How do you plan to use financial statements in your projected financial statement analysis? Provide rationale for your approach.
Category: Accounting
Creating A Partnership Tax Return
You are a senior tax accountant in the firm, Ernest & Rainhouse. Joe, a new junior accountant, has just completed an interview with a new client Harry, who is a general partner of Widget Unlimited. Harry is seeking to have Ernest & Rainhouse prepare Widget Unlimited’s Partnership Tax Return. Joe has never prepared a Partnership Tax Return and seeks your help in doing so. Additionally, there are a couple of questions Harry asks that Joe needs your assistance in answering. You are to read the scenario below and then follow the instructions.
Scenario
Henry, Hunter, and Harry formed a partnership (Widget Unlimited) on January 1, 2020. Henry and Hunter each contributed $200,000 and Harry transferred a building he had purchased two years earlier to the partnership. The building had a tax basis of $150,000 and was appraised at $300,000. The building was also encumbered with a $100,000 mortgage. The partners plan to use the building to manufacture, distribute, and sell green and purple widgets.
Harry will work full time operating the business for which he will receive guaranteed payments (not included in expenses) of $5,000 per month. Henry and Hunter will devote less than twelve days a year to the business. At the end of 2020, Widgets Unlimited had made $6,000 in mortgage principal payments. The partnership agreement specifies that Henry, Hunter, and Harry will share in income/loss in the ratio of 3:3:4.
For the first year of operation, the partnership records disclose the following information:
Sales revenue$820,000Cost of goods sold$735,000Operating expenses$65,000Long-term capital gains$3,300~1231 gains$1,500Charitable contributions$700Political campaign donation$500Municipal bond interest$450
Instructions
Write a 3-5 page paper in which you do the following:
Using the information provided, create a Form 1065: U.S. Return of Partnership Income 2020 for Widgets Unlimited, preparing a Schedule K for Henry, Hunter, and Harry.
Refer to the completed Form 1065 schedule of Henry, Hunter, and Harry’s adjusted tax basis immediately after partnership formation and at the end of the first year of operation. Explain in what situations Henry, Hunter, and Harry would need to know the tax basis in their partnerships. Explain how often a partner’s tax basis in his partnership needs to be adjusted. Justify your answer with relevant tax code citation.
The tax code specifically enumerates several common separately stated items. Explain which items would be separately stated for partners Henry, Hunter, and Harry. Explain why each should be separately stated, citing relevant tax code for at least three of your identified separately stated items.
Assume Widgets Unlimited initial year of operation resulted in a loss. Explain in what order are the loss limitation rules applied to limit partner’s losses from partnerships.
Explain how Henry, Hunter, and Harry would determine whether they are passive participants in Widgets Unlimited when applying the passive activity loss limitation rules.
Understanding of the major theories in economics
Using your understanding of the major theories in economics, which theory, or theories, are most likely to influence a monetary policy that encourages inflation and spending on final goods and services? Which theory, or theories, are most like to influence a monetary policy that encourages savings and production of goods and services? Lastly, which theory do you find you might agree with the most, and why?
Budget in Service Company (Cash Budget)
Edge Soccer Program (Edge) began the year with a cash balance of $10,500. The budget forecasts that collections from customers owed to the company will be $11,000 in January and $15,200 in February. The soccer program is also supposed to receive $8,500 in January on a note receivable from a soccer club that owes Edge for training.
Edge plans to purchase soccer equipment in January and February with cash. The budgeted amounts of the purchases are $15,600 in January and $14,800 in February. Operating costs for the business is $2900 per month.
Edge must maintain a minimum cash balance of $10,000 in their bank account at all times. If the amount in the bank account falls below $10,000, then bank extends credit to Edge immediately in multiples of $1000. Edge pays back any amounts borrowed each quarter in payments of $2000 plus 4% interest. The first payment occurs three (3) months after the bank has extended edge credit.
Requirement
Prepare a cash budget for January and February.
INTRODUCTION TO QUALITY ASSURANCE AND QUALITY MANAGEMENT
In all settings, healthcare quality processes must be designed and implemented in a way that meets or exceeds the expectations of patients. Accreditation requirements must be met or exceeded as well, and all applicable laws must be obeyed. With the bar constantly being raised on the quality and safety indicators of patient outcomes and experiences, we must be prepared to provide consistently excellent patient care experiences, to only provide necessary services, and to do all of this at the lowest cost possible.
The Agency for Healthcare Research and Quality, in cooperation with the Institute of Medicine, currently promotes six quality aims/dimensions for health care provision. Considered together, these six dimensions provide us with a timely framework to begin understanding the foundation of quality assurance in health care provision in both the public and the private sectors. The first Case allows you to explore what each of these six quality dimensions are, and understand how we assess them in terms of their quality indicators. Under this framework, the technical and interpersonal processes of providing health care come together—and we examine that interaction for both its benefits and its challenges.
Using the information in the required readings as well as some additional research in peer-reviewed sources, complete your Case Assignment by answering the following:
1. Research and articulate the six current quality aims/dimensions of providing health care as promoted by the Agency for Healthcare Research and Quality and the Institute of Medicine.
2. Provide a summary of how each of the six aims/dimensions are commonly assessed and then managed in terms of quality. What are the identified best practices for ensuring quality in each of the six dimensions? Be specific in your explanations.
3. The Agency for Health Research and Quality (AHRQ) recognizes that health disparities impact the health status of different groups creating a higher rate of disease and increased rates of death and suffering. AHRQ has developed specific health guidelines to combat these health challenges in an effort to improve health outcomes. Using the link below, choose two health programs and develop a short summary of the remediation efforts of for each and their effectiveness.
https://effectivehealthcare.ahrq.gov/products/cultural-competence/research-protocol
4. Explain both the technical and the interpersonal processes as essential elements of providing quality health care. What is the synergy between them? What are the benefits and the challenges we must be aware of?
Oriole Company’s trial balance at December 31
Oriole Company’s trial balance at December 31 shows Supplies $7,300 and Supplies Expense $0. On December 31, there are $2,500 of supplies on hand.
Prepare the adjusting entry at December 31, and using T-accounts, enter the balances in the accounts, post the adjusting entry, and indicate the adjusted balance in each account.
Oriole Company’s trial balance at December 31
Oriole Company’s trial balance at December 31 shows Supplies $7,300 and Supplies Expense $0. On December 31, there are $2,500 of supplies on hand.
Prepare the adjusting entry at December 31, and using T-accounts, enter the balances in the accounts, post the adjusting entry, and indicate the adjusted balance in each account.
Different elements of the financial statements
Answer all the 3 questions below. Explain your calculations
It assesses the following learning outcomes:
• Outcome 1: Critically understand the different elements of the financial statements.
• Outcome 2: Knowing how to record business transactions on the General Journal
• Outcome 3: Knowing how to prepare a trial balance
Exercise 1:
Calculate the missing retained earnings (X) and inventory (Y) accounts in the following cases: (20 points) Balance Sheet A:
Assets Liabilities
Cash 28000 Accounts payable 65000
Accounts receivable 65000 Notes payable
128000
Land 50000 Salaries payable 23000
Building 300000 Taxes payable 49000
Office Equipement 24000
Vehicles 32000 Stockholders equity
Inventory
125000
Capital stock
Retained earnings 200000
(X)
Balance Sheet B:
Assets Liabilities
Cash 30500 Accounts payable 43000
Accounts receivable 12700 Notes payable
23000
Land 50000 Salaries payable 12000
Building 260000 Taxes payable 75000
Office Equipement 2300
Vehicles 24000 Stockholders equity
Inventory
(Y)
Capital stock 150000
Retained earnings 207000
Exercise 2:
A. Prepare the Balance Sheet based on the information supplied below: (30 points)
Inventory 15000
Loans 40000
Bank Accounts 6000
Accounts payable 12000
Land 60000
Owners’ Capital 35000
Cash 500
Equipments 7000
Retained earnings 55000
Salaries payable 7000
Building 65000
Accounts receivable 22000
Accumulated depreciation 4500
Line of credit 20000
Bonds payable 8000
Vehicles 6000
B. Compute the Accounting Metrics and comment the results. (20 points)
Exercise 3:
Brandon has recently decided to open his new business of retail of toys in a store located in the center of Barcelona. During the month of April 2021, Brandon’s new company BONCO, Ltd. realized the following transactions:
2nd of April: BONCO, Ltd issued to Brandon 100,000 shares in exchange of $350,000 of share capital.
3rd of April: BONCO, Ltd purchased a shop for $250,000. The price of the land is $100,000 and the building $150,000. BONCO, Ltd has signed a mortgage with a bank.
4th of April: BONCO, Ltd purchased furniture to FURNISH YOUR SHOP, Inc. for $35,000.
5th of April: BONCO, Ltd purchased merchandises on account to BIGUP, Inc for $28,000.
6th of April: BONCO, Ltd makes some installations in the shop for $7,500 paid in cash.
7th of April: BONCO, Ltd hires two employees with a salary $1,500/ month each. Salaries are paid on the last day of the month.
8th of April: BONCO, Ltd purchases little gifts to be offered to clients during the first week of activity for $1,500, paid in cash.
16th of April, BONCO, Ltd purchases merchandises to ONSTYLE, Ltd on account for $41,000.
22nd of April, BONCO, Ltd receives an electricity bill for $900 payable in May.
29th of April: BONCO, Ltd pays the accounts payable to FURNISH YOUR SHOP, Inc.
30th of April: BONCO, Ltd records the sales of the month of April that amount to $126,000. All sales have been paid in cash.
Record the transactions of the company on the General Journal using the Double-Entry method (30 points)
Different elements of the financial statements
Answer all the 3 questions below. Explain your calculations
It assesses the following learning outcomes:
• Outcome 1: Critically understand the different elements of the financial statements.
• Outcome 2: Knowing how to record business transactions on the General Journal
• Outcome 3: Knowing how to prepare a trial balance
Exercise 1:
Calculate the missing retained earnings (X) and inventory (Y) accounts in the following cases: (20 points) Balance Sheet A:
Assets Liabilities
Cash 28000 Accounts payable 65000
Accounts receivable 65000 Notes payable
128000
Land 50000 Salaries payable 23000
Building 300000 Taxes payable 49000
Office Equipement 24000
Vehicles 32000 Stockholders equity
Inventory
125000
Capital stock
Retained earnings 200000
(X)
Balance Sheet B:
Assets Liabilities
Cash 30500 Accounts payable 43000
Accounts receivable 12700 Notes payable
23000
Land 50000 Salaries payable 12000
Building 260000 Taxes payable 75000
Office Equipement 2300
Vehicles 24000 Stockholders equity
Inventory
(Y)
Capital stock 150000
Retained earnings 207000
Exercise 2:
A. Prepare the Balance Sheet based on the information supplied below: (30 points)
Inventory 15000
Loans 40000
Bank Accounts 6000
Accounts payable 12000
Land 60000
Owners’ Capital 35000
Cash 500
Equipments 7000
Retained earnings 55000
Salaries payable 7000
Building 65000
Accounts receivable 22000
Accumulated depreciation 4500
Line of credit 20000
Bonds payable 8000
Vehicles 6000
B. Compute the Accounting Metrics and comment the results. (20 points)
Exercise 3:
Brandon has recently decided to open his new business of retail of toys in a store located in the center of Barcelona. During the month of April 2021, Brandon’s new company BONCO, Ltd. realized the following transactions:
2nd of April: BONCO, Ltd issued to Brandon 100,000 shares in exchange of $350,000 of share capital.
3rd of April: BONCO, Ltd purchased a shop for $250,000. The price of the land is $100,000 and the building $150,000. BONCO, Ltd has signed a mortgage with a bank.
4th of April: BONCO, Ltd purchased furniture to FURNISH YOUR SHOP, Inc. for $35,000.
5th of April: BONCO, Ltd purchased merchandises on account to BIGUP, Inc for $28,000.
6th of April: BONCO, Ltd makes some installations in the shop for $7,500 paid in cash.
7th of April: BONCO, Ltd hires two employees with a salary $1,500/ month each. Salaries are paid on the last day of the month.
8th of April: BONCO, Ltd purchases little gifts to be offered to clients during the first week of activity for $1,500, paid in cash.
16th of April, BONCO, Ltd purchases merchandises to ONSTYLE, Ltd on account for $41,000.
22nd of April, BONCO, Ltd receives an electricity bill for $900 payable in May.
29th of April: BONCO, Ltd pays the accounts payable to FURNISH YOUR SHOP, Inc.
30th of April: BONCO, Ltd records the sales of the month of April that amount to $126,000. All sales have been paid in cash.
Record the transactions of the company on the General Journal using the Double-Entry method (30 points)
Fixed Overhead Costs
Brandt Gardner, the owner-manager of a small firm that manufactures feed processing equipment and round-hay bailers, is unhappy with the latest report on financial performance in the Kansas City, Missouri, plant. The company had recently installed a standard cost system in the Kansas City plant with the objective of controlling manufacturing costs. The performance report for the year ended revealed that the variances for materials, labor, and variable overhead were all within the desired ranges, but the fixed overhead spending and volume variances were both significantly unfavorable. Brandt wanted an explanation of the fixed overhead variances and a recommendation.
Which do you think is more important for control of fixed overhead costs: the spending variance or the volume variance? Explain.