From Chapter 1, Ethical Issue 1-1, page 59.  Complete all parts of the case and respond to at least two of your classmates’ postings. 

What is the fundamental ethical issue in this situation?I can picture Wai Lee telling and asking (his) people about these two transactions and sounding non-chalant about them. The one fundamental ethical issue behind this scenario is falsifying the paperwork and making them look like something they really are not to a bank. The bank then lends them money and sure enough, another company ends up right where some other companies in our nation have landed--in trouble with finances as their CEO's get escorted off to jail.

Define the terms “debit” and “credit”.  Explain how debits and credits affect the following:  assets, liabilities, owner’s capital account, revenues and expenses.  Respond to at least two of your classmates’ postings. 

Week 2 Assignment

ACC 205

Week Two Problems Chapter 3, P3-32A Dr. Payroll Expense $7000Cr. Cash $7000 Chapter 3, P3-33A Dr. Accounts Receivable $800Cr. Service Revenue $800 Dr. Supplies Expense $1400Cr. Supplies $1400 Dr. Insurance Expense $600Cr. Prepaid Insurance $600

From Chapter 3, Ethical Issue 3-1.Complete all parts of the case and respond to at least two of your classmates’ postings. 

1. Compute the overall effects of these transaction o the store’s reported income 2014.The revenue recognition principle in our text by authors Horngren, Harrison, and Oliver (2010) states: “record revenue when it has been earned—but not before. Revenue has been earned when the business has delivered a good or service to the customer (2012, p. 133).” Based on this statement, Mort Steinbach, manager of the store, is asking the accountant to make the books appear to have more profit than is truth; therefore, it would be unethical and illegal for the accountant to do what is asked of him.

Explain the purpose of adjusting entries. How is net income affected if adjusting entries are not made? Describe the four closing entries and explain their purpose. Respond to at least two of your classmates’ postings. 

Adjusting entries are made to allocate expenses and revenues in the proper period. Normal journal entries are made n the day the transaction occurred. In accrual accounting you want your expenses to match with your income. An example would be that you purchase materials in late February for a job you will begin and complete in early march. You want to end February with the income and expenses for the work completed in February.

Week 3 Assignment

ACC 205

E5-16

Sales Sale discounts Net sales Cost of goods sold

Gross profit

89,500 1,560 87,940 60,200 (a)

103,600 (b) 99,220 ( c ) 34,020

66,200 2,000 (d) 40,500 ( e)

(f) 2,980 (g) 75,800 36,720

From Chapter 5, Ethical Issue 5-1.  Complete all parts of the case and respond to at least two of your classmates’ postings. 

Under Dobbs’ FOB policy, when should the company record a sale?The sale should be recorded when it is made if Dobbs’ desires to be correct and truthful. The date of sale should always be recorded in the month it is made. The shipping date has nothing to do with the reality of the purchase date; although, good business practice would be to ship the merchandise right after it was purchased; since the new owner obviously bought the merchandise for their own inventory purpose and business need, and because they take ownership at shipping point.  I think Dobbs’ uses unethical shipping practices.

Describe the inventory valuation methods FIFO and LIFO.  Which items are included in ending inventory under each method?  Respond to at least two of your classmates’ postings. 

The inventory valuation methods in FIFO and LIFO are reported as follows:

FIFO = First In, First Out; based on a sale, the inventory purchased first is the inventory sold first.  The ending inventory in this situation would be more higher cost per unit on hand, selling the lower cost per unit goods first.  

Week 4 Assignment

ACC 205

P7-31A

Part 1 : Before replenishment, petty cash fund should hold cash of $330(500-170)

Part 2 : Journal Entry

Date Accounts and Explanations Debit Credit

June 1 Petty cash 500

Cash in bank 500

To open the petty cash funds.

June 30 Entertainment expense (25+75) 100

Office supplies expense (35+15) 50

Postage expense 20

Cash short and over 5

From Chapter 7, Fraud Case 7-1. Complete all parts of the case and respond to at least two of your classmates’ postings. 

What was the key control weakness in this case?There did not appear to be any internal or external monitoring control procedures in place. If the Levon Helm had set up internal control procedures such as audits, and separation of duties, he might have had more insight into what his accountant was doing. Just because Cindy Paterson was a trusted old family friend, does not make Levon Helm less responsible for overseeing his profits and expenditures. The least he could have done is have an outside audit done on his books. Unfortunately, I know of two business people who experienced similar problems. One was an eye doctor, who trusted his office manager, who ended up stealing over $150,000 from him.

Discuss the allowance method and the direct write-off method of accounting for bad debts.  When is the expense for uncollected accounts receivable recognized under each method?  Respond to at least two of your classmates’ postings.

The allowance method of accounting for bad debt involves setting up of a contra account to house estimates of uncollectable accounts receivable for that period. The advantage of the allowance method is that it supports the matching principle by booking expected expenses in the same period as the revenue. 

Week 5 Assignment

ACC 205

Over the years modern accounting systems have changed for the better and the worse as

well. The topic I picked to write of is, how have modern account systems made a difference in

modern organizations? Before taking this course I was unsure of how accounting was used in

businesses or the way it was formatted. I learned so much from taking this course as how to

analysis transactions and use these format correctly. I have made Excel spreadsheets in other

courses and for my personal use but they do not compare the assignment in this course. I have

learned how to successful create balance sheets, income statements, and so much more. Lastly, I

have learned the correctly in order to create successful and understandable business financial

statement.

Week 5 Assignment

ACC 205

P10-18A REQ 1

Employee Louis Welch

For the Year Ended December 31, 2010

Gross pay:

Salary earning (6200*12) $74,000

Bonus (74,000 * .10) 7,440

Total gross pay $81,840

Deductions:

Federal income tax [($850 * 12) + $924] $11,124