1) MORO Company has assets of BD600,000, liabilities of BD250,000, and equity of BD350,000

1) MORO Company has assets of BD600,000, liabilities of BD250,000,

and equity of BD350,000. It buys office equipment on credit for BD75,000. What would be the effects of this transaction on the accounting equation?

2) Describe the steps an auditor would take to satisfy the following

audit objectives for sales and accounts receivable:
a. Posting and summarization
b. Detail tie-in

3) Lewis Incorporated and Clark Enterprises report the following amounts for the year

 Calculate the inventory turnover ratio for each company.

LEWIS CLARK

Inventory (beginning)$15,000  $41,000

Inventory (ending)  9,000   51,000

Purchases  133,200   157,600

Purchase returns  6,000  51,000

4) Evaluate whether "subscription accounting" to account for iPhone revenue is more appropriate than the traditional revenue recognition method at the time of sale.

5) A multi-product company produces and sells 7,000 units of a product every year. Each unit sells for $12 and has a contribution margin of $4.00. If the product is discontinued, $19,000 of the $32,000 in fixed costs charged to the product could be eliminated. If it is discontinued, what will happen to the company's overall operating income?

6) How is reduced liquidity often the first domino to fall in a distressed company's potential path to bankruptcy? What are the leading indicators of distress that could be revealed through analysis of the company's financial statements? Once diagnosed, what were some alternative courses of action that GM leaders pursued to remedy their financial difficulties?

7) what are some of the concerns related to comparing financial ratios of companies from different industries?

8) What information does the investment section, along with applicable notes to the financial statements, provide to the user? How does each company comply with the rules as provided in the FASB Codification?

9) Assume that there IS a capacity issue, in that the sewing machine

can ONLY work 3600 (about 10 hours a day) hours (or it will break). Also, assume that annual demand for nylon suits is 800 and annual demand for cotton is also 800. What is the optimal product mix in terms of making/selling nylon and cotton suits? SHOW YOUR WORK.