The main objective of iACCOUNT: akawnting is helping students through easy access to accounting problems and solutions in a quick and convenient way that will augment the analytical skills and competencies of Accounting students aiming to become Certified Public Accountants (CPA).
Luna, Ingred and Tony decided to liquidate their partnership on March 31, 2015. On this date, their capital balances were as follows:
Luna P 150,000
Ingred 90,000
Tony 120,000
The partners share profits and losses in 40%, 30% and 30% to Luna, Ingred and Tony respectively. The net income from January 1 to March 31, 2015 was 65,000. Assume Tony received P 21,000 cash from the liquidation process.
February 15, 2015 - some faculty, students and staff of the College of Business and Entrepreneurship of the Eastern Visayas State University visited Babatngon, Leyte, to conduct a field observation in consonance with the College extension program SPACE (Sustainable Program and Advocacy for Community Extension). The place could be considered as the home of peace and quite people.
The field observation was conducted with the permission granted by the Brgy. Captain. The filed observation consisted of roving the area in District I, talking with the folks, interviewing about their livelihoods, resources, and other pertinent information that will be used in the conduct and implementation of possible extension activities for the district in the future.
District I: Regular Session
The Brgy captain and her officials were conducting their regular session when the team arrived. We asked permission if we could conduct the said field observation. Fortunately, the whole body agreed and was happy to know that the college is so serious about the program.
Team COBE: planning how to conduct the field observation
So the team immediately got the map of the District and divided the team into four groups for the conduct of the said field observation. We were so happy that the people were approachable and accommodating. After an hour or two, we were done with the interview and we were able to gather some pertinent information about the people, their livelihoods and background.
After the conduct of the field observation: a photo with the Brgy Captain (lady in yellow, 4th from right)
The
list of accounting scandals, which includes Arthur Andersen’s
disastrous thumbs-up of Enron, the Internet stock bust and the financial
crisis, has just gotten longer.
Matthew Goldstein of The Times reported this week
that an arbitration panel of three former judges has found no basis for
a malpractice claim against Ernst & Young, the auditor of Lehman
Brothers. The panel held that Lehman and its former executives were
“more culpable than EY” for accounting maneuvers that misled investors
about the firm’s financial condition before its catastrophic collapse in
2008.
Translation:
When it comes to cooking the books, not being as guilty as someone else
is the same as being blameless. That sounds appalling, and it is. But
it echoes a misguided law from 1995 that set an exceedingly high bar for
holding outside auditors liable — along with corporate management — for
accounting fraud, a law that has encouraged slippery audits.
Ernst
has argued all along that Lehman’s accounting tactics, deceptive or
not, complied with generally accepted accounting principles. That may be
so, but it is a dubious defense for one of the biggest firms in a
profession that is presumably based on integrity.
The
problem is larger than Ernst and goes beyond this specific case, which
was brought by the holding company charged with recovering and selling
Lehman’s assets and paying off creditors. The big auditing firms are
virtually never the first to uncover and publicly report financial
frauds; credit for that goes to the press, whistle-blowers, hedge funds,
independent research firms, bankruptcy trustees or regulators. With
each failure by auditors to sound warnings, it becomes increasingly
clear that the investing public is being shortchanged when it comes to
the reliable information it needs to make sound investing decisions.
Among
many needed reforms is a revamped system in which audits are paid for
not by company management, but by fees that companies pay to a public
entity for the purpose of financing audits. In the near term, the
Securities and Exchange Commission should require audited statements to
be signed by the lead auditor, rather than merely affixing the firm
name.
Without
reforms, the role played by Ernst in the Lehman bust — and the role of
auditors in undetected frauds and in the financial crisis more broadly —
is sure to be reprised in future financial catastrophes.
Answer Problem 13 on page 4-45 of Partnership and Corporation Made Easy by Ballada. You may use EXCEL for your entries. Submission will be on February 4, 2015.
Review the lessons discussed dated February 2, 2015. We will have our first quiz for the End Term.
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