PCAOB auditing standard Assignment

PCAOB auditing standard
                                   PCAOB auditing standard

PCAOB auditing standard

1. When a PCAOB auditing standard indicates that an auditor could perform a specific procedure, how should the auditor decide whether and how to perform the procedure?

A. BY COMPARING THE PCAOB AUDITING STANDARD WITH RELATED AICPA AUDITING STANDARDS

B. BY EXERCISING PROFESSIONAL JUDGMENT IN THE CIRCUMSTANCES

C. BY SOLICITING INPUT FROM THE ISSUER’S AUDIT COMMITTEE

D. BY EVALUATING WHETHER THE AUDIT IS LIKELY TO BE SUBJECT TO INSPECTION BY THE PCAOB

2. “The accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria by a competent, independent person” is a definition of

A. ANALYTICAL PROCEDURES.

B. TESTS OF TRANSACTIONS.

C. TESTS OF BALANCES.

D. AUDITING.

3. In a financial statement audit, inherent risk is evaluated to help an auditor assess which of the following?

A. THE RISK THAT THE AUDIT PROCEDURES IMPLEMENTED WILL NOT DETECT A MATERIAL MISSTATEMENT OF A FINANCIAL STATEMENT ASSERTION

B. THE RISK THAT THE INTERNAL CONTROL SYSTEM WILL NOT DETECT A MATERIAL MISSTATEMENT OF A FINANCIAL STATEMENT ASSERTION

C. THE INTERNAL AUDIT DEPARTMENT’S OBJECTIVITY IN REPORTING A MATERIAL MISSTATEMENT OF A FINANCIAL STATEMENT ASSERTION IT DETECTS TO THE AUDIT COMMITTEE

D. THE SUSCEPTIBILITY OF A FINANCIAL STATEMENT ASSERTION TO A MATERIAL MISSTATEMENT ASSUMING THERE ARE NO RELATED CONTROLS

4. Which statement regarding analytical procedures is not correct?

A. ANALYTICAL TESTS EMPHASIZE A COMPARISON OF CLIENT INTERNAL CONTROLS TO GAAP.

B. ANALYTICAL PROCEDURES ARE REQUIRED ON ALL AUDITS.

C. ANALYTICAL PROCEDURES CAN BE USED AS SUBSTANTIVE TESTS.

D. FOR CERTAIN ACCOUNTS WITH SMALL BALANCES, ANALYTICAL PROCEDURES ALONE MAY BE SUFFICIENT EVIDENCE.

5. Which statement is not correct with respect to analytical procedures?

A. AUDITING STANDARDS EMPHASIZE THE NEED FOR AUDITORS TO DEVELOP AND USE EXPECTATIONS.

B. ANALYTICAL PROCEDURES MUST BE PERFORMED THROUGHOUT THE AUDIT.

C. ANALYTICAL PROCEDURES MAY BE PERFORMED AT ANY TIME DURING THE AUDIT.

D. ANALYTICAL PROCEDURES USE COMPARISONS AND RELATIONSHIPS TO ASSESS WHETHER ACCOUNT BALANCES APPEAR REASONABLE.

6. Which statement is not correct?

A. ANALYTICAL PROCEDURES USED IN THE PLANNING PHASE OF THE AUDIT ARE PRIMARILY DIRECTED AT UNDERSTANDING THE CLIENT’S BUSINESS AND DIRECTING THE AUDITOR’S ATTENTION TO AREAS THAT MAY CONTAIN POSSIBLE MISSTATEMENTS.

B. ANALYTICAL PROCEDURES USED IN THE COMPLETION PHASE ARE PRIMARILY AIMED AT ASSESSING GOING CONCERN AND SECONDARILY AIMED AT DIRECTING THE AUDITOR’S ATTENTION TO AREAS THAT MAY CONTAIN POSSIBLE MISSTATEMENTS.

C. ANALYTICAL PROCEDURES MUST BE USED IN THE PLANNING AND COMPLETION PHASES OF THE AUDIT AND ARE OPTIONAL IN THE TESTING PHASE.

D. ANALYTICAL PROCEDURES USED IN THE COMPLETION PHASE ARE PRIMARILY AIMED AT DIRECTING THE AUDITOR’S ATTENTION TO AREAS THAT MAY CONTAIN POSSIBLE MISSTATEMENTS AND SECONDARILY AIMED AT ASSESSING GOING CONCERN.

7. Match the following definitions to the appropriate terms.

A. STANDARDS OF FIELDWORK

B. GENERAL STANDARDS

C. STANDARDS OF REPORTING

8. The following is a portion of a qualified scope and opinion report due to a scope restriction. (Note: A separate report was issued on the effectiveness of internal control over financial reporting.)

To the shareholders of Fast Times Corporation,

We have audited the accompanying balance sheet of Fast Times Corporation as of September 30, 2009 and the related statements of income, retained earnings, and cash flows for the past year. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We were unable to obtain audited financial statements supporting the company’s investment in a foreign affiliate stated at $1,040,000 or its equity in earnings of that affiliate of $501,000, which is included in net income, as described in Note 14 to the financial statements. Because of the nature of the company’s records, we were unable to satisfy ourselves as to the carrying value of the investment or the equity in its earnings by means of other auditing procedures.

Required: Complete the above report by preparing the opinion paragraph. Do not date or sign the report.

9. The following situation involves a possible violation of the AICPA’s code of professional conduct. For this situation,

  1. determine the applicable rule number from the code,
  2. decide whether or not the code has been violated,
  3. briefly explain how the situation violates (or does not violate) the code.

Your answer should be set up something like this: Rule Violation? Yes or No.Provide a one- or two-line explanation.

Kelley Brent, CPA, is a partner in the CPA firm that audits Dane Inc., a closely held corporation. Kelley’s sister-in-law’s brother is the chief financial officer of Dane Inc.

10. The following situation involves a possible violation of the AICPA’s code of professional conduct. For this situation,

  1. determine the applicable rule number from the code,
  2. decide whether or not the code has been violated,
  3. briefly explain how the situation violates (or does not violate) the code.

Your answer should be set up something like this: Rule Violation? Yes or No.Provide a one- or two-line explanation.

Jim is the audit partner for the small CPA firm of Jim, CPA, PA. Jim’s neighbor Duffy has a financial advisement practice whereby she sells mutual funds to individuals for their retirement. Jim’s firm is performing the audit for a privately held company Jim’s best friend, Cressy, owns. Jim refers Cressy to Duffy for retirement advice. Cressy buys 10 units of ABC Mutual Fund, which generates Duffy a big commission fee. Duffy buys Jim a $25 gift certificate to the local movie theater.

11. Brandt CPAs has obtained Big-Bucks, a new publicly held client. Big-Bucks has various accounting-related needs that Brandt CPAs would like to fulfill. Partner-in-charge D. Brandt has discussed with Big-Bucks the possibility of performing the annual audit of Big-Bucks, as well as preparing the tax returns, business plan, and quarterly write-up services and providing consultation on the viability and valuation of mining gas reserves in Tennessee. An outside expert would be hired by Brandt CPAs to provide expert advice to the CPA firm on mining gas reserves. Additionally, Brandt CPA’s audit manager, who will be assigned to this audit, has previously been approached by Big-Bucks to come work for the company as chief financial officer. The audit manager has refused the offer, because his cousin’s sister-in-law is a 10% shareholder in Big-Bucks, and he does not want her to have any say in his employment. Under the Sarbanes-Oxley Act of 2002, what issues do you see, and how would you advise Brandt CPAs? Is there ever a time when Brandt CPAs could perform any of these services for Big-Bucks?

12. Discuss the sanctions the Securities and Exchange Commission can impose on auditors.

13.  Below are 10 documents typically examined during an audit. Classify each document as either internal or external.

1: Canceled checks for payments of accounts payable
2: Payroll time cards
3: Duplicate sales invoices
4: Vendors invoices
5: Bank statements
6: Minutes of the board of directors meetings
7: Signed lease agreements
8: Notes receivable
9: Subsidiary accounts receivable records
10: Remittance advices

14. Discuss the essential activities involved in the initial planning of an audit.

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California Return for Jack & Norma Jones

California Return
California Return

California Return

California Return for Jack & Norma Jones

Based on the Form 1040 with supportive forms and the information provided below, please prepare 2017 California Return for Jack & Norma Jones. They reside at 15 Maple Street in San Jose, CA 95134. Refer to the CA Form 540 Instructions, Week 9 supplemental lectures for the mechanics of CA Individual Tax Forms.

Jack Jones was born May 1, 1967 and works as an engineer at ABC Technology, his taxable wages (after 401k deductions, etc.) is $130,000 per year. His wife Norma Jones (born June 2, 1969) was a bookkeeper for Al’s Supermarket – she earned $35,000 during the first 9 months of the year and then was laid off for the rest of 2017. Their wage amounts are the same for federal and California. Norma has also received $11,000 in unemployment compensation from the state of California.

In 2017 Jack and Norma were covered by a healthcare plan offered through Jack’s company.

Jack has had $28,200 of Federal income taxes withheld from his paychecks and $10,000 California income taxes withheld from his paychecks. Norma had $1,800 Federal income tax and $1,000 California income tax withheld from her Al’s Supermarket paycheck. There were no taxes withheld on her unemployment compensation.

They have sold 100 shares of ABC Technology stocks during the year for $62,000 that they acquired in 2003 for $50,000. Note that everything they sold is long-term capital gains. You should assume that the cost basis for California purposes is the same as for Federal purposes. None of the stocks sold are qualified small business stock.

They received $400 of qualified dividend income from their ABC Technology stock. They also received interest income of $156 from Wells Fargo Bank. Norma is originally from Las Vegas, NV and a few years ago her parents gave her some City of Las Vegas municipal bonds which she still owns. She received $600 of interest income from these bonds which is tax exempt for Federal income tax purposes.

They have children but they finished college and have moved out – Jack and Norma do not support them.

They have owned their own home in San Jose since 1992, have mortgage interest of $9,800, and property taxes of $4,000. They own two cars and the deductible part of their DMV fees is $130. In April 2017, they filed their joint 2016 California income tax return and paid $1000 tax due to California.

Here is a list of their cash donations to various organizations:

  • Saint Mary’s (Roman Catholic Church) $2,000
  • Second Harvest Food Bank $500
  • Santa Clara University (Fundraising Campaign) $1,000
  • Make-A-Wish Foundation $100

With time on her hands, Norma has prepared and filed their joint federal Form 1040 but she has hired you to prepare the California Form 540 (and any required schedules).
You need to prepare a California Form 540 and a California Schedule CA540. If required, you should also prepare a California Schedule D540 (hint: read the directions). You may assume there is NO Federal or California AMT to consider.

Please note that I recommend using California fill-in PDF forms and not use tax software for this HW. Another option is to prepare 1040 first in tax software before you prepare California forms. This will take more time though. But it is up to you.

Approach:

1. Review Jones’ Form 1040
2. Download fill-in California Form 540 and Schedule 540(CA) and Form Instructions.
3. Start with 540(CA) to identify Federal/California differences
4. Move to Form 540 – line 13 is Federal AGI $188,556
5. Use 540 Instructions, CA (540) to complete Form 540

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Income statement and balance sheet

Income statement and balance sheet
Income statement and balance sheet

Income statement and balance sheet

Search Yahoo Finance or any other credible source to retrieve the most recent income statement and balance sheet for a major leveraged corporation.

  • Provide these statements in proper format.
  • Also, retrieve the data on the company’s stock annual rate of return for the past 20 years.
  • In addition, retrieve annual rate of return of a major financial index. Present this data as well.
  • Using the data on company’s stock rate of return and the index’s rate of return estimate beta of the corporation.
  • Make sure to adjust this value to obtain leveraged beta.
  • Compare this value with the value stated by the source.
  • Retrieve the risk-free rate of return as the annual interest rate of US treasuries.
  • Based on these values estimate the expected annual rate of return of the corporation’s security.
  • Using the financial statements mentioned above estimate the annual rate of interest paid by the corporation (cost of debt).
  • Also, find the tax rate and capitalization ratio (proportions among equity and debt).
  • Using these values that you have found estimate the annual weighted cost of capital (WACC) of the corporation.

b. Suppose that the corporation is offered an investment which has the following cash flows.

Year      Cash flow

0           -$10,000.000

1              $1,500,000

2              $1,500,000

3              $1,500,000

4              $1,500,000

5               $1,500,000

6               $1,500,000

7                $1,500,000

8                $1,500,000

9                $1,500,000

10               $1,500,000

Based on WACC, Is this investment viable?

For each part above state the problem before answering the questions, provide clear justifications, explain your work in detail, and cite all references used for development

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Sarbanes Oxley Act and Managerial Accounting

Sarbanes Oxley Act
Sarbanes Oxley Act

Sarbanes Oxley Act

Managerial Accounting and the Sarbanes Oxley Act

Description

1. The key topic is the nature of managerial-accounting and how to distinguish it from financial accounting. Briefly describe this issue in your own words and identify a professional situation in which you foresee yourself using or applying this issue or concept.

2. What is the purpose of the Sarbanes-Oxley Act of 2002? What events led to the implementation of the Act? How has the Act impacted the world of managerial accounting?

Sarbanes-Oxley Act legislation came into force in 2002 and introduced major changes to the regulation of financial practice and corporate governance. Named after Senator Paul Sarbanes and Representative Michael Oxley, who were its main architects, it also set a number of deadlines for compliance.

It came as a result of the corporate financial scandals involving Enron, WorldCom and Global Crossing. Effective in 2006, all publicly-traded companies are required to implement and report internal accounting controls to the SEC for compliance. In addition, certain provisions of Sarbanes-Oxley also apply to privately-held companies.

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Managerial Accounting and the Sarbanes Oxley Act

Managerial Accounting
Managerial Accounting

Managerial Accounting

Managerial Accounting and the Sarbanes Oxley Act

Description

1. The key topic is the nature of managerial-accounting and how to distinguish it from financial accounting. Briefly describe this issue in your own words and identify a professional situation in which you foresee yourself using or applying this issue or concept.

2. What is the purpose of the Sarbanes-Oxley Act of 2002? What events led to the implementation of the Act? How has the Act impacted the world of managerial accounting?

Sarbanes-Oxley Act legislation came into force in 2002 and introduced major changes to the regulation of financial practice and corporate governance. Named after Senator Paul Sarbanes and Representative Michael Oxley, who were its main architects, it also set a number of deadlines for compliance.

It came as a result of the corporate financial scandals involving Enron, WorldCom and Global Crossing. Effective in 2006, all publicly-traded companies are required to implement and report internal accounting controls to the SEC for compliance. In addition, certain provisions of Sarbanes-Oxley also apply to privately-held companies.

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Accounting Case Study Paper Available

Accounting Case Study
Accounting Case Study

Accounting Case Study

Accounting Case Study Paper

J.P., a wealthy investment banker, purchased an office building and underlying land (the property) for $500,000, borrowing the entire purchase price from the Last Texas Savings and Loan in two $250,000 mortgages. Both mortgages are non recourse and secured only by the property itself. One of the mortgages qualifies as “qualified non recourse financing.”
Beyond taking out the loans to purchase the property, J.P. did not invest any of his own money and did not devote any of his time to managing the office building (he hired a management company).
In the first year of operations, the results for J.P. are as follows:

  • Rental Income: $200,000
  • Interest Expense: $50,000
  • Operating Expense: $486,000
  • Depreciation Expense: $50,000
  • Net Loss ($386,000)

In addition to the interest paid during the year, J.P. made a $20,000 principal payment on each note (total of $40,000 principal paid). J.P. has $800,000 of salary income from his investment banking job and $80,000 of dividend income from the portfolio investments. J.P.’s depreciation was not accelerated or otherwise subject to any recapture rules.
a) List the primary authorities relied upon in answering parts b-d below:
b) To what extent may J.P. deduct his net loss from the office building? Provide explanations as to each type of loss limitation (and whether or not they apply).
c) In Year 2, the property generated $10,000 of net income. J.P. also earned $300,000 of salary income during the year. No principal was paid during the year. Depreciation for the year (included in the net income amount) was $14,000. Analyze the tax treatment of the property income to J.P.
d) At the beginning of Year 3, when the property was worth $460,000 – exactly equal to the amount of outstanding mortgages – J.P. sold the property. The buyer took the property subject to the mortgages and paid no other consideration. What are the tax consequences of this sale to J.P.?

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The annual accounting concept

The annual accounting concept
The annual accounting concept

The annual accounting concept

ESSAY ONLY: The annual accounting concept is a key Federal income tax concept. Please explain the annual accounting concept and discuss two (2) areas in which tax law departs from strict adherence to the annual accounting concept. Include supporting citations as you write your response.
Oil Co is a corporation that files its federal income tax return on a calendar year basis using the accrual method of accounting.

During the year, Oil Co entered leases with the federal government to use offshore wells for oil production. The leases provide that Oil Co must remove any physical assets that it constructs to run its business should it abandon the wells or upon lease termination. Although the lease itself does not state when it will terminate, the lease may be terminated upon one year’s notice by either party. Typically, parties maintain these types of lease arrangements for twenty years.

Oil Co installed platforms and fixtures this year and in its federal income tax return for the year deducted the estimated cost of removing them. Oil Co will perform all services incidental to removing the assets.

Assume that the costs at issue are fully deductible (the question is not whether they are deductible, but when). Also, assume that the estimated removal cost is a good approximation of the actual costs.

(a) List the primary authorities (Code, Regulations, cases, rulings, and procedures only) relied upon in answering parts b & c below:

(b) When may OilCo deduct the costs related to the fixtures?

(c) Assume that OilCo will pay another person to remove the physical assets when the time comes. How does this change your answer to a (if at all)?

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Eastern Electronics Case Study Paper

Eastern Electronics Case Study
Eastern Electronics Case Study

Eastern Electronics

Eastern Electronics headquartered out of Berlin Germany was a cottage industry that prospered after the unification of Germany and the growth of the electronics era. Boris Schmidt, owner of the company, has enjoyed good growth over the last several years. With sales concentrated primarily in Germany, Austria, Poland, and the Czeck Republic.

Boris saw that he had a limited market in the eastern European countries and that his company was facing stiff competition from other electronic firms in Europe as well as from companies in the United States, Korea and Japan. In order to grow in size and statue and remain competitive in this industry, Boris knew he had to expand his market into other countries.

In 20×3, Boris had a vision to aggressively market and sell electronic components in the recently liberated Russian republics. He hired Vlad Demeshkin, a computer and marketing expert, to introduce sales to the Ukraine, Georgia, and the western area of Russia. Boris felt that he could compete effectively in these new countries, even though they were relatively unfamiliar with a capitalist system. Eastern Electronics had the advantage of location, with relatively easy distribution to the former Soviet countries. He also produced high quality products indicative of precise German engineering standards. Boris believed that the customers in the former Soviet countries would appreciate and pay for quality, especially as they were transitioning to a capitalistic form of economics. Businesses could not afford to have less than satisfactory electronic systems that might not perform appropriately as new business practices and procedures were being implemented.

Vlad had numerous connections in the former Soviet countries and also had instant credibility because of his technical expertise. He was able to represent the Eastern Electronics products very well and illustrate how the potential customers would greatly benefit from the services of Eastern. While financial results started slowly in 20×4, it was evident by 20×6 that the majority of the growth in sales for Eastern Electronics was coming from the work that Vlad was doing in the former Soviet countries. Also, the budget projections for 20×7 and 20×8 also showed continued good growth in the former Soviet countries with only limited growth in the European market. Indeed the expansion into the former Soviet countries was critical to the immediate success of Eastern Electronics.

Vlad was being paid a flat salary of Euro $40,000 plus a commission of 9.0% of the annual sales increase in the former Soviet countries. In 20×6, his salary would be Euro $149,800 or Euro $40,000 plus (3,780,000 – 2,560,000)0.09 = Euro $149,800. He had implemented some very creative processes to stimulate sales to the former Soviet countries during this time of economic conversion and opportunity. Since it was very difficult for new start up companies in the former Soviet countries to obtain necessary capital for asset acquisition, Vlad provided short-term capital in the form of inventory and accounts receivable policy.

The general terms for payment on account with customers in the European countries was 2/10 net 40. Those customers often paid within the ten-day discount period to take advantage of the favorable discount terms. However, customers in the former Soviet countries did not have a favorable cash flow situation and rarely were able to pay in the short ten-day discount period. In fact, customers had great difficulty paying in the 40 day time period. Therefore Vlad offered credit terms of 2/10 net 80 and often unofficially extended the terms to 90 days.

These new start up companies really appreciated the generosity of Vlad which allowed them to purchase the electronic components from Vlad and then sell them to other customers within the country and collect on the sales before having to pay Eastern Electronics. That way these companies did not have to seek short-term financing from the banking institutions and be forced to pay unfavorable interest rates. Also, it allowed the customers in the former Soviet countries more favorable opportunities in the currency exchange process. Since they had more time before payment was due, and they could essentially use customer’s money versus their own. These companies could minimize the number of currency exchange transactions they needed to make in their payments to Eastern. Given that companies generally lose at the minimum an exchange rate fee, every time a currency exchange is made, the customers in the former Soviet countries were very supportive of Vlad’s arrangements.

Vlad felt that Eastern Electronics had a strong enough cash flow situation, and certainly stronger than these companies, to provide these sales terms. Furthermore, this was only a one time hit to Eastern Electronics of extending the payment terms by about 50 days. Once a sales pattern and resulting payments was established, the differentiation offset itself. Besides, this collection policy gave Eastern a competitive advantage in securing sales in these former Soviet countries. The obvious increase in sales volume easily offset any concerns regarding repayment.

Vlad also helped the new companies in carrying inventory. He arranged to ship a majority of the inventory to the companies generally after these companies had made their sales to other customers. Sometimes Vlad could even have Eastern Electronics ship directly to the customers of the new companies if the orders were of a sufficient quantity. This often eliminated one shipment, and saved Vlad’s customers time and money.

With the big problem of theft in the former Soviet countries, the customers of Vlad were very concerned about carrying a large inventory of highly desirable Eastern Electronic products at a storefront location. The capital cost for these new companies to provide secure inventory storage for a large amount of product was often prohibitive for the new companies. Since Vlad was able to cut down the requirements of inventory, he is in a sense providing no cost start up inventory capital to the companies in the former Soviet countries.

The inventory policy offered by Vlad also gave Eastern Electronics a competitive advantage especially over companies from countries like Japan, Korea and the United States. The new companies in the former Soviet countries especially liked the way Vlad was watching out for their best interest. They felt Vlad was a comrade who was really looking out for them as they started their companies. They rewarded Vlad with increasing levels of sales orders, and the sales projections for the next two years look particularly promising.

With the continual increase in sales levels, Eastern electronics is looking to make some capital expansion of their own. Eastern is nearing capacity limitations on production and storage facilities. Given the anticipated growth in the former Soviet market, it is possible that Eastern will consider building a major storage facility in the Ukraine. Such an action will also help to show their commitment to their expansion program with the former Soviet countries and could allow them further expansion into countries like Kazakhstan and Uzbekistan even beyond to the east. Boris sees these areas as untapped markets and with the modernization of some of the more Arab nations, he wants to get a foothold in these markets as soon as the opportunities are available.

Boris is very pleased with the work Vlad has done to open the markets in the former Soviet countries and is considering a significant raise in both the base salary and commission rate for him beginning in 20×7. He is also excited about the growth opportunities and wants to pursue a capital expansion program so Eastern electronics can meet the anticipated demand increases for the next five years. He feels he can get some very favorable financing rates with the German National Bank of 11.5% for secured capital loans, and there is always the use of internally generated funds and maybe new external funds to support a growth opportunity.

Financial statements for the years of operation from 20×3 to 20×6 along with the projected budgets for 20×7 and 20×8 are presented as follows.

Eastern Electronics Income Statement

For the years Ending December 31, 20×3 – 20×8
Years 20×7 and 20×8 are Budget Projections
All amounts in Euro $100,000

Account 20×3 20×4 20×5 20×6 20×7 20×8
Sales – Europe 156.4 158.0 162.0 167.0 172.0 177.2
Sales – Russia – 6.2 25.6 37.8 54.8 71.2
Net Sales 156.4 164.2 187.6 204.8 226.8 248.4

Operating Expenses

Production 81.4 86.8 100.4 112.6 130.8 142.6
Admin & Selling 31.4 32.0 37.4 40.4 42.0 48.0
Depreciation 9.2 10.8 14.8 15.4 15.4 17.0
Excise Duties 23.0 22.4 23.4 23.8 24.4 25.2
Total Operating Exp 145.0 152.0 176.0 192.2 212.6 232.8

Operating Margin 11.4 12.2 11.6 12.6 14.2 15.6

Other Expenses

Interest Expense 1.6 1.6 4.6 4.2 4.8 5.4
Earnings before Tax 9.8 10.6 7.0 8.4 9.4 10.2

Income Tax 3.4 3.6 2.8 3.2 3.2 3.6
Net Earnings 6.4 7.0 4.2 5.2 6.2 6.6

Dividends 4.8 5.2 3.0 4.2 4.8 4.8
Retention of Earnings 1.6 1.8 1.2 1.0 1.4 1.8

Eastern Electronics Balance Sheet

As of December 31, 20×3 – 20×8
Years 20×7 and 20×8 are Budget Projections
All amounts in Euro $100,000

Account 20×3 20×4 20×5 20×6 20×7 20×8

Assets

Cash 13.6 20.0 22.4 24.6 27.0 29.8
Accounts Receivable
Europe 17.4 18.0 18.2 19.0 19.4 19.8
Russia 0 0.6 6.0 9.0 13.4 17.6
Allowance -0.2 -0.2 -0.2 -0.2 -0.6 -0.8
Inventory 15.4 15.8 18.0 28.6 31.8 34.8
Total Current Assets 46.2 54.2 64.4 81.0 91.0 101.2

Property, Plant & Equi 147.4 147.4 153.0 153.0 170.8 188.0
Accum Depreciation -59.0 -69.8 -84.6 -100.0 -115.4 -132.4
PP & E Net 88.4 77.6 68.4 53.0 55.4 55.6
Long-Term Invest 7.8 7.8 7.8 7.8 6.0 6.0
Total Long-Term 96.2 85.4 76.2 60.8 61.4 61.6

Total Assets 142.4 139.6 140.6 141.8 152.4 162.8

Liabilities & Equity

Accounts Payable 9.0 9.2 9.4 10.6 11.4 12.4
Short-Term Notes 7.6 14.4 15.2 15.8 25.6 34.6
Other Current Liab 18.6 18.0 20.6 22.6 25.0 27.2
Total Current Liab 35.2 41.6 45.2 49.0 62.0 74.2

Long-Term Notes 40.6 29.6 25.8 22.2 18.4 14.8
Total Liabilities 75.8 71.2 71.0 71.2 80.4 89.0

Stockholders Equity 60.0 60.0 60.0 60.0 60.0 60.0
Retained Earnings 6.6 8.4 9.6 10.6 12.0 13.8
Total Liab & Equity 142.4 139.6 140.6 141.8 152.4 162.8
There are 60,000 shares of closely held stock outstanding in the company.

Required

  1. Analyze the performance of Eastern Electronics over the 20×3 through 20×6 time period. Also, determine if the budget projections in 20×7 and 20×8 indicate any changes either favorable or unfavorable in the company performance.
  2. Comment on the accounts receivable policy being implemented by Vlad for the companies in the former Soviet countries. Do these policies appear sound? What are some of the advantages and disadvantages of such a policy?
  3. Comment on the inventory policy being implemented by Vlad for the companies in the former Soviet countries. Do these policies appear sound? What are some of the advantages and disadvantages of such a policy?
  4. Should Boris give Vlad a raise for the work he has done over these last three years? Why or why not? How would you propose to pay Vlad for the work he does for Eastern Electronics?
  5. Should Eastern Electronics undergo their proposed capital expansion program, especially with their focus in the former Soviet countries? Why or why not?

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Role of interest groups Research paper

Role of interest groups
Role of interest groups

Role of interest groups

Role of interest groups in modern democracy.

Are interest groups good for our modern democracy? Explain why or why not.

Interest groups constitute important channels for mobilizing citizens. Ideally, they work to ensure that the views of a wide range of citizens are considered in democratic processes. All groups are, however, not equally well mobilized and the groups who exercise pressure on governments may not represent the views of all citizens.

Interest groups have an enormous role to play in politics in modern democracies. These groups play a very important part in supporting parties and politicians, raising issues onto the political agenda. Groups compete on a more or less level playing field created by the
national and state constitutions as well as by laws. As a result, multiple competing interests are believed to create a stable political environment that allows those interests to be represented before the government.

How does a case make it to the U.S. Supreme Court? What type of case is most likely to be heard by the Court?

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Difference between IFRS and US GAAP

Difference between IFRS and US GAAP
Difference between IFRS and US GAAP

Difference between IFRS and US GAAP

Difference between IFRS and US GAAP of Nike and Addidas

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Differences between IFRS of Adidas and US GAAP of Nike

The companies’ reporting practices should be compared and contrasted paying specific attention to at least two areas where US GAAP and IFRS potentially differ for the two companies.

You may also want to observe interesting industry reporting practices in general (e.g., use of leases, importance of R&D, intangible assets, fair values, etc.) Also, feel free to document or comment on any reporting practices that you feel are innovative and/or deficient. Ideally, you should form some type of opinion about the relative reporting quality of the two companies in comparison to each other.

Generally Accepted Accounting Principles (GAAP) refers to a widely accepted set of rules, standards, conventions, and procedures for reporting financial info. In USA this set of rules has been established by the Financial Accounting Standards Board (FASB). GAAP is an amalgamation of authoritative standards and the usually accepted methods of recording and reporting info on accounting.

International Financial Reporting Standards (IFRS) are a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements.

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