REQUIRED: Describe the three(3) kinds of written communications to be accomplished by the receiving accountant to the existing…
You're an industry analyst for the telecomm sector, and have been analyzing financial reports from two companies: CellT Corp. and Talk2Me Inc. The corporate tax rate for both firms is 35%. Your associate analyst has calculated and compiled, in the following table, a list of important figures you'll probably need for the analysis: Data Collected CellT Corp. Talk2Me Inc. EBIT $172,500 $122,820 Depreciation $69,000 $49,128 Total operating capital $1,014,300 $791,430 Net investment in operating capital $483,000 $255,300 WACC 8.84% 11.50% In your analysis, you want to look for several characteristics-one of them being the return on invested capital (ROIC). Using the information available, complete the following statements: • The net operating profit after tax (NOPAT) for CellT Corp. is , whereas the NOPAT for Talk2Me Inc. is • CellT Corp. has a free cash flow of , whereas, Talk2Me Inc. has cash flow of • CellT Corp. has a return on invested capital than Talk2Me Inc. has.
Compute: 1. The minimum required return by Cross-Ocean’s debtholders 2. The minimum required return by Cross-Ocean’s common shareholders
Requirements: Determing the effect of the errors to the following: 1. 20x2 net income2. 20x3 net income3. 20x4 net income4. 20x4 retained earnings, beginning5. 20x4 retained earnings, ending6. 20x4 working capital
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Case Study: Accounting for Tax on Business Travel Expenses Introduction: In the realm of corporate finance, the tax treatment of business travel expenses is a critical aspect that demands meticulous attention. This case study explores a scenario where a company, XYZ Corporation, navigates the complexities of accounting for tax on business travel expenses. Scenario: XYZ Corporation, a multinational company, has a robust business travel policy to facilitate its operations across various locations. Employees frequently travel for client meetings, conferences, and training sessions. The finance team faces the challenge of accounting for these travel expenses while ensuring compliance with tax regulations. Steps in Accounting for Tax on Business Travel Expenses: Expense Documentation: The finance team emphasizes the importance of comprehensive documentation. Employees are required to submit detailed receipts, itineraries, and purpose statements for each expense incurre during business…

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