The client and our firm have agreed on an initial estimated audit fee of $32,000 (see the engagement letter). However, the estimated total cost of performing this year’s audit is $37,590 (see the fee budget on workpaper 6-5). Discuss possible reasons why a CPA firm might charge a new client an audit fee that is lower than the estimated first-year costs of performing the audit.
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The client and our firm have agreed on an initial estimated audit fee of $32,000 (see the engagement letter). However, the estimated total cost of performing this year’s audit is $37,590 (see the fee budget on workpaper 6-5). Discuss possible reasons why a CPA firm might charge a new client an audit fee that is lower than the estimated first-year costs of performing the audit.
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- The budgeted indirect cost rate is calculated Select one : OA at the end of the year OB at the end of each quarter OC . at the beginning of the year D. during the year Cloor my choiceBUS 203: INTRODUCTION TO COST AND MANAGEMENT ACCOUNTING PROJECT: CASH BUDGETING ASSOCIATE DEGREE YEAR 2: SEMESTER 1 (2020/21)Ronstadt Limited’s budget for the four months from January to April includes the following data:1. MonthSalesMaterialsWagesOverheads $000$000$000$000January615115.030360February636120.033390March690135.036420April684130.040425 2. One-third of sales revenue is received one month after sale and the remainder is received two months after sale. The sales in the previous two months were: November $600 000; December $540 000.3. One-quarter of purchases of materials are paid for in the month of purchase. The remainder are paid for two months later. Purchases in the previous two months were: November $108 000; December $106 000.4. Two-thirds of the wages are paid in the month in which they are earned, and the balance is paid in the following month. The wages for the previous December amounted to $30 000.5. One-half of the overhead expenditure is paid in the month in…Relevant data from the operating budget of The Framers are: Other data: Capital assets were sold in quarter 1 and $8,000 was collected in quarter 1 and $500 collected in quarter 2. Dividends of $500 will be paid in May The beginning cash balance was $50,000 and a required minimum cash balance is $10,000. Prepare a cash budget for the first two quarters of the year.
- Month ($) Wages ($) From the following information, prepare a monthly cash budget for the three months ending 31st December 2019. Sales ($) Materials Other Expenses ($) Jun. (A) 3,000 1,800 650 385 Jul. (A) 3,250 2,000 750 385 Aug. (A) 3,500 2,400 750 425 Sep.(A) 3,750 2,250 .750 475 Oct. (E) 4,000 2,300 800 500 Nov. (E) 4,250 2,500 900 550 Dec. (E) 4,500 2,600 1,000 575 (A) Actual; (E) - Estimated. = The credit terms are as follows: • Sales -10% of sales are in cash. On average, 50% of credit sales are paid in the next month, while the other 50% are paid two months after the sale. • Creditors for material are paid 2 months after purchase. • Wages and other expenses are paid the same month. The cash and bank balance on 1st October is expected to be $1,500. Other information is given as follows: • Plant and machinery are to be installed in August at a cost of $24,000. This sum will be paid in monthly installments of $500 each from 1st October. • Dividends from investments amounting to…Question 1 From the following information prepare a monthly cash budget for the three months ending 31st Dec.2020 Sales Materials Wages Production Admin. Selling, etc Month (RM) (RM) (RM) (RM) (RM) June 6,000 3,600 1,300 450 320 July 6,500 4,000 1,500 450 320 Aug. 7,000 4,800 1,500 500 350 Sep. 7,500 4,500 1,500 600 350 Oct. 8,000 4,600 1,600 600 400 Nov. 8,500 5,000 1,800 700 400 Dec. 9,000 5,200 2,000 700 450 Credit terms Sales 3 months to debtors. 10% of sales are on cash. On an average, 50% of credit sales are paid on the due dates while the other 50% are paid in the month following Creditors for material – 2 months. Lag in payment Wages. 1/4 month, overheads 1/2 month. Other information Plant and Machinery to be installed in Aug. at a cost of RM30,000. It will be paid for by monthly installments of RM1,000 each from 1st Oct.; Preference share dividend @ 6% on RM100,000 are to be paid on 1st Dec. Calls on 500 equity shares @ RM2 per share expected on 1st November; Dividends from…Use the information provided below to prepare the Cash Budget for October, November, and December2021. Provide separate monetary columns for each month.INFORMATION1. The following data and estimates are available for a project of Fego Limited for September toDecember 2021:September October November DecemberR R R RSales 130 000 110 000 120 000 140 000Wages 40 000 34 000 38 000 39 000Fixed overheads 16 000 16 000 16 000 16 000Variable overheads 16 000 13 000 15 000 17 000Materials purchases 17 000 14 000 16 000 18 0002. Sixty percent (60%) of the sales are expected to be for cash and the balance on credit. Creditcustomers usually pay in the month after the sale.3. Labour costs are paid for in the month in which they are incurred.4. Fixed overheads include R5 000 each month for depreciation and payment is made monthly.5. Variable overheads are paid for in the month after they are incurred.6. Direct materials are purchased by electronic funds transfers each month.7. The cash balance on 01…
- АCTIVITY From the following information obtained from the books of Maruti LLC, prepare cash budget for the quarter ending 30h June 2020. Sales (OMR) 80,000 Purchase (OMR) Wages (OMR) Expenses (OMR) 5,000 Month January February March 45,000 20,000 18,000 22,000 24,000 80,000 40,000 42,000 6,000 6,000 April May June 80,000 90,000 85,000 80,000 50,000 45,000 35,000 7,000 20,000 18,000 6,000 5,000 Special information 1. Advance payment of income tax in May OMR 4,000. 2. Purchase of plant in April OMR 10,000 3. Rent OMR 300 payable each month 4. 10% of purchase and sales are in cash terms 5. Credit purchases are paid after one month and credit sales are collected after 2 months 6. Time lag in wages and expenses ½ month 7. Cash and bank balance on April 1st OMR 13,000Q.No. 2 Abuhatim LLC has given the following particulars. You are required to prepare a cash budget for the three months ending 31st December 2019 Months Sales Materials Wages Over heads (OMR) (OMR) (OMR) (OMR) 1900 August 20000 10200 3800 September 21000 10000 3800 2100 October 23000 9800 4000 2300 November 25000 10000 4200 2400 December 30000 10800 4500 2500 Credit terms are 1. Sales /Debtors 10% sales are on Cash , 50% of the credit sales are collected in next month and the balance in the following month 2. Creditors – materials 2 months Wages 1 month Over heads – 1 month 3. Cash balance on 1st October is expected to be Ro.8000 4. A machinery will be installed in August at a cost of RO.100000, the monthly instalment of RO.5000 is payable from October onwards 5. Dividend at 10% on preference share capital RO.300,000 will be paid on 1st December 2019 6. Advance to be received for the sale of vehicles RO.20000in December 7. Income tax tobe received in December RO.50007.3 Shown below are the totals from 2018 period budgets. Revenue budget Materials usage from production budget Labor cost budget Manufacturing overhead budget General and administrative budget Capital expenditure budget P100,000 15,000 20,000 20,000 30,000 20,000 32 How Work-in-Progress Inventories: Beginning of 2018 End of 2018 ndilet b rsM x) 1E valM 10,000 lsa 5,000 PLS Finished Goods Iventory: Beginning of 2018 End of 2018 Pla 15,000 10,000 Tax Rate 40% hen dees20 oldibsllonU Instructions: nongt od Prepare a forecasted Income Statement for the year. bas sldigilgon
- Preparing a financial budget—budgeted income statement and balance sheet Buncomb Company has the following post-closing trial balance on December 31, 2018 The Company’s accounting department has gathered the following budgeting information for the first quarter of 2019: Additional information; Rent and income tax expenses are paid as incurred. Insurance expense is an expiration of the prepaid amount. Requirements Prepare a budgeted income statement for the quarter ended March 31, 2019. Prepare budgeted balance sheet as of March 31, 2019.Preparing a financial budget—budgeted income statement and balance sheet Ballentine Company has the following post-closing trial balance on December 31, 2018: The company’s accounting department has gathered the following budgeting information for the first quarter of 2019: Additional information: Direct materials purchases are paid 50% in the quarter purchased and 50%, in the next quarter. Direct labor, ma following budgeted income statement nufacturing overhead selling and administrative costs, and income tax expense are paid in the quarter incurred. Accounts payable at December 31, 2018 are paid in the first quarter of 2019. Requirements Prepare Ballentine Company’s budgeted income statement for the first quarter of 2019. Prepare Ballentine Company’s budgeted balance sheet as of March 31, 2019.Preparing a financial budget—budgeted income statement and balance sheet Ball Company has the following post-closing trial balance on December 31, 2018 The company’s accounting department has gathered the following budgeting information for the first quarter of 2019: Additional information: Rent and income tax expenses are paid as incurred. Insurance expense is an expense is an expiration of the prepaid amount. Requirements Prepare a budgeted income statement for the quarter ended March 31, 2019. Prepare a budgeted balance sheet as of March 31, 2019.