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Question 4 MONTGOMERY INC. Comparative Balance Sheets December 31, 2818 and 2817 2818 2817 Assets Cash Accounts receivable, net Inventory $56, 308 16,80e S 55,900 13,80e 123,70e 97,10e Total current assets 193,40e 68,500 (31.000) 17e, 200 57,50e (21,200) Equipment Accum. depreciation-Equipment Total assets $230,908 $286,50e Liabilities and Equity Accounts payable Salaries payable 35, 200 33,e0e 6A0 890 Total current liabilities 33,600 36, eee Equity Common stock, no par value Retained earnings 165,900 31,400 153,10e 17,400 Total 1iabilities and equity $230,900 $286,50e MONTGOMERY INC. Income Statement For Year Ended December 31, 2818 Sales 61,200 Cost of goods sold (25,400) 35,800 Gross profit Operating expenses Depreciation expense Other expenses Total operating expense $ 9,800 7,50e 17.30e Income before taxes 18,5ee 4,50e Income tax expense 14,e0e Net income Addltlonal Information a. No dividends are declared or paid in 2018. b. Issued additional stock for $12.800 cash in 2018. c. Purchased equipment for cash in 2018: no equipment was sold in 2018. 1. Use the above financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2018, using the indirect method. (Amounts to be deducted should be Indlcated by a minus sign.) MONTGOMERY, INC. Statement of Cash Flows (Indirect Method) For Year Ended December 31, 2018 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: Changes in current operating assets and liabilities S 0 Cash flows from investing activities 0 Cash flows from financing activities S Cash balance at beginning of year Cash balance at end of year 0 www.wwww ww.- 2817 2816 Assets s 66.000 $94,30e 98,000 85,80e Cash Accounts receivable, net Inventory Prepaid expenses 73,00e 119.5e 6.608 9.808 Total current assets 284,700 146.000 (38,0ee) 268,300 137,0e (20,0ee) Equipment Accum. depreciation-Equipment $385,300 $392,700 Total assets Liabilities and Equity Accounts payable Wages payable Income taxes payable Total current 1liabi1ities Notes payable (long term) Total 1iabilities 47,88e 8, 288 5,600 $63,000 19,40e 8,280 68,80e 52.000 90,6ee 82,000 112,8e0 172,600 Equity Conmon stock, $5 par value Retained earnings 264,08e 15,980 182,00e 30,788 $392,70e $385,300 Total 1iabilities and equity IKIBAN INC. Incone Statement For Year Ended June 30, 2817 $788,0ee 433.80 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Total operating expenses 355,0ee $88,6e0 89,08e 169.600 185,400 Other gains (losses) Gain on sale of equipment 4,208 Income before taxes 189,60e 46.090 Income taxes expense $143,510 Net income Additional Information a. A $30,000 note payable Iss retired at Its $30,000 carrying (book) value In exchange for cash b. The only changes affecting retained earnings are net income and cash dividends pald. c. New equipment Is acquired for $79,600 cash. d. Recelved cash for the sale of equlpment that had cost $70,600. ylelding a $4,200 galn. e. Prepald Expenses and Wages Payable relate to Other Expenses on the Income statement. f. All purchases and sales of Inventory are on credit. Required: (1) Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method. (Amounts to be deducted should be Indicated with a minus sign.) IKIBAN, INC. Statement of Cash Flows (Indirect Method) For Year Ended June 30, 2017 Cash flows from operating activities Adjustments to recancile net income to net cash provided by operating activities Income slatement items not affecting cash Changes in current operating assets and iabilities S Cash flows from investing activities 0 Cash flows from financing activities 0 Net increase (decrease) in cash Cash balance at prior year end Cash balance at current year end We were unable to transcribe this image2017 2816 Assets Cash S 66,888 73.000 94,30e 98.000 Accounts receivable, net Inventory Prepaid expenses Total current assets 85.800 119,see 6,608 9.80e 284.70e 268,300 137,000 (28,000) $385,300 Equipment Accum. depreciation-Equipment 146,0ee (38,000) Total assets $392,70e Liabilities and Equity Accounts payable Wages payable Income taxes payable 47,00e 63,0ee 19,400 8,200 8,208 5.608 Total current liabilities 68,808 52,000 9e,608 82,000 Notes payable (long tern) Total liabi1itles Equity Conmon stock, $5 par value Retained earnings 112,880 172,600 264,000 15,900 182,000 30,78e $385,300 Total liabilities and equity $392,700 IKIBAN INC Incone Statement For Year Ended June 38, 2817 Sales $788.000 Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses 433,00e 355,000 $88.688 89.000 Total operating expenses 169,6ee 185,400 Other gains (losses) Gain on sale of equipment 4,208 189,6ee 46,89e Income before taxes Income taxes expense $143,510 Net income Additional Information a. A $30,000 note payable Is retired at Its $30,000 carrying (book) value In exchange for cash. b. The only changes affecting retalned earnings are net Income and cash dividends paid. c. New equlpment is acquired for $79,600 cash. d. Recelved cash for the sale of equipment that had cost $70,600. ylelding a $4.200 galn. e Prepald Expenses and Wages Payable relate to Other Expenses on the Income statement f. All purchases and sales of Inventory are on credit Using the direct method, prepare the statement of cash flows for the year ended June 30, 2017. (Amounts to be deducted should be Indicated with a minus sign.) IKIBAN, INC. Statement of Cash Flows (Direct Method) For Year Ended June 30, 2017 Cash flows from operating activities 0 Cash flows from investing activities 0 Cash flows from financing activities 0 Net increase (decrease) in cash 0 Cash balance at prior year-end Cash balance at current year-end S

Based on your understanding of financial statement analysis, of the three statements (Income Statement, Balance Sheet, Statement of Cash Flows) which statement do you think is the most important and why?

I'm not sure with my answer. ABC Company produces a single unit that it sells for $20 per unit. ABC has the capacity to produce 28,000 units each month. ABC is currently selling 19,000 units each month. The costs associated with each unit appears below: direct materials $5.00 direct labor 2.50 variable overhead 1.50 fixed overhead 1.00 variable selling costs 4.00 fixed selling costs 0.75 ABC Company has received a special order from a customer who wants to purchase 15,000 units at a reduced price of $16 per unit. ABC Company has determined that there would be no selling expenses in connection with this special order. However, there would be an increased direct material cost of $2 per unit for the special order units. Calculate the increase in company profits if ABC Company accepts the special order. 33,000

Information on Grand Corporation's direct materials costs follows: Quantities of chemical Y purchased and used Actual cost of chemical Y used Standard price per gallon of chemical Y Standard quantity of chemical Y allowed 21.200 gallons $435.000 $ 24.50 19,600 gallons Grand Corporation has no materials inventories. Required: a. What were Grand Corporation's direct materials price and efficiency variances? (Indicate the effect of each variance by selecting “F” for favorable, or “U” for unfavorable. If there is no effect, do not select either option.) Direct materials price variance Direct materials efficiency variance b. (Appendix) Prepare the joumal entries to record the purchase and use of chemical Y using standard costing. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.) View transaction list View journal entry worksheet No Event Credit General Journal Work-in-process inventory Materials efficiency variance Materials price variance Accounts payable Debit 480 200 39.200 435,000

A council health inspector threatens to close down a restaurant by issuing a fake health violation
notice if the owner does not make a financial payment to him. If the restaurant owner does not
cooperate, the restaurant cannot be opened for business and the negative publicity will drive
customers away. Faced with the potential economic loss, the owner makes the payment.
Required:
a) What type of fraud is this? (4 marks, maximum 150 words)
b) What controls can be implemented to prevent or detect the fraud? (6 marks, maximum 200
words)
Week 3
How is a credit check in the advanced technology system fundamentally different from a credit check
in the basic technology system? (10 marks, maximum 300 words)