Monthly Archives: January 2012

1. Which of the following is correct concerning reactions to INCREASES in activity?

Featured Article: Donna’s Entertainment is a merchandising business MULTIPLE CHOICE 1. Which of the following is correct concerning reactions to INCREASES in activity? a. Total Variable Cost b. Variable Cost Per Unit (Points : 2) 2. A mattress manufacturer has … Continue reading

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16-40 (Critique an Audit Report Qualified for a Scope Limitation)

16-40 (Critique an Audit Report Qualified for a Scope Limitation, LO 3) You are a senior auditor working for Rittenberg & Schwieger, CPAs. Your staff assistant has drafted the following audit report. You believe the scope limitation is significant enough … Continue reading

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16-41 (Choosing the Type of Opinion) Several independent audit situations are presented here

16-41 (Choosing the Type of Opinion) Several independent audit situations are presented here. Assume that everything other than what is described would have resulted in an unqualified opinion. Required Indicate the type of opinion you believe should be expressed in … Continue reading

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The Cambridge Cartage Company has partially completed its forecast of next year’s financial statements as follows

The Cambridge Cartage Company has partially completed its forecast of next year’s financial statements as follows. Cambridge Cartage Company Financial Plan ($000) Income Statement Balance Sheet Next Year Next Year Revenue $17,220 Beginning Ending Cost/expenses 14,120 ASSETS EBIT $3,100 Total … Continue reading

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Livetree Ltd. Is developing a detailed financial plan for next year and expects to have the following fixed asset accounts by the end of this year

Livetree Ltd. Is developing a detailed financial plan for next year and expects to have the following fixed asset accounts by the end of this year ($000). Gross $45,789 Accumulated Depreciation (26,328) Net Fixed Assets $19,461 The capital plan already … Continue reading

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16-38 (Types of Engagements and Reports) The fourth standard of reporting states

16-38 (Types of Engagements and Reports) The fourth standard of reporting states: “The auditor must either express an opinion regarding the financial statements, taken as a whole, or state that an opinion cannot be expressed in the auditor’s report. When … Continue reading

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Fleming, Inc. had a dividend payout ratio of 25% this year, which resulted in a payout of $80,000 in dividends

Fleming, Inc. had a dividend payout ratio of 25% this year, which resulted in a payout of $80,000 in dividends. Return on sales (ROS) was 8% this year and is expected to increase to 9% next year. If Fleming expects … Continue reading

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Broxholme Industries has sales of $40 million, equity totaling $27.5 million, and an ROS of 12%

Broxholme Industries has sales of $40 million, equity totaling $27.5 million, and an ROS of 12%. The sustainable growth rate has been calculated at 10.9%. What dividend payout ratio was assumed in this calculation? Click here for the SOLUTION

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Blue & Noble is a small law firm that does all of its business through billings (no cash sales)

Blue & Noble is a small law firm that does all of its business through billings (no cash sales). Historically, the firm has collected 40% of its revenue in the month of billing, 50% during the first month after billing, … Continue reading

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The Lineberry Golf Cart Co. sold 7,400 carts this year at an average unit price of $3,000

The Lineberry Golf Cart Co. sold 7,400 carts this year at an average unit price of $3,000. Fifty days of sales remained uncollected in accounts receivable at the end of the year. The firm produced the carts at a 42% … Continue reading

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