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PROJ 598 Contract and Procurement Week 8 Final Exam Complete A+ Answer

PROJ 598 Contract and Procurement Week 8 Final Exam Complete A+ Answer

PROJ 598 Contract and Procurement Week 8 Final Exam Complete A+ Answer

PROJ 598 Contract and Procurement Week 8 Final Exam Complete A+ Answer

PROJ 598 Contract and Procurement Week 8 Final Exam Complete A+ Answer

DeVry PROJ 598 Week 8 Final Exam
Part 1
1. (TCO A) All the below are tools and techniques of contract procurement, except (Points : 5)
Bidder’s conferences, negotiations, and advertising.

Analytical techniques, expert judgments, and evaluation techniques.

Estimates, bidder’s conferences, and evaluation techniques.

Negotiations, make-or-buy decisions, and advertising.

Question 2. 2. (TCO B) Proper selection criteria are critical for a successful project. All of the below would be considered good selection criteria for a buyer to use to select a seller, except (Points : 5)
Managerial approach of seller, references of seller, and ability of seller to make a reasonable make-or-buy decision.

Past work done by seller, intellectual property rights, and risk associated with a given seller.

Technical capability of seller, understanding of work by seller, and business type of seller.

Financial capacity of seller, overall cost, and warranty offered by seller.

(TCO A) Why are the project scope statement and WBS inputs of plan procurement?

(TCO B) List and describe five source selection criteria typically used in procurement management. For each, explain why this criterion is important for a buyer to use to select a given seller. (Points: 12)

(TCO C) Which has more cost risk to the seller, a fixed-price contract or a cost-reimbursable contract? Why? How might that risk be mitigated?

(TCO D) Describe the typical work relationship between a project manager and a contract manager. (Points : 12)

(TCO E) You are writing procurement SOW for an RFP. What items are you likely to include in this SOW? (Points : 12)

(TCO F) You have received back the bid proposals from prospective sellers. You are ready for source selection. What is source selection, and why is it important? (Points : 12)

Part 2

TCO G) One of the inputs to contract closeout is completion of work. What does it mean? (Points : 12)

(TCO A) In industry, there are four processes one follows in the procurement area of project management. Describe and explain these four processes in the procurement management process from the buyer perspective. (Points : 20)

(TCO C) Compare and contrast a firm fixed-price contract to a time and materials contract. When would each be appropriate for a given project? (Points : 20)

(TCO D) Compare and contrast an RFP and an RFI. When would each best be used in procuring goods or services? (Points : 20)

(TCO E) Describe the buyer’s plan procurement process of the contract management process as it relates to creating a RPF. Give an example of the activity that takes place in each step. (Points : 20)

Part 3:

TCO H) Under U.S. and international law, all contracts must contain five elements or satisfy five requirements. List and explain each of these five elements. (Points : 20)

2) Describe and compare and contrast the buyer’s and seller’s actions in the control procurement phase of the contract management process. Give an example for each. List and briefly describe the three tools and techniques used for bid or no-bid decision making. (Points : 20)

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PROJ 598

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ECO 550 Quiz 1 Complete all 20 questions A+ Answer

ECO 550 Quiz 1 Complete all 20 questions A+ Answer

ECO 550 Quiz 1 Complete all 20 questions A+ Answer

ECO 550 Quiz 1 Complete all 20 questions A+ Answer


Eco 550 Quiz 1 Complete all 20 questions A+ Answer
Question 1
To reduce Agency Problems, executive compensation should be designed to:

Question 2
In the shareholder wealth maximization model, the value of a firm’s stock is equal to the present value of all expected future ____ discounted at the stockholders’ required rate of return.

Question 3
The primary objective of a for-profit firm is to ___________.

Question 4
The Saturn Corporation (once a division of GM) was permanently closed in 2009. What went wrong with Saturn?

Question 5
Various executive compensation plans have been employed to motivate managers to make decisions that maximize shareholder wealth. These include:

Question 6
A Real Option Value is:

Question 7
The flat-screen plasma TVs are selling extremely well. The originators of this technology are earning higher profits. What theory of profit best reflects the performance of the plasma screen makers?

Question 8
Possible goals of Not-For-Profit (NFP) enterprises include all of the following EXCEPT:

Question 9
Which of the following will increase (V0), the shareholder wealth maximization model of the firm:
V0∙(shares outstanding) = Σ∞t=1 (π t ) / (1+ke)t + Real Option Value.

Question 10
Economic profit is defined as the difference between revenue and ____.

Question 11
The approximate probability of a value occurring that is greater than one standard deviation from the mean is approximately (assuming a normal distribution)

Question 12
The ____ is the ratio of ____ to the ____.

Question 13
The closest example of a risk-free security is

Question 14
Generally, investors expect that projects with high expected net present values also will be projects with

Question 15
A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits exceed the ____.

Question 16
The primary difference(s) between the standard deviation and the coefficient of variation as measures of risk are:

Question 17
The level of an economic activity should be increased to the point where the ____ is zero.

Question 18
Based on risk-return tradeoffs observable in the financial marketplace, which of the following securities would you expect to offer higher expected returns than corporate bonds?

Question 19
The standard deviation is appropriate to compare the risk between two investments only if

Question 20
The net present value of an investment represents

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ECO 550

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MGT 420 Managing Quality in the Supply Chain Week 2_Week 4_Week 5_ Part I_II_III_IV_BJB Manufacturing Company Answer

MGT 420 Managing Quality in the Supply Chain Week 2_Week 4_Week 5_ Part I_II_III_IV_BJB Manufacturing Company Answer

MGT 420 Managing Quality in the Supply Chain Week 2_Week 4_Week 5_ Part I_II_III_IV_BJB Manufacturing Company Answer

MGT 420 Managing Quality in the Supply Chain Week 2_Week 4_Week 5_ Part I_II_III_IV_BJB Manufacturing Company Answer

MGT 420 Managing Quality in the Supply Chain Week 2_Week 4_Week 5_ Part I_II_III_IV_BJB Manufacturing Company Answer

MGT 420 Managing Quality in the Supply Chain
MGT 420 Week 2 Team Part 1 BJB Manufacturing Company Quality Management Initiative Proposal
MGT 420 Week 4 Team Part II & III BJB Manufacturing Company Quality Management Implementation Strategy.
MGT 420 Week 5 Team Part IV BJB Manufacturing Company Quality Management Supplier Alliance Metrics Report.

(Only the paper in word document format. Power presentation is not part of this tutorial)

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MGT 420

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PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

PROJ 592 Proj Cost and Schedule Control Week 8 Final Exam Complete A+ Set 1_set 2 and set 3 Answer

Proj 592 Week 8 Final Exam Answer

SET 1

Page: | 1 2 3 |
Question 1. | Question : | (TCO B) Estimating Procedures
(a) You are the project manager for a new high-rise office building. You are working on estimating the exterior landscaping for the new development. The landscaping requires the use of a special landscape stone. Based on recent experience, the most likely price for the material is $120.00/ton. However, the price for this stone is volatile, and the price fluctuates over time based on market conditions and material availability. The most optimistic price estimate is $100.00/ton, and the most pessimistic estimate is $200.00/ton. What is the expected price of the material?
(b) In addition to price fluctuations, you are also uncertain of how much of the material will be required for the project. Scope changes and site conditions will affect the amount of material actually needed. The most likely amount required is 36 tons. However, as little as 32 tons or as much as 44 tons might be required.What is the expected amount of the material needed for the project? Round to two decimal places.
(c) Using the estimates from (a) & (b) what is the expected cost for the material over the life of the project using the COMPLEX method?

Question 2. | Question : | (TCO B) Contingency Allowance:
You are a project manager for the development of Motorola’s new 4G, HD, Touch Screen Cell Phone which is supposed to take the cell phone industry by storm. Listed below are the initial cost estimates for the materials and labor for one of the phones:
ITEM | COST ESTIMATE | TYPE OF ESTIMATE |
Case | $15.00 | Order of Magnitude |
Handset | $12.00 | Definitive |
Labor | $2.00 | Definitive |
Speaker | $2.50 | Budget |
Mouthpiece | $5.50 | Budget |
Antenna | $1.70 | Definitive |
Keypad | $3.00 | Order of Magnitude |
Circuit boards (handset) | $6.50 | Budget |
Circuit boards (base unit) | $8.50 | Definitive |
Battery | $1.20 | Order of Magnitude |
Charger | $16.00 | Order of Magnitude |
Total cost | $73.90 | NA |
The estimating department currently defines estimate accuracy as follows:
Order of Magnitude | -25%, +75% |
Budget | -10%, +25% |
Definitive | -5%, +10% |

(a) What contingency cost budget do you recommend for the product?
(b) The target retail price for the new telephone is $165.00 per unit. The markup demanded by retailers is 50%. Based on cost factors, write a brief rationale for acceptance or rejection of the project, including any recommendations you have regarding the cost estimates.

Page: | 1 2 3 |

Question 3. | Question : | (TCO C) Work Breakdown Structure WBS
Eurocash has decided to develop a mutual fund comprised almost entirely of East European companies with a high growth potential. The process of developing a new mutual fund begins with concept development, which includes establishing a clear definition of the project’s objectives that is agreed upon by senior management and developing a marketing strategy.
* A business analysis is then performed that includes assessments of market feasibility, internal feasibility (budgetary resource requirements), and regulatory feasibility. * If the proposed fund passes the business analysis, the fund design is developed. * The design process consists of product design, service design, internal review and authorization, and SEC registration (assuming a U.S. market). * As the design process nears completion, generally recognized as a positive preliminary review by the SEC, employee training is performed. * After completion of the employee training and final regulatory approval, the product is launched, and post-launch reviews are conducted at predetermined intervals.

Prepare a work breakdown structure (WBS) for this project with activities corresponding to a two level task and sub-task hierarchy. Provide columns showing the WBS code and activities. Number and indent the WBS codes so that the level of each activity is clearly identified.

Question 4. | Question : | (TCO A) Budgeting processes and techniques
A company builds custom yachts for the high-end boating market. They develop and build these custom designs as a single individualized unit. The orders are generated by the marketing and sales department with help from the owners, who participate in the management of the company. Each new order is assigned to a project team which starts by making an estimate to the customer before a contract is signed. The project teams have a great deal of experience in these projects. As would be expected, the owners are hands-on and have opinions on the estimates. The marketing folks also provide suggestions on what the customer is willing to pay.
What are some processes and techniques that you would suggest to make the budgeting process work well? Start with general but also provide some specifics as relate to creating detailed project budgets. Be sure to justify why you think your recommendations will work.

Page: | 1 2 3 |
Question 1. | Question : | (TCO C) Schedule Crashing
Using the network below and the additional information provided, find:
(a) The crash cost per day per activity.
(b) Which activities should be crashed to meet a project deadline of 13 days at minimum cost? State the number of days you will crash each activity.
(c) What is the additional cost to crash the project?
Critical path = B-C-D = 14
Activity | Normal time | Normal total cost | Crash time | Crash total cost |
A | 5 | 300 | 3 | 380 |
B | 3 | 250 | 1 | 330 |
C | 6 | 400 | 4 | 700 |
D | 5 | 150 | 3 | 250 |

Question 2. | Question : | (TCO E) Responsibility Assignment Matrix
Projects often cross many functional boundaries with team members reporting to different functional managers. This cross functional aspect can create problems with roles and responsibilities. You decide to use a Responsibility Assignment Matrix (RAM) to help with this situation. Your manager is wondering why you are spending your time on this tool when you already have resources assigned to tasks in your schedule.
(a) Why is the RAM such an effective tool for Project Managers?
(b) What are some of the typical responsibilities assigned on a RAM? |

Question 3. | Question : | (TCO E) Resource Allocation/Leveling
The following data were obtained from a project to expand a school: Activity | Duration | Predecessors | Resources / cost |
A | 2 Weeks | — | 2 Excavators/$800 day each |
B | 3 Weeks | — | 2 Dump Trucks/$600 day each |
C | 2 Weeks | B | 2 Concrete Mixers/$250 day each |
D | 3 Weeks | A, C | 2 Cranes/$2,000 day each |
E | 2 Weeks | B | 1 High-lift/$500 day each |
F | 1 Weeks | B | 2 Excavators/$800 day each |
G | 3 Weeks | F | 2 Cranes/$2,000 day each |
The contractor has access to the listed quantity of machines of each type available at the listed cost ‘each’. The operations cannot be split. Additional equipment can be rented at a 50% cost premium if needed.
(a) Identify any resource conflicts in the above project. State the activities involved, the time frame of the conflict(s), the resources in conflict and the quantity of resource involved.
(b) What is the least cost method of resolving the conflict(s), assuming the project duration must not be extended? What additional cost, if any, will be incurred?

Page: | 1 2 3 |
Question 1. | Question : | (TCO G) Estimate At Completion forecast (EAC)
A project has been estimated to take eight weeks and cost $65,000. The critical path is A – D. Cost and earned value data are provided below:
| | EV | PV | | | AC | | | | Budget | BCWP | – BCWS | SV | SPI | – ACWP | CV | CPI |
A | $8,500 | $8,500 | $8,500 | $ – | 1.00 | $7,500 | $1,000 | 1.13 |
B | $15,000 | $15,000 | $15,000 | $ – | 1.00 | $13,000 | $2,000 | 1.15 |
C | $6,800 | $2,530 | $2,700 | ($170) | 0.94 | $4,000 | ($1,470) | 0.63 |
D | $18,000 | $900 | $3,000 | ($2,100) | 0.30 | $1,200 | ($300) | 0.75 |
E | $16,000 | $0 | $0 | $ – | | $0 | $ – | |
Project: | $64,300 | 26,930 | 29,200 | ($2,270) | 0.92 | $25,700 | $730 | 1.05 |
(i) Calculate the Estimate At Completion (EAC) considering future performance will be back on schedule and budget.
(ii) Calculate EAC considering that the project will continue to perform as it has to date.
(iii) Using either of these two numbers discuss the status of the project and if the project manager needs to take corrective actions. Justify your comments. |

Question 2. | Question : | (TCO F) Earned Value
The following data were obtained from a project to design a new software package: Activity | Duration | Predecessors | Budgeted Cost |
A | 3 Days | — | $8,320 |
B | 6 Days | — | $11,740 |
C | 4 Days | A | $11,550 |

D | 2 Days | C, B | $7,850 |
E | 3 Days | A | $10,750 |
F | 2 Days | D, E | $8,600 |
At the end of day 4, the status of the project is as follows: Activity | % Complete | Actual Cost |
A | 100% | $7,200 |
B | 80% | $10,370 |
C | 25% | $8,250 |
D | 0% | $0 |
E | 80% | $8,560 |
F | 0% | $0 |
(a) Calculate the Cost and Schedule Variances and Indexes (CV, SV, CPI, SPI) for tasks A, B, C, D, and E.
(b) Write a brief analysis of the status of the project at this time, including task level, project level, and critical path. |

SET 2

Final Exam Page 1
1. (TCO B) Estimating Procedures
(a) You are the project manager for a new high rise office building. You are working on estimating the exterior landscaping for the new development. The landscaping requires the use of a special landscape stone. Based on recent experience the most likely price for the material is $120.00/ton. However, the price for this stone is volatile, and the price fluctuates over time based on market conditions and material availability. The most optimistic price estimate is $80.00/ton, and the most pessimistic estimate is $180.00/ton. (Note there are 3 data points in for this estimate.)What is the expected price of the material?
(b) In addition to price fluctuations, you are also uncertain of how much of the material will be required for the project. Scope changes and site conditions will affect the amount of material actually needed. The most likely amount required is 36 tons. However, as little as 28 tons, and as much as 56 tons might be required.What is the expected amount of the material needed for the project?
(c) Using the estimates from (a) & (b), what is the expected cost for the material over the life of the project using the COMPLEX method?(Points : 30)

2. (TCO B) Contingency Allowance:
You are a project manager for the development of Motorola’s new 4G, HD, Touch Screen Cell Phone which is supposed to take the cell phone industry by storm. Listed below are the initial cost estimates for the materials and labor for one of the phones:
ITEM | COST
ESTIMATE | TYPE OF ESTIMATE |
Case | $10.00 | Order of Magnitude |
Handset | $12.00 | Definitive |
Labor | $2.00 | Definitive |
Speaker | $2.50 | Budget |
Mouthpiece | $5.50 | Budget |
Antenna | $1.70 | Definitive |
Keypad | $3.00 | Order of Magnitude |
Circuit boards (handset) | $6.50 | Budget |
Circuit boards (base unit) | $8.50 | Definitive |
Battery | $1.20 | Order of Magnitude |
Charger | $16.00 | Order of Magnitude |
Total | $68.90 | NA |
The estimating department currently defines estimate accuracy as follows:
Order of Magnitude | -25%, +75% |
Budget | -10%, +25% |
Definitive | -5%, +10% |
(a) What contingency cost budget do you recommend for the product?
(b) The target retail price for the new telephone is $165.00 per unit. The markup demanded by retailers is 75%. Based on cost factors, write a brief rationale for acceptance or rejection of the project, including any recommendations you have regarding the cost estimates. (Points : 30)

3. (TCO C) Work Breakdown Structure WBS
Eurocash has decided to develop a mutual fund comprised almost entirely of East European companies with a high growth potential. The process of developing a new mutual fund begins with concept development, which includes establishing a clear definition of the project’s objectives that is agreed upon by senior management and developing a marketing strategy.
* A business analysis is then performed that includes assessments of market feasibility, internal feasibility (budgetary resource requirements), and regulatory feasibility. * If the proposed fund passes the business analysis, the fund design is developed. * The design process consists of product design, service design, internal review and authorization, and SEC registration (assuming a U.S. market). * As the design process nears completion, generally recognized as a positive preliminary review by the SEC, employee training is performed. * After completion of the employee training and final regulatory approval, the product is launched, and post-launch reviews are conducted at predetermined intervals.
Prepare a work breakdown structure (WBS) for this project with activities corresponding to a two level task and sub-task hierarchy. Provide columns showing the WBS code and activities. Number and indent the WBS codes so that the level of each activity is clearly identified. (Points : 30)

4. (TCO A) Budgeting processes and techniques
A company builds custom yachts for the high-end boating market. They develop and build these custom designs as a single individualized unit. The orders are generated by the marketing and sales department with help from the owners, who participate in the management of the company. Each new order is assigned to a project team which starts by making an estimate to the customer before a contract is signed. The project teams have a great deal of experience in these projects.
As would be expected, the owners are hands-on and have opinions on the estimates. The marketing folks also provide suggestions on what the customer is willing to pay.
What are some processes and techniques that you would suggest to make the budgeting process work well? Start with general but also provide some specifics as relate to creating detailed project budgets. Be sure to justify why you think your recommendations will work. (Points : 30)

Page: 1 2 3 |
1. (TCO C) Schedule Crashing
Using the network below and the additional information provided, find:
(a) The crash cost per day per activity.
(b) Which activities should be crashed to meet a project deadline of 13 days at minimum cost? State the number of days you will crash each activity.
(c) What is the additional cost to crash the project?
Critical path = B-C-D = 14
Activity | Normal time | Normal total cost | Crash time | Crash total cost |
A | 5 | 300 | 3 | 380 |
B | 3 | 250 | 1 | 330 |
C | 6 | 400 | 4 | 700 |
D | 5 | 150 | 3 | 250 |
(Points : 30)

2. (TCO E) Responsibility Allocation Matrix
Projects often cross many functional boundaries with team members reporting to different functional managers. This cross functional aspect can create problems with roles and responsibilities. You decide to use a Responsibility Assignment Matrix (RAM) to help with this situation. Your manager is wondering why you are spending your time on this tool when you already have resources assigned to tasks in your schedule.
(a) Why is the RAM such an effective tool for Project Managers?
(b) What are some of the typical responsibilities assigned on a RAM? (Points : 30)

3. (TCO E) Resource Allocation/Leveling
The following data were obtained from a project to design a new software package: Activity | Duration | Predecessors | Personnel / Cost |
A | 3 days | — | 1 Systems Analyst/$260 day |
B | 6 days | — | 3 Programmers/$200 day each |
C | 4 days | A | 3 Programmers/$200 day each |
D | 2 days | C | 2 Hardware specialists/$230 day each |
E | 3 days | A | 1 Systems Analyst/$260 day |
F | 2 days | D, E | 1 Test Engineer/$300 day |
Personnel Available | Quantity |
Systems Analysts | 1 |
Programmers | 3 |
Hardware Specialists | 2 |
Test Engineers | 2 |
The software manufacturer has only the above personnel available for the project. Additional personnel can be hired from an agency at an 80% cost premium if needed.
(a) Identify any resource conflicts in the above project. State the activities involved, the time frame of the conflict(s), the personnel in conflict, and the number of people involved.
(b) Note that operations can be split if required: what is the least cost method of resolving the conflict(s), assuming the project duration must not be extended? What additional cost, if any, will be incurred? (Points : 30)

Page: 1 2 3
Page 3
1. (TCO G) Estimate At Completion forecast (EAC)
A project has been estimated to take eight weeks and cost $65,000. The critical path is A – D. Cost and earned value data are provided below: | | EV | PV | | | AC | | |
| Budget | BCWP | – BCWS | SV | SPI | – ACWP | CV | CPI |
A | $8,500 | $8,500 | $8,500 | $ – | 1.00 | $7,000 | $1,500 | 1.21 |
B | $15,000 | $15,000 | $15,000 | $ – | 1.00 | $13,000 | $2,000 | 1.15 |
C | $6,800 | $2,530 | $2,700 | ($170) | 0.94 | $4,000 | ($1,470) | 0.63 |
D | $18,000 | $900 | $3,000 | ($2,100) | 0.30 | $1,200 | ($300) | 0.75 |
E | $16,000 | $0 | $0 | $ – | | $0 | $ – | |
Project: | $65,000 | 26,930 | 29,200 | ($2,270) | 0.92 | $25,200 | $ 730 | 1.07 |
(i) Calculate the Estimate At Completion (EAC) considering future performance will be back on schedule and budget.
(ii) Calculate EAC considering that the project will continue to perform as it has to date.
(iii) Using either of these two numbers discuss the status of the project and if the project manager needs to take corrective actions. Justify your comments.(Points : 30)

2. (TCO D) PMIS and cost accounting
An Earned Value system can be a very effective way to monitor projects. However, Earned Value Analysis requires a Project Cost Accounting System (PCAS).
(a) What are some of the benefits of PCAS?
(b) What are some of the software solutions for establishing a PCAS? (Points : 30)

3. (TCO F) Earned Value
The following data were obtained from a project to design a new software package: Activity | Duration | Predecessors | Budgeted Cost |
A | 3 Days | — | $8,320 |
B | 6 Days | — | $11,740 |
C | 4 Days | A | $11,550 |
D | 2 Days | C, B | $7,850 |
E | 3 Days | A | $10,750 |
F | 2 Days | D, E | $8,600 |
At the end of day 5, the status of the project is as follows: Activity | % Complete | Actual Cost |
A | 100% | $7,200 |
B | 50% | $6,370 |
C | 25% | $8,250 |
D | 0% | $0 |
E | 80% | $8,560 |
F | 0% | $0 |
(a) Calculate the Cost and Schedule Variances and Indexes (CV, SV, CPI, SPI) for tasks A, B, C, D, and E.
(b) Write a brief analysis of the status of the project at this time, including task level, project level, and critical path.(Points : 30)

Set 3

Week 8 : Final Exam – Final Exam

Page 1

Question 1. 1. (TCO A) Work Breakdown Structure (WBS)

A consumer electronics firm is planning an expansion into Milwaukee. Generally, the firm prefers to remodel large existing tenant spaces to suit its needs. After a site is selected from several alternatives, the corporate architect develops plans by reviewing the suitability of the existing structure and utilities. A modification and demolition plan is then developed. Interior finish plans are then developed from corporate standards and adjusted to each site.

• Building permits are handled by the general contractor (GC). The firm uses the GC for all of its construction in a region. The GC hires local subcontractors and provides on-site construction supervision.
• As construction begins, the firm also begins to assemble a new management team from existing management staff, making an attempt to use only staff that has an interest in relocating. Sales staff is hired locally.
• When construction is approximately 6 weeks from completion, inventory is ordered.

Prepare a WBS for this project with activities corresponding to a two-level task and subtask hierarchy. Provide columns showing the WBS code and activities. Number and indent the WBS codes so that the level of each activity is clearly identified. (Points : 25)

Question 2. 2. (TCO E) Using the network below and the additional information provided, find answers to the following questions.

(a) What is the crash cost per day per activity?
(b) Which activities should be crashed to meet a project deadline of 13 days at minimum cost? State the number of days you will crash each activity.
(c) What is the additional cost to crash the project?

Critical path = B-C-D = 15

Activity Normal time Normal total cost Crash time Crash total cost
A 4 $300 3 $360
B 3 $250 1 $330
C 7 $400 4 $550
D 5 $150 3 $250
(Points : 25)

Question 3. 3. (TCO E) There are many stakeholders and participants in projects, and they often get confused as to who is doing what. You decide to use an RACI to help with this situation. Your manager is wondering why you are spending your time on this tool when you already have resources assigned to tasks in your schedule.

(a) What do you tell management to justify your time creating the RACI?
(b) What are the best ways to create the RACI? (Points : 25)

Page 2

Question 1. 1. (TCO F) Earned Value

The following data were obtained from a project to design a new software package.
Activity Duration Predecessors Budgeted Cost
A 3 days — $8,320
B 6 days — $11,740
C 4 days A $11,550
D 2 days C and B $7,850
E 3 days A $10,750
F 2 days D and E $8,600

At the end of Day 5, the status of the project is as follows.
Activity % Complete Actual Cost
A 100% $7,200
B 50% $5,370
C 25% $8,250
D 0% $0
E 70% $8,560
F 0% $0

(a) Calculate the cost and schedule variances and indexes (CV, SV, CPI, SPI) for Tasks A, B, C, D, and E.

(b) Write a brief analysis of the status of the project at this time, including task level, project level, and critical path. (Points : 25)

Question 2. 2. (TCO C)
(a) You are the project manager for a new high-rise office building. You are working on estimating the exterior landscaping for the new development. The landscaping requires the use of a special landscape stone. Based on recent experience, the most likely price for the material is $120.00/ton. However, the price for this stone is volatile, and the price fluctuates over time based on market conditions and material availability. The most optimistic price estimate is $80.00/ton, and the most pessimistic estimate is $180.00/ton.
What is the expected price of the material? Round to two decimal places.

(b) In addition to price fluctuations, you are also uncertain of how much of the material will be required for the project. Scope changes and site conditions will affect the amount of material actually needed. The most likely amount required is 36 tons. However, as little as 28 tons or as much as 56 tons might be required.
What is the expected amount of the material needed for the project?

(c) Using the estimates from (a) and (b), what is the expected cost for the material over the life of the project? (Points : 25)

Question 3. 3. (TCO E) Resource Allocation and Leveling

The following data were obtained from an in-house MIS project.
Activity Duration Predecessors Personnel/Cost
A 3 days — One systems snalyst/$260 day
B 6 days — Two programmers/$200 day each
C 3 days A Two programmers/$200 day each
D 3 days B Two hardware specialists/$280 day each
E 3 days B One hardware specialist/$280 day
F 2 days C and D One test engineer/$300 day

Personnel Available Quantity
Systems analysts 1
Programmers 4
Hardware specialists 2
Test engineers 1

The software manufacturer has only the above personnel available for the project. Additional personnel can be hired from an agency at a 90% cost premium if needed.

(a) Identify any resource conflicts in the above project. State the activities involved, the time frame of the conflict(s), the personnel in conflict, and the number of people involved.

(b) Note that operations cannot be split. What is the least-cost method of resolving the conflict(s), assuming the project duration must not be extended? What additional cost, if any, will be incurred? (Points : 25)

Page 3

Question 1. 1. (TCO D) Change control is critical to a successful project. Describe the roles and responsibilities of two key components of a good change control process: the change control board and the project manager. (Points : 25)

Question 2. 2. (TCO G) Your project is progressing well in your estimation. Your team has collected the following data. From these data, calculate the project’s ETC. Assume spending will continue at the same rate.
Activity A is 60% complete at a cost so far of $100,000. It was estimated to cost $200,000 when finished. It is at the end of Week 3 of 5. Activity B is 85% complete at a cost so far of $50,000. It was estimated to cost $80,000 when finished. It is at the end of Week 4 of 5. Activity C is complete at a cost so far of $110,000. It was estimated to cost $100,000 when finished. (Points : 25)

Question 3. 3. (TCO B) You are the project manager for three different projects.

Project A: This project is behind schedule by 12 weeks. It was to have been completed in 3 months. The sponsor has additional funds to help complete the project on time if needed but does not want to increase risk to the project.
Project B: This project is scheduled to take 27 weeks to complete. You are in the planning stage of the project. You need to reduce the schedule for this project by 8 weeks. This project has a number of predecessors that were created by the project team’s preference. The sponsor insists on having all the work done on time without unduly increasing risk or costs to the project.
Project C: This project is in the execution stage of the project. It is behind schedule by 6 weeks; it was scheduled to be completed in 10 weeks. The sponsor is desperate to accomplish something on this project. The budget is limited to the original amount, and all soft predecessors have already been removed.

For each of the projects above, choose an appropriate schedule compression technique. Explain your choice. (Points : 25)

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ACC 550 Final Exam Answer Set 1 and 2 Complete A+ Answer

ACC 550 Final Exam Answer Set 1 and 2_Complete_Perfect Answer

ACC 550 Final Exam Answer Set 1 and 2_Complete_Perfect Answer

ACC 550 Final Exam Answer Set 1 and 2_Complete_Perfect Answer

ACC 550 Final Exam Answer Set 1 and 2_Complete_Perfect Answer

SET 1:

1. (TCO A) Listed below are several information, characteristics, and accounting principles and assumptions. Match the letter of each with the appropriate phrase that states its application.
(Points : 30)
Potential Matches:

1 : Earnings process completed and realized or realizable

2 : Cost of providing financial information versus the benefits derived from its use

3 : Accruals and deferrals in adjusting and closing process

4 : Business enterprise assumed to have a long life

5 : Stable dollar assumption

6 : Notes as part of necessary information to a fair presentation

7 : Valuing assets at amount originally paid for them

8 : The impact of an item on the overall financial operations of a company

9 : Presentation of error-free information with representational faithfulness

Answer

: Historical cost principle

: Going concern principle

: Matching principle

: Monetary unit

: Revenue recognition principle

: Full disclosure principle

: Reliability characteristic

: Cost-benefit relationship

: Materiality constraint

2. (TCO B) Adjusting Entries: Unearned rent at 1/1/12 was $28,300 and at 12/31/12 was $48,200. The records indicate cash receipts from rental sources during 2010 amounted to $145,200, all of which was credited to the Unearned Rent Account. You are to supply the missing adjusting entry.

3. (TCO B) Adjusting Entries: Information relating to the balances of various accounts affected by adjusting or closing entries appear below. You are asked to supply the missing journal entries which would account for the changes in the account balances. Interest receivable at 1/1/12 was $8,000. During 2010 cash received from debtors for interest on outstanding notes receivable amounted to $11,000. The 2010 income statement showed interest revenue in the amount of $8,900. You are to provide the missing adjusting entry that must have been made, assuming reversing entries are not made.

4. (TCO B) Adjusting Entries: Accumulated depreciation-machinery at 1/1/10 was $150,000. At 12/31/10, the balance of the account was $300,000. During 2010, one piece of equipment was sold. The equipment had an original cost of $100,000 and was 1/2 depreciated when sold. You are to prepare the missing adjusting entry. For each journal entry write Dr. for debit and Cr. for credit.

5. (TCO B) Adjusting Entries: Allowance for Doubtful accounts made on 1/1/10 was $40,000. The balance in the allowance account on 12/31/10 after making the annual adjusting entry was $60,000 and during 2010 bad debts written off amounted to $30,000. You are to provide the missing adjusting entry. For each journal entry write Dr. for debit and Cr. for credit.

Second Part

1. (TCO B) Adjusting Entries: Prepaid rent at 1/1/10 was $9,000. During 2010 rent payments of $110,000 were made and charged to “rent expense.” The 2010 income statement shows as a general expense the item “rent expense” in the amount of $111,000. You are to prepare the missing adjusting entry that must have been made, assuming reversing entries are not made. For each journal entry write Dr. for debit and Cr. for credit.

2. (TCO B) Adjusting Entries: Retained earnings at 1/1/10 were $100,000 and at 12/31/10 it was $300,000. During 2010, cash dividends of $40,000 were paid and a stock dividend of $40,000 was issued. Both dividends were properly charged to retained earnings. You are to provide the missing closing entry. For each journal entry write Dr. for debit and Cr. for credit.

3. (TCO C) Here is information related to the DRF Corporation.
Retained earnings, December 31, 2012
$ 3,890,000
Sales
4,500,000
Selling and administrative expenses
387,000
Extraordinary Item(Loss)(Net of Tax)
178,000
Cash dividends declared on common stock
82,600
Cost of good sold
1,780,000
Other revenue
142,500
Other expenses
77,800

Instructions: Prepare a multiple step income statement.

4. (TCO D) This is a balance sheet for the ABC corporation as of 12/31/12.
Cash
$ 60,000
Accounts payable
$ 55,000
Accounts receivable (net)
42,200
Long-term liabilities
60,000
Inventories
47,000
Stockholders’ equity
208,500
Investments
66,300
Equipment (net)
86,000
Patents
22,000
Total $323500
Total $323500

The following additional information is provided:
(1) Cash includes the cash surrender value of a life insurance policy $7,400 and a bank overdraft of $1,500 has been deducted.
(2) The net accounts receivable balance includes:
(a) accounts receivable debit balances $56,000;
(b) accounts receivable credit balances $6,000; and
(c) allowance for doubtful accounts $7,800.
(3) Inventories do not include goods costing $6,000 shipped out on consignment. Receivables of $2,000 were recorded on these goods.
(4) Investments include investments in common stock, trading $14,000, available-for-sale $48,300, and franchises $4,000.
(5) Equipment costing $5,000 with accumulated depreciation $4,000 is no longer used and is held for sale. Accumulated depreciation on the other equipment is $40,000.
Instructions:
Prepare a balance sheet in good form (stockholders’ equity details can be omitted).
Do not worry about balancing the statement but rather use your time to compute the account balances properly for presentation purposes.

5. (TCO E) Jack Sawyer is presently leasing a copier from John Office Equipment Company. The lease requires 11 annual payments of $3,500 at the end of each year and provides the leaser (John) with an 8% return on its investment. You may use the following 8% interest factors.

9 Periods
10 Periods
11 Periods
Future Value of 1
1.99900
2.15892
2.33164

Present Value of 1
.50025
.46319
.42888
Future Value of
12.48756
14.48656
16.64549
Ordinary Annuity of 1
Present Value of
6.24689
6.71008
7.13896
Ordinary Annuity of 1
Present Value of
6.74664
7.24689
7.71008
Annuity Due of 1
Instructions
(a) Assuming the computer has an 11-year life and will have no salvage value at the expiration of the lease, what was the original cost of the copier to John?
(b) What amount would each payment be if the 11 annual payments are to be made at the beginning of each period?

6. (TCO F) Daniels Company deposits all receipts and makes all payments by check. The following information is available from the cash records.
MARCH 31
BANK RECONCILIATION
Balance per bank
$26,746
Add: Deposits in transit
2,100
Deduct: Outstanding checks
(3,800)
Balance per books
$25,046
Month of April Results
Per Bank
Per Books
Balance April 30
$27,995
$24,355
April deposits
8,864
13,889
April checks
13,100
14,080
April note collected
3,000
-0-
(not included in April deposits)

April bank service charge
35
-0-
April NSF check of a customer returned by the bank
(recorded by bank as a charge)
900
-0-
Instructions
Calculate the amount of the April 30
(1) deposits in transit; and
(2) outstanding checks.
Show all your work for potential partial credit.

7. Steve Company was formed on December 1, 2010. The following information is available from Steve’s inventory record for Product X.

Units Unit Cost

January 1, 2012 (beginning inventory) 2800 $17.00

Purchases:

05-Jan-12 3600 $25.00

25-Jan-12 2800 $27.00

16-Feb-12 2400 $32.00

15-Mar-12 3300 $34.00

A physical inventory on March 31, 2012, shows 4800 units on hand.
Instructions:
Prepare schedules to compute the ending inventory at March 31, 2012, under each of the following inventory methods.
(a) FIFO
(b) LIFO
(c) Weighted-average
Show supporting computations in good form. (Points : 40)

8. (TCO H) A machine cost $300,000 on April 1, 2012. Its estimated salvage value is $60,000 and its expected life is 8 years.
Instructions:
Calculate the depreciation expense (to the nearest dollar) by each of the following methods, showing the figures used.
(a) Straight-line for 2012
(b) Double-declining balance for 2013
(c) Sum-of-the-years’-digits for 2013.

SET 2:

1. Question : (TCO A) Listed below are several information, characteristics, and accounting principles and assumptions. Match the letter of each with the appropriate phrase that states its application.

2. Question : (TCO B) Adjusting Entries: Unearned rent at 1/1/10 was $5,300 and at 12/31/10 was $6,000. The records indicate cash receipts from rental sources during 2010 amounted to $60,000, all of which was credited to the Unearned Rent Account.

You are to prepare the missing adjusting entry. For each journal entry write Dr. for debit and Cr. for credit.

3. Question : (TCO B) Adjusting Entries: Data relating to the balances of various accounts affected by adjusting or closing entries appear below. (The entries which caused the changes in the balances are not given.) You are asked to supply the missing journal entries which would logically account for the changes in the account balances. Interest receivable at 1/1/10 was $1,000. During 2010 cash received from debtors for interest on outstanding notes receivable amounted to $1,000. The 2010 income statement showed interest revenue in the amount of $2,900. You are to provide the missing adjusting entry that must have been made, assuming reversing entries are not made. For each journal entry write Dr. for debit and Cr. for credit.

4. Question : (TCO B) Adjusting Entries: Accumulated depreciation-machinery at 1/1/10 was $150,000. At 12/31/10, the balance of the account was $300,000. During 2010,

one piece of equipment was sold. The equipment had an original cost of $100,000 and was 1/2 depreciated when sold. You are to prepare the missing adjusting entry. For each journal entry write Dr. for debit and Cr. for credit.

5. Question : (TCO B) Adjusting Entries: Allowance for doubtful accounts on 1/1/10 was $70,000. The balance in the allowance account on 12/31/10 after making the annual adjusting entry was $70,000 and during 2010 bad debts written off amounted to $40,000. You are to provide the missing adjusting entry. For each journal entry write Dr. for debit and Cr. for credit.

Page: 1 2

1. Question : (TCO B) Adjusting Entries: Prepaid rent at 1/1/10 was $30,000. During 2010 rent payments of $100,000 were made and charged to “rent expense.” The 2010 income statement shows as a general expense the item “rent expense” in the amount of $130,000. You are to prepare the missing

adjusting entry that must have been made, assuming reversing entries are not made. For each journal entry write Dr. for debit and Cr. for credit.

2. Question : (TCO B) Adjusting Entries: Retained earnings at 1/1/10 were $100,000 and at 12/31/10 it was $300,000. During 2010, cash dividends of $40,000 were paid and a stock dividend of $40,000 was issued. Both dividends were properly charged to retained earnings. You are to provide the missing closing entry. For each journal entry write Dr. for debit and Cr. for credit.

3. Question : (TCO C) Presented below is information related to Bruce Van Company. Retained earnings, December 31, 2010 $650,000
Sales 1,400,000
Selling and administrative expenses 240,000
Hurricane loss (pre-tax) on plant (extraordinary item) 290,000
Cash dividends declared on common stock 33,600
Cost of goods sold 780,000
Gain resulting from computation error on depreciation charge in 2009(pre-tax) 520,000
Other revenue 120,000

Other expenses 100,000

Instructions: Prepare in good form a multiple-step income statement for the year 2011. Assume a 30% tax rate and that 80,000 shares of common stock were outstanding during the year. Show EPS computations as well.

4. Question : (TCO D) The following balance sheet was prepared by the bookkeeper for Purple Company as of December 31, 2011 Purple Company Balance Sheet as of December 31, 2011 Cash $ 80,000 Accounts payable $ 75,000
Accounts receivable (net) 52,200 Long-term liabilities 100,000
Inventories 57,000 Stockholders’ equity 218,500
Investments 76,300
Equipment (net) 96,000
Patents
$393,500 $393,500
The following additional information is provided:
(1) Cash includes the cash surrender value of a life insurance policy $12,000, and a bank overdraft of $2,500 has been deducted.
(2) The net accounts receivable balance includes:
(a) accounts receivable debit balances $60,000;
(b) accounts receivable 0;
(c) allowance for doubtful accounts $3,800.
(3) Inventories do not include goods costing $3,000 shipped out on consignment. Receivables of $3,000 were recorded on these goods.
(4) Investments include investments in common stock, trading $13,000, available-for-sale $48,300, and franchises $15,000.
(5) Equipment costing $5,000 with accumulated depreciation

$4,000 is no longer used and is held for sale. Accumulated depreciation on the other equipment is $40,000.
(6) An unrecorded liability was not recorded on the balance sheet of $2000.
Instructions
Prepare a balance sheet in good form (stockholders’ equity details can be omitted.)

5. Question : (TCO E) Jack Sawyer is presently leasing a copier from John Office Equipment Company. The lease requires 11 annual payments of $2,500 at the end of each year and provides the leaser (John) with an 8% return on its investment. You may use the following 8% interest factors:

9 Periods 10 Periods 11 Periods
Future Value of 1 1.99900 2.15892 2.33164
Present Value of 1 .50025 .46319 .42888
Future Value of 12.48756 14.48656
Ordinary Annuity of 1
Present Value of 6.24689 6.71008 7.13896
Ordinary Annuity of 1
Present Value of 6.74664 7.24689 7.71008
Annuity Due of 1
(a) Assuming the computer has an eleven-year life and will have no salvage value at the expiration of the lease, what was the original cost of the copier to John?
(b) What amount would each payment be if the 11 annual payments are to be made at the beginning of each period?

6. Question : (TCO F) Daniels Company deposits all receipts and makes all payments by check. The following information is available from the cash records:
MARCH 31
BANK RECONCILIATION

Balance per bank $26,746
Add: Deposits in transit 2,100
Deduct: Outstanding checks (3,800)
Balance per books $25,046
Month of April Results Per Bank Per Books
Balance April 30 $27,995 $24,355
April deposits 8,864 13,889
April checks 13,100 14,080
April note collected 3,000 -0-
(not included in April deposits)
April bank service charge 35 -0-
April NSF check of
a customer returned by the bank
(recorded by bank as a charge) 900 -0-
Instructions
Calculate the amount of the April 30:
(1) Deposits in transit
(2) Outstanding checks
Show all your work for potential partial credit.

7. Question : (TCO G) Rye Company was formed on December 1, 2010. The following information is available from Rye’s inventory record for Product Bread. Units Unit Cost
January 1, 2011 (beginning inventory) 1,700 $17.00
Purchases:
January 5, 2011 2,600 $20.00
January 25, 2011 2,400 $21.00
February

16, 2011 1,000 $22.00
March 15, 2011 2,100 $25.00

A physical inventory on March 31, 2011, shows 3,000 units on hand.
Instructions
Prepare schedules to compute the ending inventory at March 31, 2011, under each of the following inventory methods:
(a) FIFO.
(b) LIFO.
(c) Weighted-average.
Show supporting computations in good form.

8. Question : (TCO H) A machine cost $500,000 on April 1, 2010. Its estimated salvage value is $50,000 and its expected life is eight years.
Instructions
Calculate the depreciation expense (to the nearest dollar) by each of the following methods, showing the figures used.
(a) Straight-line for 2010
(b) Double-declining balance for 2011
(c) Sum-of-the-years’-digits for 2011

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HRM 599 Benefits Week 8 Final Exam Complete set 1 and set 2 A+ Answer

HRM 599 Benefits Week 8 Final Exam Complete set 1 and set 2 A+ Answer

HRM 599 Benefits Week 8 Final Exam Complete set 1 and set 2 A+ Answer

HRM 599 Benefits Week 8 Final Exam Complete set 1 and set 2 A+ Answer

HRM 599 Benefits Week 8 Final Exam Complete set 1 and set 2 A+ Answer

Set 1

1. Question : (TCO A) What are some of the legal and regulatory influences on discretionary benefits?

2. Question : (TCO B) Give a brief overview of the main provisions of HIPAA.

3. Question : (TCO C) Discuss the two forms of employer-sponsored disability coverage. Analyze the potential advantages of each for the employee and for the employer.

4. Question : (TCO D) Your company’s CEO is interested in implementing a new dental plan for employees and has asked you to do some research. The CEO wants you to report back to him in 3 weeks with the following information: What are the three main types of dental care plans? Discuss each plan and make a recommendation for your company.

5. Question : (TCO E) Discuss the various FASB rulings associated with retiree health insurance.

6. Question : (TCO F) You have recently been hired as an employee benefit consultant and have been asked to recommend the establishment of either a defined contribution or a defined benefit plan. Given the following employer objectives, which type of plan would you recommend? Specify the type of retirement plan you would recommend. Explain how your recommendation would handle the employer’s objectives.
Employer objectives include majority of employees are young would like to encourage long potential service concerned about providing retirement income, capital accumulation, and/or estate benefits concerned about limiting their funding costs and administrative expenses.

7. Question : (TCO G) Discuss the concept of “good business sense” of benefits communication and the primary objectives of an organization’s benefits communication program.

8.Question : (TCO H) Family assistance programs help employees with caring for loved ones, both young and old. Briefly describe the three types of family assistance programs and their benefits.

Set 2

Question 1. Briefly outline the key provisions of the Pension Protection Act of 2006.

Question 2. What are some of the legal and regulatory influences on discretionary benefits?

Question 3. Discuss and compare multiple-payer versus single-payer systems in the United States.

Question 4. What are the main characteristics of long-term disability insurance?

Question 5. Compare the basic structure of a profit sharing plan, thrift/savings plan, a 401(K) plan, and an employee stock ownership plan. Why would an employer choose to implement each one of these plans over the other?

Question 6. Discuss the various FASB rulings associated with retiree health insurance.

Question 7: Discuss the concept of “good business sense” of benefits communication and the primary objectives of an organization’s benefits communication program.

Question 8. Employers must provide some disclosure information regarding their benefits plan as spelled out by ERISA. One of those requirements includes a summary plan description, or SPD. What is an SPD? Briefly discuss the information that SPDs must provide.

Question 9. Family assistance programs help employees with caring for loved ones, both young and old. Briefly describe the three types of family assistance programs and their benefits.

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HRM 599

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ACC 455 Final Exam Complete A+ Answer

ACC 455 Final Exam Complete A+ Answer

ACC 455 Final Exam Complete A+ Answer

ACC 455 Final Exam Complete A+ Answer

ACC 455 Final Exam Complete A+ Answer

1) Which of the following statements regarding proposed regulations is not correct?

A. Proposed and temporary regulations are generally issued simultaneously.

B. Proposed regulations do not provide any insight into the IRS’s interpretation of the tax law.

C. Proposed regulations expire after 3 years.

D. Practitioners and other interested parties may comment on proposed regulations.

2) Regulations are

A. presumed to be valid and to have almost the same weight as the IRC

B. equal in authority to legislation if interpretative

C. equal in authority to legislation

D. equal in authority to legislation if statutory

3) Which of the following courts is not a trial court for tax cases?

A. U.S. Tax Court

B. U.S. Court of Federal Claims
C. U.S. Bankruptcy Court

D. U.S. District Court

4) Which of the following statements is incorrect?

A. Limited partners’ liability for partnership debt is limited to their amount of investment.
B. In a general partnership, all partners have unlimited liability for partnership debts.

C. In a limited partnership, all partners participate in managerial decision-making.

D. All of the statements are correct.

5) Which of the following is an advantage of a sole proprietorship over other business forms?

A. Low tax rates on dividends

B. Ease of formation

C. Tax-exempt treatment of fringe benefits

D. The deduction for compensation paid to the owner

6) Which of the following statements is correct?

A. S shareholders are taxed on their proportionate share of earnings that are distributed.

B. S shareholders are taxed on their proportionate share of earnings whether or not distributed.
C. An owner of a C corporation is taxed on his or her proportionate share of earnings.

D. S shareholders are only taxed on distributions.

7) Three members form an LLC in the current year. Which of the following statements is incorrect?

A. The LLC can elect to be taxed as a C corporation with no special tax consequences.

B. If the LLC elects to use its default classification, it can elect to change its status to being taxed as a C corporation beginning with the third tax year after the initial classification.
C. The LLC’s default classification under the check-the-box rules is as a partnership.

D. The LLC can elect to have its default classification ignored.

8) Identify which of the following statements is true.

A. Under the check-the-box regulations, an LLC that has one member (owner) may be disregarded as an entity separate from its owner.
B. An unincorporated business may not be taxed as a corporation.

C. A new LLC that is owned by four members elects to be taxed under its default classification (as a partnership) in its first year of operations. The entity is prohibited from changing its tax classification at any time in the future.
D. All are false.

9) Identify which of the following statements is true.

A. The check-the-box regulations permit an LLC to be taxed as a C corporation.

B. Under the check-the-box regulations, an LLC that has only two members (owners) default classification is as a partnership.
C. Once an election is made to change its classification, an entity cannot change again for 60 months.
D. All of the statements are true.

10) Rose and Wayne form a new corporation. Rose contributes cash for 85% of the stock and Wayne contributes services for 15% of the stock. The tax effect is

A. Rose and Wayne are not required to recognize their realized gains.

B. Wayne must report the FMV of the stock received as capital gain.

C. Rose and Wayne must recognize their realized gains, if any.

D. Wayne must report the FMV of the stock received as ordinary income.

11) Matt and Sheila form Krupp Corporation. Matt contributes property with a FMV of $55,000 and a basis of $35,000. Sheila contributes property with a FMV of $75,000 and a basis of $40,000. Matt sells his stock to Paul shortly after the exchange. The transaction will

A. qualify with respect to Sheila under Sec. 351 whether Matt qualifies or not

B. qualify under Sec. 351 if Matt can show the sale to Paul was not part of a prearranged plan

C. not qualify under Sec. 351

D. qualify under Sec. 351 only if an advance ruling has been obtained

12) For Sec. 351 purposes the term property does not include

A. inventory

B. accounts receivable
C. cash

D. services rendered

13) Identify which of the following statements is true.

A. In computing an NOL for the current year, a deduction is allowed for NOLs from previous years.

B. An election to forgo an NOL carryback must be made on or before the return due date (including extensions) for the year in which the NOL is incurred.
C. A corporate NOL can be carried back 2 years and forward 15 years.

D. All are false.

14) A new corporation may generally select one of the following accounting methods with the exception of

A. retail method

B. accrual method

C. cash method

D. hybrid method

15) Identify which of the following statements is false.

A. A new corporation can elect a fiscal year that runs from February 16 to February 15 of the following year.
B. A fiscal year may not end on December 31.

C. A corporation’s fiscal year generally must end on the last day of the month.

D. A corporation’s first tax year may not cover a full 12-month period.

16) Edison Corporation is organized on July 31. The corporation starts business on August 10. The corporation adopts a November 30 fiscal year end. The following expenses are incurred during the year:
Date Type Amount
6-30 Attorneys fees associated with obtaining charter $10,000
7-10 Underwriter fees for stock sale 25,000
7-15 Transfer cost for property contributed to the corporation for stock 3,000
6-30 Costs of organizational meetings 2,000
12-6 Legal fees to modify charter 4,000

What is the maximum amount of organizational expenditures that can be deducted by the corporation for its first tax year ending November 30?

A. $5,156

B. $12,000

C. $16,000

D. $800

17) Maxwell Corporation reports the following results:

Gross income from operations $ 90,000
Dividends received from 18%-owned domestic corporation 70,000
Expenses 100,000

Maxwell’s dividends-received deduction is

A. $56,000

B. $49,000

C. $42,000

D. $70,000

18) Island Corporation has the following income and expense items for the year.

Gross receipts from sales $60,000
Dividends received from 15%-owned domestic corporation 40,000
Expenses connected with sales 30,000

The taxable income of Island Corporation is

A. $47,000

B. $70,000

C. $100,000

D. $42,000

19) Which of the following is not an adjustment in calculating AMTI?

A. Production activities deduction

B. The regular tax NOL deduction

C. Gain on installment sales of noninventory property

D. The difference between the gains for AMTI and regular tax purposes

20) Tax-exempt interest income on state and local municipal bonds which are not a private activity is

A. a negative adjustment in calculating alternative minimum taxable income (AMTI)

B. a positive adjustment in calculating alternative minimum taxable income (AMTI)

C. a tax preference item

D. included in calculating ACE (adjusted current earnings)

21) Which of the following statements about the alternative minimum tax depreciation rules is correct?

A. A 31.5-year recovery period is used when calculating the commercial real property depreciation deduction for alternative minimum taxable income purposes.
B. The excess of the gain reported on the disposition of tangible personal property for income tax purposes over the gain reported for alternative minimum tax purposes is a positive adjustment to taxable income in arriving at alternative minimum taxable income.
C. The MACRS depreciation rules are used to calculate the depreciation deduction when calculating alternative minimum taxable income regardless of the date the property was placed in service.
D. No depreciation adjustment is made when computing AMT for real property acquired after 1998.

22) Maxwell Corporation reports the following results:
Year Current E&P Distributions
2005 $6,000 $4,000
2006 5,000 1,000
2007 1,000 -0-

Maxwell’s dividends-received deduction is

A. $5,000

B. $7,000

C. $0

D. $12,000

23) Grant Corporation sells land (a noninventory item) with a basis of $57,000 for $100,000. Nichole will be paid on an installment basis in five equal annual payments starting in the current year. The E&P for the year of sale will be increased as a result of the sale (excluding federal income taxes) by

A. $43,000

B. $0

C. $8,600

D. $100,000

24) Identify which of the following statements is false.

A. At formation, a corporation’s E&P depends on the amount of capital contributed by the shareholders.
B. For E&P dividend distribution purposes, property as defined in Sec. 317(a) includes money.

C. The function of E&P is to provide a measure of a corporation’s economic ability to pay dividends.
D. Adjustments to taxable income when computing E&P do not include tax exempt interest.

25) Identify which of the following statements is true.

A. Section 179 property must be expensed ratably over a 5-year period when computing E&P.

B. Losses on property sales to related parties are not deductible when computing E&P.

C. Distributions made out of accumulated E&P are allocated ratably between multiple distributions made during the tax year.
D. All are false.

26) Identify which of the following statements is true.

A. If both the current and accumulated E&P have deficit balances, a corporate distribution cannot be characterized as a dividend.
B. The shareholder’s basis in property received in a nonliquidating distribution is the property’s FMV reduced by liabilities assumed by the shareholder.
C. A corporation recognizes gain when distributing money as a dividend to its shareholders.

D. All are false.

27) For purposes of determining current E&P, which of the following items cannot be deducted in the year incurred?

A. Life insurance premiums (in excess of the increase in cash surrender value for the policy) paid on the lives of key employees
B. Charitable contribution in excess of the 10% limitation

C. Capital losses in excess of capital gains

D. Dividends-received deduction

28) A corporation distributes land and the related liability to Meg, its sole shareholder. The land has a FMV of $60,000 and is subject to a liability of $70,000. The corporation has current and accumulated E&P of $80,000. The corporation’s adjusted basis for the property is $70,000. What effect does the transaction have on the corporation?

A. No recognized gain or loss and its E&P is reduced by $60,000.

B. A recognized loss of $10,000 and its E&P is reduced by $70,000.

C. A recognized loss of $10,000 and its E&P is unchanged.

D. No recognized gain or loss and its E&P is unchanged by the distribution.

29) Hogg Corporation distributes $30,000 to its sole shareholder, Ima. At the time of the distribution, Hoggs’ E&P is $14,000 and Ima’s basis in her stock is $10,000. Ima’s gain from this transaction is

A. $20,000 capital gain

B. $6,000 capital gain

C. $14,000 capital gain

D. $30,000 capital gain

30) One consequence of a property distribution by a corporation to a shareholder is

A. the shareholder’s basis in the distributed property is the same as the distributing corporation’s basis
B. the amount of the distribution is increased by any liability assumed by the shareholder

C. the holding period of the distributed property includes the holding period of the distributing corporation
D. any liabilities assumed by the shareholder do not reduce the shareholder’s basis

31) Which of the following is not a reason for a stock redemption?

A. Redemption of shares is a good corporate investment.

B. desire by remaining shareholders to retain control

C. desire by shareholders to reduce the corporate tax liability

D. No outside market exists for the stock.

32) Elijah owns 20% of Park Corporation’s single class of stock. Elijah’s basis in the stock is $8,000. Park’s E&P is $28,000. If Park redeems all of Elijah’s stock for $48,000, Elijah must report dividend income of

A. $40,000

B. $0

C. $28,000

D. $48,000

33) Which of the following is not a condition that permits a stock redemption to be treated as a sale?

A. The redemption is substantially disproportionate.

B. It provides funds for payment of income taxes.

C. It is not essentially equivalent to a dividend.

D. The redemption completely terminates the shareholder’s interest.

34) Identify which of the following statements is true.

A. Formation of a partnership requires legal documentation.

B. An individual engaged in the active conduct of a business must elect not to be taxed as a partnership.
C. If two people (or business entities) work together to carry on any business or financial operation with the intention of making a profit and sharing that profit as co-owners, a partnership exists for federal income tax purposes.
D. All are false.

35) Identify which of the following statements is true.

A. A partnership can be an S corporation shareholder.

B. A nonresident alien can be an S corporation shareholder.

C. An S corporation can have more than 100 shareholders since families are treated as a single shareholder.
D. All are false.

36) The definition of a partnership does not include

A. a syndicate

B. a group

C. a pool

D. All are included

37) Which of the following items is not separately stated for an S corporation?

A. Section 1245 income

B. Short-term capital gain
C. Dividend income

D. Charitable contribution

38) Cactus Corporation, an S Corporation, had accumulated earnings and profits of $100,000 at the beginning of 2008. Tex and Shirley each own 50% of the stock. Cactus does not make any distributions during 2008, but had $200,000 of ordinary income. In 2009, ordinary income was $100,000 and distributions were $100,000. What is Tex’s ordinary income for 2008?

A. $100,000

B. $0

C. $50,000

D. $200,000

39) Cactus Corporation, an S Corporation, had accumulated earnings and profits of $100,000 at the beginning of 2008. Tex and Shirley each own 50% of the stock. Cactus does not make any distributions during 2008, but had $200,000 of ordinary income. In 2009, ordinary income was $100,000 and distributions were $100,000. What is Tex’s ordinary income for 2009?

A. $100,000

B. $0

C. $50,000

D. $200,000

40) On January 1, Helmut pays $2,000 for a 10% capital, profits and loss interest in a partnership, which has recourse liabilities of $20,000. The partners share economic risk of loss from recourse liabilities in the same way they share partnership losses. In the same year, the partnership incurs losses of $6,000 and the recourse liabilities increase by $5,000. Helmut and the partnership use a calendar tax year-end. Helmut’s basis at year-end is

A. $2,000

B. $3,900

C. $1,500

D. $3,500

41) On January 2 of the current year, Calloway and Taylor contribute cash equally to form the CT Partnership. Calloway and Taylor share profits and losses in a ratio of 75% and 25%, respectively. The partnership’s ordinary income for the year was $40,000. Calloway received a distribution of $5,000 during the year. What is Calloway’s share of taxable income for the year?

A. $10,000

B. $30,000

C. $5,000

D. $20,000

42) On the first day of the partnership’s tax year, Karen purchases a 50% interest in a general partnership for $30,000 cash and she materially participates in the operation of the partnership for the entire year. The partnership has $40,000 in recourse liabilities when Karen enters the partnership. Partners share the economic risk of loss from recourse liabilities in the same way they share partnership losses. There is no minimum gain related to the nonrecourse liability. During the year the partnership incurs a $120,000 loss and a $20,000 increase in liabilities. How much of the loss can Karen report on her tax return for the current year?

A. $40,000

B. $60,000

C. $30,000

D. $50,000

43) The total bases of all distributed property in the partner’s hands following a nonliquidating distribution is limited to

A. the FMV of the property distributed

B. the predistribution FMV of the partner’s partnership interest

C. the partner’s predistribution basis in his partnership interest

D. the partnership’s bases in the distributed property

44) The Internal Revenue Code includes which of the following assets in the definition of Sec. 751 properties?

A. Cash

B. Sec. 1231 assets

C. Inventory, which is substantially appreciated

D. Capital assets

45) Identify which of the following statements is true.

A. If a partner sells property received in a partnership distribution for a gain and the property was inventory in the hands of the distributing partnership, the partner will always recognize ordinary income.
B. The primary purpose of Sec. 751 is to prevent partnerships from converting capital gains into ordinary income.
C. Unrealized receivables include rights to payments on the sale of a capital asset.

D. All are false.

46) Which of the following conditions will not cause an S election to be terminated?

A. Creating a second class of stock having a dividend preference
B. Failing to file a timely tax return

C. Exceeding the 100 shareholder limit

D. Selecting an improper tax year

47) Identify which of the following statements is true.

A. All of the shareholders of an S corporation must consent to a revocation of the S election.

B. A revocation of an S corporation election can be retrospective to any date.

C. An S election will not be terminated due to excess passive income if the corporation does not have Subchapter C E&P.
D. All are true.

48) Identify which of the following statements is false.

A. If the termination of an S election is considered to be inadvertent, then the election is permitted to continue in place as if the termination had never occurred.
B. A corporation can obtain relief for a late S election if the IRS consents.

C. A C corporation short year income tax liability must be determined on an annualized basis.

D. If an S election is terminated and the termination is not considered to be inadvertent, a 10-tax-year waiting period is required before making a new election.

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ACC 305 Final Exam Complete A+ Answer

ACC 305 Final Exam Complete A+ Answer

ACC 305 Final Exam Complete A+ Answer

ACC 305 Final Exam Complete A+ Answer

ACC 305 Final Exam Complete A+ Answer

1. The Higgins Company has just purchased a piece of equipment at a cost of $300,000. This equipment will reduce operating costs by $55,000 each year for the next eleven years. This equipment replaces old equipment which was sold for $14,000 cash. The new equipment has a payback period of: (Ignore income taxes.) (Round your answer to 1 decimal place.)
A. 16.2 Years
B. 5.5 Years
C. 5.2 Years
D. 11.10

2. The management of Serpas Corporation is considering the purchase of a machine that would cost $170,000, would last for 5 years, and would have no salvage value. The machine would reduce labor and other costs by $41,000 per year. The company requires a minimum pretax return of 11% on all investment projects. (Ignore income taxes.)

Click here to view Exhibit 13B-2 to determine the appropriate discount factor(s) using tables.

The net present value of the proposed project is closest to: (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.)
A.-18,464
B. 35,000
C.-33,811
D. 27,384
3. Lett Corporation is investigating buying a small used aircraft for the use of its executives. The aircraft would have a useful life of 12 years. The company uses a discount rate of 17% in its capital budgeting. The net present value of the investment, excluding the salvage value of the aircraft, is -$578,526. (Ignore income taxes.)

Click here to view Exhibit 13B-1 to determine the appropriate discount factor(s) using tables.

Management is having difficulty estimating the salvage value of the aircraft. How large would the salvage value of the aircraft have to be to make the investment in the aircraft financially attractive? (Round discount factor(s) to 3 decimal places and final answers to the nearest dollar amount.)
A. $3,806,092
B. $3,403,094
C. $98,349
D. $578,526
4.
The management of Londo Corporation is investigating buying a small used aircraft to use in making airborne inspections of its above-ground pipelines. The aircraft would have a useful life of 4 years. The company uses a discount rate of 10% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is −$316,080. (Ignore income taxes.)

Click here to view Exhibit 13B-2 to determine the appropriate discount factor(s) using tables.

How large would the annual intangible benefit have to be to make the investment in the aircraft financially attractive? (Round discount factor(s) to 3 decimal places and final answer to the nearest dollar amount.)

$31,608

$316,080

$79,020

$99,710

5.
The management of Melchiori Corporation is considering the purchase of a machine that would cost $360,000, would last for 6 years, and would have no salvage value. The machine would reduce labor and other costs by $116,000 per year. The company requires a minimum pretax return of 14% on all investment projects. (Ignore income taxes.)

Click here to view Exhibit 13B-2, to determine the appropriate discount factor(s) using tables.

The present value of the annual cost savings of $116,000 is closest to: (Round discount factor(s) to 3 decimal places and final answer to the nearest dollar amount.)

$451,124

$175,448

$1,091,462

$696,000
6.
Gull Inc. is considering the acquisition of equipment that costs $550,000 and has a useful life of 6 years with no salvage value. The incremental net cash flows that would be generated by the equipment are: (Ignore income taxes.)

Incremental net
cash flows
Year 1 $145,000
Year 2 $195,000
Year 3 $156,000
Year 4 $165,000
Year 5 $155,000
Year 6 $135,000

Click here to view Exhibit 13B-1 to determine the appropriate discount factor(s) using tables.

If the discount rate is 13%, the net present value of the investment is closest to: (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.)

$435,000

$148,776

$89,228

$591,264
7.
Charley has a typing service. He estimates that a new computer will result in increased cash inflow $1,100 in Year 1, $1,500 in Year 2 and $2,500 in Year 3. (Ignore income taxes.)

Click here to view Exhibit 13B-1 to determine the appropriate discount factor(s) using tables.

If Charley’s required rate of return is 12%, the most that Charley would be willing to pay for the new computer would be: (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.)

$3,459

$2,296

$3,278

$3,958
8.
Shields Company has gathered the following data on a proposed investment project: (Ignore income taxes.)

Investment required in equipment $460,000
Annual cash inflows $77,000
Salvage value $0
Life of the investment 16 years
Discount rate 12%

The simple rate of return on the investment is closest to: (Round your answer to the closest interest rate.)

5%

10%

15%

11%

9.
Sibble Corporation is considering the purchase of a machine that would cost $330,000 and would last for 7 years. At the end of 7 years, the machine would have a salvage value of $25,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $63,000. The company requires a minimum pretax return of 11% on all investment projects. (Ignore income taxes.)

Click here to view Exhibit 13B-1 and Exhibit 13B-2 to determine the appropriate discount factor(s) using tables.

The net present value of the proposed project is closest to: (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.)

−$45,194

−$33,144

−$8,144

−$21,094

10.
Shields Company has gathered the following data on a proposed investment project: (Ignore income taxes.)

Investment required in equipment $470,000
Annual cash inflows $77,000
Salvage value $0
Life of the investment 20 years
Discount rate 14%

Click here to view Exhibit 13B-2 to determine the appropriate discount factor(s) using tables.

The internal rate of return on the investment is closest to: (Round discount factor(s) to 3 decimal places and final answer to the closest interest rate.)

12%

14%

16%

18%

11.
Cezar Corporation’s comparative balance sheet appears below:

Cezar Corporation
Comparative Balance Sheet
Ending
Balance Beginning
Balance
Assets:
Current assets:
Cash and cash equivalents $ 84,000 $ 51,000
Accounts receivable 33,900 41,000
Inventory 76,200 71,000
Total current assets 194,100 163,000
Property, plant, and equipment 535,500 510,000
Less accumulated depreciation 195,500 171,000
Net property, plant, equipment 340,000 339,000
Total assets $534,100 $502,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 27,800 $ 31,000
Accrued liabilities 61,800 71,000
Income taxes payable 63,600 61,000
Total current liabilities 153,200 163,000
Bonds payable 96,200 91,000
Total liabilities 249,400 254,000
Stockholders’ equity:
Common stock 42,000 51,000
Retained earnings 242,700 197,000
Total stockholders’ equity 284,700 248,000
Total liabilities and stockholders’ equity $534,100 $502,000

The company did not dispose of any property, plant, and equipment during the year. Its net income for the year was $48,400 and its cash dividends were $2,700. The company did not retire any bonds payable or issue any common stock during the year. Its net cash provided by operating activities and net cash used in financing activities are:

net cash provided by operating activities, $31,600; net cash used in financing activities,$7,900

net cash provided by operating activities, $31,600; net cash used in financing activities,$6,500

net cash provided by operating activities, $65,000; net cash used in financing activities,$6,500

net cash provided by operating activities, $65,000; net cash used in financing activities,$7,900

Explanation:

Cezar Corporation
Comparative Balance Sheet
Ending Beginning
Balance Balance
Assets: Net Income
Current assets: 48400
Cash and cash equivalents 84000.00 51000.00 33000
Accounts receivable 33900 41000 -7100 7100
Inventory 76200 71000 5200 -5200
Total current assets 194100 163000 31100
Property, plant, and equipment 535500 510000 25500
Less accumulated depreciation 195500 171000 24500 24500
Net property, plant, equipment 340000 339000 1000
Total assets 534100 502000 32100
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable 27800 31000 -3200 -3200
Accrued liabilities 61800 71000 -9200 -9200
Income taxes payable 63600 61000 2600 2600
Total current liabilities 153200 163000 -9800
Bonds payable 96200 91000 5200 5200
Total liabilities 249400 254000 -4600
Stockholders’ equity:
Common stock 42000 51000 -9000 -9000
Retained earnings 242700 197000 45700
Total stockholders’ equity 284700 248000 36700
Total liabilities and stockholders’ equity 534100 502000 32100 -2700

65000 -6500

12.
Nordquist Company’s net income last year was $31,000. The company did not sell or retire any property, plant, and equipment last year. Changes in selected balance sheet accounts for the year appear below:

Increases
(Decreases)
Asset and Contra-Asset Accounts:
Accounts receivable $15,500
Inventory $(4,000)
Prepaid expenses $11,000
Accumulated depreciation $28,000
Liability Accounts:
Accounts payable $15,000
Accrued liabilities $(8,500)
Income taxes payable $3,100

Based solely on this information, the net cash provided by operating activities under the indirect method on the statement of cash flows would be:

$68,600

$15,900

$46,100

$91,100

13. Last year Burford Company’s cash account decreased by $33,000. Net cash used in investing activities was $8,800. Net cash provided by financing activities was $29,500. On the statement of cash flows, the net cash flow provided by (used in) operating activities was:

$20,700

$(53,700)

$(33,000)

$(12,300)

14.
Mccloe Corporation’s balance sheet and income statement appear below:

Mccloe Corporation
Comparative Balance Sheet
Ending
Balance Beginning
Balance
Assets:
Cash and cash equivalents $ 58 $ 43
Accounts receivable 48 62
Inventory 78 62
Property, plant and equipment 535 520
Less: accumulated depreciation 275 262
Total assets $444 $425
Liabilities and stockholders’ equity:
Accounts payable $ 71 $ 57
Accrued liabilities 44 28
Income taxes payable 57 57
Bonds payable 77 144
Common stock 47 42
Retained earnings 148 97
Total liabilities and stockholders’ equity $444 $425

Income Statement
Sales $568
Cost of goods sold 360
Gross margin 208
Selling and administrative expenses 141
Net operating income 67
Gain on sale of plant and equipment 22
Income before taxes 89
Income taxes 32
Net income $ 57

Cash dividends were $6. The company did not issue any bonds or repurchase any of its own common stock during the year. The net cash provided by (used in) financing activities for the year was:

rev: 05_24_2013_QC_31013

$(67)

$(68)

$(6)

$5

15.
Lueckenhoff Corporation’s most recent balance sheet appears below:

Lueckenhoff Corporation
Comparative Balance Sheet
Ending
Balance Beginning
Balance
Assets:
Cash and cash equivalents $ 44 $ 40
Accounts receivable 59 52
Inventory 86 80
Property, plant and equipment 790 732
Less: accumulated depreciation 289 206
Total assets $690 $698
Liabilities and stockholders’ equity:
Accounts payable $ 37 $ 34
Bonds payable 460 668
Common stock 72 64
Retained earnings 121 (68)
Total liabilities and stockholders’ equity $690 $698

The company’s net income for the year was $242 and it did not sell or retire any property, plant, and equipment during the year. Cash dividends were $53. The net cash provided by (used in) operating activities for the year was:

$315

$73

$169

$368

16.
Hocking Corporation’s comparative balance sheet appears below:

Hocking Corporation
Comparative Balance Sheet
Ending
Balance Beginning
Balance
Assets:
Current assets:
Cash and cash equivalents $ 47,000 $ 27,000
Accounts receivable 22,300 27,000
Inventory 61,700 57,000
Prepaid expenses 15,300 17,000
Total current assets 146,300 128,000
Property, plant, and equipment 356,000 337,000
Less accumulated depreciation 176,000 144,000
Net property, plant, and equipment 180,000 193,000
Total assets $326,300 $321,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 21,700 $ 18,000
Accrued liabilities 65,700 57,000
Income taxes payable 49,700 47,000
Total current liabilities 137,100 122,000
Bonds payable 64,500 77,000
Total liabilities 201,600 199,000
Stockholders’ equity:
Common stock 34,300 38,000
Retained earnings 90,400 84,000
Total stockholders’ equity 124,700 122,000
Total liabilities and stockholders’ equity $326,300 $321,000

The company’s net income (loss) for the year was $8,800 and its cash dividends were $2,400. It did not sell or retire any property, plant, and equipment during the year.

The company’s net cash used in investing activities is:

$19,000

$36,700

$13,000

$51,000

17. Hocking Corporation’s comparative balance sheet appears below:

Hocking Corporation
Comparative Balance Sheet
Ending
Balance Beginning
Balance
Assets:
Current assets:
Cash and cash equivalents $ 57,000 $ 37,000
Accounts receivable 31,300 37,000
Inventory 72,700 67,000
Prepaid expenses 24,300 27,000
Total current assets 185,300 168,000
Property, plant, and equipment 374,000 347,000
Less accumulated depreciation 196,000 164,000
Net property, plant, and equipment 178,000 183,000
Total assets $363,300 $351,000
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 32,700 $ 28,000
Accrued liabilities 76,700 67,000
Income taxes payable 60,700 57,000
Total current liabilities 170,100 152,000
Bonds payable 59,000 87,000
Total liabilities 229,100 239,000
Stockholders’ equity:
Common stock 45,400 48,000
Retained earnings 88,800 64,000
Total stockholders’ equity 134,200 112,000
Total liabilities and stockholders’ equity $363,300 $351,000

The company’s net income (loss) for the year was $31,000 and its cash dividends were $6,200. It did not sell or retire any property, plant, and equipment during the year. The company uses the indirect method to determine the net cash provided by operating activities.

The company’s net cash provided by operating activities is:

$89,500

$78,100

$83,800

$51,800

Ans:

Net Income
31000

5700
-5700
2700

32000

4700
9700
3700

83800

18. Boole Corporation’s net cash provided by operating activities was $125; its capital expenditures were $68; and its cash dividends were $27. The company’s free cash flow was:

$30

$98

$57

$220

FCF to equal EBIT(1-Tax Rate) + Depreciation & Amortization – Change in Net Working Capital – Capital Expenditure.
FCF is also = net cash provided by operating activities – capital expenditures – cash dividends

19.
Financial statements of Ansbro Corporation follow:

Ansbro Corporation
Comparative Balance Sheet
Ending
Balance Beginning
Balance
Assets:
Cash and cash equivalents $ 38 $ 35
Accounts receivable 94 86
Inventory 53 45
Property, plant and equipment 738 620
Less: accumulated depreciation 358 313
Total assets $565 $473
Liabilities and stockholders’ equity:
Accounts payable $ 71 $ 80
Bonds payable 165 250
Common stock 104 86
Retained earnings 225 57
Total liabilities and stockholders’ equity $565 $473

Income Statement
Sales $775
Cost of goods sold 438
Gross margin 337
Selling and administrative expenses 104
Net operating income 233
Income taxes 40
Net income $ 193

Cash dividends were $25. The company did not dispose of any property, plant, and equipment. It did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company’s statement of cash flows.

The net cash provided by (used in) investing activities for the year was:
$118
$(73)
$73
$(118)

20.
Schleich Corporation’s most recent balance sheet appears below:

Schleich Corporation
Comparative Balance Sheet
Ending
Balance Beginning
Balance
Assets:
Cash and cash equivalents $ 42 $ 31
Accounts receivable 40 27
Inventory 52 67
Property, plant and equipment 744 552
Less: accumulated depreciation 286 264
Total assets $592 $413
Liabilities and stockholders’ equity:
Accounts payable $ 57 $ 74
Accrued liabilities 22 20
Income taxes payable 45 30
Bonds payable 107 168
Common stock 87 82
Retained earnings 274 39
Total liabilities and stockholders’ equity $592 $413

Net income for the year was $330. Cash dividends were $62. The company did not sell or retire any property, plant, and equipment during the year. The net cash provided by (used in) operating activities for the year was:

$306

$24

$465

$354

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ACC-305

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Case 23 Fraud ACME Office Cleaning Services Part 1 only Answer

Case 23 Fraud ACME Office Cleaning Services Part 1 only Answer

Case 23 Fraud ACME Office Cleaning Services Part 1 only Answer

Case 23 Fraud ACME Office Cleaning Services Part 1 only Answer

Case 23 Fraud ACME Office Cleaning Services Part 1 only Answer

ACME Office Cleaning Services
Balance Sheet
As of 12/31
Year 1 Year 2 Year 3 Year 4 Year 5
Current Assets:
Cash 26,058 22,100 40,647 78,995 57,879
Accounts Receivable 15,212 18,406 38,532 37,888 33,759
Investments – Marketable securities 20,000 20,000 20,000 – –
Supplies Inventory 34,430 11,822 29,350 38,039 77,368
Prepaid Rent 7,403 8,059 8,735 9,273 9,985
Total current Assets 1,03,103 80,387 1,37,264 1,64,195 1,78,991

Property:
Cleaning Equipment 43,000 43,000 41,000 62,000 80,000
Vans 1,30,000 1,30,000 1,30,000 1,45,000 1,60,000
Office Furniture 15,000 16,000 16,000 17,000 17,000
Office Equipment 12,000 12,000 12,500 13,000 13,200
Total Property, Plant & Equipment 2,00,000 2,01,000 1,99,500 2,37,000 2,70,200
Less Accumulated Depreciation (60,067) (1,20,334) (1,80,034) (1,94,267) (2,19,500)
Net Property, Plant & Equipment 1,39,933 80,666 19,466 42,733 50,700

Other Assets:
Rent Deposit 5,000 5,000 5,000 7,000 7,000
Long term investments – 30,000 50,000 – –
Total Other Assets 5,000 35,000 55,000 7,000 7,000

Total Assets 2,48,036 1,96,053 2,11,730 2,13,928 2,36,691

Current Liabilities:
Accounts Payable 42,377 5,123 38,050 52,215 77,128
Accrued Wages Payable 1,641 952 2,350 2,672 2,755
Short-Term portion of L.T. Debt 18,188 19,309 20,500 21,765 23,107
Total Current Liabilities 62,206 25,384 60,900 76,652 1,02,990

Long-Term Liabilities:
Long-Term Note Payable 84,681 65,372 44,872 44,872 –
Total Long-term Liabilities 84,681 65,372 44,872 44,872 –

Total Liabilities 1,46,887 90,756 1,05,772 1,21,524 1,02,990

Equity:
Retained Earnings 21,149 25,297 25,958 34,169 70,701
Janet Janitorial, Equity 80,000 80,000 80,000 80,000 80,000
Total Equity 1,01,149 1,05,297 1,05,958 1,14,169 1,50,701

Total Liabilities & Equity 2,48,036 1,96,053 2,11,730 2,35,693 2,53,691

ACME Office Cleaning Services
Income Statement
Year ended 12/31

Year 1 Year 2 Year 3 Year 4 Year 5
Revenues:
Sales 3,98,769 4,89,112 5,40,493 4,71,837 5,72,544

Expenses:
Cleaning Supplies 57,812 62,005 69,542 67,900 82,150
Advertising & Promotion 13,567 8,554 10,381 12,888 7,391
Bad Debt Expense (write offs) 542 1,855 203 3,511 5,184
Bank Charges 1,822 2,650 2,001 3,225 1,881
Depreciation 60,067 60,267 59,700 14,233 25,233
Insurance 4,851 5,387 5,911 6,744 6,399
Interest Expense 6,734 5,677 8,500 3,365 2,100
Legal & Professional 3,200 7,988 9,433 10,573 5,544
Miscellaneous 451 826 155 2,736 3,928
Office Supplies 6,100 4,722 9,025 9,487 7,711
Payroll Taxes 19,176 24,517 26,875 26,151 32,887
Rent Expense 26,400 27,600 28,800 30,000 33,600
Repairs & Maintenance 6,712 12,542 10,615 15,228 7,000
Administrative labor 35,000 35,700 36,414 40,055 44,061
Direct Labor 1,24,800 1,51,625 1,87,542 1,77,872 2,06,853
Telephone 2,216 3,344 3,575 7,392 5,000
Travel 2,378 2,568 3,157 3,508 3,028
Utilities 5,792 7,137 8,003 4,758 8,062
Total Expenses 3,77,620 4,24,964 4,79,832 4,39,626 4,88,012

Net Income (Loss) 21,149 64,148 60,661 32,211 84,532

Place a “Y” in the accounts for the years that you think need further Investigation.
Place an “N” in the accounts for the years that you think are OK.

Y = Investigate
N = OK

Your Name or Team # —> 100
Your Selected accounts will appear here.
Accounts Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5
Current Assets:
Cash N Y OK Investigate
Accounts Receivable
Investments – Marketable securities
Supplies Inventory
Prepaid Rent

Property:
Cleaning Equipment
Vans
Office Furniture
Office Equipment
Total Property, Plant & Equipment
Less Accumulated Depreciation

Other Assets:
Rent Deposit
Long term investments

Current Liabilities:
Accounts Payable
Accrued Wages Payable
Short-Term portion of L.T. Debt

Long-Term Liabilities:
Long-Term Note Payable

Equity:
Retained Earnings
Janet Janitorial, Equity

Revenues: Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5
Sales

Expenses:
Cleaning Supplies
Advertising & Promotion
Bad Debt Expense (write offs)
Bank Charges
Depreciation
Insurance
Interest Expense
Legal & Professional
Miscellaneous
Office Supplies
Payroll Taxes
Rent Expense
Repairs & Maintenance
Administrative labor
Direct Labor
Telephone
Travel
Utilities

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Case 23

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Biven Corporation’s balance sheet and income statement appear below Answer

Biven Corporation’s balance sheet and income statement appear below Answer

Biven Corporation’s balance sheet and income statement appear below Answer

Biven Corporation’s balance sheet and income statement appear below Answer

Biven Corporation’s balance sheet and income statement appear below Answer

1. Biven Corporation’s balance sheet and income statement appear below:
BALANCE SHEETS 2006 2005
ASSETS
Cash & equivalents $35,000 $30,000
Accounta receivable 54,000 49,000
Inventory 67,000 58,000
Plant & equipment 580,000 530,000
Accumulated depreciation (316,000) (313,000)
Total Assets $420,000 $354,000
LIABILITIES & EQUITIES
Accounts payable $51,000 $57,000
Wages payable 26,000 24,000
axes payable 11,000 10,000
Deferred taxes payable 25,000 24,000
Bonds payable (long term) 77,000 90,000
Total liabilities 190,000 205,000
Common stock 33,000 30,000
Retained earnings 197,000 119,000
Total equities 230,000 149,000
Total liabilities & equities $420,000 $354,000

INCOME STATEMENTS 2006 2005
Sales $620,000 $520,000
Cost of goods sold 381,000 300,000
Gross margin 239,000 220,000
Selling & Admin expense 103,000 99,000
Net operating income 136,000 121,000
Gain on sale of plant & equipment 20,000
– Income before tax 156,000 121,000
Income tax 47,000 36,000
Net income $109,000 $85,000
Cash dividends were $31,000.
The company sold equipment for $20,000.
The equipment had originally cost $14,000 and was fully depreciated.
Required: Prepare a statement of cash flows for 2006 using the indirect and direct methods.

2. Biven Corporation’s balance sheet and income statement appear below:
BALANCE SHEETS 2006 2005
ASSETS
Cash & equivalents $35,000 $30,000
Accounta receivable 54,000 49,000
Inventory 67,000 58,000
Plant & equipment 580,000 530,000
Accumulated depreciation (316,000) (313,000)
Total Assets $420,000 $354,000
LIABILITIES & EQUITIES
Accounts payable $51,000 $57,000
Wages payable 26,000 24,000
axes payable 11,000 10,000
Deferred taxes payable 25,000 24,000
Bonds payable (long term) 77,000 90,000
Total liabilities 190,000 205,000
Common stock 33,000 30,000
Retained earnings 197,000 119,000
Total equities 230,000 149,000
Total liabilities & equities $420,000 $354,000

INCOME STATEMENTS 2006 2005
Sales $620,000 $520,000
Cost of goods sold 381,000 300,000
Gross margin 239,000 220,000
Selling & Admin expense 103,000 99,000
Net operating income 136,000 121,000
Gain on sale of plant & equipment 20,000
– Income before tax 156,000 121,000
Income tax 47,000 36,000
Net income $109,000 $85,000
Cash dividends were $31,000.
The company sold equipment for $20,000.
The equipment had originally cost $14,000 and was fully depreciated.

Required: Fill in the Amounts and Percent of change in the balance sheet and income statements.

3. Espinola Corporation’s most recent balance sheet and income statement appear below:

BALANCE SHEETS 2006 2005

ASSETS
Cash & equivalents $320,000 $180,000
Accounta receivable 220,000 240,000
Inventory 140,000 130,000
Prepaid expenses 20,000 20,000
Total current assets 700,000 570,000
Plant & equipment, net 860,000 920,000
Total Assets $1,560,000 $1,490,000
LIABILITIES & EQUITIES
Accounts payable $200,000 $170,000
Accrued payable 80,000 80,000
Notes payable, current 40,000 40,000
Total current liabilities 320,000 290,000
Bonds payable 210,000 220,000
Total liabilities 530,000 510,000
Preferred stock, $100 par value, 5% 100,000 100,000
Common stock, $1
par value 100,000 100,000
Additional paid in capital, common stock 150,000 150,000
Retained earnings 680,000 630,000
Total equities 1,030,000 980,000
Total liabilities & equities $1,560,000 $1,490,000

INCOME STATEMENT 2006
Sales $1,220,000
Cost of goods sold 790,000
Gross margin 430,000
Selling & Admin expense 268,000
Net operating income 162,000
Interest expense 26,000
Income before tax 136,000
Income tax 41,000
Net income 95,000
Dividends paid, preferred 5,000
Net income for common shareholders 90,000
Dividends paid, common 40,000
Net income added to retained earnings 50,000
Beginning retained earnings 630,000
Ending retained earnings $680,000
Other: Market value of stock end of year $12.87
Tax rate 30%
Bond interest 10%
Return demanded on preferred stock 10%
Return demanded on common stock 14%
Required compute the following for 2006 :

a. Gross margin percentage.
b. Earnings per share (of common stock).
c. Price-earnings ratio.
d. Dividend payout ratio.
dividend per share
dividend payout ratio
e. Dividend yield ratio.
f. Return on total assets.
after tax cost of interest
average total assets
return on total assets
g. Return on common stockholders’ equity.
average stockholders equity
average preferred stock
return on equity
h. Book value per share.
i. Working capital.
j. Current ratio.
k. Acid-test ratio.
l. Accounts receivable turnover.
m. Average collection period (days).
n. Inventory turnover.
o. Average sale period (days).
p. Times interest earned.
q. Debt-to-equity ratio.
r. Show that financial leverage is positive or negative.

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Biven