1) In 2012, the balance sheet of Worth Company incorrectly reported as long term some
liabilities that should have been treated as current liabilities. How would this error
affect financial statement users’ analysis and assessment of the company?
2) San Jose Company issued 5-year $200,000 face value bonds at 105 on January 1,
2012 . The stated interest rate on these bonds is 9%. Use the straight line method to
complete the amortization schedule below.
3) Greenville Company estimates sales of 12,000 units for the upcoming period. At this
sales volume its budgeted income is as follows:
During the period the company actually produced and sold 13,000 units.
Required:
Prepare a flexible budget based on 13,000 units.
4) What cost driver would you use to allocate the cost of indirect materials to products?
5) The ethical standards issued by the Institute of Management Accountants include
confidentiality requirements. What must an accountant do, to comply with the
confidentiality requirements?
6) What should be the organizational purpose for identifying and calculating variances?