how might a financial analyst interpret the results 558545

Aug 29, 2021 | Uncategorized

Computing and Interpreting the Fixed Asset Turnover Ratio from a Financial Analyst’s Perspective The following data were included in a recent Apple Inc. annual report ($ in millions):

Required:

1. Compute Apple’s fixed asset turnover ratio for 2007, 2008, and 2009.

2. How might a financial analyst interpret the results?

what would be the net book value of the property land and building at the end of yea 558546

Aug 29, 2021 | Uncategorized

Computing and Recording Cost and Depreciation of Assets (Straight Line Depreciation) K Delta Company bought a building for $71,000 cash and the land on which it was located for $107,000 cash. The company paid transfer costs of $9,000 ($3,000 for the building and $6,000 for the land). Renovation costs on the building were $23,000.

Required:

1. Give the journal entry to record the purchase of the property, including all expenditures. Assume that all transactions were for cash and that all purchases occurred at the start of the year.

2. Compute straight line depreciation at the end of one year, assuming an estimated 10 year useful life and a $15,000 estimated residual value.

3. What would be the net book value of the property (land and building) at the end of year 2?

what would be the net book value of the machine at the end of 2013 558547

Aug 29, 2021 | Uncategorized

Determining Financial Statement Effects of an Asset Acquisition and Depreciation (Straight Line Depreciation) Ashkar Company ordered a machine on January 1, 2012, at an invoice price of $21,000. On the date of delivery, January 2, 2012, the company paid $6,000 on the machine, with the balance on credit at 10 percent interest. On January 3, 2012, it paid $1,000 for freight on the machine. On January 5, Ashkar paid installation costs relating to the machine amounting to $2,500. On July 1, 2012, the company paid the balance due on the machine plus the interest. On December 31, 2012 (the end of the accounting period), Ashkar recorded depreciation on the machine using the straight line method with an estimated useful life of 10 years and an estimated residual value of $4,000.

Required (round all amounts to the nearest dollar):

1. Indicate the effects (accounts, amounts, and + or ) of each transaction (on January 1, 2, 3, and 5 and July 1) on the accounting equation. Use the following schedule:

Date Assets = Liabilities + Stockholders’ Equity

2. Compute the acquisition cost of the machine.

3. Compute the depreciation expense to be reported for 2012.

4. What impact does the interest paid on the 10 percent note have on the cost of the machine? Under what circumstances can interest expense be included in acquisition cost?

5. What would be the net book value of the machine at the end of 2013?

give the journal entries to record the two expenditures during 2011 558548

Aug 29, 2021 | Uncategorized

Recording Depreciation and Repairs (Straight Line Depreciation) – Nasoff Company operates a small manufacturing facility as a supplement to its regular service activities. At the beginning of 2011, an asset account for the company showed the following balances:

During 2011, the following expenditures were incurred for the equipment:

The equipment is being depreciated on a straight line basis over an estimated life of 15 years with a $10,000 estimated residual value. The annual accounting period ends on December 31.

Required:

1. Give the adjusting entry that was made at the end of 2010 for depreciation on the manufacturing equipment.

2. Starting at the beginning of 2011, what is the remaining estimated life?

3. Give the journal entries to record the two expenditures during 2011.

assuming that the machine was used directly in the production of one of the products 558551

Aug 29, 2021 | Uncategorized

Computing Depreciation under Alternative Methods Sterling Steel Inc. purchased a new stamping machine at the beginning of the year at a cost of $580,000. The estimated residual value was $60,000. Assume that the estimated useful life was five years, and the estimated productive life of the machine was 260,000 units. Actual annual production was as follows:

Required:

1. Complete a separate depreciation schedule for each of the alternative methods. Round your answers to the nearest dollar.

a. Straight line.

b. Units of production.

c. Double declining balance.

2. Assuming that the machine was used directly in the production of one of the products that the company manufactures and sells, what factors might management consider in selecting a preferable depreciation method in conformity with the matching principle?

which method would result in the highest amount of cash outflows in year 1 why 558552

Aug 29, 2021 | Uncategorized

Computing Depreciation and Book Value for Two Years Using Alternative Depreciation Methods and Interpreting the Impact on Cash Flows – Schrade Company bought a machine for $96,000 cash. The estimated useful life was four years, and the estimated residual value was $6,000. Assume that the estimated useful life in productive units is 120,000. Units actually produced were 43,000 in year 1 and 45,000 in year 2.

Required:

1. Determine the appropriate amounts to complete the following schedule. Show computations, and round to the nearest dollar.

2. Which method would result in the lowest EPS for year 1? For year 2?

3. Which method would result in the highest amount of cash outflows in year 1? Why?

4. Indicate the effects of ( a ) acquiring the machine and ( b ) recording annual depreciation on the operating and investing activities sections of the statement of cash flows (indirect method) for year 1 (assume the straight line method).

assume that fedex sold a delivery truck that had been used in the business for three 558553

Aug 29, 2021 | Uncategorized

Recording the Disposal of an Asset at Three Different Sale Prices FedEx is the world’s leading express distribution company. In addition to the world’s largest fleet of allcargo aircraft, the company has more than 654 aircraft and 51,000 vehicles and trailers that pick up and deliver packages. Assume that FedEx sold a delivery truck that had been used in the business for three years. The records of the company reflected the following:

Required:

1. Give the journal entry for the disposal of the truck, assuming that the truck sold for

a. $15,000 cash

b. $15,600 cash

c. $14,600 cash

2. Based on the three preceding situations, explain the effects of the disposal of an asset.

give the journal entry for the disposal of the furniture assuming that it was sold f 558554

Aug 29, 2021 | Uncategorized

Recording the Disposal of an Asset at Three Different Sale Prices – Marriott International is a worldwide operator and franchisor of hotels and related lodging facilities totaling over $1.4 billion in property and equipment. It also develops, operates, and markets time share properties totaling nearly $2 billion. Assume that Marriott replaced furniture that had been used in the business for five years. The records of the company reflected the following regarding the sale of the existing furniture:

Required:

1. Give the journal entry for the disposal of the furniture, assuming that it was sold for

a. $500,000 cash

b. $1,600,000 cash

c. $400,000 cash

2. Based on the three preceding situations, explain the effects of the disposal of an asset.

give all journal entries with respect to the truck on december 31 2012 show computat 558555

Aug 29, 2021 | Uncategorized

Inferring Asset Age and Recording Accidental Loss on a Long Lived Asset (Straight Line Depreciation) On January 1, 2012, the records of Seward Corporation showed the following regarding a truck:

On December 31, 2012, the delivery truck was a total loss as the result of an accident.

Required:

1. Based on the data given, compute the estimated useful life of the truck.

2. Give all journal entries with respect to the truck on December 31, 2012. Show computations.

compute the net book value of the deposit after payment of the january 2013 developm 558556

Aug 29, 2021 | Uncategorized

Computing the Acquisition and Depletion of a Natural Resource Freeport McMoRan Copper & Gold Inc., headquartered in Phoenix, Arizona, is one of the world’s largest copper, gold, and molybdenum mining and production companies, with its principal asset in natural resource reserves (approximately 102.0 billion pounds of copper, 40.0 million ounces of gold, 2.48 billion pounds of molybdenum, 266.6 million ounces of silver, and 0.7 billion pounds of cobalt, as of the end of 2008). Its annual revenues exceed $17.7 billion. Assume that in February 2012, Freeport McMoRan paid $700,000 for a mineral deposit in Indonesia.

During March, it spent $74,000 in preparing the deposit for exploitation. It was estimated that 900,000 total cubic yards could be extracted economically. During 2012, 60,000 cubic yards were extracted. During January 2013, the company spent another $6,000 for additional developmental work that increased the estimated productive capacity of the mineral deposit.

Required:

1. Compute the acquisition cost of the deposit in 2012.

2. Compute depletion for 2012.

3. Compute the net book value of the deposit after payment of the January 2013 developmental costs.

show how these assets and any related expenses should be reported on the balance she 558557

Aug 29, 2021 | Uncategorized

Computing and Reporting the Acquisition and Amortization of Three Different Intangible Assets Trotman Company had three intangible assets at the end of 2012 (end of the accounting year):

a. Computer software and Web development technology purchased on January 1, 2011, for $70,000. The technology is expected to have a four year useful life to the company.

b. A patent purchased from Ian Zimmer on January 1, 2012, for a cash cost of $6,000. Zimmer had registered the patent with the U.S. Patent Office five years ago.

c. An internally developed trademark registered with the federal government for $13,000 on November 1, 2012. Management decided the trademark has an indefinite life.

Required:

1. Compute the acquisition cost of each intangible asset.

2. Compute the amortization of each intangible at December 31, 2012. The company does not use contra accounts.

3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for 2012.

show how these assets and any related expenses should be reported on the balance she 558558

Aug 29, 2021 | Uncategorized

Computing and Reporting the Acquisition and Amortization of Three Different Intangible Assets Cheshire Company had three intangible assets at the end of 2011 (end of the accounting year):

a. A copyright purchased on January 1, 2011, for a cash cost of $12,300. The copyright is expected to have a 10 year useful life to Cheshire.

b. Goodwill of $65,000 from the purchase of the Hartford Company on July 1, 2010.

c. A patent purchased on January 1, 2010, for $39,200. The inventor had registered the patent with the U.S. Patent Office on January 1, 2006.

Required:

1. Compute the acquisition cost of each intangible asset.

2. Compute the amortization of each intangible at December 31, 2011. The company does not use contra accounts.

3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for 2011. (Assume there has been no impairment of goodwill.)

give any adjusting entries required at the end of the annual accounting period on de 558559

Aug 29, 2021 | Uncategorized

Recording Leasehold Improvements and Related Amortization – Starbucks Corporation is the leading roaster and retailer of specialty coffee, with nearly 17,000 company operated and licensed stores worldwide. Assume that Starbucks planned to open a new store on Commonwealth Avenue near Boston University and obtained a 10 year lease starting January 1, 2012. The company had to renovate the facility by installing an elevator costing $375,000. Amounts spent to enhance leased property are capitalized as intangible assets called Leasehold Improvements. The elevator will be amortized over the useful life of the lease.

Required:

1. Give the journal entry to record the installation of the new elevator.

2. Give any adjusting entries required at the end of the annual accounting period on December 31, 2012, related to the new elevator. Show computations.

give the adjusting entry that should be made by nasoff company at the end of 2011 fo 558560

Aug 29, 2021 | Uncategorized

Finding Financial Information as a Potential Investor You are considering investing the cash gifts you received for graduation in various stocks. You have received several annual reports of major companies.

Required:

For each of the following, indicate where you would locate the information in an annual report.

1. Depreciation expense.

2. The detail on major classifications of long lived assets.

3. Prior year’s accumulated depreciation.

4. The accounting method(s) used for financial reporting purposes.

5. Net amount of property, plant, and equipment.

6. Whether the company has had any capital expenditures for the year.

7. Policies on amortizing intangibles.

8. Any significant gains or losses on disposals of fixed assets.

9. The amount of assets written off as impaired during the year.

Recording a Change in Estimate

Required:

Give the adjusting entry that should be made by Nasoff Company at the end of 2011 for depreciation of the manufacturing equipment, assuming no change in the original estimated life or residual value. Show computations.

explain the rationale for your entries in requirements 1 and 3 558561

Aug 29, 2021 | Uncategorized

Recording and Explaining Depreciation, Extraordinary Repairs, and Changes in Estimated Useful Life and Residual Value (Straight Line Depreciation) – At the end of the annual accounting period, December 31, 2012, O’Connor Company’s records reflected the following for Machine A:

During January 2013, the machine was renovated at a cost of $15,500. As a result, the estimated life increased from five years to eight years, and the residual value increased from $4,500 to $6,500. The company uses straight line depreciation.

Required:

1. Give the journal entry to record the renovation.

2. How old was the machine at the end of 2012?

3. Give the adjusting entry at the end of 2013 to record straight line depreciation for the year.

4. Explain the rationale for your entries in requirements 1 and 3.

explain why ford management chose to use lifo for certain of its inventories 555628

Aug 29, 2021 | Uncategorized

Analyzing Notes to Adjust Inventory from LIFO to FIFO The following note was contained in a recent Ford Motor Company annual report:

Required:

1. What amount of ending inventory would have been reported in the current year if Ford had used only FIFO?

2. The cost of goods sold reported by Ford for the current year was $127,103 million. Determine the cost of goods sold that would have been reported if Ford had used only FIFO for both years.

3. Explain why Ford management chose to use LIFO for certain of its inventories.

analyzing and interpreting the impact of an inventory error ndash grants corporation 555631

Aug 29, 2021 | Uncategorized

Analyzing and Interpreting the Impact of an Inventory Error – Grants Corporation prepared the following two income statements (simplified for illustrative purposes):

During the third quarter, it was discovered that the ending inventory for the first quarter should have been $4,400.

Required:

1. What effect did this error have on the combined pretax income of the two quarters? Explain.

2. Did this error affect the EPS amounts for each quarter? Explain.

3. Prepare corrected income statements for each quarter.

4. Set up a schedule with the following headings to reflect the comparative effects of the correct and incorrect amounts on the income statement:

give the journal entry assuming instead that the account was paid in full on march 2 555633

Aug 29, 2021 | Uncategorized

Recording Sales and Purchases with Cash Discounts Brett’s Cycles sells merchandise on credit terms of 2/15, n/30. A sale invoiced at $900 (cost of sales $600) was made to Shannon Allen on February 1, 2011. The company uses the gross method of recording sales discounts.

Required:

1. Give the journal entry to record the credit sale. Assume use of the perpetual inventory system.

2. Give the journal entry, assuming that the account was collected in full on February 9, 2011.

3. Give the journal entry, assuming, instead, that the account was collected in full on March 2, 2011.

On March 4, 2011, the company purchased bicycles and accessories from a supplier on credit, invoiced at $8,400; the terms were 3/10, n/30. The company uses the gross method to record purchases.

Required:

4. Give the journal entry to record the purchase on credit. Assume the use of the perpetual inventory system.

5. Give the journal entry, assuming that the account was paid in full on March 12, 2011.

6. Give the journal entry, assuming, instead, that the account was paid in full on March 28, 2011.

recording purchases and sales using a perpetual and periodic inventory system 555634

Aug 29, 2021 | Uncategorized

Recording Purchases and Sales Using a Perpetual and Periodic Inventory System Misty Company reported beginning inventory of 100 units at a unit cost of $20. It engaged in the following purchase and sale transactions during 2011:

Jan. 14 Sold 20 units at unit sales price of $47.50 on open account.

April 9 Purchased 15 additional units at unit cost of $20 on open account.

Sept. 2 Sold 45 units at sales price of $50 on open account.

At the end of 2011, a physical count showed that Misty Company had 50 units of inventory still on hand.

Required:

Record each transaction, assuming that Misty Company uses ( a ) a perpetual inventory system and ( b ) a periodic inventory system (including any necessary entries at the end of the accounting period on December 31).

portfolio expected returns calculate the expected return on a portfolio of 40 percen 557661

Aug 29, 2021 | Uncategorized

Portfolio Expected Returns Calculate the expected return on a portfolio of 40 percent Roll and 60 percent Ross by filling in the following:

portfolio returns and volatilities given the following information calculate the exp 557666

Aug 29, 2021 | Uncategorized

Portfolio Returns and Volatilities Given the following information, calculate the expected return and standard deviation for a portfolio that has 40 percent invested in Stock A, 30 percent in Stock B, and the balance in Stock C.

asset allocation fill in the missing information assuming a correlation of 10 557670

Aug 29, 2021 | Uncategorized

Asset Allocation Fill in the missing information assuming a correlation of .10.

analyze the relative effects on the cash position for each situation 558501

Aug 29, 2021 | Uncategorized

Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling Income is to be evaluated under four different situations as follows:

a. Prices are rising:

(1) Situation A: FIFO is used.

(2) Situation B: LIFO is used.

b. Prices are falling:

(1) Situation C: FIFO is used.

(2) Situation D: LIFO is used.

The basic data common to all four situations are: sales, 500 units for $15,000; beginning inventory, 300 units; purchases, 400 units; ending inventory, 200 units; and operating expenses, $4,000. The following tabulated income statements for each situation have been set up for analytical purposes:

Required:

1. Complete the preceding tabulation for each situation. In Situations A and B (prices rising), assume the following: beginning inventory, 300 units at $11 = $3,300; purchases, 400 units at $12 = $4,800. In Situations C and D (prices falling), assume the opposite; that is, beginning inventory, 300 units at $12 = $3,600; purchases, 400 units at $11 = $4,400. Use periodic inventory procedures.

2. Analyze the relative effects on pretax income and on net income as demonstrated by requirement (1) when prices are rising and when prices are falling.

3. Analyze the relative effects on the cash position for each situation.

4. Would you recommend FIFO or LIFO? Explain.

what is the conceptual basis for applying lcm to merchandise inventories 558502

Aug 29, 2021 | Uncategorized

Evaluating the Income Statement and Cash Flow Effects of Lower of Cost or Market Harvey Company prepared its annual financial statements dated December 31, 2011. The company applies the FIFO inventory costing method; however, the company neglected to apply LCM to the ending inventory. The preliminary 2011 income statement follows:

Assume that you have been asked to restate the 2011 financial statements to incorporate LCM. You have developed the following data relating to the 2011 ending inventory:

Required:

1. Restate this income statement to reflect LCM valuation of the 2011 ending inventory. Apply LCM on an item by item basis and show computations.

2. Compare and explain the LCM effect on each amount that was changed on the income statement in requirement (1).

3. What is the conceptual basis for applying LCM to merchandise inventories?

4. Thought question: What effect did LCM have on the 2011 cash flow? What will be the long term effect on cash flow?

compute the effect of the projected change in the balance in inventory on cash flow 558503

Aug 29, 2021 | Uncategorized

Evaluating the Effects of Manufacturing Changes on Inventory Turnover Ratio and Cash Flows from Operating Activities Carter and Company has been operating for five years as an electronics component manufacturer specializing in cellular phone components. During this period, it has experienced rapid growth in sales revenue and in inventory. Mr. Carter and his associates have hired you as its first corporate controller. You have put into place new purchasing and manufacturing procedures that are expected to reduce inventories by approximately one third by year end. You have gathered the following data related to the changes:

Required:

1. Compute the inventory turnover ratio based on two different assumptions:

a. Those presented in the preceding table (a decrease in the balance in inventory).

b. No change from the beginning of the year inventory balance.

2. Compute the effect of the projected change in the balance in inventory on cash flow from operating activities for the year (the sign and amount of effect).

3. On the basis of the preceding analysis, write a brief memo explaining how an increase in inventory turnover can result in an increase in cash flow from operating activities. Also explain how this increase can benefit the company.

use of the lifo method reduced the amount of taxes that gm had to pay for the year c 558504

Aug 29, 2021 | Uncategorized

Evaluating the Choice between LIFO and FIFO Based on an Inventory Note An annual report for General Motors Corporation included the following note: Inventories are stated generally at cost, which is not in excess of market. The cost of substantially all domestic inventories was determined by the last in, first out (LIFO) method. If the first in, first out (FIFO) method of inventory valuation had been used by the corporation for U.S. inventories, it is estimated that they would be $2,077.1 million higher at the end of this year, compared with $1,784.5 million higher at the end of last year. For the year, GM reported net income (after taxes) of $320.5 million. At year end, the balance of the GM retained earnings account was $15,340 million.

Required:

1. Determine the amount of net income that GM would have reported for the year if it had used the FIFO method (assume a 30 percent tax rate).

2. Determine the amount of retained earnings that GM would have reported at year end if it always had used the FIFO method (assume a 30 percent tax rate).

3. Use of the LIFO method reduced the amount of taxes that GM had to pay for the year compared with the amount that would have been paid if GM had used FIFO. Calculate the amount of this reduction (assume a 30 percent tax rate).

what effect would the error have had on the income tax expense assuming a 30 percent 558505

Aug 29, 2021 | Uncategorized

Analyzing and Interpreting the Effects of Inventory Errors The income statement for Pruitt Company summarized for a four year period show the following:

An audit revealed that in determining these amounts, the ending inventory for 2012 was overstated by $18,000. The company uses a periodic inventory system.

Required:

1. Recast the income statements to reflect the correct amounts, taking into consideration the inventory error.

2. Compute the gross profit percentage for each year ( a ) before the correction and ( b ) after the correction.

3. What effect would the error have had on the income tax expense assuming a 30 percent average rate?

compute the increase or decrease in pretax operating profit that would have been rep 558506

Aug 29, 2021 | Uncategorized

Analyzing LIFO and FIFO When Inventory Quantities Decline Based on an Actual Note In a recent annual report, General Electric reported the following in its inventory note:

It also reported a $23 million change in cost of goods sold due to “lower inventory levels.”

Required:

1. Compute the increase or decrease in the pretax operating profit (loss) that would have been reported for the current year had GE employed FIFO accounting for all inventory for both years.

2. Compute the increase or decrease in pretax operating profit that would have been reported had GE employed LIFO but not reduced inventory quantities during the current year.

assume that the second sale was selected from the remainder of the beginning invento 558507

Aug 29, 2021 | Uncategorized

Analyzing the Effects of Four Alternative Inventory Methods – Dixon Company uses a periodic inventory system. At the end of the annual accounting period, December 31, 2011, the accounting records for the most popular item in inventory showed the following:

Required:

Compute the cost of ( a ) goods available for sale, ( b ) ending inventory, and ( c ) goods sold at December 31, 2011, under each of the following inventory costing methods (show computations and round to the nearest dollar):

1. Average cost (round average cost per unit to the nearest cent).

2. First in, first out.

3. Last in, first out.

4. Specific identification, assuming that the first sale was selected two fifths from the beginning inventory and three fifths from the purchase of February 20, 2011. Assume that the second sale was selected from the remainder of the beginning inventory, with the balance from the purchase of June 30, 2011.

of fifo and lifo which method would produce the more favorable cash flow explain 558508

Aug 29, 2021 | Uncategorized

Evaluating Four Alternative Inventory Methods Based on Income and Cash Flow At the end of January 2012, the records of NewRidge Company showed the following for a particular item that sold at $16 per unit:

Required:

1. Assuming the use of a periodic inventory system, prepare a summarized income statement through gross profit for January 2012 under each method of inventory: ( a ) weighted average cost, ( b ) FIFO, ( c ) LIFO, and ( d ) specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. Show the inventory computations (including for ending inventory) in detail.

2. Of FIFO and LIFO, which method would result in the higher pretax income? Which would result in the higher EPS?

3. Of FIFO and LIFO, which method would result in the lower income tax expense? Explain, assuming a 30 percent average tax rate.

4. Of FIFO and LIFO, which method would produce the more favorable cash flow? Explain.

analyze the relative effects on pretax income and on net income as demonstrated by r 558509

Aug 29, 2021 | Uncategorized

Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling Income is to be evaluated under four different situations as follows:

a. Prices are rising:

(1) Situation A: FIFO is used.

(2) Situation B: LIFO is used.

b. Prices are falling:

(1) Situation C: FIFO is used.

(2) Situation D: LIFO is used.

The basic data common to all four situations are: sales, 510 units for $13,260; beginning inventory, 340 units; purchases, 410 units; ending inventory, 240 units; and operating expenses, $5,000. The following tabulated income statements for each situation have been set up for analytical purposes:

Required:

1. Complete the preceding tabulation for each situation. In Situations A and B (prices rising), assume the following: beginning inventory, 340 units at $9 = $3,060; purchases, 410 units at $10 = $4,100. In Situations C and D (prices falling), assume the opposite; that is, beginning inventory, 340 units at $10 = $3,400; purchases, 410 units at $9 = $3,690. Use periodic inventory procedures.

2. Analyze the relative effects on pretax income and on net income as demonstrated by requirement (1) when prices are rising and when prices are falling.

3. Analyze the relative effects on the cash position for each situation.

4. Would you recommend FIFO or LIFO? Explain.

what effect would the error have had on the income tax expense assuming a 30 percent 558510

Aug 29, 2021 | Uncategorized

Analyzing and Interpreting the Effects of Inventory Errors The income statements for four consecutive years for Colca Company reflected the following summarized amounts:

Subsequent to development of these amounts, it has been determined that the physical inventory taken on December 31, 2012, was understated by $2,000.

Required:

1. Recast the income statements to reflect the correct amounts, taking into consideration the inventory error.

2. Compute the gross profit percentage for each year ( a ) before the correction and ( b ) after the correction.

3. What effect would the error have had on the income tax expense, assuming a 30 percent average rate?

explain how including these costs in inventory increased both inventories and net in 558514

Aug 29, 2021 | Uncategorized

Using Financial Reports: Interpreting the Effect of a Change in Accounting for Production Related Costs Dana Holding Corporation designs and manufactures component parts for the vehicular, industrial, and mobile off highway original equipment markets. In a recent annual report, Dana’s inventory note indicated the following:

Dana changed its method of accounting for inventories effective January 1 . . . to include in inventory certain production related costs previously charged to expense. This change in accounting principle resulted in a better matching of costs against related revenues. The effect of this change in accounting increased inventories by $23.0 and net income by $12.9.

Required:

1. Under Dana’s previous accounting method, certain production costs were recognized as expenses on the income statement in the period they were incurred. When will they be recognized under the new accounting method?

2. Explain how including these costs in inventory increased both inventories and net income for the year.

an explanation of the differences in the ratios across the fifo and lifo methods 558515

Aug 29, 2021 | Uncategorized

Using Financial Reports: Interpreting Effects of the LIFO/FIFO Choice on Inventory Turnover In its annual report, Caterpillar, Inc., a major manufacturer of farm and construction equipment, reported the following information concerning its inventories:

Inventories are stated at the lower of cost or market. Cost is principally determined using the last in, first out (LIFO) method. The value of inventories on the LIFO basis represented about 70% of total inventories at December 31, 2008, and about 75% of total inventories at December 31, 2007 and 2006.

If the FIFO (first in, first out) method had been in use, inventories would have been $3,183 million, $2,617 million, and $2,403 million higher than reported at December 31, 2008, 2007, and 2006, respectively. On its balance sheet, Caterpillar reported:

Required:

As a recently hired financial analyst, you have been asked to analyze the efficiency with which Caterpillar has been managing its inventory and to write a short report. Specifically, you have been asked to compute inventory turnover for 2008 based on FIFO and LIFO and to compare the two ratios with two standards: (1) Caterpillar for the prior year 2007 and (2) its chief competitor, John Deere.

For 2008, John Deere’s inventory turnover was 4.9 based on FIFO and 7.3 based on LIFO. In your report, include:

1. The appropriate ratios computed based on FIFO and LIFO.

2. An explanation of the differences in the ratios across the FIFO and LIFO methods.

3. An explanation of whether the FIFO or LIFO ratios provide a more accurate representation of the companies’ efficiency in use of inventory.

which of the following is an acceptable explanation for the difference in net book v 558524

Aug 29, 2021 | Uncategorized

Miga Company and Porter Company both bought a new delivery truck on January 1, 2008. Both companies paid exactly the same cost, $30,000, for their respective vehicles. As of December 31, 2011, the net book value of Miga’s truck was less than Porter Company’s net book value for the same vehicle. Which of the following is an acceptable explanation for the difference in net book value?

a. Miga Company estimated a lower residual value, but both estimated the same useful life and both elected straight line depreciation.

b. Both companies elected straight line depreciation, but Miga Company used a longer estimated life.

c. Because GAAP specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible.

d. Miga Company is using the straight line method of depreciation, and Porter Company is using the double declining balance method of depreciation.

classifying long lived assets and related cost allocation concepts ndash for each of 558534

Aug 29, 2021 | Uncategorized

Classifying Long Lived Assets and Related Cost Allocation Concepts – For each of the following long lived assets, indicate its nature and the related cost allocation concept. Use the following symbols:

identifying capital and revenue expenditures 558536

Aug 29, 2021 | Uncategorized

Identifying Capital and Revenue Expenditures For each of the following items, enter the correct letter to the left to show the type of expenditure. Use the following:

indicate whether an asset has been impaired y for yes and n for no and if so the amo 558540

Aug 29, 2021 | Uncategorized

Identifying Asset Impairment For each of the following scenarios, indicate whether an asset has been impaired (Y for yes and N for no) and, if so, the amount of loss that should be recorded.

compute the amount of goodwill that giant bakery should record on the date of the pu 558542

Aug 29, 2021 | Uncategorized

Computing Goodwill and Patents Elizabeth Pie Company has been in business for 50 years and has developed a large group of loyal restaurant customers. Giant Bakery Inc. has made an offer to buy Elizabeth Pie Company for $5,000,000. The book value of Elizabeth Pie”s recorded assets and liabilities on the date of the offer is $4,300,000 with a fair value of $4,500,000. Elizabeth Pie also (1) holds a patent for a pie crust fluting machine that the company invented (the patent with a fair value of $300,000 was never recorded by Elizabeth Pie because it was developed internally) and (2) estimates goodwill from loyal customers to be $310,000 (also never recorded by the company). Should Elizabeth Pie Company management accept Giant Bakery”s offer of $5,000,000? If so, compute the amount of goodwill that Giant Bakery should record on the date of the purchase.

do a detailed benchmarking analysis of the bookstore s income statement 557244

Aug 29, 2021 | Uncategorized

Do a detailed benchmarking analysis of the Bookstore’s income statement, five product lines, and financial and operating performance measures, using the Association of Universities and Colleges of Canada Stores’ (AUCC) benchmarking information. Identify performance gaps between the Bookstore results and the AUCC averages and consider possible corrective actions. (12 Marks ~ no page limit) Q2. As required by Tom, Emma must develop a few key related short term goals and related performance measures that could be used in future performance evaluations. What objectives and related performance measures might she consider? Provide specific answers. (3 Marks ~ one page limit) Q3. Assuming all AUCC bookstores are suffering from the same trends and experiencing the same financial difficulties, should Milton be benchmarked against the 25th percentile, the average, or the 75th percentile? Why? Assuming all AUCC bookstores are experiencing superior financial performance and sales growth and Milton is experiencing financial difficulties, is the 25th percentile, the median, or the 75th percentile the best source for benchmarking? Why? (2 Marks ~ half a page limit) Q4. Due to prior superior performance regarding sales of custom materials, assume that Milton has the objective to maintain excellence for this product line. Against which comparison point should this product line be benchmarked (e.g., median, 25th percentile)? Why? (2 Marks ~ half a page limit) Q5. Assume that there is an independent bookstore located near the campus of Milton University that also sells apparel with the Milton logo as well as new and used textbooks. Against which comparison point should these product lines be benchmarked? Why? (2 Marks ~ half a page limit) Q6. Based upon your benchmarking analysis, make appropriate recommendations and decisions for the Milton Bookstore. (5 Marks ~ two page limit)

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Individual Written Cases Part 2 (50 Marks) th Due Thursday April 10 Instructions: ? A Hard copy of the report should be submitted at the beginning of the class. ? You are required to complete both of the following cases: Quality Treats, Inc. Case (24 Marks) Milton University Bookstore Case (26 Marks) ? Font type should be Arial and the font size should be 12 points. ? Line spacing should be 1.5 lines. ? Follow the required page limits as stated for each requirement. ? Marks for professional presentation are integrated with the marks of each requirement. ? The assignment should be done independently by each student. ? It is the student’s responsibility to ensure that the assignment is completed when due. ? The Business Faculty requires the Harvard style of referencing for academic papers. Please see Quote, Unquote Referencing, and a Speedy Guide to Harvard Referencing at http://www.viu.ca/business/resources.asp. ? Errors happen in the real life every day, so if you see an error in the cases. Note the error in your report and use your best judgment to continue your analysis. Quality Treats, Inc. Case (24 Marks) INTRODUCTION Nicole Molson is the manager of Strategic Marketing Unit Two (SMU2) at Quality Treats, Inc., a provider of branded, high quality food products. Molson is unhappy with what she perceives to be unfair and inappropriate product costing for her unit, especially for what Quality Treats considers to be special orders. Molson’s education, experience, and expertise as a food scientist and process engineer have earned her considerable respect at Quality Treats, but she has limited accounting knowledge, which holds her back from expressing her serious concerns. Therefore, Molson asked you, soon to be an accounting graduate, to develop a memorandum and a glossary of terms to help her make her case more forcefully to top management. QUALITY TREATS, INC. Quality Treats, Inc., rooted in the upper Midwest…

Attachments:

Written 20Cas….pdf

the contribution format income statement for westex inc for its most recent period i 557280

Aug 29, 2021 | Uncategorized

the following information relates to david pande co 557302

Aug 29, 2021 | Uncategorized

Exercise 1 12 The following information relates to David Pande Co. for the year 2014. Owner’s capital, January 1, 2014 $48,456 Advertising expense $ 1,817 Owner’s drawings during 2014 6,057 Rent expense 10,499 Service revenue 64,204 Utilities expense 3,129 Salaries and wages expense 29,780 After analyzing the data, prepare an income statement for the year ending December 31, 2014. DAVID PANDE CO. Income Statement For the Year Ended December 31, 2014 $ $ $ Show List of Accounts After analyzing the data, prepare an owner’s equity statement for the year ending December 31, 2014. (List items that increase owner’s equity first.) DAVID PANDE CO. Owner’s Equity Statement For the Year Ended December 31, 2014 $ : : $ Brief Exercise 2 6 H. Xiao has the following transactions during August of the current year. Aug. 1 Opens an office as a financial advisor, investing $8,236 in cash. 4 Pays insurance in advance for 6 months, $1,590 cash. 16 Receives $3,044 from clients for services performed. 27 Pays secretary $1,334 salary. Journalize the transactions. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Brief Exercise 2 10 An inexperienced bookkeeper prepared the following trial balance. HUEWITT COMPANY Trial Balance December 31, 2014 Debit Credit Cash $12,759 Prepaid Insurance $3,133 Accounts Payable 4,592 Unearned Service Revenue 3,792 Owner’s Capital 10,959 Owner’s Drawings 6,092 Service Revenue 27,559 Salaries and Wages Expense 20,559 Rent Expense 4,359 $37,110 $56,694 Prepare a correct trial balance, assuming all account balances are normal. HUEWITT COMPANY Trial Balance December 31, 2014 Debit Credit $ $ Total $ $ Multiple Choice Question 98 Meat Puppets Company purchased equipment for $7,200 on December 1. It is estimated that annual depreciation on the equipment will be $1,800. If financial statements are to be prepared on December 31, the company should make the following adjusting entry: Debit Equipment, $7,200; Credit Accumulated Depreciation, $7,200. Debit Depreciation Expense, $150; Credit Accumulated Depreciation, $150. Debit Depreciation Expense, $1,800; Credit Accumulated Depreciation, $1,800. Debit Depreciation Expense, $5,400; Credit Accumulated Depreciation, $5,400. Multiple Choice Question 104 At December 31, 2014, before any year end adjustments, Murmur Company’s Insurance Expense account had a balance of $2,450 and its Prepaid Insurance account had a balance of $3,800. It was determined that $2,800 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be $5,250. $2,450. $2,800. $3,450. Multiple Choice Question 142 Stone Roses Candies paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29–31). Employees work 5 days a week and the company pays $1,500 a day in wages. What will be the adjusting entry to accrue wages expense at the end of January? Salaries and Wages Expense 1,500 Salaries and Wages Payable 1,500 No adjusting entry is required Salaries and Wages Expense 7,500 Salaries and Wages Payable 7,500 Salaries and Wages Expense 4,500 Salaries and Wages Payable 4,500

Attachments:

QUIZ 1 Part….docx

questions.docx

question a cost volume profit cvp income statement is frequently prepared for intern 557414

Aug 29, 2021 | Uncategorized

Question: A cost Volume Profit (CVP) income statement is frequently prepared for internal use by management. Describe the features of the CVP that influence make it more useful for management decision making than the traditional income statement that is prepared for external users.

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Question: A cost Volume Profit (CVP) income statement is frequently prepared for internal use by management. Describe the features of the CVP that influence make it more useful for management decision making than the traditional income statement that is prepared for external users.

Attachments:

Cost Volume P….docx

instructions 1 cases will be randomly assigned in class 2 research the problem 557423

Aug 29, 2021 | Uncategorized

Instructions: 1. Cases will be randomly assigned in class. 2. Research the problem using the online Checkpoint tax research database. 3. Prepare the memorandum following the format of the sample memorandum posted on Blackboard. 4. The memorandum should contain sections. a. Facts . b. Issues c. Conclusion 1. 1 ­ 6 sentences. 2. Remember, there is no right or wrong answer. Many of the fact situations may be argued either for or against the taxpayer. d. Discussion Applicable Law 1. Cite Internal Revenue Code sections. 2. Other cites could include Regulations, Revenue Rulings, and court cases. a. Use the PROPER citation forms as shown in Chapter 2. 3. a. Your particular fact situation may or may NOT have applicable Regulations, Revenue Rulings, or court cases. 4. DO try to find all applicable law regarding your fact situation. Analysis 5. In this subsection compare your fact situation to ALL the authorities cited in the “Applicable Law” subsection of this Discussion . 6. IMPORTANT !!! For EVERY authority mentioned in the “Applicable Law” subsection include a COMPLETE analysis of how EACH cited authority relates to the facts of the research problem. 7. Be SPECIFIC and THOROUGH in your comparison. Cite every authority by NAME. COMMON ERRORS ON MEMORANDUM ASSIGNMENTS WHICH WILL RESULT IN POINT DEDUCTIONS 1. Failure to begin “Applicable Law” subsection with cite to a Code section. ALWAYS start with a code section, not the related Regulation. 2. Failure to give a full citation to a Revenue Ruling and, less commonly, a court case. Citation forms are shown in Chapter 2 of the text. 3. Citing to the CCH, RIA, or other tax service. DO NOT cite to these services. Cite to the primary source (i.e., Code, Regulations, Revenue Rulings, etc.). A tax service cannot be cited as an authority when representing your client before the IRS or in court. 4. A weak “Analysis” subsection. Most students do a reasonable job on the “Applicable Law” subsection, but then lose steam when comparing the facts of the particular situation to the “Applicable Law” subsection.

Attachments:

Instructions.pdf

Case 29.pdf

salialailai ltd manufactures water tanks for different sizes for use by industrial c 557434

Aug 29, 2021 | Uncategorized

Job Order Cost Accounting Salialailai Ltd manufactures water tanks for different sizes for use by industrial customers. The company uses a job costing system, in which manufacturing overhead is applied on the basis of direct labour hours. The company’s budget for the current year included the following estimates: Budgeted total manufacturing overhead $504,000 Budgeted total direct labour hours 24,000 During March, the company started two production jobs: • Job number ST81, consisting of 76 water tanks (Standard size) • Job number MI45 consisting of 110 water tanks (midi size) The transactions for March are described below: 1,000 square meters of aluminium sheet material were purchased on account for $6,000. • 400 kilograms of aluminium tubing were purchased on account for $5,200 • The following requisitions were filed on 5 March: ? Requisition number 112: 260 square meters of aluminium sheet metal (for job number ST81) @ $5.50 per square meter. ? Requisition number 113: 1,100 kilograms of aluminium tubing (for job number MI45) @ $9 per kilogram ? Requisition number 114: 10 litres of superb glue @ $14 per liter. All aluminium used in production is treated as direct material. Superb glue is an indirect material. • An analysis of labour time sheets revealed the following labour usage for March: ? Direct labour: job number ST81, 850 hours @ $20 per hour ? Direct labour: job number MI45, 950 hours @ $20 per hour ? Indirect labour: general factory clean up, $4,500 ? Indirect labour: factory supervisory salaries, $9,600 • Depreciation of the factory building and equipment during March amounted to $13,000. • Other manufacturing overhead costs incurred in March totalled $9,010. • Sales and administrative expenses for March totalled $13,150. • Job number ST81 was completed in March. • 75% of the water tanks (Standard size) were sold on account during March for $700 each. 19 The March 1st balances in selected accounts are as follows: Cash $11,000 Accounts receivable 20,000 Raw material inventory 50,000 Manufacturing supplies inventory 600 Work in process inventory 89,600 Finished goods inventory 223,000 Accumulated depreciation 99,000 Accounts payable 14,500 Wages payable 8,500 Required: 1. Calculate the company’s predetermined overhead rate for the current year. 2. .Prepare and complete a job cost sheet for Job Number ST81 3. Prepare journal entries (without narration) for March to record the following (Note: Use summary entries where appropriate by combining individual job data): i) the issue of raw material to production ii) the labour costs incurred iii) the manufacturing overhead costs incurred iv) the application of manufacturing overhead to production v) the completion of job(s) in March vi) the sale of job(s) in March 4. Calculate the overapplied or underapplied overhead for March. 5. Prepare a journal entry to close this balance to Cost of goods sold.

Attachments:

Job Order cos….odt

should scorchers limited continue to buy the part from the outside supplier or 557438

Aug 29, 2021 | Uncategorized

Study the information given below and answer the following questions: 4.3.1 Should Scorchers Limited continue to buy the part from the outside supplier or should it produce the part? Motivate your answer with the relevant calculations. (4) 4.3.2 Provide two other factors that are important to this decision. (2)

INFORMATION Scorchers Limited uses a certain part in its manufacturing process that it purchases from an outside supplier at R256 per part including R40 per part for shipping and other purchase related costs. The company estimates that 54 000 of these parts are required next year and is considering making the part Internally. It has sufficient unused capacity to manufacture the 54 000 parts but would need to employ a manager at an annual salary of R432 000 to oversee this production activity. Estimated

production costs (excluding the additional manager’s salary) are as follows: R Direct material 138 Direct labour 60 Variable overheads 30 Fixed overheads (Assumed to be non incremental) 48

Attachments:

Accounting fo….pdf

research the problem using the online checkpoint tax research database 557486

Aug 29, 2021 | Uncategorized

Instructions: 1. Cases will be randomly assigned in class. 2. Research the problem using the online Checkpoint tax research database. 3. Prepare the memorandum following the format of the sample memorandum posted on Blackboard. 4. The memorandum should contain sections. a. Facts. b. Issues c. Conclusion 1. 1 ­ 6 sentences. 2. Remember, there is no right or wrong answer. Many of the fact situations may be argued either for or against the taxpayer. d. Discussion Applicable Law 1. Cite Internal Revenue Code sections. 2. Other cites could include Regulations, Revenue Rulings, and court cases. a. Use the PROPER citation forms as shown in Chapter 2. 3. a. Your particular fact situation may or may NOT have applicable Regulations, Revenue Rulings, or court cases. 4. DO try to find all applicable law regarding your fact situation. Analysis 5. In this subsection compare your fact situation to ALL the authorities cited in the “Applicable Law” subsection of this Discussion . 6. IMPORTANT !!! For EVERY authority mentioned in the “Applicable Law” subsectioninclude a COMPLETE analysis of how EACH cited authority relates to the facts of the research problem. 7. Be SPECIFIC and THOROUGH in your comparison. Cite every authority by NAME. COMMON ERRORS ON MEMORANDUM ASSIGNMENTS WHICH WILL RESULT IN POINT DEDUCTIONS1. Failure to begin “Applicable Law” subsection with cite to a Code section. ALWAYS start with a codesection, not the related Regulation.2. Failure to give a full citation to a Revenue Ruling and, less commonly, a court case. Citation forms are shown in Chapter 2 of the text.3. Citing to the CCH, RIA, or other tax service. DO NOT cite to these services. Cite to the primary source (i.e., Code, Regulations, Revenue Rulings, etc.). A tax service cannot be cited as anauthority when representing your client before the IRS or in court.4. A weak “Analysis” subsection. Most students do a reasonable job on the “Applicable Law” subsection, but then lose steam when comparing the facts of the particular situation to the “ApplicableLaw” subsection.

Attachments:

Instructions.pdf

Case 29.pdf

acc 30001 acc 30008 accounting theory semester 1 2014 557499

Aug 29, 2021 | Uncategorized

Acc 30001/Acc 30008 Accounting Theory Semester 1 2014 Assignment Information Sheet Aligning the Incentives of Managers and Shareholders through Executive Remuneration Individual or Groups of 2 Assignment Due 8.00pm 1st May, 2014 Deegan 4e Question 7.21 p. 328 (adapted) “Within annual reports, companies frequently disclose information about how their managers are rewarded in terms of the components of their management compensation plans. For example, within IAS 24 (and AASB 124 within Australia) there is a requirement that information about the components of rewards paid to key management personnel be disclosed within a company’s annual report.” Required: a) Select two large companies listed on the Australian Securities Exchange (ASX) that issue share options as part of their remuneration for key managerial personnel. Use the financial year 2013 annual reports for listed companies to select two such companies, but generally companies within the S&P ASX All Ordinaries Index use stock options as a remuneration mechanism. 2 You are required to explain in a report for the Chief Accountant of the Australian Securities & Investments Commission how the respective components of the remuneration could be expected to align the interests of the managers with those of the owners and to minimise the contracting costs of the organisation. In your report you are expected to draw on (not necessarily in the numbered order): 1) the chosen annual reports 2) at least six quality*, scholarly articles from JOURNALS that appear in the Australian Business Deans’ Council (2013) ranking of journals – Business Source Complete (Ebscohost) is a Library database that hosts scholarly journal articles. 3) media reports of the workings in practise of the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011.No. 42, which provided shareholders with a ‘say on pay’ and which may result in ‘first strike’ or ‘second strike’ votes by shareholders. Factiva is a Library database that hosts newspapers). Note: Research for and writing of the assignment can be commenced after the first tutorial. Positive accounting theory is covered specifically in Lecture 6. Executive remuneration is covered specifically in Chapter 7 (pages 291 301) of the prescribed text. Some students find reading scholarly journal articles very difficult. YouTube clips that help with this can be found on Blackboard under ‘Assignments’. *The quality of journals can be assessed by reference to the Australian Council of Business Deans (ABDC) 2013 journal rankings (A*, A, B, C in order of declining quality) available http://www.abdc.edu.au/journalreview l Learning outcomes addressed by the assignment. The assignment is designed to provide you with the opportunity to develop the following learning outcomes: 1 with regard to your accounting theory knowledge, the assignment provides you with the opportunity to develop your understanding of positive accounting theory and, in 3 particular, agency or costly contracting theory and its application to executive remuneration. 2. with respect to generic skills, the assignment provides you with the opportunity to develop your ability to research and analyse complex issues, to formulate well reasoned and coherent arguments and to reach well considered conclusions, and to develop your written communication skills, including the conventions of referencing at university. You are to aspire to the highest standard of work with respect to both the content and presentation of the Report. The Harvard referencing system is to be used as applied by the American Accounting Association’s The Accounting Review an A* journal (ABDC rankings). Marks will be deducted where the Harvard system is not used appropriately. Please note that Wikipedia is not an appropriate source to reference for an academic Report such as this. The Library holds sessions on referencing technique and provides guidelines at http://www.swinburne.edu.au/lib/researchhelp/harvard_style l. LODGEMENT: You must submit your assignment via the Turnitin facility available on Blackboard no later than 8.00pm 1st May, 2014. Students must also keep an electronic or photocopied version of their assignment for evidentiary purposes. The file name should be Surname1_Surname2 (in the case of a submission by two students). MAXIMUM MARKS: 20 Marks toward the final assessment. The assignment will be marked out of 100. The rubric for marking is in the Unit Outline. Assignments will be marked to the same standard regardless of whether one or two students are involved in the submission. When working in pairs, students are expected to contribute equally. On this basis each student responsible for a submission is provided the same mark. Where equal contributions are not forthcoming and this cannot be resolved by the students themselves, the Convenor should be informed in writing. WORD COUNT: the body of the Report should not exceed 1500 words (+/ 10 per cent) (excluding title page, references and executive summary but including footnotes, endnotes and appendices). Please provide a word count on the cover sheet. 4 FORMAT A report format is required for this assignment. In a report, the Executive Summary should provide an overview of the whole report, including any recommendations. This is a ‘thinking’ assignment and what is expected is the personal view of individual students’ based on research and the evidence that has been sourced. Further, an assignment which presents more quotes than constructive analysis and argument may be heavily penalised. SUGGESTED REPORT STRUCTURE 1. Title Page 2. Contents Page 3. Executive Summary (which provides an overview of the whole report) 4. Introduction and Purpose 5. Responses to specific task using appropriate headings and sub headings 6. Conclusion 7. References This assignment is an important assessment component of this Unit and as such the assignment must be properly researched and professionally presented. The assignment should also: • Be all your own (individual submissions) or your group’s (pairs) work • Be word processed (printed), and have 1.5 spacing for clarity; a high standard of presentation is expected • Have the cover sheet with all relevant details, including: student name, student number, tutorial time & tutor’s name Unit name and code date of submission • Contain correct referencing, using the Harvard system. • Include a list of references (alphabetical by first author’s surname) adequately referencing your sources (in text references should only refer to the surname of the author/authors and the year of the publication). 5 Students are reminded to review the University policy on plagiarism. The University uses the Turnitin tool. This is an effective tool to reduce plagiarism. Students should self check their assignments prior to final submission. Documentation on the use of this tool will be posted on Blackboard. Please ensure that you use only the Draft option to check your work. This is a matching and not a punitive tool. The default setting allows every student to check draft submissions, but you should be aware that the closer to the deadline you use Turnitin, the longer it may take to receive a report. Upon receiving feedback from Turnitin, you should amend your assignment to ensure that it is “Plagiarism Safe” before

Attachments:

Acc30001 8Ass….pdf

elctro company manufactures an innovative automobile transmission for electric cars 557514

Aug 29, 2021 | Uncategorized

Elctro Company manufactures an innovative automobile transmission for electric cars. Management predicts that ending finished goods inventory for the 1st quarter will be 80,180 units. The following unit sales of the transmissions are expected during the rest of the year: 2nd quarter 211,000 units, 3rd quarter 497,000 units and 4th quarter 239,000 units. Company policy calls for the endinf finished goods inventory of a quarter to equal 38% of the next quarter’s budgeted sales. (Ending inventory for the 1st quarter does not comply with company policy.) Each transmission requires 0.57 pouns of a key raw material. Electro Company aims to end each quarter with an ending inventory of dorect materials equal to 38% of next quarter’s budgeted materials requirements. Direct materials cost $169 per unit.Prepare a direct materials budger for the 2ndquarterwith the following:2nd quarter’s budgeted production units is 391,680 units, materials needed for production pounds is 182,218 lbs. Budgeted beginning inventory is 69,243 lbs. What is Budgeted ending inventory lbs and materials price per lb? $296 per lbs is not correct

a contingency theory has frequently been used to explain variations in the functioni 557518

Aug 29, 2021 | Uncategorized

a)Contingency theory has frequently been used to explain variations in the functioning of organizations.It has been criticized on a number of grounds, including whether sufficient attention has been given to people and culture.

Requirement

Explain and discuss from a management control perspective, the criticism that contingency theory pays insufficient attention to the people in organizations and to organizational culture.

(b)Some organizations have long standing practices of promoting from existing staff, as a consequence of which they rarely recruit outsiders to any senior position.Staff turnover is vey low.Other organizations have frequent management and structural changes, and often recruit senior managers from outside the organization.

Requirement

Explain the differences in control systems and approaches to management control hat could be expected with these alternative practices.

Question 3

Describe the contingency theory of management accounting and

discuss the relationship between various contingent factors and

features of the management accounting system.

assume the equipment costing 125 000 was purchased for cash and equipment costing 85 557569

Aug 29, 2021 | Uncategorized

use the following table of states of the economy and stock returns to answer the rev 557639

Aug 29, 2021 | Uncategorized

Use the following table of states of the economy and stock returns to answer the review problems:

1. Expected Returns Calculate the expected returns for Roten and Bradley.

2. Standard Deviations Calculate the standard deviations for Roten and Bradley.

3. Portfolio Expected Returns Calculate the expected return on a portfolio of 50 percent Roten and 50 percent Bradley.

4. Portfolio Volatility Calculate the volatility of a portfolio of 50 percent Roten and 50 percent Bradley.

we calculate the expected return as follows 557640

Aug 29, 2021 | Uncategorized

We calculate the expected return as follows:

we calculate the standard deviation as follows 557641

Aug 29, 2021 | Uncategorized

We calculate the standard deviation as follows:

Taking square roots, the standard deviations are 24.495 percent and 9.798 percent.

we calculate the expected return on a portfolio of 50 percent roten and 50 percent b 557642

Aug 29, 2021 | Uncategorized

We calculate the expected return on a portfolio of 50 percent Roten and 50 percent Bradley as follows:

given these correlations which of the following portfolios constructed from these st 557654

Aug 29, 2021 | Uncategorized

Minimum Variance Portfolio Stocks A, B, and C each have the same expected return and standard deviation. The following shows the correlations between returns on these stocks.

Given these correlations, which of the following portfolios constructed from these stocks would have the lowest risk? (1994 CFA Exam)

a. equally invested in stocks A and B

b. equally invested in stocks A and C

c. equally invested in stocks B and C

d. totally invested in stock C

expected returns use the following information on states of the economy and stock re 557656

Aug 29, 2021 | Uncategorized

Expected Returns Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone:

expected returns and deviations repeat questions 1 and 2 assuming that all three sta 557658

Aug 29, 2021 | Uncategorized

Expected Returns and Deviations Repeat Questions 1 and 2 assuming that all three states are equally likely.

Use the following information on states of the economy and stock returns to answer Questions 4 7.

expected returns calculate the expected returns for roll and ross by filling in the 557659

Aug 29, 2021 | Uncategorized

Expected Returns Calculate the expected returns for Roll and Ross by filling in the following:

why might managers favor this abc system instead of abram rsquo s older system which 556838

Aug 29, 2021 | Uncategorized

Product costing in an ABC system

The Abram Manufacturing Company in Rochester, Minnesota, assembles and tests electronic components used in handheld video phones. Consider the following data regarding component T24:

The activities required to build the component follow:

Requirements

1. Complete the missing items for the two tables.

2. Why might managers favor this ABC system instead of Abram’s older system, which allocated all conversion costs on the basis of direct labor?

which product costs are reported in the external financial statements 556839

Aug 29, 2021 | Uncategorized

Product costing in an ABC system

McKnight, Inc., manufactures bookcases and uses an activity based costing system. McKnight’s activity areas and related data follow:

McKnight produced two styles of bookcases in April: the standard bookcase and an unfinished bookcase, which has fewer parts and requires no finishing. The totals for quantities, direct materials costs, and other data follow:

Requirements

1. Compute the manufacturing product cost per unit of each type of bookcase.

2. Suppose that pre manufacturing activities, such as product design, were assigned to the standard bookcases at $4 each, and to the unfinished bookcases at $3 each. Similar analyses were conducted of post manufacturing activities such as distribution, marketing, and customer service. The post manufacturing costs were $20 per standard bookcase and $15 per unfinished bookcase. Compute the full product costs per unit.

3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference.

4. What price should McKnight’s managers set for unfinished bookcases to earn $16 per bookcase?

explain why the costs changed as they did 556840

Aug 29, 2021 | Uncategorized

Comparing costs from ABC and single rate systems

Sawyer Pharmaceuticals manufactures an over the counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care facilities and travel packs of 20 capsules to shops in airports, train stations, and hotels. The following information has been developed to determine if an activity based costing system would be beneficial:

Other production information includes the following:

Requirements

1. Compute the cost allocation rate for each activity.

2. Use the activity based cost allocation rates to compute the activity costs per unit of the commercial containers and the travel packs. (Hint: First compute the total activity costs allocated to each product line, and then compute the cost per unit.)

3. Sawyer’s original single allocation base costing system allocated indirect costs to products at $150 per machine hour. Compute the total indirect costs allocated to the commercial containers and to the travel packs under the original system. Then compute the indirect cost per unit for each product.

4. Compare the indirect activity based costs per unit to the indirect costs per unit from the single allocation base system. How have the unit costs changed? Explain why the costs changed as they did.

what are the major features of a jit production system such as that of deep freeze 556841

Aug 29, 2021 | Uncategorized

Recording manufacturing costs for a JIT costing system

Deep Freeze produces fleece jackets. The company uses JIT costing for its JIT production system. Deep Freeze has two inventory accounts: Raw and in process inventory and Finished goods inventory. On February 1, 2012, the account balances were Raw and in process inventory, $10,000; Finished goods inventory, $1,600. The standard cost of a jacket is $39, comprised of $16 direct materials plus $23 conversion costs. Data for February’s activities follow:

Requirements

1. What are the major features of a JIT production system such as that of Deep Freeze?

2. Prepare summary journal entries for February. Under or overallocated conversion costs are closed to Cost of goods sold monthly.

3. Use a T account to determine the February 29, 2012, balance of Raw and in process inventory.

what major difficulty would roxi rsquo s managers have in implementing this costs of 556842

Aug 29, 2021 | Uncategorized

Analyzing costs of quality

Roxi, Inc., is using a costs of quality approach to evaluate design engineering efforts for a new skateboard. Roxi’s senior managers expect the engineering work to reduce appraisal, internal failure, and external failure activities. The predicted reductions in activities over the 2 year life of the skateboards follow. Also shown are the cost allocation rates for each activity.

Requirements

1. Calculate the predicted quality cost savings from the design engineering work.

2. Roxi spent $109,000 on design engineering for the new skateboard. What is the net benefit of this “preventive” quality activity?

3. What major difficulty would Roxi’s managers have in implementing this costs of quality approach? What alternative approach could they use to measure quality improvement?

if sheldon paid 3 900 for the job what is the profit or loss under abc 556843

Aug 29, 2021 | Uncategorized

Product costing in an ABC system

This exercise continues the Lawlor Lawn Service, Inc., situation from Exercise 17 34 of Chapter 17. Recall that Lawlor completed a special landscaping job for Sheldon’s Ideal Designs. If Lawlor had used activity based costing, Lawlor’s data about the job, including ABC information, would be as follows:

ABC Costing Rates:

$275 per setup

$15 per plant

Requirements

1. Lawlor uses one setup for the Sheldon job and installs 35 plants. What is the total cost of the Sheldon job?

2. If Sheldon paid $3,900 for the job, what is the profit or loss under ABC?

how much what fee should it charge each of these two clients 556844

Aug 29, 2021 | Uncategorized

Comparing costs from ABC and single rate systems

This problem continues the Draper Consulting, Inc., situation from Problem 17 35 of Chapter 17. Recall that Draper allocated indirect costs to jobs based on a predetermined indirect cost allocation rate, computed as a percentage of direct labor costs. Because Draper provides a service, there are no direct materials costs. Draper is now considering using an ABC system. Information about ABC costs follows:

Records for two clients appear here:

Requirements

1. Compute the total cost of each job.

2. Is the job cost greater or less than that computed in Problem 17 35 for each job? Why?

3. If Draper wants to earn gross profit equal to 25% of cost, how much (what fee) should it charge each of these two clients?

which costing system more accurately assigns to jobs the costs of the resources cons 556845

Aug 29, 2021 | Uncategorized

Decision Case 18 1 Harris Systems specializes in servers for workgroup, e commerce, and ERP applications. The company’s original job costing system has two direct cost categories: direct materials and direct labor. Overhead is allocated to jobs at the single rate of $22 per direct labor hour. A task force headed by Harris’s CFO recently designed an ABC system with four activities. The ABC system retains the current system’s two direct cost categories. Overhead costs are reflected in the four activities. Pertinent data follow:

Harris Systems has been awarded two new contracts, which will be produced as Job A and Job B. Budget data relating to the contracts follow:

Requirements

1. Compute the product cost per unit for each job, using the original costing system (with two direct cost categories and a single overhead allocation rate).

2. Suppose Harris Systems adopts the ABC system. Compute the product cost per unit for each job using ABC.

3. Which costing system more accurately assigns to jobs the costs of the resources consumed to produce them? Explain.

manning has just returned from a packaging industry conference on activity based cos 556847

Aug 29, 2021 | Uncategorized

Cassidy Manning is assistant controller at LeMar Packaging, Inc., a manufacturer of cardboard boxes and other packaging materials. Manning has just returned from a packaging industry conference on activity based costing. She realizes that ABC may help LeMar meet its goal of reducing costs by 5% over each of the next three years.

LeMar Packaging’s Order Department is a likely candidate for ABC. While orders are entered into a computer that updates the accounting records, clerks manually check customers’ credit history and hand deliver orders to shipping. This process occurs whether the sales order is for a dozen specialty boxes worth $80, or 10,000 basic boxes worth $8,000.

Manning believes that identifying the cost of processing a sales order would justify (1) further computerization of the order process and (2) changing the way the company processes small orders. However, the significant cost savings would arise from elimination of two positions in the Order Department. The company’s sales order clerks have been with the company many years. Manning is uncomfortable with the prospect of proposing a change that will likely result in terminating these employees.

Requirement

1. Use the IMA’s ethical standards (see Chapter 16) to consider Manning’s responsibility when cost savings come at the expense of employees’ jobs.

what are some of the other options that anu might have considered 556848

Aug 29, 2021 | Uncategorized

Anu Ghai was a new production analyst at RHI, Inc., a large furniture factory in North Carolina. One of her first jobs was to update the activity rates for factory production costs. This was normally done once a year, by analyzing the previous year’s actual data, factoring in projected changes, and calculating a new rate for the coming year. What Anu found was strange. The activity rate for “maintenance” had more than doubled in one year, and she was puzzled how that could have happened. When she spoke with Larry McAfee, the factory manager, she was told to spread the increases out over the other activity costs to “smooth out” the trends. She was a bit intimidated by Larry, an imposing and aggressive man, but she knew something wasn’t quite right. Then one night she was at a restaurant and overheard a few employees who worked at RHI talking. They were joking about the work they had done fixing up Larry’s home at the lake last year. Suddenly everything made sense. Larry had been using factory labor, tools, and supplies to have his lake house renovated on the weekends. Anu had a distinct feeling that if she went up against Larry on this issue, she would come out the loser. She decided to look for work elsewhere.

Requirements

1. Besides spotting irregularities, like the case above, what are some other ways that ABC cost data are useful for manufacturing companies?

2. What are some of the other options that Anu might have considered?

units of production depreciation on routers used to cut wood enclosures 556861

Aug 29, 2021 | Uncategorized

Variable, fixed, and mixed costs

Philadelphia Acoustics builds innovative speakers for music and home theater systems. Consider the following costs:

1.Units of production depreciation on routers used to cut wood enclosures.

2.Wood for speaker enclosures.

3.Patents on crossover relays.

4.Total compensation to salesperson, who receives a salary plus a commission based on meeting sales goals.

5.Crossover relays.

6.Straight line depreciation on manufacturing plant.

7.Grill cloth.

8.Cell phone costs of salesperson (plan includes 1,200 minutes; overseas calls are charged at an average of $0.15 per minute).

9.Glue.

10.Quality inspector’s salary.

Requirement

1.Identify the costs as variable (V), fixed (F), or mixed (M).

care has been in operation for several years consider the following costs 556862

Aug 29, 2021 | Uncategorized

Variable, fixed, and mixed costs

Holly’s Day Care has been in operation for several years. Consider the following costs:

1. Building rent.

2. Toys.

3. Salary of office manager, who also receives a bonus based on number of students enrolled.

4. Afternoon snacks.

5. Lawn service contract at $200 a month; any extra work needed is billed at an hourly rate based on the time needed to complete the job.

6. Holly’s salary.

7. Wages of afterschool employees.

8. Drawing paper for student art work.

9. Straight line depreciation of tables, chairs, and playground equipment.

10. Fee paid to security company for monthly service (contract includes up to four responses in a month; responses over four in a month incur an additional fee per response).

Requirement

1. Identify the costs as variable (V), fixed (F), or mixed (M).

calculate a the variable rate per machine hour and b martin rsquo s total fixed util 556863

Aug 29, 2021 | Uncategorized

Mixed costs—high low method

Martin owns a machine shop. In reviewing his utility bill for the last 12 months, he found that his highest bill of $2,800 occurred in August when his machines worked 1,400 machine hours. His lowest utility bill of $2,600 occurred in December when his machines worked 900 machine hours.

Requirements

1. Calculate (a) the variable rate per machine hour and (b) Martin’s total fixed utility cost.

2. Show the equation for determining the total utility cost for Martin’s.

3. If Martin’s anticipates using 1,200 machine hours in January, predict his total utility bill using the equation from Requirement 2.

4. Draw a graph illustrating your total cost under this plan. Label the axes, and show your costs at 900, 1,200, and 1,400 machine hours.

compute the missing information 556866

Aug 29, 2021 | Uncategorized

Computing contribution margin, breakeven point, and units to achieve operating income

Consider the following facts:

Requirement

1. Compute the missing information.

hellas pty ltd had the following balances on the 1st of july 2013 materials control 556871

Aug 29, 2021 | Uncategorized

Hellas Pty. Ltd had the following balances on the 1st of July 2013:

$

Materials Control (direct and indirect materials) 5000

Work in Process 10 000

Finished Goods 6000

Hellas Pty. Ltd. uses a Factory Ledger and during July the following transactions took place:

$

· Materials purchased: Direct materials $18 000

Indirect materials $ 3 000 21 000

· Materials issued during the month:

Direct Material 21 000

Indirect Material 2 600

· Total payroll for the period was paid in cash and amounted to $54 000. This was distributed as follows:

Assembly workers 42 000

Supervisor’s salary 8 000

Factory cleaner 4 000

· Other overhead incurred during the month was as follows:

Depreciation on machinery 8 000

Factory light and power 2 500

Other overhead incurred 1 500

Other information:

· Overhead is applied to production at 70% of the Direct Labour cost.

· The balance in the WIP account at the end of July was $13 000.

· During July goods costing $90 000 were sold.

· Goods are marked up at 80% on cost.

Required:

1. Closing balance of Materials Control Account $__________________

(3 marks)

1. Closing balance of Finished Goods Account $__________________

(3 marks)

1. The total actual overhead incurred $__________________

(3 marks)

4.Calculate the amount of under applied or

over applied overhead. How should this

Amount be accounted for? Provide specific reasons for your proposals. (4 marks)

Show all relevant calculations and T accounts

Total marks for Question Three: 13

Question 4

The following information relates to the Mick Richards Company.

Beginning fixed manufacturing overhead in inventory $60,000

Ending fixed manufacturing overhead in inventory $45,000

Beginning variable manufacturing overhead in inventory $30,000

Ending variable manufacturing overhead in inventory $14,250

Fixed selling and administrative costs $724,000

Units produced 5,000

Units sold 4,800

Required:

What is the difference between operating profits under absorption costing and Variable costing? (8 marks)

Total marks for Question Four: 8

this is very important assignment the work need to be done in excel and i have submi 557200

Aug 29, 2021 | Uncategorized

this is very important assignment.. the work need to be done in excel and i have submitted a last year sample file of work.. see the last year work because u need to do the work similar type formate.. the details are given in the assignment question.. read it thoroughly because i need this to be perfect and best..

Document Preview:

Corporate Accounting Systems Consolidated Financial Statements with Non Controlling Interests QUESTION Using the information below and on the next two pages, prepare the following as at 30th June 2014: PART A: Adjustment/elimination journal entries for consolidation at that date; and PART B: Detailed calculation of non controlling interest balance and consolidation worksheet; and PART C: Consolidated financial statements and statements of changes in equity for the group and parent. INFORMATION For the year ended 30 June 2012: On 1 July 2011 Harbour Ltd created a group entity when it purchased 80% of the issued capital of Bridge Ltd for $440,000 cash. On acquisition Bridge Ltd’s accounts showed: Share capital $300,000 and Retained earnings $125,000. All assets and liabilities appearing in Bridge Ltd’s financial statements were fairly valued, except: An item of Bridge Ltd’s plant, that had originally cost $157,000 and had a carrying value of $100,480, was undervalued by $30,000. The plant was still on hand at 30 June 2014. Bridge Ltd had an internally developed identifiable intangible asset, a patent, with a fair value of $35,000. During the year Bridge Ltd made sales of inventory to Harbour Ltd of $70,200. Harbour Ltd’s closing inventories on 30 June 2012 included $33,600 bought from Bridge Ltd (which included the intragroup mark up on original cost price). For the year ended 30 June 2013: On 1 January 2013 it was decided that goodwill acquired in Bridge Ltd should be marked down at a rate of 10% per annum from this date forward. Also on 1 January 2013 Harbour Ltd sold plant to Bridge Ltd for $35,000. This was financed by a short term interest free loan from Harbour Ltd. The plant had originally cost $82,000 when purchased on 1 January 2010. Harbour Ltd declared and paid dividends of $50,000 for the year. Bridge Ltd did not declare or pay any dividends for the year. For the year ended 30 June 2014: During the year Bridge Ltd made sales of inventory to…

Attachments:

Assignment Qu….docx

Last year wor….xlsx

healthwise medical supplies company 557202

Aug 29, 2021 | Uncategorized

Please complete a 2012 Partnership Income Tax Return. All the information needed is attached.

From what I can tell, forms 1065 Schedule A through Schedule D, Form 1125 A, Form 4562, and Form 1065 Schedule K 1 need to be completed.

Thank you!

Attachments:

Question 9 58….docx

the following costing and financial information refers to global plastic inc 557205

Aug 29, 2021 | Uncategorized

The following costing and financial information refers to Global Plastic Inc. for the year of 2010; Sales Revenues 2,105,000 Raw Material Inventory (1 January 2009) 89,000 Raw Material Inventory (31 December 2009) 59,000 Purchases of Raw Material during the year 731,000 Direct Labour Cost 474,000 Selling and Administration Expenses 200,000 Indirect Labour Costs 150,000 Depreciation of Administration building 69,000 Property Tax on Factory 90,000 Depreciation on Factory building 125,000 Income Tax expense 25,000 Indirect Material used 45,000 Depreciation on Factory Equipments 60,000 Insurance on Factory and Equipments 40,000 Utilities for Factory 70,000 Work in Process Inventory (1 January 2009) 0 Work in Process Inventory(31 December 2009) 40,000 Finished Goods Inventory (1 January 2009) 35,000 Finished Goods Inventory (31 December 2009) 40,000 Manufacturing overhead Applied 577,500 21. the Manufacturing overhead cost is Over or under applied by; A. $3,000 under applied. B. $67,500 over applied. C. $2,500 under applied. D. $71,500 under applied. E. None of the Above. 22. the Company PRIME COST is; A. $1,815,000 B. $1,385,000 C. $761,000 D. $1,235,000 E. None of the Above. 23. the Company Conversion Cost is; A. $1,815,000 B. $1,385,000 C. $1,054,000 D. $1,235,000 24. If the Company management policy is to close the over applied or under applied overhead into Cost of Goods sold, which of the following journal entry is correct? A. Dr Manufacturing overhead applied 577,500 Dr Cost of goods sold 3,000 Cr Manufacturing overhead actual 580,000 B. Dr Manufacturing overhead applied 577,500 Dr Cost of goods sold 2,500 Cr Manufacturing overhead actual 580,000 C. Dr Manufacturing overhead Actual 577,500 Dr Cost of goods sold 2,500 Cr Manufacturing overhead actual 580,000 D. None of the Above. 25. What is the Company Net Income for the year 2009? A. $38,500 B. $107,500 C. $$635,00 D. None of the above. 26. What is the Company cost of goods manufactured? A. $1,855,000 B. $1,775,000 C. $1,844,000 D. $1,815,000 E. None of the above. 27. What is the company cost of goods sold? A. $1,775,000 B. $1,810,000 C. $1,772,500 Questions from 28 to 30 are based on the following information: Job G34 was unfinished at the end of the accounting period. The total cost assigned to the job is $48,000 of which $12,000 is direct material. Factory overhead is allocated to goods in process at 125% of direct labour cost. 28. What was the amount of direct labour charged to Job G34? A. $12,000 B. $16,000 C. $36,000 D. Cannot be determined from information given. E. $28,800 29. What was the amount of manufacturing overhead allocated to Job G34? A. $32,000 B. $36,000 C. $19,200 D. None of the above. 30. What was the amount of total cost of goods manufactured for job G34? A. $48,000 B. $64,000 C. Cannot be determined. D. $84,000 31. An equivalent unit of material is equal to: A. The amount of material necessary to complete one unit of production. B. The amount of material necessary to start a unit of production into work in process. C. Half of the material necessary to complete one unit of finished goods. D. An equivalent unit of conversion cost. E. None of the above is correct. 32. Beginning work in process was 1,200 units, 2,800 additional units were put into production, and ending work in process was 500 units. How many units were completed? A. 500 units B. 3,000 units C. 3,300 units D. 3,500 units 33. The appropriate journal entry to transfer the cost of completed units from the Work in Process account would involve a credit to Work in Process and a debit to which of the following accounts? A. Income Summary B. Raw Materials Inventory C. Finished Goods D. Manufacturing Summary 34. Which of the following comments regarding activity based costing is not a correct observation? A. The per unit cost of an end product under ABC will necessarily be less than the per unit cost under traditional costing methods. B. ABC may produce results that are not suitable for external reporting under GAAP. C. Activities are said to be resource drivers because they consume resources necessary for the activities to happen. D. Batch level activities produce costs that may not be in proportion to the number of units produced. 35. Product under costing occurs when the product: A. consumes a high level of resources, but reports a low cost per unit B. consumes a high level of resources, and reports a high cost per unit C. consumes a low level of resources, and reports a low cost per unit D. consumes a low level of resources, but reports a high cost per unit 36. One of the best tools for refining a costing system (allocate cost more objectively) is: A. activity based costing B. job order costing C. process costing D. FIFO costing E. None of the above 37. All of the following are part of the activity based cost system hierarchy except for: A. Manufacturing overhead unit cost. B. direct unit costs C. batch level costs D. product sustaining costs E. facility sustaining costs 38. ABC company has determined that the shipment setup costs should be accounted for at the batch level of activities. ABC believes that the costs assigned to the shipment setup for the current period will be $440,000. ABC is estimating that there will be 400 shipments totalling 8,000 units during the current period. How much cost should be allocated to an order of 70 units that requires three shipments to deliver? A. $165 B. $1,100 C. $3,200 D. $3,850 E. None of the above. 39. Next Generation Information Systems, Inc. pays salaries to a number of computer scientists to design and develop computer operating systems. Into which component of the value chain would this cost be most accurate classified? A. Manufacturing over head. B. Research and development and design. C. Suppliers and production. D. Distribution and marketing. E. Customer service. 40. Big University recently implemented a telephone course registration system. The system eliminated the need for numerous meetings between students and university staff, resulting in an eventual reduction in total administrative costs. This action by Big University illustrates: A. Activity based management. B. Activity based costing. C. Target costing. D. Quality costing.

Attachments:

qus.docx

do a detailed benchmarking analysis of the bookstore s income statement five product 557232

Aug 29, 2021 | Uncategorized

Quality Treats, Inc. Case (24 Marks) INTRODUCTION Nicole Molson is the manager of Strategic Marketing Unit Two (SMU2) at Quality Treats, Inc., a provider of branded, high quality food products. Molson is unhappy with what she perceives to be unfair and inappropriate product costing for her unit, especially for what Quality Treats considers to be special orders. Molson’s education, experience, and expertise as a food scientist and process engineer have earned her considerable respect at Quality Treats, but she has limited accounting knowledge, which holds her back from expressing her serious concerns. Therefore, Molson asked you, soon to be an accounting graduate, to develop a memorandum and a glossary of terms to help her make her case more forcefully to top management.

Milton University Bookstore Case (26 Marks) INTRODUCTION In January 2014, Emma Wu, the Milton University Bookstore manager, was considering the implications of a shocking development. For the first time in her seven years as the Bookstore manager, textbook sales for this past fall had decreased from the prior fall sales. The sales decrease was approximately $180,000, or 3% of annual textbook sales. Emma wanted to address this problem before it got worse. She found that this sales decrease was due to two emerging technology problems, possibly of equal magnitude: 1) the students’ increasing use of online textbook vendors, and 2) the professors’ increasing use of online textbook publishers.

Q1. Do a detailed benchmarking analysis of the Bookstore’s income statement, five product lines, and financial and operating performance measures, using the Association of Universities and Colleges of Canada Stores’ (AUCC) benchmarking information. Identify performance gaps between the Bookstore results and the AUCC averages and consider possible corrective actions. (12 Marks ~ no page limit) Q2. As required by Tom, Emma must develop a few key related short term goals and related performance measures that could be used in future performance evaluations. What objectives and related performance measures might she consider? Provide specific answers. (3 Marks ~ one page limit) Q3. Assuming all AUCC bookstores are suffering from the same trends and experiencing the same financial difficulties, should Milton be benchmarked against the 25th percentile, the average, or the 75th percentile? Why? Assuming all AUCC bookstores are experiencing superior financial performance and sales growth and Milton is experiencing financial difficulties, is the 25th percentile, the median, or the 75th percentile the best source for benchmarking? Why? (2 Marks ~ half a page limit) Q4. Due to prior superior performance regarding sales of custom materials, assume that Milton has the objective to maintain excellence for this product line. Against which comparison point should this product line be benchmarked (e.g., median, 25th percentile)? Why? (2 Marks ~ half a page limit) Q5. Assume that there is an independent bookstore located near the campus of Milton University that also sells apparel with the Milton logo as well as new and used textbooks. Against which comparison point should these product lines be benchmarked? Why? (2 Marks ~ half a page limit) Q6. Based upon your benchmarking analysis, make appropriate recommendations and decisions for the Milton Bookstore. (5 Marks ~ two page limit)

Attachments:

Written 20Cas….pdf

nicolemolsonis the manager of strategic marketing unit two smu2 at quality treats 557243

Aug 29, 2021 | Uncategorized

Page 1of 18Individual Written CasesPart 2(50 Marks)DueThursday April 10thInstructions:?A Hard copy of the report should be submitted at the beginning of the class.?You are required to complete both of the followingcases:Quality Treats, Inc.Case (24Marks)Milton University Bookstore Case(26Marks)?Font type should be Arial and the font size should be12points.?Line spacing should be 1.5lines.?Follow the required page limits as stated for each requirement.?Marks for professional presentation are integrated with the marksof each requirement.?The assignment should be done independently by each student. ?It is the student’s responsibility to ensure that the assignment is completed when due.?The Business Faculty requires the Harvard style of referencing for academic papers.Please see Quote, Unquote Referencing, and a Speedy Guide to Harvard Referencing at http://www.viu.ca/business/resources.asp.?Errors happen in the real life every day, so if you see an errorin the cases. Note the error in your report and use your best judgment to continue your analysis.Quality Treats, Inc.Case (24Marks) INTRODUCTIONNicoleMolsonis the manager of Strategic Marketing Unit Two (SMU2) at Quality Treats, Inc., a provider of branded, high quality food products. Molsonis unhappy with what she perceives to be unfair and inappropriate product costing for her unit, especially for what Quality Treatsconsiders to be special orders. Molson’s education, experience, and expertise as a food scientist and process engineer have earned her considerable respect at Quality Treats, but she has limited accounting knowledge, which holds her back from expressing her serious concerns. Therefore, Molsonasked you, soon to be anaccounting graduate, to develop a memorandumand a glossary of terms to help her make her case more forcefully to top management.QUALITY TREATS, INC.Quality Treats, Inc., rooted in the upper Midwest United States, produces a wide range of food products in a competitiveindustry. Almost all of its products are sold under the Fine ’n’ Fast brand name, which is

Page 2of 18widely recognized for its high quality and has a loyal customer following. Most products are packaged in sizes for end consumption and are sold through supermarkets, convenience shops, and similar outlets. Depending on the nature of the product and consumer preferences, products are sold frozen, refrigerated, canned, boxed, or packaged in other ways. Some items, such as individual packets of ketchup, mayonnaise, and mustard, are sold to fast food restaurants and similar outlets. The company also sells half gallon containers—branded with the company logo—of salad dressings, ketchup, mustard, and similar items with a plastic pump so that restaurant customers can serve themselves at salad bars and similar places. Other products are sold, often in bulk, to institutional users, such as large food service groups, caterers, and the like. These products may or may not be branded. A small portion of sales is made to other food producers, for example, salad dressing packets are sold to producers of packaged fresh salad greens; Quality Treatsdoes not deal with fresh products. Quality Treatsis owned by Jordan Meadows Group, a private equity firm. Jordan Meadows Groupgives Quality Treatsalmost complete freedom and control over management, product selection, performance evaluation, and so forth. Because it is privately owned, external financial reporting is not mandatory, nor is there any obligation to use any set of financial accounting standards for internal reporting. Any external financial reporting is on a group or consolidated basis and performed by Jordan Meadows Group.Jordan Meadows Groupalso owns Quality TreatsCanada, Ltd., which sells products almost exclusively in Canada, with primary operations nearby in the prairie provinces. There is no mutual ownership or management connection between Quality Treatsand Quality TreatsCanada. Because the two companies produce many identical products using the Fine ’n’ Fast brand, they do share recipes and process technology. Quality Treatsalso produces some products for Quality TreatsCanada that do not have sufficient market size in Canada to justify separate production. Jordan Meadows Groupalso owns smaller companies with the Fine ’n’ Fast name that are mostly importers of Fine ’n’ Fast products in countries outside of the U.S. and Canada where high quality, branded North American food products have niche markets. These products are produced by Quality Treats.Quality Treatsis organized into three Strategic Marketing Units (SMUs) based on the markets they serve. SMU1 serves supermarkets and similar outlets. SMU2 serves mostly institutional customers who order in large volumes and often in bulk quantities. SMU2 also sells specialorders from time to time that involve unbranded bulk products that are exported. SMU3 serves affiliated Quality Treatscompanies in other countries, mostly for import into those countries; governmental organizations that sell food and have food service facilities, such as military organizations; and similar customers that have special contracting requirements.Products sold by all three SMUs are manufactured by the same production facilities, including warehouses, food preparation and cooking facilities, and packaging facilities. The SMUs also share most headquarters activities, such as information technology, accounting and other administration, human resources, and similar activities. SMU1 and SMU2 have their own marketing and sales departments, while SMU3 does not have separate departments for these tasks. Figure 1 shows an organizational chart for Quality Treats.

Page 1of 18Individual Written CasesPart 2(50 Marks)DueThursday April 10thInstructions:?A Hard copy of the report should be submitted at the beginning of the class.?You are required to complete both of the followingcases:Quality Treats, Inc.Case (24Marks)Milton University Bookstore Case(26Marks)?Font type should be Arial and the font size should be12points.?Line spacing should be 1.5lines.?Follow the required page limits as stated for each requirement.?Marks for professional presentation are integrated with the marksof each requirement.?The assignment should be done independently by each student. ?It is the student’s responsibility to ensure that the assignment is completed when due.?The Business Faculty requires the Harvard style of referencing for academic papers.Please see Quote, Unquote Referencing, and a Speedy Guide to Harvard Referencing at http://www.viu.ca/business/resources.asp.?Errors happen in the real life every day, so if you see an errorin the cases. Note the error in your report and use your best judgment to continue your analysis.Quality Treats, Inc.Case (24Marks) INTRODUCTIONNicoleMolsonis the manager of Strategic Marketing Unit Two (SMU2) at Quality Treats, Inc., a provider of branded, high quality food products. Molsonis unhappy with what she perceives to be unfair and inappropriate product costing for her unit, especially for what Quality Treatsconsiders to be special orders. Molson’s education, experience, and expertise as a food scientist and process engineer have earned her considerable respect at Quality Treats, but she has limited accounting knowledge, which holds her back from expressing her serious concerns. Therefore, Molsonasked you, soon to be anaccounting graduate, to develop a memorandumand a glossary of terms to help her make her case more forcefully to top management.QUALITY TREATS, INC.Quality Treats, Inc., rooted in the upper Midwest United States, produces a wide range of food products in a competitiveindustry. Almost all of its products are sold under the Fine ’n’ Fast brand name, which is

Page 2of 18widely recognized for its high quality and has a loyal customer following. Most products are packaged in sizes for end consumption and are sold through supermarkets, convenience shops, and similar outlets. Depending on the nature of the product and consumer preferences, products are sold frozen, refrigerated, canned, boxed, or packaged in other ways. Some items, such as individual packets of ketchup, mayonnaise, and mustard, are sold to fast food restaurants and similar outlets. The company also sells half gallon containers—branded with the company logo—of salad dressings, ketchup, mustard, and similar items with a plastic pump so that restaurant customers can serve themselves at salad bars and similar places. Other products are sold, often in bulk, to institutional users, such as large food service groups, caterers, and the like. These products may or may not be branded. A small portion of sales is made to other food producers, for example, salad dressing packets are sold to producers of packaged fresh salad greens; Quality Treatsdoes not deal with fresh products. Quality Treatsis owned by Jordan Meadows Group, a private equity firm. Jordan Meadows Groupgives Quality Treatsalmost complete freedom and control over management, product selection, performance evaluation, and so forth. Because it is privately owned, external financial reporting is not mandatory, nor is there any obligation to use any set of financial accounting standards for internal reporting. Any external financial reporting is on a group or consolidated basis and performed by Jordan Meadows Group.Jordan Meadows Groupalso owns Quality TreatsCanada, Ltd., which sells products almost exclusively in Canada, with primary operations nearby in the prairie provinces. There is no mutual ownership or management connection between Quality Treatsand Quality TreatsCanada. Because the two companies produce many identical products using the Fine ’n’ Fast brand, they do share recipes and process technology. Quality Treatsalso produces some products for Quality TreatsCanada that do not have sufficient market size in Canada to justify separate production. Jordan Meadows Groupalso owns smaller companies with the Fine ’n’ Fast name that are mostly importers of Fine ’n’ Fast products in countries outside of the U.S. and Canada where high quality, branded North American food products have niche markets. These products are produced by Quality Treats.Quality Treatsis organized into three Strategic Marketing Units (SMUs) based on the markets they serve. SMU1 serves supermarkets and similar outlets. SMU2 serves mostly institutional customers who order in large volumes and often in bulk quantities. SMU2 also sells specialorders from time to time that involve unbranded bulk products that are exported. SMU3 serves affiliated Quality Treatscompanies in other countries, mostly for import into those countries; governmental organizations that sell food and have food service facilities, such as military organizations; and similar customers that have special contracting requirements.Products sold by all three SMUs are manufactured by the same production facilities, including warehouses, food preparation and cooking facilities, and packaging facilities. The SMUs also share most headquarters activities, such as information technology, accounting and other administration, human resources, and similar activities. SMU1 and SMU2 have their own marketing and sales departments, while SMU3 does not have separate departments for these tasks. Figure 1 shows an organizational chart for Quality Treats.

Attachments:

Written 20Cas….pdf

calculate the product cost per unit for both products using activity based costing 556815

Aug 29, 2021 | Uncategorized

Using ABC to compute product costs per unit

Jaunkas, Corp., manufactures mid fi and hi fi stereo receivers. The following data have been summarized:

Indirect manufacturing cost information includes the following:

The company plans to manufacture 200 units of the mid fi receivers and 250 units of the hi fi receivers.

Requirement

1. Calculate the product cost per unit for both products using activity based costing.

compute the operating income from the crockett engagement 556816

Aug 29, 2021 | Uncategorized

Allocating indirect costs and computing income

Pacific, Inc., is a technology consulting firm focused on Web site development and integration of Internet business applications. The president of the company expects to incur $775,000 of indirect costs this year, and she expects her firm to work 5,000 direct labor hours. Pacific’s systems consultants provide direct labor at a rate of $310 per hour. Clients are billed at 160% of direct labor cost. Last month Pacific’s consultants spent 150 hours on Crockett’s engagement.

Requirements

1. Compute Pacific’s indirect cost allocation rate per direct labor hour.

2. Compute the total cost assigned to the Crockett engagement.

3. Compute the operating income from the Crockett engagement.

compute the operating income from the crockett engagement using the abc system 556818

Aug 29, 2021 | Uncategorized

Using ABC to allocate costs and compute profit

Refer to Short Exercises 18 7 and 18 8. Suppose Pacific’s direct labor rate was $310 per hour, the documentation cost was $34 per page, the information technology support cost was $200 per application, and training costs were $110 per direct labor hour. The Crockett engagement used the following resources last month:

Requirements

1. Compute the cost assigned to the Crockett engagement, using the ABC system.

2. Compute the operating income from the Crockett engagement, using the ABC system.

indicate whether each is characteristic of a jit production system or a traditional 556820

Aug 29, 2021 | Uncategorized

Just in time characteristics

Consider the following characteristics of either a JIT production system or a traditional production system.

a. Products are produced in large batches.

b. Large stocks of finished goods protect against lost sales if customer demand is higher than expected.

c. Suppliers make frequent deliveries of small quantities of raw materials.

d. Employees do a variety of jobs, including maintenance and setups as well as operating machines.

e. Machines are grouped into self contained production cells or production lines.

f. Machines are grouped according to function. For example, all cutting machines are located in one area.

g. The final operation in the production sequence “pulls” parts from the preceding operation.

h. Each employee is responsible for inspecting his or her own work.

i. Management works with suppliers to ensure defect free raw materials.

Requirement

1. Indicate whether each is characteristic of a JIT production system or a traditional production system.

the standard cost per pin is 2 for raw materials and 3 for conversion costs 556821

Aug 29, 2021 | Uncategorized

Recording JIT costing journal entries

Quality Products uses a JIT system to manufacture trading pins for the Hard Rock Café. The standard cost per pin is $2 for raw materials and $3 for conversion costs. Last month Quality recorded the following data:

Requirement

1. Use JIT costing to prepare journal entries for the month, including the entry to close the Conversion costs account.

indicate which of the following quality cost categories each example represents 556822

Aug 29, 2021 | Uncategorized

Matching cost of quality examples to categories

Sammy, Inc., manufactures motor scooters. Consider each of the following examples of quality costs.

1. Preventive maintenance on machinery.

2. Direct materials, direct labor, and manufacturing overhead costs incurred to rework a defective scooter that is detected in house through inspection.

3. Lost profits from lost sales if company’s reputation was hurt because customers previously purchased a poor quality scooter.

4. Costs of inspecting raw materials, such as chassis and wheels.

5. Working with suppliers to achieve on time delivery of defect free raw materials.

6. Cost of warranty repairs on a scooter that malfunctions at customer’s location.

7. Costs of testing durability of vinyl.

8. Cost to re inspect reworked scooters.

Requirement

1. Indicate which of the following quality cost categories each example represents.

? P Prevention costs

? A Appraisal costs

? IF Internal failure costs

? EF External failure costs

compute the indirect manufacturing cost of each bumper 556823

Aug 29, 2021 | Uncategorized

Product costing in an activity based costing system

Fortunado, Inc., uses activity based costing to account for its chrome bumper manufacturing process. Company managers have identified four manufacturing activities: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for 2012 and their allocation bases are as follows:

Fortunado expects to produce 500 chrome bumpers during the year. The bumpers are expected to use 4,000 parts, require 10 setups, and consume 1,000 hours of finishing time.

Requirements

1. Compute the cost allocation rate for each activity.

2. Compute the indirect manufacturing cost of each bumper.

compute the indirect manufacturing cost of each motorcycle 556824

Aug 29, 2021 | Uncategorized

Product costing in an activity based costing system

Turbo Champs, Corp., uses activity based costing to account for its motorcycle manufacturing process. Company managers have identified three supporting manufacturing activities: inspection, machine setup, and machine maintenance. The budgeted activity costs for 2012 and their allocation bases are as follows:

Turbo Champs expects to produce 20 custom built motorcycles for the year. The motorcycles are expected to require 100 inspections, 20 setups, and 100 maintenance hours.

Requirements

1. Compute the cost allocation rate for each activity.

2. Compute the indirect manufacturing cost of each motorcycle.

compute the total budgeted indirect manufacturing cost for 2012 556825

Aug 29, 2021 | Uncategorized

Product costing in an activity based costing system

Elton Company manufactures wheel rims. The controller budgeted the following ABC allocation rates for 2012:

The number of parts is now a feasible allocation base because Elton recently purchased bar coding technology. Elton produces two wheel rim models: standard and deluxe. Budgeted data for 2012 are as follows:

The company expects to produce 500 units of each model during the year.

Requirements

1. Compute the total budgeted indirect manufacturing cost for 2012.

2. Compute the ABC indirect manufacturing cost per unit of each model. Carry each cost to the nearest cent.

3. Prior to 2012, Elton used a direct labor hour single allocation base system. Compute the (single) allocation rate based on direct labor hours for 2012. Use this rate to determine the indirect manufacturing cost per wheel rim for each model, to the nearest cent.

what total price will the company bid for the entire animal hut order 556826

Aug 29, 2021 | Uncategorized

Using activity based costing to make decisions

Dino Dog Collars uses activity based costing. Dino’s system has the following features:

Each collar has 4 parts; direct materials cost per collar is $9. Direct labor cost is $4 per collar. Suppose Animal Hut has asked for a bid on 25,000 dog collars. Dino will issue a total of 150 purchase orders if Animal Hut accepts Dino’s bid.

Requirements

1. Compute the total cost Dino will incur to purchase the needed materials and then assemble and package 25,000 dog collars. Also compute the cost per collar.

2. For bidding, Dino adds a 40% markup to total cost. What total price will the company bid for the entire Animal Hut order?

3. Suppose that instead of an ABC system, Dino has a traditional product costing system that allocates indirect costs other than direct materials and direct labor at the rate of $9.60 per direct labor hour. The dog collar order will require 12,000 direct labor hours. What total price will Dino bid using this system’s total cost?

4. Use your answers to Requirements 2 and 3 to explain how ABC can help Dino make a better decision about the bid price it will offer Animal Hut.

which course of action will yield more income for elton 556827

Aug 29, 2021 | Uncategorized

Using activity based costing to make decisions

Refer to Exercise 18 17. For 2013, Elton’s managers have decided to use the same indirect manufacturing costs per wheel rim that they computed in 2012. In addition to the unit indirect manufacturing costs, the following data are budgeted for the company’s standard and deluxe models for 2013:

Because of limited machine hour capacity, Elton can produce either2,000 standard rims or2,000 deluxe rims.

Requirements

1. If Elton’s managers rely on the ABC unit cost data computed in E18 17, which model will they produce? Carry each cost to the nearest cent. (Ignore operating expenses for this calculation.)

2. If the managers rely on the single allocation base cost data, which model will they produce?

3. Which course of action will yield more income for Elton?

would implementing the value engineering recommendation enable elton to achieve its 556828

Aug 29, 2021 | Uncategorized

Activity based management and target cost

Refer to Exercises 18 17 and 18 19. Controller Michael Bender is surprised by the increase in cost of the deluxe model under ABC. Market research shows that for the deluxe rim to provide a reasonable profit, Elton will have to meet a target manufacturing cost of $656 per rim. A value engineering study by Elton’s employees suggests that modifications to the finishing process could cut finishing cost from $50 to $40 per hour and reduce the finishing direct labor hours per deluxe rim from 6.5 hours to 6 hours. Direct materials would remain unchanged at $50 per rim, as would direct labor at $56 per rim. The materials handling, machine setup, and insertion of parts activity costs also would remain the same.

Requirement

1. Would implementing the value engineering recommendation enable Elton to achieve its target cost for the deluxe rim?

determine whether conversion costs are over or underallocated for the month by how m 556829

Aug 29, 2021 | Uncategorized

Recording manufacturing costs in a JIT costing system

Lancer, Inc., produces universal remote controls. Lancer uses a JIT costing system. One of the company’s products has a standard direct materials cost of $9 per unit and a standard conversion cost of $35 per unit. During January 2012, Lancer produced 600 units and sold 595. It purchased $6,300 of direct materials and incurred actual conversion costs totaling $17,500.

Requirements

1. Prepare summary journal entries for January.

2. The January 1, 2012, balance of the Raw and in process inventory account was $50. Use a T account to find the January 31 balance.

3. Use a T account to determine whether conversion costs are over or underallocated for the month. By how much? Prepare the journal entry to close the Conversion costs account.

suppose dubuc rsquo s standard cost per calculator is 27 for materials and 63 for co 556830

Aug 29, 2021 | Uncategorized

Recording manufacturing costs in a JIT costing system

Dubuc produces electronic calculators. Suppose Dubuc’s standard cost per calculator is $27 for materials and $63 for conversion costs. The following data apply to August production:

Requirements

1. Prepare summary journal entries for August using JIT costing, including the entry to close the Conversion costs account.

2. The beginning balance of Finished goods inventory was $1,700. Use a T account to find the ending balance of Finished goods inventory.

Apollo 11

Apollo 11 was the spaceflight that landed the first humans, Americans Neil Armstrong and Buzz Aldrin, on the Moon on July 20, 1969, at 20:18 UTC. Armstrong became the first to step onto the lunar surface 6 hours later on July 21 at 02:56 UTC.

Armstrong spent about three and a half two and a half hours outside the spacecraft, Aldrin slightly less; and together they collected 47.5 pounds (21.5 kg) of lunar material for return to Earth. A third member of the mission, Michael Collins, piloted the command spacecraft alone in lunar orbit until Armstrong and Aldrin returned to it for the trip back to Earth.

Broadcasting and
quotes

Broadcast on live TV to a world wide audience, Armstrong stepped onto the lunar surface and described the event as:

One small step for [a] man, one giant leap for mankind.

Apollo 11 effectively ended the Space Race and fulfilled a national goal proposed in 1961 by the late U.S. President John F. Kennedy in a speech before the United States Congress:

[…] before this decade is out, of landing a man on the Moon and returning him safely to the Earth.

Technical details
Mission crew

Launched by a Saturn V rocket from Kennedy Space Center in Merritt Island, Florida on July 16, Apollo 11 was the fifth manned mission of NASA’s Apollo program. The Apollo spacecraft had three parts:

1. Command Module with a cabin for the three astronauts which was the only part which landed back on Earth
2. Service Module which supported the Command Module with propulsion, electrical power, oxygen and water
3. Lunar Module for landing on the Moon.

After being sent to the Moon by the Saturn V’s upper stage, the astronauts separated the spacecraft from it and travelled for three days until they entered into lunar orbit. Armstrong and Aldrin then moved into the Lunar Module and landed in the Sea of Tranquility. They stayed a total of about 21 and a half hours on the lunar surface. After lifting off in the upper part of the Lunar Module and rejoining Collins in the Command Module, they returned to Earth and landed in the Pacific Ocean on July 24.

Source: Wikipedia.org

classify each item as a prevention cost an appraisal cost an internal failure cost o 556831

Aug 29, 2021 | Uncategorized

Classifying quality costs

Delance & Co. makes electronic components. Chris Delance, the president, recently instructed vice president Jim Bruegger to develop a total quality control program. “If we don’t at least match the quality improvements our competitors are making,” he told Bruegger, “we’ll soon be out of business.” Bruegger began by listing various “costs of quality” that Delance incurs. The first six items that came to mind were:

a. Costs incurred by Delance customer representatives traveling to customer sites to repair defective products, $15,000.

b. Lost profits from lost sales due to reputation for less than perfect products, $60,000.

c. Costs of inspecting components in one of Delance’s production processes, $25,000.

d. Salaries of engineers who are redesigning components to withstand electrical overloads, $80,000.

e. Costs of reworking defective components after discovery by company inspectors, $40,000.

f. Costs of electronic components returned by customers, $55,000.

Requirement

1. Classify each item as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost. Then, determine the total cost of quality by category.

should clarke implement the new quality program give your reason 556832

Aug 29, 2021 | Uncategorized

Classifying quality costs and using these costs to make decisions

Clarke, Inc., manufactures door panels. Suppose Clarke is considering spending the following amounts on a new total quality management (TQM) program:

Clarke expects the new program would save costs through the following:

Requirements

1. Classify each cost as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost.

2. Should Clarke implement the new quality program? Give your reason.

should kane implement the quality program give your reasons 556833

Aug 29, 2021 | Uncategorized

Classifying quality costs and using these costs to make decisions

Kane manufactures high quality speakers. Suppose Kane is considering spending the following amounts on a new quality program:

Kane expects this quality program to save costs, as follows:

It also expects this program to avoid lost profits from the following:

Requirements

1. Classify each of these costs into one of the four categories of quality costs (prevention, appraisal, internal failure, external failure).

2. Should Kane implement the quality program? Give your reasons.

what price should prescott rsquo s managers set for unfinished bookcases to earn 15 556834

Aug 29, 2021 | Uncategorized

Product costing in an ABC system

Prescott, Inc., manufactures bookcases and uses an activity based costing system. Prescott’s activity areas and related data follow:

Prescott produced two styles of bookcases in October: the standard bookcase and an unfinished bookcase, which has fewer parts and requires no finishing. The totals for quantities, direct materials costs, and other data follow:

Requirements

1. Compute the manufacturing product cost per unit of each type of bookcase.

2. Suppose that pre manufacturing activities, such as product design, were assigned to the standard bookcases at $7 each, and to the unfinished bookcases at $2 each. Similar analyses were conducted of post manufacturing activities such as distribution, marketing, and customer service. The post manufacturing costs were $22 per standard bookcase and $14 per unfinished bookcase. Compute the full product costs per unit.

3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference.

4. What price should Prescott’s managers set for unfinished bookcases to earn $15 per bookcase?

how have the unit costs changed explain why the costs changed 556835

Aug 29, 2021 | Uncategorized

Comparing costs from ABC and single rate systems

Corbertt Pharmaceuticals manufactures an over the counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care facilities and travel packs of 20 capsules to shops in airports, train stations, and hotels. The following information has been developed to determine if an activitybased costing system would be beneficial:

Other production information includes the following:

Requirements

1. Compute the cost allocation rate for each activity.

2. Use the activity based cost allocation rates to compute the activity costs per unit of the commercial containers and the travel packs. (Hint: First compute the total activity costs allocated to each product line, and then compute the cost per unit.)

3. Corbertt’s original single allocation base costing system allocated indirect costs to products at $157 per machine hour. Compute the total indirect costs allocated to the commercial containers and to the travel packs under the original system. Then compute the indirect cost per unit for each product.

4. Compare the indirect activity based costs per unit to the indirect costs per unit from the single allocation base system. How have the unit costs changed? Explain why the costs changed.

what are the major features of a jit production system such as that of high point 556836

Aug 29, 2021 | Uncategorized

Recording manufacturing costs for a JIT costing system

High Point produces fleece jackets. The company uses JIT costing for its JIT production system. High Point has two inventory accounts: Raw and in process inventory and Finished goods inventory. On February 1, 2012, the account balances were Raw and in process inventory, $7,000; Finished goods inventory, $2,200. The standard cost of a jacket is $37, comprised of $13 direct materials plus $24 conversion costs. Data for February’s activities follow:

Requirements

1. What are the major features of a JIT production system such as that of High Point?

2. Prepare summary journal entries for February. Under or overallocated conversion costs are closed to Cost of goods sold monthly.

3. Use a T account to determine the February 29, 2012, balance of Raw and in process inventory.

compute the number of equivalent units and the cost per equivalent unit in the assem 556790

Aug 29, 2021 | Uncategorized

Computing equivalent units and assigning costs to completed units and ending work in process; no beginning work in process inventory or cost transferred in

Amy Electronics makes CD players in three processes: assembly, programming, and packaging. Direct materials are added at the beginning of the assembly process. Conversion costs are incurred evenly throughout the process. The Assembly Department had no Work in process inventory on October 31. In mid November, Amy Electronics started production on 125,000 CD players. Of this number, 95,800 CD players were assembled during November and transferred out to the Programming Department. The November 30 Work in process inventory in the Assembly Department was 25% of the way through the assembly process. Direct materials costing $437,500 were placed in production in Assembly during November, and Direct labor of $200,800 and Manufacturing overhead of $134,275 were assigned to that

department.

Requirements

1.Compute the number of equivalent units and the cost per equivalent unit in the Assembly Department for November.

2.Assign total costs in the Assembly Department to (a) units completed and transferred to Programming during November and (b) units still in process at November 30.

3.Prepare a T account for Work in process inventory—Assembly to show its activity during November, including the November 30 balance.

journalize all transactions affecting the company rsquo s mixing process during marc 556791

Aug 29, 2021 | Uncategorized

Computing equivalent units and assigning costs to completed units and ending work in process; no beginning work in process inventory or cost transferred in

Reed Paper, Co., produces the paper used by wallpaper manufacturers. Reed’s fourstage process includes mixing, cooking, rolling, and cutting. During March, the Mixing Department started and completed mixing for 4,520 rolls of paper. The department started but did not finish the mixing for an additional 500 rolls, which were 20% complete with respect to both direct materials and conversion work at the end of March. Direct materials and conversion costs are incurred evenly throughout the mixing process. The Mixing Department incurred the following costs during March:

Requirements

1.Compute the number of equivalent units and the cost per equivalent unit in the Mixing Department for March.

2.Show that the sum of (a) cost of goods transferred out of the Mixing Department and (b) ending Work in process inventory—Mixing equals the total cost accumulated in the department during March.

3.Journalize all transactions affecting the company’s mixing process during March, including those already posted.

what is the ending balance 556792

Aug 29, 2021 | Uncategorized

Computing equivalent units and assigning costs to completed units and ending work in process inventory; two materials, added at different points; no beginning work in process inventory or cost transferred in

Smith’s Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets. Conversion costs are added evenly throughout the preparation process. January data for the Preparation Department are as follows:

Requirements

1.Draw a timeline for the Preparation Department.

2.Use the timeline to help you compute the equivalent. (Hint: Each direct material added at a different point in the production process requires its own equivalentunit computation.)

3.Compute the total costs of the units (sheets)

a.completed and transferred out to the Compression Department.

b.in the Preparation Department’s ending Work in process inventory.

4.Prepare the journal entry to record the cost of the sheets completed and transferred out to the Compression Department.

5.Post the journal entries to the Work in process inventory—Preparation T account. What is the ending balance?

prepare the november production cost report or christine rsquo s dyeing department 556793

Aug 29, 2021 | Uncategorized

Computing equivalent units for a second department with beginning work in process inventory; preparing a production cost report and recording transactions on the basis of the report’s information; weighted average method

Christine Carpet manufactures broadloom carpet in seven processes: spinning, dyeing, plying, spooling, tufting, latexing, and shearing. In the Dyeing Department, direct materials (dye) are added at the beginning of the process. Conversion costs are incurred evenly throughout the process. Christine uses weighted average process costing. Information for November 2012 follows:

Requirements

1.Prepare a timeline for Christine’s Dyeing Department.

2.Use the timeline to help you compute the equivalent units, cost per equivalent unit, and total costs to account for in Christine’s Dyeing Department for November.

3.Prepare the November production cost report or Christine’s Dyeing Department.

4.Journalize all transactions affecting Christine’s Dyeing Department during November, including the entries that have already been posted.

why would management be interested in this cost 556794

Aug 29, 2021 | Uncategorized

Computing equivalent units for a second department with beginning work in process inventory; assigning costs to completed units and ending work in process; weighted average method

WaterBound uses three processes to manufacture lifts for personal watercraft: forming a lift’s parts from galvanized steel, assembling the lift, and testing the completed lifts. The lifts are transferred to finished goods before shipment to marinas across the country. WaterBound’s Testing Department requires no direct materials. Conversion costs are incurred evenly throughout the testing process. Other information follows:

The cost transferred into Finished goods inventory is the cost of the lifts transferred out of the Testing Department. WaterBound uses weighted average process costing.

Requirements

1.Draw a timeline for the Testing Department.

2.Use the timeline to compute the number of equivalent units of work performed by the Testing Department during the period.

3.Compute WaterBound’s transferred in and conversion costs per equivalent unit. Use the unit costs to assign total costs to (a) units completed and transferred out of Testing and (b) units in Testing’s ending Work in process inventory.

4.Compute the cost per unit for lifts completed and transferred out to Finished goods inventory. Why would management be interested in this cost?

compute the number of equivalent units and the cost per equivalent unit in the assem 556795

Aug 29, 2021 | Uncategorized

Computing equivalent units and assigning costs to completed units and ending work in process; no beginning work in process inventory or cost transferred in

Beth Electronics makes CD players in three processes: assembly, programming, and packaging. Direct materials are added at the beginning of the assembly process. Conversion costs are incurred evenly throughout the process. The Assembly Department had no work in process inventory on March 31. In mid April, Beth Electronics started production on 115,000 CD players. Of this number, 99,000 CD players were assembled during April and transferred out to the Programming Department. The April 30 work in process inventory in the Assembly Department was 45% of the way through the assembly process. Direct materials costing $345,000 were placed in production in Assembly during April, and direct labor of $150,000 and manufacturing overhead of $62,400 were assigned to that department.

Requirements

1. Compute the number of equivalent units and the cost per equivalent unit in the Assembly Department for April.

2. Assign total costs in the Assembly Department to (a) units completed and transferred to Programming during April and (b) units still in process at April 30.

3. Prepare a T account for Work in process inventory—Assembly to show its activity during April, including the April 30 balance.

journalize all transactions affecting the company rsquo s mixing process during sept 556796

Aug 29, 2021 | Uncategorized

Computing equivalent units and assigning costs to completed units and ending work in process; no beginning work in process inventory or cost transferred in

Smith Paper, Co., produces the paper used by wallpaper manufacturers. Smith’s four stage process includes mixing, cooking, rolling, and cutting. During September, the Mixing Department started and completed mixing for 4,405 rolls of paper. The department started but did not finish the mixing for an additional 600 rolls, which were 20% complete with respect to both direct materials and conversion work at the end of September. Direct materials and conversion costs are incurred evenly throughout the mixing process. The Mixing Department incurred the following costs during September:

Requirements

1. Compute the number of equivalent units and the cost per equivalent unit in the Mixing Department for September.

2. Show that the sum of (a) cost of goods transferred out of the Mixing Department and (b) ending Work in process inventory—Mixing equals the total cost accumulated in the department during September.

3. Journalize all transactions affecting the company’s mixing process during September, including those already posted.

what is the ending balance 556797

Aug 29, 2021 | Uncategorized

Computing equivalent units and assigning costs to completed units and ending work in process inventory; two materials, added at different points; no beginning work in process inventory or cost transferred in

Bert’s Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets. Conversion costs are added evenly throughout the preparation process. January data for the Preparation Department are as follows:

Requirements

1. Draw a timeline for the Preparation Department.

2. Use the timeline to help you compute the equivalent units. (Hint: Each direct material added at a different point in the production process requires its own equivalent unit computation.)

3. Compute the total costs of the units (sheets)

a. completed and transferred out to the Compression Department.

b. in the Preparation Department’s ending Work in process inventory.

4. Prepare the journal entry to record the cost of the sheets completed and transferred out to the Compression Department.

5. Post the journal entries to the Work in process inventory—Preparation T account. What is the ending balance?

prepare the july production cost report for carol rsquo s dyeing department 556798

Aug 29, 2021 | Uncategorized

Computing equivalent units for a second department with beginning work in process inventory; preparing a production cost report and recording transactions on the basis of the report’s information; weighted average method

Carol Carpet manufactures broadloom carpet in seven processes: spinning, dyeing, plying, spooling, tufting, latexing, and shearing. In the Dyeing Department, direct materials (dye) are added at the beginning of the process. Conversion costs are incurred evenly throughout the process. Carol uses weighted average process costing. Information for July 2012 follows:

Requirements

1. Prepare a timeline for Carol’s Dyeing Department.

2. Use the timeline to help you compute the equivalent units, cost per equivalent unit, and total costs to account for in Carol’s Dyeing Department for July.

3. Prepare the July production cost report for Carol’s Dyeing Department.

4. Journalize all transactions affecting Carol’s Dyeing Department during July, including the entries that have already been posted.

why would management be interested in this cost 556799

Aug 29, 2021 | Uncategorized

Computing equivalent units for a second department with beginning work in process inventory; assigning costs to completed units and ending work in process; weighted average method

OceanBound uses three processes to manufacture lifts for personal watercrafts: forming a lift’s parts from galvanized steel, assembling the lift, and testing the completed lifts. The lifts are transferred to finished goods before shipment to marinas across the country. OceanBound’s Testing Department requires no direct materials. Conversion costs are incurred evenly throughout the testing process. Other information follows:

The cost transferred into Finished goods inventory is the cost of the lifts transferred out of the Testing Department. OceanBound uses weighted average process costing.

Requirements

1.Draw a timeline for the Testing Department.

2.Use the timeline to compute the number of equivalent units of work performed by the Testing Department during the period.

3.Compute OceanBound’s transferred in and conversion costs per equivalent unit. Use the unit costs to assign total costs to (a) units completed and transferred out of Testing and (b) units in Testing’s ending Work in process inventory.

4.Compute the cost per unit for lifts completed and transferred out to Finished goods inventory. Why would management be interested in this cost?

calculate the amount each person would pay 556811

Aug 29, 2021 | Uncategorized

Calculating costs using traditional and ABC

Brian and Gary are college friends planning a skiing trip to Killington before the New Year. They estimated the following costs for the trip:

Requirements

1. Brian suggests that the costs be shared equally. Calculate the amount each person would pay.

2. Gary does not like the idea because he plans to stay in the room rather than ski. Gary suggests that each type of cost be allocated to each person based on the above listed cost driver. Using the activity allocation for each person, calculate the amount that each person would pay based on his own consumption of the activity.

compute the indirect manufacturing cost per unit using direct labor hours from the s 556813

Aug 29, 2021 | Uncategorized

Computing indirect manufacturing costs per unit

The following information is provided for the Orbit Antenna, Corp., which manufactures two products: Lo Gain antennas, and Hi Gain antennas for use in remote areas.

Orbit plans to produce 75 Lo Gain antennas and 150 Hi Gain antennas.

Requirements

1. Compute the ABC indirect manufacturing cost per unit for each product.

2. Compute the indirect manufacturing cost per unit using direct labor hours from the single allocation base system.

what are the advantages and disadvantages of ortega rsquo s proposal 556777

Aug 29, 2021 | Uncategorized

Decision Case 17 2 Nature’s Own Garden manufactures organic fruit preserves sold primarily through health food stores and on the Web. The company closes for two weeks each December to enable employees to spend time with their families over the holiday season. Nature’s Own Garden’s manufacturing overhead is mostly straight line depreciation on its plant, and air conditioning costs for keeping the berries cool during the summer months. The company uses direct labor hours as the manufacturing overhead allocation base. President Cynthia Ortega has just approved new accounting software and is telling controller Jack Strong about her decision.

“I think this new software will be great,” Ortega says. “It will save you time in preparing all those reports.”

“Yes, and having so much more information just a click away will help us make better decisions and help control costs,” replies Strong. “We need to consider how we can use the new system to improve our business practices.”

“And I know just where to start,” says Ortega. “You complain each year about having to predict the weather months in advance for estimating air conditioning costs to include in the calculation of the predetermined manufacturing overhead rate, when professional meteorologists can’t even get tomorrow’s forecast right! I think we should calculate the predetermined overhead rate on a monthly basis.”

Controller Strong is not so sure this is a good idea.

Requirements

1. What are the advantages and disadvantages of Ortega’s proposal?

2. Should Nature’s Own Garden compute its predetermined manufacturing overhead rate on an annual basis or monthly basis? Explain.

how did using manufacturing cost only instead of using all costs associated with the 556778

Aug 29, 2021 | Uncategorized

Farley, Inc., is a manufacturer that produces customized computer components for several wellknown computer assembly companies. Farley’s latest contract with CompWest.com calls for Farley to deliver sound cards that simulate surround sound from two speakers. Farley spent several hundred thousand dollars to design the sound card to meet CompWest.com’s specifications.

Farley’s president, Bryon Wilson, has stipulated a pricing policy that requires the bid price for a new job to be based on Farley’s estimated costs to design, manufacture, distribute, and provide customer service for the job, plus a profit margin. Upon reviewing the contract figures, Farley’s controller, Paul York, was startled to find that the cost estimates developed by Farley’s cost accountant, Tony Hayes, for the CompWest.com bid were based on only the manufacturing costs. York is upset with Hayes. He is not sure what to do next

Requirements

1. How did using manufacturing cost only, instead of using all costs associated with the job, affect the amount of Farley’s bid for the job?

2. Identify the parties involved in Paul York’s dilemma. What are his alternatives? How would each party be affected by each alternative? What should York do next?

based on what you have read above what was jerry rsquo s company using as a cost dri 556779

Aug 29, 2021 | Uncategorized

Jerry never imagined he’d be sitting there in Washington being grilled mercilessly by a panel of congressmen. But a young government auditor picked up on his scheme last year. His company produced hi tech navigation devices that were sold to both military and civilian clients. The military contracts were “cost plus,” meaning that payments were calculated based on actual production costs plus a profit markup. The civilian contracts were bid out in a very competitive market, and every dollar counted. Jerry knew that because all the jobs were done in the same factory, he could manipulate the allocation of overhead costs in a way that would shift costs away from the civilian contracts and into the military “cost plus” work. That way, the company would collect more from the government and be able to shave its bids down on civilian work. He never thought anyone would discover the alterations he had made in the factory workers’ time sheets, but one of his accountants had noticed and tipped off the government auditor. Now as the congressman from Michigan rakes him over the coals, Jerry is trying to figure out his chances of dodging jail time.

Requirements

1. Based on what you have read above, what was Jerry’s company using as a cost driver to allocate overhead to the various jobs?

2. Name two ways that reducing costs on the civilian contracts would benefit the company.

major airlines like american delta and continental are struggling to meet the challe 556780

Aug 29, 2021 | Uncategorized

Major airlines like American, Delta, and Continental are struggling to meet the challenges of budget carriers such as Southwest and JetBlue. Suppose the Delta CFO has just returned from a meeting on strategies for responding to competition from budget carriers. The vice president of operations suggested doing nothing: “We just need to wait until these new airlines run out of money. They cannot be making money with their low fares.” In contrast, the vice president of marketing, not wanting to lose market share, suggests cutting Delta’s fares to match the competition.

“If JetBlue charges only $75 for that flight from New York, so must we!” Others, including the CFO, emphasized the potential for cutting costs. Another possibility is starting a new budget airline within Delta. The CEO cut the meeting short, and directed the CFO to “get some hard data.”

As a start, the CFO decides to collect cost and revenue data for a typical Delta flight, and then compare it to the data for a competitor. Assume she prepares the following schedule:

Excluding food and beverage, the CFO estimates that the cost per available seat mile is 8.4 cents for Delta, compared to 5.3 cents for JetBlue. (That is, the cost of flying a seat for one mile—whether or not the seat is occupied—is 8.4 cents for Delta, and 5.3 cents for JetBlue.) Assume the average cost of food and beverage is $5 per passenger for snacks and $10 for a meal.

Split your team into two groups. Group 1 should prepare its response to Requirement 1 and group 2 should prepare its response to Requirement 2 before the entire team meets to consider Requirements 3 and 4.

Requirements

1. Use the data to determine the following for Delta:

a. The total cost of Flight 1247, assuming a full plane (100% load factor)

b. The revenue generated by Flight 1247, assuming a 100% load factor and average revenue per one way ticket of $102

c. The profit per Flight 1247, given the responses to a. and b.

2. Use the data to determine the following for JetBlue:

a. The total cost of Flight 53, assuming a full plane (100% load factor)

b. The revenue generated by Flight 53, assuming a 100% load factor

c. The profit per Flight 53, given the responses to a. and b.

3. Based on the responses to Requirements 1 and 2, carefully evaluate each of the four alternative strategies discussed in Delta’s executive meeting.

4. The analysis in this project is based on several simplifying assumptions. As a team, brainstorm factors that your quantitative evaluation does not include, but that may affect a comparison of Delta’s operations to budget carriers.

what was the filtration cost per liter 556782

Aug 29, 2021 | Uncategorized

Calculating conversion costs and unit cost

Spring Fresh produces premium bottled water. Spring Fresh purchases artesian water, stores the water in large tanks, and then runs the water through two processes: filtration and bottling. During February, the filtration process incurred the following costs in processing 150,000 liters:

Spring Fresh had no beginning Work in process inventory in the Filtration Department in February.

Requirements

1.Compute the February conversion costs in the Filtration Department.

2.The Filtration Department completely processed 150,000 liters in February. What was the filtration cost per liter?

compute the equivalent units of direct materials and conversion costs for the filtra 556783

Aug 29, 2021 | Uncategorized

Drawing a timeline, and computing equivalent units

Refer to S17A 1. At Spring Fresh, water is added at the beginning of the filtration process. Conversion costs are added evenly throughout the process. Now assume that in February, 130,000 liters were completed and transferred out of the Filtration Department into the Bottling Department. The 20,000 liters remaining in Filtration’s ending Work in process inventory were 80% of the way through the filtration process. Recall that Spring Fresh has no beginning inventories.

Requirements

1.Draw a timeline for the filtration process.

2.Compute the equivalent units of direct materials and conversion costs for the Filtration Department.

compute the total costs of the units gallons 556787

Aug 29, 2021 | Uncategorized

Drawing a timeline, computing equivalent units, and assigning cost to completed units and ending work in process; no beginning work in process inventory or cost transferred in

Crafty Paint prepares and packages paint products. Crafty Paint has two departments: (1) Blending and (2) Packaging. Direct materials are added at the beginning of the blending process (dyes) and at the end of the packaging process (cans). Conversion costs are added evenly throughout each process. Data from the month of May for the Blending Department are as follows:

Requirements

1.Fill in the timeline for the Blending Department.

2.Use the timeline to help you compute the Blending Department’s equivalent units for direct materials and for conversion costs.

3.Compute the total costs of the units (gallons)

a.completed and transferred out to the Packaging Department.

b.in the Blending Department ending Work in process inventory.

what is the ending balance 556789

Aug 29, 2021 | Uncategorized

Computing equivalent units, computing cost per equivalent unit; assigning costs; journalizing; second department, weighted average method

Cool Spring Company produces premium bottled water. In the second department, the Bottling Department, conversion costs are incurred evenly throughout the bottling process, but packaging materials are not added until the end of the process. Costs in beginning Work in process inventory include transferred in costs of $1,700, direct labor of $700, and manufacturing overhead of $330. February data for the Bottling Department follow:

Requirements

1.Compute the Bottling Department equivalent units for the month of February. Use the weighted average method.

2.Compute the cost per equivalent unit for February.

3.Assign the costs to units completed and transferred out and to ending Work in process inventory.

4.Prepare the journal entry to record the cost of units completed and transferred out.

5.Post all transactions to the Work in process inventory—Bottling Department T account. What is the ending balance?

operating income 263976

Aug 29, 2021 | Uncategorized

Classic Coolers manufactures portable coolers adorned with college logos. During the first quarter of the year, the company had the following costs:

The company had no beginning or endingwork in process inventoryand no beginning finished-goods inventory. Although 7,000 units were started and finished during the quarter, just 4,300 were sold, for an average price of $33 each.

alexsandra isosev industries has three operating divisions falil 263978

Aug 29, 2021 | Uncategorized

Alexsandra Isosev Industries has three operating divisions—Falilat Mining, Mourning Paperbacks, and Osygus Protection Devices. Each division maintains its own accounting system and method of revenue recognition.

Falilat Mining

Falilat Mining specializes in the extraction of precious metals such as silver, gold, and platinum. During the fiscal year ended November 30, 2008, Falilat entered into contracts worth $2,250,000 and shipped metals worth $2,000,000. A quarter of the shipments were made from inventories on hand at the beginning of the fiscal year, and the remainder were made from metals that were mined during the year. Mining totals for the year, valued at market prices, were: silver at $750,000, gold at $1,300,000, and platinum at $490,000. Falilat uses the completion-of-production method to recognize revenue, because its operations meet the specified criteria (i.e., reasonably assured sales prices, interchangeable units, and insignificant distribution costs).

Mourning Paperbacks

Mourning Paperbacks sells large quantities of novels to a few book distributors that in turn sell to several national chains of bookstores. Mourning allows distributors to return up to 30% of sales, and distributors give the same terms to bookstores. While returns from individual titles fluctuate greatly, the returns from distributors have averaged 20% in each of the past 5 years. A total of $8,000,000 of paperback novel sales were made to distributors during the fiscal year. On November 30, 2008, $3,200,000 of fiscal 2008 sales were still subject to return privileges over the next 6 months. The remaining $4,800,000 of fiscal 2008 sales had actual returns of 21%. Sales from fiscal 2008 totaling $2,500,000 were collected in fiscal 2008, with less than 18% of sales returned. Mourning records revenue according to the method referred to as revenue recognition when the right of return exits, because all applicable criteria for use of this method are met by Mourning’s operations.

Osygus Protection Devices

Osygus Protection Devices works through manufacturers’ agents in various cities. Orders for alarm systems and down payments are forwarded from agents, and Osygus ships the goods f.o.b. shipping point. Customers are billed for the balance due plus actual shipping costs. The firm received orders for $6,000,000 of goods during the fiscal year ended November 30, 2008. Down payments of $600,000 were received, and $5,000,000 of goods were billed and shipped. Actual freight costs of $100,000 were also billed. Commissions of 10% on product price were paid to manufacturers’ agents after the goods were shipped to customers. Such goods are warranted for 90 days after shipment, and warranty returns have been about 1% of sales. Revenue is recognized at the point of sale by Osygus.

Instructions

(a) There are a variety of methods for revenue recognition. Define and describe each of the following methods of revenue recognition, and indicate whether each is in accordance with generally accepted accounting principles.

(1) Completion-of-production method.

(2) Percentage-of-completion method.

(3) Installment-sales method.

(b) Compute the revenue to be recognized in the fiscal year ended November 30, 2008, for:

(1) Falilat Mining.

(2) Mourning Paperbacks.

(3) Osygus Protection Devices.

(CMA adapted)

analysis of percentage of completion financial statements in 201 263984

Aug 29, 2021 | Uncategorized

Analysis of Percentage-of-Completion Financial Statements In 2010, Stein otter Construction Corp. began construction work under a 3-year contract. The contract price was $1,000,000. Stein otter uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2010, follow.

(a) How much cash was collected in 2010 on this contract?

(b) What was the initial estimated total income before tax on this contract?

(AICPA adapted)

andre agassi construction company began operations january 1 20 263986

Aug 29, 2021 | Uncategorized

Andre Agassi Construction Company began operations January 1, 2008. During the year, Andre Agassi Construction entered into a contract with Lindsey Davenport Corp. to construct a manufacturing facility. At that time, Agassi estimated that it would take 5 years to complete the facility at a total cost of $4,500,000. The total contract price for construction of the facility is $6,300,000. During the year, Agassi incurred $1,185,800 in construction costs related to the construction project. The estimated cost to complete the contract is $4,204,200. Lindsey Davenport Corp. was billed and paid 30% of the contract price.

Instructions

Prepare schedules to compute the amount of gross profit to be recognized for the year ended December 31, 2008, under each of the following methods.

(a) Completed-contract method.

(b) Percentage-of-completion method. Show supporting computations in good form.

appliance center is an experienced home appliance dealer applia 263987

Aug 29, 2021 | Uncategorized

Appliance Center is an experienced home appliance dealer. Appliance Center also offers a number of services together with the home appliances that it sells. Assume that Appliance Center sells ovens on a standalone basis. Appliance Center also sells installation services and maintenance services for ovens. However, Appliance Center does not offer installation or maintenance services to customers who buy ovens from other vendors. Pricing for ovens is as follows.

Oven only ……………………………………..…… $ 800

Oven with installation service ……………………….. 850

Oven with maintenance services ……………………… 975

Oven with installation and maintenance services …… 1,000

In each instance in which maintenance services are provided, the maintenance service is separately priced within the arrangement at $175. Additionally, the incremental amount charged by Appliance Center for installation approximates the amount charged by independent third parties. Ovens are sold subject to a general right of return. If a customer purchases an oven with installation and/or maintenance services, in the event Appliance Center does not complete the service satisfactorily, the customer is only entitled to a refund of the portion of the fee that exceeds $800.

Instructions

(a) Assume that a customer purchases an oven with both installation and maintenance services for $1,000. Based on its experience, Appliance Center believes that it is probable that the installation of the equipment will be performed satisfactorily to the customer. Assume that the maintenance services are priced separately. Explain whether the conditions for a multiple-deliverable arrangement exist in this situation.

(b) Indicate the amount of revenues that should be allocated to the oven, the installation, and to the maintenance contract.

journal en1 prepare journal entries to record the december 2012 transactions 264017

Aug 29, 2021 | Uncategorized

1. Prepare journal entries to record the December 2012 transactions.

2. Post those entries to t-accounts.

3. Prepare journal entries for the required adjusting entries.

4. Post the adjusting entries to the t-accounts.

5. Calculate balances for each of the t-accounts and then prepare an adjusted trial balance as of December 31, 2012.

6. Prepare an income statement for the month ended December 31, 2012.

7. Prepare a statement of retained earnings for the month ended December 31, 2012.

8. Prepare a balance sheet as of December 31, 2012.

9. Prepare closing entries and post them to the t-accounts.

10. Prepare a post-closing trial balance as of December 31, 2012.

Document Preview:

Problem – Part 1 The business transactions for the comprehensive problem appear below the Chart of Accounts. Required: 1. Prepare journal entries to record the December 2012 transactions. 2. Post those entries to t-accounts. 3. Prepare journal entries for the required adjusting entries. 4. Post the adjusting entries to the t-accounts. 5. Calculate balances for each of the t-accounts and then prepare an adjusted trial balance as of December 31, 2012. 6. Prepare an income statement for the month ended December 31, 2012. 7. Prepare a statement of retained earnings for the month ended December 31, 2012. 8. Prepare a balance sheet as of December 31, 2012. 9. Prepare closing entries and post them to the t-accounts. 10. Prepare a post-closing trial balance as of December 31, 2012. Chart of Accounts: Cash Accounts Receivable Supplies Prepaid Insurance Prepaid Rent Accounts Payable Salaries Payable Unearned Consulting Revenue Common Stock Retained Earnings Dividends Consulting Revenue Advertising Expense Insurance Expense Rent Expense Salary Expense Supplies Expense Utility Expense Transactions: Dec 1. Murray invested $10,000 cash in exchange for all of the common stock in Murray Company. Dec 3. The company paid $3,200 cash for four months’ rent for office space. Dec 3. The company purchased $1,420 of supplies on credit from Harris Office Products, promising to pay the bill in 7 days. Dec 4. The company billed Easy Leasing $3,200 for consulting services performed in installing a web server. Easy Leasing agreed to pay the bill in 15 days. Dec 5. The company paid $2,400 cash for one year’s premium on a property and liability insurance policy effective December 1. Dec 10. The company paid $1,420 cash to Harris Office for the supplies purchased on credit on December 3. Dec 11. The company began consulting work on a project with Faulty Leasing. The work will last 15 working days, from December 11, 2012 through January 3, 2013. (Note that…

Attachments:

exe.docx

completed contract and percentage of completion with interim los 264026

Aug 29, 2021 | Uncategorized

Completed Contract and Percentage of Completion with Interim Loss Reynolds Custom Builders (RCB) was established in 1985 by Avery Conway and initially built high-quality customized homes under contract with specific buyers. In the 1990s, Conway’s two sons joined the company and expanded RCB’s activities into the high-rise apartment and industrial plant markets. Upon the retirement of RCB’s long-time financial manager, Conway’s sons recently hired Ed Borke as controller for RCB. Borke, a former college friend of Conway’s sons, has been associated with a public accounting firm for the last 6 years. Upon reviewing RCB’s accounting practices, Borke observed that RCB followed the completed contract method of revenue recognition, a carryover from the years when individual home building was the majority of RCB’s operations. Several years ago, the predominant portion of RCB’s activities shifted to the high-rise and industrial building areas. From land acquisition to the completion of construction, most building contracts cover several years. Under the circumstances, Borke believes that RCB should follow the percentage-of-completion method of accounting. From a typical building contract, Borke developed the following data.

Instructions

(a) Explain the difference between completed-contract revenue recognition and percentage-of-completion revenue recognition.

(b) Using the data provided for the Bluestem Tractor Plant and assuming the percentage-of-completion method of revenue recognition is used, calculate RCB’s revenue and gross profit for 2010, 2011, and 2012, under each of the following circumstances.

(1) Assume that all costs are incurred, all billings to customers are made, and all collections from customers are received within 30 days of billing, as planned.

(2) Further assume that, as a result of unforeseen local ordinances and the fact that the building site was in a wetlands area, RCB experienced cost overruns of $800,000 in 2010 to bring the site into compliance with the ordinances and to overcome wetlands barriers to construction. (3) Further assume that, in addition to the cost overruns of $800,000 for this contract incurred under part (b)2, inflationary factors over and above those anticipated in the development of the original contract cost have caused an additional cost overrun of $850,000 in 2011. It is not anticipated that any cost overruns will occur in 2012.

(CMAadapted)

comprehensive problem long term contracts you have been engaged 264028

Aug 29, 2021 | Uncategorized

Comprehensive Problem—Long-Term Contracts you have been engaged by Buhl Construction Company to advise it concerning the proper accounting for a series of long-term contracts. Buhl commenced doing business on January 1, 2010. Construction activities for the first year of operations are shown below. All contract costs are with different customers, and any work remaining at December 31, 2010, is expected to be completed in 2011.

Instructions

(a) Prepare a schedule to compute gross profit (loss) to be reported, unbilled contract costs and recognized profit, and billings in excess of costs and recognized profit using the percentage-of completion method.

(b) Prepare a partial income statement and balance sheet to indicate how the information would be reported for financial statement purposes.

(c) Repeat the requirements for part (a) assuming Buhl uses the completed-contract method.

(d) Using the responses above for illustrative purposes, prepare a brief report comparing the conceptual merits (both positive and negative) of the two revenue recognitionapproaches.

comprehensive three part revenue recognition van hatten industri 264030

Aug 29, 2021 | Uncategorized

Comprehensive Three-Part Revenue Recognition Van Hatten Industries has three operating divisions—Depp Construction Division, Dement Publishing Division, and Ankiel Securities Division. Each division maintains its own accounting system and method of revenue recognition. Depp Construction Division During the fiscal year ended November 30, 2010. Depp Construction Division had one construction project in process. A $30,000,000 contract for construction of a civic center was granted on June 19, 2010, and construction began on August 1, 2010. Estimated costs of completion at the contract date were $25,000,000 over a 2-year time period from the date of the contract. On November 30, 2010, construction costs of $7,200,000 had been incurred and progress billings of $9,500,000 had been made. The construction costs to complete the remainder of the project were reviewed on November 30, 2010, and were estimated to amount to only $16,800,000 because of an expected decline in raw materials costs. Revenue recognition is based upon a percentage-of-completion method. Dement Publishing Division The Dement Publishing Division sells large volumes of novels to a few book distributors, which in turn sell to several national chains of bookstores. Dement allows distributors to return up to 30% of sales, and distributors give the same terms to bookstores. While returns from individual titles fluctuate greatly, the returns from distributors have averaged 20% in each of the past 5 years. A total of $7,000,000 of paperback novel sales was made to distributors during fiscal 2010. On November 30, 2010 (the end of the fiscal year) $1,500,000 of fiscal 2010 sales was still subject to return privileges over the next 6 months. The remaining $5,500,000 of fiscal 2010 sales had actual returns of 21%. Sales from fiscal 2009 totaling $2,000,000 were collected in fiscal 2010 less 18% returns. This division records revenue according to the method referred to as revenue recognition when the right of return exists. Ankiel Securities Division Ankiel Securities Division works through manufacturers’ agents in various cities. Orders for alarm systems and down payments are forwarded from agents, and the Division ships the goods f.o.b. factory directly to customers (usually police departments and security guard companies). Customers are billed directly for the balance due plus actual shipping costs. The company received orders for $6,000,000 of goods during the fiscal year ended November 30, 2010. Down payments of $600,000 were received, and $5,200,000 of goods were billed and shipped. Actual freight costs of $100,000 were also billed. Commissions of 10% on product price are paid to manufacturing agents after goods are shipped to customers. Such goods are warranted for 90 days after shipment, and warranty returns have been about 1% of sales. Revenue is recognized at the point of sale by this division.

(a) There are a variety of methods of revenue recognition. Define and describe each of the following methods of revenue recognition, and indicate whether each is in accordance with generally accepted accounting principles.

(1) Point of sale.

(2) Completion-of-production.

(3) Percentage-of-completion.

(4) Installment-sales.

(b) Compute the revenue to be recognized in fiscal year 2010 for each of the three operating divisions of Van Hatten Industries in accordance with generally accepted accounting principles.

employees at your company disagree about the accounting for sale 264046

Aug 29, 2021 | Uncategorized

Employees at your company disagree about the accounting for sales returns. The sales manager believes that granting more generous return provisions can give the company a competitive edge and increase sales revenue. The controller cautions that, depending on the terms granted, loose return provisions might lead to non-GAAP revenue recognition. The company CFO would like you to research the issue to provide an authoritative answer.

Instructions

If your school has a subscription to the FASB Codification, go to http://aaa.hq.org/asclogin.cfm to log in and prepare responses to the following. Provide Codification references for your responses.

(a) What is the authoritative literature addressing revenue recognition when right of return exists?

(b) What is meant by ?oright of return???

(c) When there is a right of return, what conditions must the company meet to recognize the revenue at the time of sale?

(d) What factors may impair the ability to make a reasonable estimate of future returns?

franchise entries pacific cross burgers inc charges an initial 264056

Aug 29, 2021 | Uncategorized

Franchise Entries Pacific Cross burgers Inc. charges an initial franchise fee of $70,000. Upon the signing of the agreement, a payment of $28,000 is due. Thereafter, three annual payments of $14,000 are required. The credit rating of the franchisee is such that it would have to pay interest at 10% to borrow money. Prepare the entries to record the initial franchise fee on the books of the franchisor under the following assumptions.

(a) The down payment is not refundable, no future services are required by the franchisor, and collection of the note is reasonably assured.

(b) The franchisor has substantial services to perform, the down payment is refundable, and the collection of the note is very uncertain.

(c) The down payment is not refundable, collection of the note is reasonably certain, the franchisor has yet to perform a substantial amount of services, and the down payment represents a fair measure of the services already performed.

a consulting firm produces a service that requires the use of labor and materials 264061

Aug 29, 2021 | Uncategorized

A consulting firm produces a service that requires the use of labor and materials. Each unit of service requires a standard labor time of 30 minutes (0.5 hours). The average pay rate for a labor hour is £20. The consulting firm considers all materials that are required for the service as variable overheads (OH), the cost of which is directly associated with the labor hours worked. It has been estimated that variable OH rate is £10 per service hour.

The budgeted and actual costs, revenue and units for the month November are given in the table below:

1.Calculate the flexed budget and the key variances between budgeted and actual results.
2. Reconcile the original budget and present the relationship between the budgeted and the actual profit for the month November
3. Discuss the calculated variances, and provide suggestions for better cost management (target length 300 words).

The material used is from the book Atrill, P. & McLaney, E. (2012)
Management accounting for decision makers. 7th ed. Harlow, England : Pearson Education Ltd.
Which I have attached for your reference.

Please no plagiarism as the max percentage is 9%

Please use equation and not just computerised solution

Attachments:

accounting-fo….pdf

this-weeks-qu….docx

gail devers corporation sells farm machinery on the installment 264065

Aug 29, 2021 | Uncategorized

Gail Devers Corporation sells farm machinery on the installment plan. On July 1, 2008, Devers entered into an installment sale contract with Gwen Torrence Inc. for a 10-year period. Equal annual payments under the installment sale are $100,000 and are due on July 1. The first payment was made on July 1, 2008.

Additional Information

1. The amount that would be realized on an outright sale of similar farm machinery is $676,000.

2. The cost of the farm machinery sold to Gwen Torrence Inc. is $500,000.

3. The finance charges relating to the installment period are $324,000 based on a stated interest rate of 10%, which is appropriate.

4. Circumstances are such that the collection of the installments due under the contract is reasonably assured.

Instructions

What income or loss before income taxes should Devers record for the year ended December 31, 2008, as a result of the transaction above?

(AICPA adapted)

gross profit on uncompleted contract on april 1 2010 dougherty 264074

Aug 29, 2021 | Uncategorized

Gross Profit on Uncompleted Contract On April 1, 2010, Dougherty Inc. entered into a cost-plus- fixed-fee contract to construct an electric generator for Altom Corporation. At the contract date, Dougherty estimated that it would take 2 years to complete the project at a cost of $2,000,000. The fixed fee stipulated in the contract is $450,000. Dougherty appropriately accounts for this contract under the percentage-of-completion method. During 2010 Dougherty incurred costs of $800,000 related to the project. The estimated cost at December 31, 2010, to complete the contract is $1,200,000. Altom was billed $600,000 under the contract.

Prepare a schedule to compute the amount of gross profit to be recognized by Dougherty under the contract for the year ended December 31, 2010. Show supporting computations in good form

(AICPA adapted)

hertzel advertising agency handles advertising for clients under 264084

Aug 29, 2021 | Uncategorized

Hertzel Advertising Agency handles advertising for clients under contracts that require the agency to develop advertising copy and layouts and place ads in various media, charging clients a commission of 15% of the media cost as its fee. The agency makes advance billings to its clients of estimated media cost plus its 15% commission. Adjustments to these advances usually are small. Frequently, both the billings and receipt of cash from these billings occur before the period in which the advertising actually appears in the media. A conference meeting is held between officers of the agency and the new firm of CPAs recently engaged to perform annual audits. In this meeting, consideration is given to four possible points for measuring revenue:

(1) At the time the advanced billing is made,

(2) When payment is received from the client,

(3) In the month when the advertising appears in the media, and

(4) When the bill for advertising is received from the media, generally in the month following its appearance. The agency has been following the first method for the past several years on the basis that a definite contract exists and the revenue is earned when billed. When the billing is made, an entry is prepared to record the estimated receivable and liability to the media. Estimated expenses related to the contract are also recorded. Adjusting entries are made later for any differences between the estimated and actual amounts. As a member of the CPA firm attending this meeting, how would you react to the agency’s method of recognizing revenue? Discuss the strengths and weaknesses of each of the four methods of revenue recognition, and indicate which one you would recommend for the agency to follow.

installment repossession entries selected transactions of tv lan 264120

Aug 29, 2021 | Uncategorized

Installment Repossession Entries selected transactions of TV Land Company are presented below.

1. A television set costing $540 is sold to Jack Matre on November 1, 2010, for $900. Matre makes a down payment of $300 and agrees to pay $30 on the first of each month for 20 months thereafter.

2. Matre pays the $30 installment due December 1, 2010.

3. On December 31, 2010, the appropriate entries are made to record profit realized on the installment sales.

4. The first seven 2011 installments of $30 each are paid by Matre. (Make one entry.)

5. In August 2011 the set is repossessed, after Matre fails to pay the August 1 installment and indicates that he will be unable to continue the payments. The estimated fair value of the repossessed set is $100. Prepare journal entries to record the transactions above on the books of TV Land Company. Closing entries should not be made.

installment sales default and repossession crawford imports inc 264125

Aug 29, 2021 | Uncategorized

Installment Sales—Default and Repossession Crawford Imports Inc. was involved in two default and repossession cases during the year:

1. A refrigerator was sold to Cindy McClary for $1,800, including a 30% markup on selling price. McClary made a down payment of 20%, four of the remaining 16 equal payments, and then defaulted on further payments. The refrigerator was repossessed, at which time the fair value was determined to be $800.

2. An oven that cost $1,200 was sold to Travis Longman for $1,500 on the installment basis. Longman made a down payment of $240 and paid $80 a month for six months, after which he defaulted. The oven was repossessed and the estimated fair value at time of repossession was determined to be $750. Prepare journal entries to record each of these repossessions using a fair value approach. (Ignore interest charges.)

calculating interest rates solve for the unknown interest rate in each of the follow 556341

Aug 29, 2021 | Uncategorized

Calculating Interest Rates Solve for the unknown interest rate in each of the following:

what will appear in the income statement and the shareholder equity account under th 556603

Aug 29, 2021 | Uncategorized

Suppose you had invested $1 million in US fixed assets and in Italian fixed assets under

the following conditions:

Assume that fixed asset prices in local currency have kept pace with prices in general.

a Which investment yielded higher returns over the year?

b What will appear in the income statement and the shareholder equity account under the FAS 52 procedure?

c What should appear as income?

d Why does your answer to ‘‘b’’ (where income and shareholder equity are aggregated) disagree with your answer to ‘‘c’’?

what sale price per box should ben hiebert set for the second order 556776

Aug 29, 2021 | Uncategorized

Decision Case 17 1 Hiebert Chocolate, Ltd., is located in Memphis. The company prepares gift boxes of chocolates for private parties and corporate promotions. Each order contains a selection of chocolates determined by the customer, and the box is designed to the customer’s specifications. Accordingly, Hiebert uses a job order costing system and allocates manufacturing overhead based on direct labor cost.

One of Hiebert’s largest customers is the Goforth and Leos law firm. This organization sends chocolates to its clients each Christmas and also provides them to employees at the firm’s gatherings. The law firm’s managing partner, Bob Goforth, placed the client gift order in September for 500 boxes of cream filled dark chocolates. But Goforth and Leos did not place its December staff party order until the last week of November. This order was for an additional 100 boxes of chocolates identical to the ones to be distributed to clients. Hiebert budgeted the cost per box for the original 500 box order as follows:

Ben Hiebert, president of Hiebert Chocolate, Ltd., priced the order at $20 per box.

In the past few months, Hiebert has experienced price increases for both dark chocolate and direct labor. All other costs have remained the same. Hiebert budgeted the cost per box for the second order as follows:

Requirements

1. Do you agree with the cost analysis for the second order? Explain your answer.

2. Should the two orders be accounted for as one job or two in Hiebert’s system?

3. What sale price per box should Ben Hiebert set for the second order? What are the advantages and disadvantages of this price?

computation of prior service cost amortization pension 263694

Aug 29, 2021 | Uncategorized

(Computation of Prior Service Cost Amortization, Pension Expense, Journal Entries, and Net Gain or Loss) Aykroyd Inc. has sponsored a noncontributory-defined benefit pension plan for its employees since 1987. Prior to 2010, cumulative net pension expense recognized equaled cumulative contributions to the plan. Other relevant information about the pension plan on January 1, 2010, is as follows.

1. The company has 200 employees. All these employees are expected to receive benefits under the plan. The average remaining service life per employee is 12 years.

2. The projected benefit obligation amounted to $5,000,000 and the fair value of pension plan assets was $3,000,000. The market-related asset value was also $3,000,000. Unrecognized prior service cost was $2,000,000. On December 31, 2010, the projected benefit obligation and the accumulated benefit obligation were $4,850,000 and $4,025,000, respectively. The fair value of the pension plan assets amounted to $4,100,000 at the end of the year. A 10% settlement rate and a 10% expected asset return rate were used in the actuarial present value computations in the pension plan. The present value of benefits attributed by the pension benefit formula to employee service in 2010 amounted to $200,000. The employer’s contribution to the plan assets amounted to $775,000 in 2010. This problem assumes no payment of pension benefits.

(Round all amounts to the nearest dollar.)

(a) Prepare a schedule, based on the average remaining life per employee, showing the prior service cost that would be amortized as a component of pension expense for 2010, 2011, and 2012.

(b) Compute pension expense for the year 2010.

(c) Prepare the journal entries required to report the accounting for the company’s pension plan for 2010.

(d) Compute the amount of the 2010 increase/decrease in net gains or losses and the amount to be amortized in 2010 and 2011.

direct your attention to the company with perhaps the largest 263706

Aug 29, 2021 | Uncategorized

Direct your attention to the company with perhaps the largest private pension plan in the world—General Motors. GM’s note relating to its pension plan is included in Exhibit 17-11 on pages 1056–1057. Use that information to answer the following questions.

1. Compute GM’s total PBO as of December 31, 2007. How much has GM set aside in its pension fund to offset the PBO?

2. Now consider GM’s postretirement benefits other than pensions. Add to the PBO from question (1) GM’s accumulated postretirement benefit obligation (APBO). What is GM’s estimated obligation related to pensions and other postretirement benefits?

3. Why do you think there is a separation into U.S. and non-U.S. plans?

4. Note that in 2006 GM’s obligation for its other benefit plans was reduced by $15,091 (in millions) because of ?oamendments.?? What happened?

henning company sponsors a defined benefit pension plan for 263737

Aug 29, 2021 | Uncategorized

(Pension Expense, Journal Entries, Statement Presentation) Henning Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2010 in which no benefits were paid.

1. The actuarial present value of future benefits earned by employees for services rendered in 2010 amounted to $56,000.

2. The company’s funding policy requires a contribution to the pension trustee amounting to $145,000 for 2010.

3. As of January 1, 2010, the company had a projected benefit obligation of $900,000, an accumulated benefit obligation of $800,000, and a balance of $400,000 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $600,000 at the beginning of the year. The actual and expected return on plan assets was $54,000. The settlement rate was 9%. No gains or losses occurred in 2010 and no benefits were paid.

4. Amortization of prior service cost was $50,000 in 2010. Amortization of net gain or loss was not required in 2010. Instructions

(a) Determine the amounts of the components of pension expense that should be recognized by the company in 2010.

(b) Prepare the journal entry or entries to record pension expense and the employer’s contribution to the pension trustee in 2010.

(c) Indicate the amounts that would be reported on the income statement and the balance sheet for the year 2010.

implications of gaap rules on pensions jill vogel and 263753

Aug 29, 2021 | Uncategorized

(Implications of GAAP Rules on Pensions) Jill Vogel and Pete Dell have to do a class presentation on GAAP rules for reporting pension information. In developing the class presentation, they decided to provide the class with a series of questions related to pensions and then discuss the answers in class. Given that the class has all read the rules related to pension accounting and reporting, they felt this approach would provide a lively discussion. Here are the questions:

1. In an article in Business Week prior to new rules related to pensions, it was reported that the discount rates used by the largest 200 companies for pension reporting ranged from 5% to 11%. How can such a situation exist, and does GAAP alleviate this problem?

2. An article indicated that when new GAAP rules were issued related to pensions it caused an increase in the liability for pensions for approximately 20% of companies. Why might this situation occur?

3. A recent article noted that while ?osmoothing?? is not necessarily an accounting virtue, pension accounting has long been recognized as an exception—an area of accounting in which at least some dampening of market swings is appropriate. This is because pension funds are managed so that their performance is insulated from the extremes of short-term market swings. A pension expense that reflects the volatility of market swings might, for that reason, convey information of little relevance. Are these statements true?

4. Understanding the impact of the changes required in pension reporting requires detailed information about its pension plan(s) and an analysis of the relationship of many factors, particularly:

(a) The type of plan(s) and any significant amendments.

(b) The plan participants.

(c) The funding status.

(d) The actuarial funding method and assumptions currently used.

What impact does each of these items have on financial statement presentation?

5. An article noted ?oYou also need to decide whether to amortize gains and losses using the corridor method, or to use some other systematic method. Under the corridor approach, only gains and losses in excess of 10% of the greater of the projected benefit obligation or the plan assets would have to be amortized.?? What is the corridor method and what is its purpose what answers do you believe Jill and Pete gave to each of these questions?

isu company adopted a stock option plan on november 30 263762

Aug 29, 2021 | Uncategorized

ISU Company adopted a stock option plan on November 30, 2007, that provided that 70,000 shares of $5 par value stock be designated as available for the granting of options to officers of the corporation at a price of $8 a share. The market value was $12 a share on November 30, 2007.

On January 2, 2008, options to purchase 28,000 shares were granted to president Don Pedro—15,000 for services to be rendered in 2008 and 13,000 for services to be rendered in 2009. Also on that date, options to purchase 14,000 shares were granted to vice president Beatrice Leonato—7,000 for services to be rendered in 2008 and 7,000 for services to be rendered in 2009. The market value of the stock was $14 a share on January 2, 2008.

The options were exercisable for a period of one year following the year in which the services were rendered. The fair value of the options on the grant date was $3 per option.

In 2009 neither the president nor the vice president exercised their options because the market price of the stock was below the exercise price. The market value of the stock was $7 a share on December 31, 2009, when the options for 2008 services lapsed.

On December 31, 2010, both president Pedro and vice president Leonato exercised their options for 13,000 and 7,000 shares, respectively, when the market price was $16 a share.

Instructions

Prepare the necessary journal entries in 2007 when the stock option plan was adopted, in 2008 when options were granted, in 2009 when options lapsed, and in 2010 when options were exercised.

larson corp sponsors a defined benefit pens 263768

Aug 29, 2021 | Uncategorized

(Pension Worksheet) Larson Corp. sponsors a defined-benefit pension plan for its employees. On January 1, 2011, the following balances related to this plan.

Plan assets (market-related value) $270,000

Projected benefit obligation 340,000

Pension asset/liability 70,000 Cr.

Prior service cost 90,000

OCI—Loss 39,000

As a result of the operation of the plan during 2011, the actuary provided the following additional data at December 31, 2011.

(a) Compute pension expense for Larson Corp. for the year 2011 by preparing a pension worksheet that shows the journal entry for pension expense.

(b) Indicate the pension amounts reported in the financialstatements.

mantle company sponsors a defined benefit pension plan the foll 263782

Aug 29, 2021 | Uncategorized

Mantle Company sponsors a defined-benefit pension plan. The following information related to the pension plan is available for 2008.

2008

Plan assets (fair value), January 1 ……………………$380,000

Projected benefit obligation, January 1 ………………..600,000

Pension liability, January 1 ……………………………220,000

Prior service cost, January 1 …………………………..180,000

Service cost …………………………………………….60,000

Actual and expected return on plan assets ……………..24,000

Amortization of prior service cost ……………………..10,000

Contributions (funding) ………………………………110,000

Interest/settlement rate …………………………………….9%

Instructions

(a) Compute pension expense for 2008.

(b) Prepare the journal entry (ies) to record the pension expense and the company’s funding of the pension plan for 2008.

non vested employees an ethical dilemma thinken technology 263794

Aug 29, 2021 | Uncategorized

(Non-vested Employees—An Ethical Dilemma) Thinken Technology recently merged with College Electronic (CE), a computer graphics manufacturing firm. In performing a comprehensive audit of CE’s accounting system, Gerald Ott, internal audit manager for Thinken Technology, discovered that the new subsidiary did not record pension assets and liabilities, subject to GAAP. The net present value of CE’s pension assets was $15.5 million, the vested benefit obligation was $12.9 million, and the projected benefit obligation was $17.4 million. Ott reported this audit finding to Julie Habbe, the newly appointed controller of CE. A few days later Habbe called Ott for his advice on what to do. Habbe started her conversation by asking, ?oCan’t we eliminate the negative income effect of our pension dilemma simply by terminating the employment of non-vested employees before the end of our fiscal year??? How should Ott respond to Habbe’s remark about firing non-vested employees?

on november 1 2007 columbo company adopted a stock option 263813

Aug 29, 2021 | Uncategorized

On November 1, 2007, Columbo Company adopted a stock option plan that granted options to key executives to purchase 30,000 shares of the company’s $10 par value common stock. The options were granted on January 2, 2008, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company; the options expired 6 years from date of grant. The option price was set at $40, and the fair value option pricing model determines the total compensation expense to be $450,000.

All of the options were exercised during the year 2010: 20,000 on January 3 when the market price was $67, and 10,000 on May 1 when the market price was $77 a share.

Instructions

Prepare journal entries relating to the stock option plan for the years 2008, 2009, and 2010 under the fair value method. Assume that the employees perform services equally in 2008 and 2009.

pencomp s balance sheet at december 31 2012 is as follows 263816

Aug 29, 2021 | Uncategorized

PENCOMP’s balance sheet at December 31, 2012, is as follows.

?

Additional information concerning PENCOMP’s defined benefit pension plain is as follows.

Projected benefit obligation at 12/31/12 …………………… $ 820.5

Plan assets (fair value) at 12/31/12 …………………………… 476.5

Unamortized past service cost at 12/31/12 …………………… 150.0

Amortization of past service cost during 2013 ………………… 15.0

Service cost for 2013 …………………………………………… 42.0

Discount rate …………………………………………………… 10%

Expected rate of return on plan assets in 2013 …………………. 12%

Actual return on plan assets in 2013 ……………………………. 10.4

Contributions to pension fund in 2013 …………………………. 70.0

Benefits paid during 2013 ……………………………………… 40.0

Unamortized net loss due to changes in actuarial assumptions

and deferred net losses on plan assets at 12/31/12 ……………… 92.0

Expected remaining service life of employees ………………….. 15.0

Average period to vesting of prior service costs ………………… 10.0

Other information about PENCOMP is as follows.

Salary expense, all paid with cash during 2013 ………………. $ 700.0

Sales, all for cash ……………………………………………… 3,000.0

Purchases, all for cash ………………………………………… 2,000.0

Inventory at 12/31/13 …………………………………………. 1,800.0

Property originally cost $2,000 and is depreciated on a straight-line basis over 25 years with no residual value.

Interest on the note payable is 10% annually and is paid in cash on 12/31 of each year.

Dividends declared and paid are $200 in 2013.

Accounting

Prepare an income statement for 2013 and a balance sheet as of December 31, 2013. Also, prepare the pension expense journal entry for the year ended December 31, 2013. Round to the nearest tenth (e.g., round 2.87 to 2.9)

Analysis

Compute return on equity for PENCOMP for 2013 (assume stockholders’ equity is equal to year-end average stockholders’ equity). Do you think an argument can be made for including some or even all of the change in accumulated other comprehensive income (due to pensions) in the numerator of return on equity? Illustrate that calculation.

Principles

Explain a rationale for why the FASB has (so far) decided to exclude from the current period income statement the effects of pension plan amendments and gains and losses due to changes in actuarialassumptions.

pension expense journal entries amortization of loss 263821

Aug 29, 2021 | Uncategorized

(Pension Expense, Journal Entries, Amortization of Loss) Gottschalk Company sponsors a defined benefit plan for its 100 employees. On January 1, 2010, the company’s actuary provided the following information.

Accumulated other comprehensive loss (PSC) $150,000

Pension plan assets (fair value and market-related asset value) 200,000

Accumulated benefit obligation 260,000

Projected benefit obligation 380,000

The average remaining service period for the participating employees is 10 years. All employees are expected to receive benefits under the plan. On December 31, 2010, the actuary calculated that the present value of future benefits earned for employee services rendered in the current year amounted to $52,000; the projected benefit obligation was $490,000; fair value of pension assets was $276,000; the accumulated benefit obligation amounted to $365,000. The expected return on plan assets and the discount rate on the projected benefit obligation were both 10%. The actual return on plan assets is $11,000. The company’s current year’s contribution to the pension plan amounted to $65,000. No benefits were paid during the year.

(a) Determine the components of pension expense that the company would recognize in 2010. (With only one year involved, you need not prepare a worksheet.)

(b) Prepare the journal entry to record the pension expense and the company’s funding of the pension plan in 2010.

(c) Compute the amount of the 2010 increase/decrease in gains or losses and the amount to be amortized in 2010 and 2011.

(d) Indicate the pension amounts reported in the financial statement as of December 31, 2010.

pension worksheet missing amounts kramer co has prepared 263827

Aug 29, 2021 | Uncategorized

(Pension Worksheet – Missing Amounts) Kramer Co. has prepared the following pension worksheet. Unfortunately, several entries in the worksheet are not decipherable. The company has asked your assistance in completing the worksheet and completing the accounting tasks related to the pension plan for 2010.

(a) Determine the missing amounts in the 2010 pension worksheet, indicating whether the amounts are debits or credits.

(b) Prepare the journal entry to record 2010 pension expense for Kramer Co.

(c) Determine the following for Kramer for 2010: (1) settlement rate used to measure the interest on the liability and (2) expected return on planassets.

pension worksheet the following data relate to the operation of 263830

Aug 29, 2021 | Uncategorized

Pension Worksheet) The following data relate to the operation of Kramer Co.’s pension plan in 2011. The pension worksheet for 2010 is provided in P20-10.

Service cost $59,000

Actual return on plan assets 32,000

Amortization of prior service cost 28,000

Annual contributions 51,000

Benefits paid retirees 27,000

Average service life of all employees 25 years

For 2011, Kramer will use the same assumptions as 2010 for the expected rate of returns on plan assets.

The settlement rate for 2011 is 10%.

Instructions

(a) Prepare a pension worksheet for 2011 and accompanying computations and amortization of the loss, if any, in 2011 using the corridor approach.

(b) Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31.

(c) Indicate the pension amounts reported in the financial statements.

pension worksheet missing amounts the accounting staff of 263831

Aug 29, 2021 | Uncategorized

(Pension Worksheet—Missing Amounts) The accounting staff of Usher Inc. has prepared the following pension worksheet. Unfortunately, several entries in the worksheet are not decipherable. The company has asked your assistance in completing the worksheet and completing the accounting tasks related to the pension plan for 2010.

(a) Determine the missing amounts in the 2010 pension worksheet, indicating whether the amounts are debits or credits.

(b) Prepare the journal entry to record 2010 pension expense for Usher Inc.

(c) The accounting staff has heard of a pension accounting procedure called ?ocorridor amortization.?? Is Usher required to record any amounts for corridor amortization in (1) 2010 In (2) 2011?Explain.

postretirement benefit worksheet 2 years elton co has the 263840

Aug 29, 2021 | Uncategorized

(Postretirement Benefit Worksheet—2 Years) Elton Co. has the following postretirement benefit plan balances on January 1, 2010.

Accumulated postretirement benefit obligation $2,250,000

Fair value of plan assets 2,250,000

The interest (settlement) rate applicable to the plan is 10%. On January 1, 2011, the company amends the plan so that prior service costs of $175,000 are created. Other data related to the plan are:

(a) Prepare a worksheet for the postretirement plan in 2010.

(b) Prepare any journal entries related to the postretirement plan that would be needed at December 31, 2010.

(c) Prepare a worksheet for 2011 and any journal entries related to the postretirement plan as of December 31, 2011.

(d) Indicate the postretirement-benefit–related amounts reported in the 2011 financial statements.

the following defined pension data of doreen corp apply to 263885

Aug 29, 2021 | Uncategorized

The following defined pension data of Doreen Corp. apply to the year 2012.

Defined benefit obligation, 1/1/12 (before amendment) ……. $560,000

Plan assets, 1/1/12 …………………………………………….. 546,200

Pension asset/liability ………………………………………. 13,800 Cr

On January 1, 2012, Doreen Corp., through plan amendment,

grants past service benefits having a present value of ………… 100,000

Discount rate ……………………………………………………….. 9%

Service cost ……………………………………………………… 58,000

Contributions (funding) ………………………………………… 55,000

Actual (expected) return on plan assets …………………………. 52,280

Benefits paid to retirees ………………………………………… 40,000

Past service cost amortization for 2012 ………………………… 17,000

Instructions

For 2012, prepare a pension worksheet for Doreen Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts.

the total payroll of rene auber company for september 2008 263902

Aug 29, 2021 | Uncategorized

The total payroll of Rene Auber Company for September 2008 was $480,000, of which $110,000 is exempt from FICA tax because it represented amounts paid in excess of $97,500 to certain employees. The amount paid to employees in excess of $7,000 was $400,000. Income taxes in the amount of $90,000 were withheld, as well as $9,000 in union dues. The state unemployment tax is 3.5%, but Auber Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee’s wages to $97,500 and 1.45% in excess of $97,500. No employee for Auber makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit.

Instructions

Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately.

identify all the economic entities involved in the development of anacomp s 263933

Aug 29, 2021 | Uncategorized

Week 2: “Anacomp Inc.” [on Blackboard]

1. Identify all the economic entities involved in the development of Anacomp’s CIS

software system.

2. Describe the contractual arrangements between the economic entities involved in the

CIS development. Who bears the majority of the risk of failure of the development

effort? Who stands to gain most if the development effort succeeds? Are Anacomp’s

shareholders better off or worse off with this arrangement, relative to in-house

development of the system?

3. What criteria will Anacomp’s management use in deciding on whether or not to buy

back the CIS system from RTS Associates? Is Anacomp’s management likely to be

unbiased in deciding on the timing and the price of the purchase? If not, what will be

the direction of the bias?

4. Describe how Anacomp accounts for the CIS development effort. How does this type

of accounting compare with the accounting for in-house software development? What

particular accounts will be affected differe

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Week 2: “Anacomp Inc.” [on Blackboard] 1. Identify all the economic entities involved in the development of Anacomp’s CIS software system. 2. Describe the contractual arrangements between the economic entities involved in the CIS development. Who bears the majority of the risk of failure of the development effort? Who stands to gain most if the development effort succeeds? Are Anacomp’s shareholders better off or worse off with this arrangement, relative to in-house development of the system? 3. What criteria will Anacomp’s management use in deciding on whether or not to buy back the CIS system from RTS Associates? Is Anacomp’s management likely to be unbiased in deciding on the timing and the price of the purchase? If not, what will be the direction of the bias? 4. Describe how Anacomp accounts for the CIS development effort. How does this type of accounting compare with the accounting for in-house software development? What particular accounts will be affected differentially by the two development arrangements? 5. In general, do you think Anacomp’s use of R&D partnerships is a sensible approach to new product development? What are the overall costs and benefits of this approach? 6. Anacomp’s earnings dropped from $0.87 per share in 1981 to $0.50 per share in 1982. What are the reasons for this earnings decline? Are there any unusual and one-time items that influenced Anacomp’s 1982 performance? 7. What is the total amount of debt that Anacomp has on its books? Does the company have any off-balance-sheet liabilities? 8. What is your assessment of Anacomp’s financial flexibility at the end of 1982? Can the company withstand any potential difficulties which could arise with the completion of the CIS system? 9. What is your overall assessment of Anacomp’s future? Do you think Anacomp’s investors should be worried about the company’s viability???????????????????????????????????????????????????????????????????????????

Attachments:

Week-2fsa.odt

02-Anacomp-bb….pdf

a corporation sold property with an adjusted basis of 300 000 263969

Aug 29, 2021 | Uncategorized

1. A corporation sold property with an adjusted basis of $300,000 in an installment sale in Year 1. The terms of the sale called for a payment of $100,000 at the time of the sale and five annual payments of $100,000 each, plus interest on the outstanding balance.

(a) Compute the corporations gross profit percentage on the sale

(b) How much of the realized gain must Walker recognize in Year 1?

(c) How much of the realized gain must Walker recognized each year in Year 2 through 6?

2. Herold transfers Blackacre to Maude in exchange for Whiteacre and $125,000 in cash. The two parcels of land have the following tax attributes: Blackacre Whiteacre

Fair market value $450,000 $300,000

Basis $200,000 $375,000

Mortgage $100,000 $75,000

Assuming these properties are held as an investment for both Harold and Maude, analyze the tax consequences of the transaction to each party. How much gain or loss does each party recognize? What is the basis of the properties held by each at the end of the transaction?

How much of each partys gain or loss is postponed (deferred)?

accountutor company operates a nationwide online tutorial servic 263975

Aug 29, 2021 | Uncategorized

AccounTutor Company operates a nationwide online tutorial service for college students taking intermediate financial accounting. Subscribers to the service pay an upfront, refundable fee of $200 that allows them access to the company’s services for one year. A subscriber may receive a full refund of this fee at any time during the year. Because the subscribers are accounting students with high ethics, AccounTutor has no concern about unscrupulous students using the service for a year and then brazenly asking for a full refund. The initial setup cost (incurred in cash) associated with each subscriber is $40. The direct cost to service a subscriber’s account for a year is $80; these costs are incurred in cash evenly throughout the year. The company can reliably estimate that 20% of subscribers will ask for a full refund of their subscription fee. On January 1, 2011, the company received payments from 20,000 subscribers. No refunds were requested until the end of the fourth quarter of the year when 3,800 subscribers requested and received full refunds. Costs associated with the subscribers who are expected to request refunds are expensed as incurred. Other direct costs are deferred and matched with the associated revenues. Make all summary journal entries necessary:

1. On January 1, 2011.

2. At the end of the first quarter.

3. At the end of the second quarter.

4. At the end of the third quarter.

5. At the end of the fourth quarter.

the partnership of mortin and oscar is being dissolved and 263334

Aug 29, 2021 | Uncategorized

The partnership of Mortin and Oscar is being dissolved, and the assets and equities at book value and fair value and the profit and loss sharing ratios at January 1, 2011, are as follows:

Mortin and Oscar agree to admit Trent into the partnership for a one-third interest. Trent invests $95,000 cash and a building to be used in the business with a book value to Trent of $100,000 and a fair value of $120,000.

REQUIRED

1. Prepare a balance sheet for the Mortin, Oscar, and Trent partnership on January 2, 2011, just after the admission of Trent, assuming that the assets are revalued and goodwill is recognized.

2. Prepare a balance sheet for the Mortin, Oscar, and Trent partnership on January 2, 2011, after the admission of Trent, assuming that the assets are no trevalued.

the partnership of rummel and kang stonecutters showed revenue 263336

Aug 29, 2021 | Uncategorized

The partnership of Rummel and Kang, Stonecutters, showed revenues of $133,000 and expenses of $41,000 on the year-end work sheet. The capital balances as of January 1, 20–, were $41,000 for C. Rummel and $25,000 for V. Kang. No additional investments were made during the year. As stated in their partnership agreement, after withdrawing salary allowances of $43,000 for Rummel and $34,000 for Kang, the partners each withdrew 10% interest on their January 1 capital balances. No additional withdrawals were made. Any remaining net income is to be divided on a 60-40 basis.

REQUIRED

1. Prepare the lower portion of the income statement of the partnership for the year ended December 31, 20–, showing the division of the partnership net income for the year.

2. Prepare a statement of partners’ equity for the year ended December 31, 20–, and the partners’ equity section of the balance sheet on that date.

3. Prepare closing entries for the partnership as of December 31, 20–. (For simplicity, use the account titles ?oRevenues?? for all revenues and ?oExpenses?? for all expenses.)

the post closing trial balances of two proprietorships on 263338

Aug 29, 2021 | Uncategorized

The post-closing trial balances of two proprietorships on January 1, 2012, are presented below.

?

Williams and Jones decide to form a partnership, Wijo Company, with the following agreed upon valuations for non-cash assets.

?

All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships. Further, it is agreed that Williams will invest an additional $5,000 in cash, and Jones will invest an additional $19,000 in cash.

Instructions

(a) Prepare separate journal entries to record the transfer of each proprietorship’s assets and liabilities to the partnership.

(b) Journalize the additional cash investment by each partner.

(c) Prepare a classified balance sheet for the partnership on January 1,2012.

this activity requires teamwork to reinforce understanding of ac 263345

Aug 29, 2021 | Uncategorized

This activity requires teamwork to reinforce understanding of accounting for partnerships.

Required

1. Assume that Baker, Warner, and Rice form the BWR Partnership by making capital contributions of $200,000, $300,000, and $500,000, respectively. BWR predicts annual partnership net income of $600,000. The partners are considering various plans for sharing income and loss. Assign a different team member to compute how the projected $600,000 income would be shared under each of the following separate plans:

a. Shared equally.

b. In the ratio of the partners’ initial capital investments.

c. Salary allowances of $50,000 to Baker, $60,000 to Warner, and $70,000 to Rice, with the remaining balance shared equally.

d. Interest allowances of 10% on the partners’ initial capital investments, with the remaining balance shared equally.

2. In sequence, each member is to present his or her income-sharing calculations with the team.

3. As a team, identify and discuss at least one other possible way that income could be shared.

phd in financial accounting 263434

Aug 29, 2021 | Uncategorized

as per requirement mentioned

plagiarism free

A+ Assignment

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101 301 106 302 126 403 128 623 131 655 163 676 167 684 201 699 2 3 5 6 8 10 12 15 17 20 22 28 31 31 2 5 8 13 18 22 24 25 28 30 30 SERIAL PROBLEM – Aurora Systems This comprehensive problem starts in this chapter and continues in Chapters 4, 5, and 6. On October 1, 2011, Aurora Wilson organized a computer service company called Aurora Systems. Aurora is organized as a sole proprietorship and will provide consulting services, computer system installations, and custom program development. Wilson has adopted the calendar year for reporting, and expects to prepare the company’s first set of financial statements as of December 31, 2011. The initial chart of accounts for the accounting system includes these items: Account Number Account Name Cash Aurora Wilson, Capital Accounts Receivable Aurora Wilson, Withdrawals Computer Supplies Computer Services Revenue Prepaid Insurance Wages Expense Prepaid Rent Advertising Expense Office Equipment Mileage Expense Computer Equipment Repairs Expense, Computer Accounts Payable Charitable Donations Expense Part A Required 1. Set up balance column accounts based on the chart of accounts provided. 2. Prepare journal entries to record each of the following October transactions. 3. Post the October entries. 4. Prepare a trial balance at October 31, 2011. 5. Prepare an income statement and a statement of changes in equity for the month ended October 31, 2011, as well as a balance sheet at October 31, 2011. Oct. 1 Aurora Wilson invested $26,500 cash, a $9,000 computer system, and $5,000 of office equipment in the business. Paid six months of rent in advance; $8,250. Purchased computer supplies on credit for $1,475 from Triple-One Supplies. Paid $8,136 cash for one year’s premium on a property and liability insurance policy. Billed Norton Electric $1,300 for installing a new computer system. Paid for the computer supplies purchased from Triple-One…

Attachments:

Aurora-20Prob….xlsx

accounting 263453

Aug 29, 2021 | Uncategorized

Check My Work (3 remaining) Problem 1-45A (Algorithmic)  http://east.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.doApplying the Fundamental Accounting Equation At the beginning of 2011, Huffer Corporation had total assets of $222,700, total liabilities of $84,200, common stock of $75,900, and retained earnings of $62,600. During 2011, Huffer had net income of $42,750, paid dividends of $11,900, and issued additional common stock for $13,200. Huffer’s total assets at the end of 2011 were $222,700.

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? HYPERLINK “http://east.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do” ?Check My Work? (3 remaining) Problem 1-45A (Algorithmic) ?? HYPERLINK “http://east.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do” o “Click to Continue > by I Want This” ?Applying? the Fundamental Accounting Equation At the beginning of 2011, Huffer Corporation had total assets of $222,700, total liabilities of $84,200, common stock of $75,900, and retained earnings of $62,600. During 2011, Huffer had net income of $42,750, paid dividends of $11,900, and issued additional common stock for $13,200. Huffer’s total assets at the end of 2011 were $222,700. Calculate the amount of liabilities that Huffer must have at the end of 2011 in order for the balance sheet equation to balance.?$  ??? HYPERLINK “http://east.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do” ?Check My Work? (3 remaining) Problem 1-48A (Algorithmic) ?Income Statement and Balance Sheet Relationships Each column presents financial information taken from one of four different companies, with one or more items of data missing. Use your understanding of the relationships among financial statements and financial statement items to find the missing values. ? HYPERLINK “http://east.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do” o “Click to Continue > by I Want This” ?Enter? expenses amounts as positive values.  ?Company??Financial Statement Item?Floyd?Slater?Wooderson?O’Bannion??Total revenue?$130? ?$715? ?$  ? ?$2,475? ??Total expense?98? ?$  ? ?54? ?$  ? ??Net income (net loss)?$  ? ?184? ?18? ?(600)? ??Total assets?905? ?1,985? ?$  ? ?8,140? ??Total liabilities?412? ?$  ? ?117? ?2,280? ??Total equity?$  ? ?828? ?80? ?$  ? ????? HYPERLINK “http://east.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do” ?Check My Work? (3 remaining) Problem 1-49A (Algorithmic)??Income Statement and Balance Sheet The following information for Rogers Enterprises is available at December 31, 2011, and…

Attachments:

Check-My-Work….docx

donald chin works for northwest supplies his rate of pay 263496

Aug 29, 2021 | Uncategorized

Donald Chin works for Northwest Supplies. His rate of pay is $8.50 per hour, and he is paid 1?1 times the regular rate for all hours worked in excess of 40 per week. During the last week of January of the current year, he worked 48 hours. Chin is married and claims three withholding allowances on his W-4 form. His weekly wages are subject to the following deductions:

(a) Employee income tax (use Figure 8-4 on pages 286 and 287)

(b) Social Security tax at 6.2%

(c) Medicare tax at 1.45%

(d) Health insurance premium, $85.00

(e) Credit union, $125.00

(f) United Way contribution, $10.00

REQUIRED

1. Compute Chin’s regular pay, overtime pay, gross pay, and net pay.

2. Journalize the payment of his wages for the week ended January 31, crediting Cash for the net amount.

elyse lin works for columbia indu stries her rate of 263500

Aug 29, 2021 | Uncategorized

Elyse Lin works for Columbia Indu stries. Her rate of pay is $9.00 per hour, and she is paid 1?1 times the regular rate for all hours worked in excess of 40 per week. During the last week of January of the current year, she worked 46 hours. Lin is married and claims two withholding allowances on her W-4 form. Her weekly wages are subject to the following deductions:

(a) Employee income tax (use Figure 8-4 on pages 286 and 287)

(b) Social Security tax at 6.2%

(c) Medicare tax at 1.45%

(d) Health insurance premium, $92.00

(e) Credit union, $110.00

(f) United Way contribution, $5.00

REQUIRED

1. Compute Lin’s regular pay, overtime pay, gross pay, and net pay.

2. Journalize the payment of her wages for the week ended January 31, crediting Cash for the net amount.

francis baker owns a business called baker construction co she 263508

Aug 29, 2021 | Uncategorized

Francis Baker owns a business called Baker Construction Co. She does her banking at the American National Bank in Seattle, Washington. The amounts in her general ledger for payroll taxes and employees’ withholding of Social Security, Medicare, and federal income tax payable as of July 15 of the current year are as follows:

Social Security tax payable (includes both employer and employee) $9,563

Medicare tax payable (includes both employer and employee) 2,250

FUTA tax payable 504

SUTA tax payable 3,402

Employee federal income tax payable 7,245

Journalize the payment of the employee federal income taxes and Social Security and Medicare taxes on July 15, 20–, and the payments of the FUTA and state unemployment taxes on July 31, 20–.

sail away sports limited see attachment 2 student learning outcome list below in alp 263524

Aug 29, 2021 | Uncategorized

1. Case study: Sail-Away Sports Limited (see attachment) 2 Student learning outcome List below, in alpha format, what key knowledge and skills students would be expected to attain by successfully completing this subject/unit (link to assessment tasks (refer to 2.4 below)): (a) Demonstrate knowledge of the links between management accounting, customers, suppliers and sources of external information and appreciate what is relevant to decision-making in a Management Accounting context. (b) Effectively use costing techniques and describe the strengths and limitations of such techniques (c) Analyse accounting information and present reports in various formats (d) Describe and utilise the basic concepts of planning and control systems (e) Show an awareness of the ethical and regulatory dimensions of accounting 2. Student assessment: Provide, in table format as shown below, a schedule of formal assessment tasks and major examinations for the subject/unit. Assessment Type When assessed Weighting Learning Outcomes Assessed Group project Week 11 Due via Moodle 10 AM Tuesday 5 February 20% a, b, c, d, e 3. The Assignment is to be submitted (using either MS Word and/or MS Excel) via Turnitin on the KOI Moodle site by 10am Tuesday 5 February 2013. A hard copy (Paper copy) of the Case study is to be handed in either at the Lecture or at the beginning of your Tutorial class in Week 11. Students should note, that the hard copy is to ASSIST in marking however the electronic submission MUST occur by 10am Tuesday 5 February otherwise there will be a 20% penalty for ANY late submission PLUS an additional 5% penalty for each day late after Monday. No assignment will be marked after one week late. Please do NOT bring Doctor’s Certificates for the due date. As this is the work of an entire group, please ensure you have sufficient group members ready to work to deliver the work ON TIME.

Attachments:

ACC200-T3-12-….pdf

in the following summary of data for a payroll period 263527

Aug 29, 2021 | Uncategorized

In the following summary of data for a payroll period, some amounts have been intentionally omitted:

Earnings:

1. At regular rate ……………………………. ?

2. At overtime rate ……………………………$ 39,480

3. Total earnings ………………………………. ?

Deductions:

4. Social security tax …………………………. 15,250

5. Medicare tax …………………………………. 3,900

6. Income tax withheld ……………………….. 46,590

7. Medical insurance ………………………….. 7,775

8. Union dues ……………………………………. ?

9. Total deductions ……………………………. 76,000

10. Net amount paid …………………………… 184,000

Accounts debited:

11. Factory Wages ……………………………… 138,900

12. Sales Salaries ………………………………… ?

13. Office Salaries …………………………….. 59,200

a. Calculate the amounts omitted in lines (1), (3), (8), and (12).

b. Journalize the entry to record the payroll accrual.

c. Journalize the entry to record the payment of the payroll.

d. From the data given in this exercise and your answer to (a), would you conclude that this payroll was paid sometime during the first few weeks of the calendar year? Explain.

johnny fuller owns and manages johnny s restaurant a 24 hour re 263530

Aug 29, 2021 | Uncategorized

Johnny Fuller owns and manages Johnny’s Restaurant, a 24-hour restaurant near the city’s medical complex. Johnny employs 9 full-time employees and 16 part-time employees. He pays all of the full-time employees by check, the amounts of which are determined by Johnny’s public accountant, Mary Lake. Johnny pays all of his part-time employees in cash. He computes their wages and withdraws the cash directly from his cash register.

Mary has repeatedly urged Johnny to pay all employees by check. But as Johnny has told his competitor and friend, Steve Hill, who owns the Greasy Diner, ?oFirst of all, my part-time employees prefer the cash over a check, and secondly I don’t withhold or pay any taxes or workmen’s compensation insurance on those wages because they go totally unrecorded and unnoticed.??

Instructions

(a) Who are the stakeholders in this situation?

(b) What are the legal and ethical considerations regarding Johnny’s handling of his payroll?

(c) Mary Lake is aware of Johnny’s payment of the part-time payroll in cash. What are her ethical responsibilities in this case?

(d) What internal control principle is violated in this payroll process?

maura lowe is a payroll accountant for n l 263543

Aug 29, 2021 | Uncategorized

Maura Lowe is a payroll accountant for N & L Company. She prepares and processes the company’s payroll on a weekly basis and has been at N & L for only three months. All employees are paid on Friday. On Wednesday afternoon, Simon Lentz, one of the company’s top sales associates, asks Maura to not take out any payroll deductions from his pay this week. He explains that he is short of cash and needs the full amount of his gross salary just to put food on the table and make his past-due car payment. He promises Maura that she can catch up on the deductions over the next month. The deductions include employee income tax, Social Security tax, Medicare tax, and health insurance premiums.

1. Is Simon’s request of Maura ethical? Why or why not?

2. If this were the first pay period of the year and Maura agreed not to take out deductions from Simon’s pay, what effect would this have on the liabilities section of the balance sheet?

3. Write a short paragraph from Maura to Simon explaining how omitting deductions from a pay period will cause errors in the company’s financial statements.

4. In small groups, discuss what action Maura should take regarding Simon’s request.

multnomah manufacturing estimated that its total payroll for the 263547

Aug 29, 2021 | Uncategorized

Multnomah Manufacturing estimated that its total payroll for the coming year would be $540,000. The workers’ compensation insurance premium rate is 0.2%.

REQUIRED

1. Calculate the estimated workers’ compensation insurance premium and prepare the journal entry for the payment as of January 2, 20–.

2. Assume that Multnomah Manufacturing’s actual payroll for the year was $562,000. Calculate the total insurance premium owed and prepare a journal entry as of December 31, 20–, to record the adjustment for the underpayment. The actual payment of the additional premium will take place in January of the next year.

3. Assume instead that Multnomah Manufacturing’s actual payroll for the year was $532,000. Prepare a journal entry as of December 31, 20–, for the total amount that should be refunded. The refund will not be received until the next year.

aggie co sells agricultural products aggie pays its salespeopl 263636

Aug 29, 2021 | Uncategorized

Aggie Co. sells agricultural products. Aggie pays its salespeople a salary plus a commission. The salary is the same for each salesperson, $1,000 per month. The commission varies by length of employment and is a percentage of the company’s total gross sales. Each salesperson starts with a commission of 1.0%, which is increased an additional 0.5% for each full year of employment with Aggie, to a maximum of 5.0%.

The total gross sales for the month of January were $120,000.

Aggie has six salespeople as follows:

Number of Years Employment

Frank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Sally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Tina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Barry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Mark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Lisa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.75

Assume that the FICA rate is 7.65%, the FUTA rate is 6.2%, and the state unemployment rate is 5.4%. (Assume that the federal government allows the maximum credit for state unemployment tax paid.) The federal income tax withholding rate is 30%. Compute the January salaries and commissions expense, and make any necessary entries to record the payroll transactions including cash payment of all the taxes payable.

amortization of accumulated oci balances keeton company 263638

Aug 29, 2021 | Uncategorized

(Amortization of Accumulated OCI Balances) Keeton Company sponsors a defined-benefit pension plan for its 600 employees. The company’s actuary provided the following information about the plan. The average remaining service life per employee is 10.5 years. The service cost component of net periodic pension expense for employee services rendered amounted to $400,000 in 2010 and $475,000 in 2011. The accumulated OCI (PSC) on January 1, 2010, was $1,260,000. No benefits have been paid. Instructions (Round to the nearest dollar)

(a) Compute the amount of accumulated OCI (PSC) to be amortized as a component of net periodic pension expense for each of the years 2010 and 2011.

(b) Prepare a schedule which reflects the amount of accumulated OCI (G/L) to be amortized as a component of pension expense for 2010 and 2011.

(c) Determine the total amount of pension expense to be recognized by Keeton Company in 2010 and2011.

amortization of accumulated oci g l corridor approach 263639

Aug 29, 2021 | Uncategorized

(Amortization of Accumulated OCI (G/L), Corridor Approach, Pension Expense Computation) The actuary for the pension plan of Gustafson Inc. calculated the following net gains and losses. Other information about the company’s pension obligation and plan assets is as follows. Gustafson Inc. has a stable labor force of 400 employees who are expected to receive benefits under the plan. The total service-years for all participating employees is 5,600. The beginning balance of accumulated OCI G/L) is zero on January 1, 2010. The market-related value and the fair value of plan assets are the same for the 4-year period. Use the average remaining service life per employee as the basis for amortization. (Round to the nearest dollar) Prepare a schedule which reflects the minimum amount of accumulated OCI (G/L) amortized as a component of net periodic pension expense for each of the years 2010, 2011, 2012, and 2013. Apply the ?ocorridor?? approach in determining the amount to be amortized eachyear.

buhl corp sponsors a defined benefit pension plan for its 263676

Aug 29, 2021 | Uncategorized

Buhl Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2012, the following balances relate to this plan.

Plan assets ……………………….. $480,000

Defined benefit obligation ……….. 625,000

Pension asset/liability ……………… 45,000

Unrecognized past service cost …… 100,000

As a result of the operation of the plan during 2012, the following additional data are provided by the actuary.

Service cost for 2012 ………………………………………. $90,000

Discount rate ……………………………………………………. 9%

Actual return on plan assets in 2012 ……………..…………. 57,000

Amortization of past service cost …………………………… 19,000

Expected return on plan assets ……………………………… 52,000

Unexpected loss from change in defined benefit obligation,

due to change in actuarial predictions ………………………. 76,000

Contributions in 2012 ……………………………………….. 99,000

Benefits paid retirees in 2012 ……………………………….. 85,000

Instructions

(a) Using the data above, compute pension expense for Buhl Corp. for the year 2012 by preparing a pension worksheet that shows the journal entry for pension expense and the year-end balances in the related pension accounts.

(b) At December 31, 2012, prepare a schedule reconciling the funded status of the plan with the pension amount reported on the statement of financial position.

comprehensive 2 year worksheet hobbs co has the following 263684

Aug 29, 2021 | Uncategorized

(Comprehensive 2-Year Worksheet) Hobbs Co. has the following defined-benefit pension plan balances on January 1, 2010.

Projected benefit obligation$4,600,000

Fair value of plan assets 4,600,000

The interest (settlement) rate applicable to the plan is 10%. On January 1, 2011, the company amends its pension agreement so that prior service costs of $600,000 are created. Other data related to the pension plan are:

(a) Prepare a pension worksheet for the pension plan in 2010.

(b) Prepare any journal entries related to the pension plan that would be needed at December 31, 2010.

(c) Prepare a pension worksheet for 2011 and any journal entries related to the pension plan as of December 31, 2011.

(d) Indicate the pension-related amounts reported in the 2011 financialstatements.

computation of pension expense amortization of net gain or 263693

Aug 29, 2021 | Uncategorized

(Computation of Pension Expense, Amortization of Net Gain or Loss–Corridor Approach, Journal Entries for 3 Years) Hiatt Toothpaste Company initiates a defined-benefit pension plan for its 50 employees on January 1, 2010. The insurance company which administers the pension plan provided the following selected information for the years 2010, 2011, and 2012. There were no balances as of January 1, 2010, when the plan was initiated. The actual and expected return on plan assets was 10% over the 3-year period but the settlement rate used to discount the company’s pension obligation was 13% in 2010, 11% in 2011, and 8% in 2012. The service cost component of net periodic pension expense amounted to the following: 2010, $60,000; 2011, $85,000; and 2012, $119,000. The average remaining service life per employee is 12 years. No benefits were paid in 2010, $30,000 of benefits were paid in 2011, and $18,500 of benefits were paid in 2012 (all benefits paid at end of year)

(Round to the nearest dollar)

(a) Calculate the amount of net periodic pension expense that the company would recognize in 2010, 2011, and 2012.

(b) Prepare the journal entries to record net periodic pension expense, employer’s funding contribution, and related pension amounts for the years 2010, 2011, and2012.

on march 1 2009 eckert and kelley formed a partnership 263197

Aug 29, 2021 | Uncategorized

On March 1, 2009, Eckert and Kelley formed a partnership. Eckert contributed $83,000 cash and Kelley contributed land valued at $66,400 and a building valued at $96,400. The partnership also assumed responsibility for Kelley’s $77,800 long-term note payable associated with the land and building. The partners agreed to share income as follows: Eckert is to receive an annual salary allowance of $30,500, both are to receive an annual interest allowance of 11% of their beginning-year capital investment, and any remaining income or loss is to be shared equally. On October 20, 2009, Eckert withdrew $32,000 cash and Kelley withdrew $25,000 cash. After the adjusting and closing entries are made to the revenue and expense accounts at December 31, 2009, the Income Summary account had a credit balance of $86,000.

1. Prepare journal entries to record (a) the partners’ initial capital investments, (b) their cash withdrawals, and (c) the December 31 closing of both the Withdrawals and Income Summary accounts.

2. Determine the balances of the partners’ capital accounts as of December 31, 2009.

on march 15 20×9 troy peter and sarah formed picture perfect 263199

Aug 29, 2021 | Uncategorized

On March 15, 20X9, Troy, Peter, and Sarah formed Picture Perfect general partnership.

This partnership was created to sell a variety of cameras, picture frames, and other photography accessories. When it was formed, the partners received equal profits and capital interests and the following items were contributed by each partner:

Troy-cash of $3,000, inventory with a FMV and tax basis of $5,000, and a building with a FMV of $22,000 and adjusted basis of $10,000. Additionally, the building was secured by a $10,000 nonrecourse mortgage.

Peter-cash of $5,000, accounts payable of $12,000, and land with a FMV of $27,000 and tax basis of $20,000.

Sarah-cash of $2,000, accounts receivable with a FMV and tax basis of $1,000, and equipment with a FMV of $40,000 and adjusted basis of $3,500. Sarah also contributed a $23,000 note payable, and the partnership assumed legally responsibility for paying the note. What is each partners outside basis and how much gain (loss) must the partners recognize in 20X9 when Picture Perfect was formed?

on october 1 2012 the firm of sams price and 263204

Aug 29, 2021 | Uncategorized

On October 1, 2012, the firm of Sams, Price, and Ladd decided to liquidate their partnership. The partners have capital balances of $54,000, $77,000, and $12,000, respectively. The cash balance is $26,000, the book values of noncash assets total $155,000, and liabilities total $38,000. The partners share income and losses in the ratio of 2:2:1.

Instructions

1. Prepare a statement of partnership liquidation, covering the period October 1–30 2012, for each of the following independent assumptions:

a. All of the noncash assets are sold for $212,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners.

b. All of the noncash assets are sold for $70,000 in cash, the creditors are paid, the partner with the debit capital balance pays the amount owed to the firm, and the remaining cash is distributed to the partners.

2. Assume the partner with the capital deficiency in part (b) above declares bankruptcy and is unable to pay the deficiency. Journalize the entries to (a) allocate the partner’s deficiency and (b) distribute the remaining cash.

part 1 davis brown and nell are partners and share 263208

Aug 29, 2021 | Uncategorized

Part 1. Davis, Brown, and Nell are partners and share income and loss in a 5:1:4 ratio. The partnership’s capital balances are as follows: Davis, $303,000; Brown, $74,000; and Nell, $223,000. Davis decides to withdraw from the partnership, and the partners agree not to have the assets revalued upon Davis’s retirement. Prepare journal entries to record Davis’s April 30 withdrawal from the partnership under each of the following separate assumptions: Davis

(a) Sells her interest to Leer for $125,000 after Brown and Nell approve the entry of Leer as a partner;

(b) Gives her interest to a daughter-in-law, Gibson, and thereafter Brown and Nell accept Gibson as a partner;

(c) Is paid $303,000 in partnership cash for her equity; (d) is paid $175,000 in partnership cash for her equity; and

(e) Is paid $100,000 in partnership cash plus manufacturing equipment recorded on the partnership books at $269,000 less its accumulated depreciation of $168,000.

Part 2. Assume that Davis does not retire from the partnership described in Part 1. Instead, McCann is admitted to the partnership on April 30 with a 20% equity. Prepare journal entries to record the entry of McCann under each of the following separate assumptions: McCann invests (a) $150,000;

(b) $98,000; and

(c) $213,000.

part 1 meir zarcus and ross are partners and share 263210

Aug 29, 2021 | Uncategorized

Part 1. Meir, Zarcus, and Ross are partners and share income and loss in a 1:4:5 ratio. The partnership’s capital balances are as follows: Meir, $43,000; Zarcus, $179,000; and Ross, $228,000. Zarcus decides to withdraw from the partnership, and the partners agree to not have the assets revalued upon Zarcus’s retirement. Prepare journal entries to record Zarcus’s February 1 withdrawal from the partnership under each of the following separate assumptions: Zarcus

(a) Sells her interest to Garcia for $160,000 after Meir and Ross approve the entry of Garcia as a partner;

(b) Gives her interest to a sonin- law, Fields, and thereafter Meir and Ross accept Fields as a partner;

(c) Is paid $179,000 in partnership cash for her equity;

(d) Is paid $215,000 in partnership cash for her equity; and

(e) Is paid $20,000 in partnership cash plus equipment recorded on the partnership books at $70,000 less its accumulated depreciation of $23,200.

Part 2. Assume that Zarcus does not retire from the partnership described in Part 1. Instead, Potter is admitted to the partnership on February 1 with a 25% equity. Prepare journal entries to record Potter’s entry into the partnership under each of the following separate assumptions: Potter invests

(a) $150,000;

(b) $110,000; and

(c) $196,000.

rahmel becker and heather morrow decide to form a partnership 263230

Aug 29, 2021 | Uncategorized

Rahmel Becker and Heather Morrow decide to form a partnership. Becker will contribute $300,000 to the partnership, while Morrow will contribute only $30,000. However, Morrow will be responsible for running the day-to-day operations of the partnership, which are anticipated to require about 45 hours per week. In contrast, Becker will only work five hours per week for the partnership. The two partners are attempting to determine a formula for dividing partnership net income. Becker believes the partners should divide income in the ratio of 7:3, favoring Becker, since Becker provides the majority of the capital. Morrow believes the income should be divided 7:3, favoring Morrow, since Morrow provides the majority of effort in running the partnership business.

How would you advise the partners in developing a method for dividing income?

siblings jordan and morgan hartley are partners in a trendy 263256

Aug 29, 2021 | Uncategorized

Siblings Jordan and Morgan Hartley are partners in a trendy toy store called ToyMania! Jordan, as senior partner, receives an annual salary allowance of $20,000 and 60 percent of all income/losses after salary and interest allowances are paid. Junior partner Morgan receives an annual salary allowance of $15,000 and 40 percent of all income/losses after salary and interest allowances are paid. The partners receive a 10 percent interest allowance at the end of the accounting period based on their respective January 1 capital account balances. Capital balances as of January 1 are $60,000 for Jordan Hartley and $40,000 for Morgan Hartley.

ToyMania! uses the allowance method for uncollectible accounts. Credit terms are 2/10, n/30. Longer payment terms are available by accepting interest-bearing notes receivable. Terms will vary depending on individual circumstances and will be provided in the related transactions. Notes under $1,000 are collected by ToyMania! while notes greater than $1,000 are collected by either Dean Bank or Marshall Bank.

Interest is based on a 360-day year. Estimated uncollectibles are based on 3 percent of accounts receivable. Accounts are written off, as they are deemed uncollectible; however, efforts to collect all receivables continue for a two-year period.

ToyMania! occasionally writes notes to finance larger purchases and to extend time on accounts payable. Terms will be specified in the related transactions. Again, interest is based on a 360-day year.

Plant assets are depreciated using one of the various GAAP methods for depreciation. Fully depreciated assets that are useful remain in service until a sale, trade, or disposal is necessary. ToyMania! holds a patent on a toy which is amortized during year-end adjustments. The $25,000 patent’s economic life is 10 years although the legal life is 20 years.

A periodic inventory system is maintained valuing inventory using the First-In, First-Out (FIFO) method. The lower-of-cost-or-market rule is applied by recognizing a loss on write-down of inventory when necessary. Beginning merchandise inventory on January 1 was $91,250.

Transactions for 20-1 are provided below.

Jan. 5 Reinstated the account of Christine Roby, which had been written off in the preceding year, and received $500 cash in full settlement.

14 Issued a $3,000, 3-month, 6% note to Zekir Computer Systems to purchase a new computer system (Computer System). The system, with an expected life of four years and no salvage value, will be depreciated using the double-declining-balance method.

Feb. 15 Received a $2,500, 6-month, 7% note from Carol Reynolds for sale of merchandise.

Mar. 11 Morgan Hartley invested an additional $5,000 into the business.

Apr. 1 Disposed of a cash register (Store Equipment) originally costing $675 with a $75 salvage value. Depreciation is computed on a monthly basis with adjusting entries made at the end of each year. Depreciation after eight years of use was $480 as of December 31. The cash register had an estimated life of 10 years.

12 Borrowed $5,000 from Dean Bank, signing a 75-day, 10% note.

14 Paid $500, plus interest, to Zekir Computer Systems (see January 14) and gave a new $2,500, 30-day, 8% note to extend time for payment.

May 1 Wrote off the $1,200 balance owed by Brenda Husband as uncollectible.

14 Paid the principal and interest due on the $2,500 note to Zekir Computer Systems. (See April 14.)

25 Paid $75 cash to Snowden’s Service Station for an oil change, tire rotation, and coolant flushing on the company van.

June 1 Received a $1,700, 120-day, 8% note from Heidi Kruczkiewicz to settle an account receivable.

20 Reinstated the account of Brenda Husband, which had been written off last month, and received $1,200 cash in full settlement. (See May 1.)

22 Paid $30,000 cash to Klippi Construction for an addition (Addition) to the store so that more merchandise could be displayed. The addition has an estimated salvage value of $2,000 and an estimated life of 20 years. Depreciation is to be calculated using the straight-line method.

26 Paid the principal and interest due on the $5,000 note to Dean Bank. (See April 12.)

30 Upon opening the store, it was apparent that someone had entered the store illegally.

Jordan and Morgan need to determine whether anything had been stolen. A physical inventory was taken and it was determined that approximately $67,500 in inventory was on hand, but they need to know how much inventory should have been on hand. Estimate the cost using the retail method based on the following information.

Figures at cost: beginning inventory, $91,250; and net purchases, $70,000. Figures at retail: beginning inventory, $120,000; net purchases $95,000; and net sales, $125,000. Compare your estimate with the balance of $67,500. Does it appear that any inventory was stolen? Space is provided for your calculations following the journal pages for the problem in your working papers.

July 1 Heidi Kruczkiewicz’s note (see June 1) is discounted at Marshall Bank at a discount rate of 12%.

8 Sold $4,250 in merchandise to Kim Sackett, terms 2/10, n/30.

10 Purchased merchandise on account for $15,000 from Dionis Distributing. Credit terms are 3/20, n/30.

18 Received payment in full from Kim Sackett, less discount, for merchandise sold on July 8.

30 Paid Dionis Distributing for merchandise purchased on account on July 10.

Aug. 1 Paid $500 to Snowden’s Service Station to replace the exhaust system on the company van.

15 Received notification from Dean Bank that the principal and interest were collected on the note from Carol Reynolds. (See February 15.) The bank fee for collecting the note was $10.

22 Wrote off the $750 balance owed by Shelley Kozub as uncollectible.

Sept. 1 Traded the company car (Automobile) for a more stylish one at Plume Motors. The old car originally cost $13,000 and is depreciated up-to-date in the amount of $9,000. A trade-in allowance of $5,500 was given. The new car had a market value of $18,000 and the balance was paid in cash. The new car should last at least 100,000 miles and will be depreciated at $0.375 per mile.

9 Received a $2,000, 60-day, 7.5% note from Tammy Jones in payment of an account receivable.

15 Purchased $3,500 worth of toys from Dennis Designs, terms n/30.

Sept. 29 Received notification from Marshall Bank that Heidi Kruczkiewicz’s note was dishonored. (See June 1 and July 1.) A check is issued to cover the maturity value plus a $50 bank fee that must be paid to the bank.

Oct. 15 Issued a $3,500, 90-day, 8% note to Dennis Designs to extend time for payment on an account payable.

20 Borrowed $10,000 for 180 days from Ohler-Cupplo Savings Association on a non-interest-bearing note. The discount rate is 7.5%.

Oct. 31 Sold $125 of merchandise for cash to Melinda Miller.

Nov. 1 Received a $500, 30-day, 5% note from Laura Nottingham in payment of an account receivable.

8 Received notification from Marshall Bank that Tammy Jones dishonored her note. (See September 9.) No fee was charged.

30 Heidi Kruczkiewicz’s dishonored note is collected; Kruczkiewicz pays ToyMania! The maturity value of the note, the $50 bank fee, and interest at 9% on the maturity value plus bank fee. (See September 29.)

Dec. 1 Laura Nottingham paid the interest due on her note (see November 1), and gave a new note ($500) for 45 days at 8%.

14 Paid $2,000 to landscape and improve a grassy area on the lot. There will be no salvage value after 5 years and the landscaping will be depreciated using the sum-ofthe- years’-digits method.

31 Sold building fixtures for $100. The original cost of the fixtures was $500 with an estimated 5-year life and no salvage value. Depreciation up-to-date is $300.

REQUIRED

1. Journalize the above transactions as needed.

2. Prepare selected adjusting entries using the following information.

(a) Accrued interest receivable. (See December 1.)

(b) Accrued interest payable. Separate entries should be made for discounted and non-discounted notes. (See October 15 and October 20.)

(c) Depreciation for the year on the computer system put into service on

January 14.

(d) Depreciation for the year on the new car. 7,000 miles were traveled this period.

(e) Depreciation for the year on the addition completed June 22.

(f) Depreciation for the year on the landscaping recorded December 14.

(g) Annual amortization on the patent.

(h) Estimated uncollectibles are based on accounts receivable of $48,940. Current Allowance for Bad Debts balance is $375 credit.

(i, j) Ending inventory valued at cost on December 31 is $102,000.

(k) Ending inventory valued at market prices on December 31 is $100,500.

3. Prepare the following financial statements:

(a) Partial Income Statement showing the allocation of net income.

ToyMania! had a net income of $84,000 for the year. Each partner made withdrawals equal to his/her salary and interest allowances as stated in the partnership agreement.

(b) Statement of Partners’ Equity. No additional withdrawals were made after salary and interest allowances were allocated.

4. Prepare selected closing entries, referring to the financial statements as needed.

(a) Close Income Summary to the capital accounts.

(b) Close drawing accounts to the capital accounts.

5. Prepare reversing entries when appropriate.

6. Journalize the following transactions that occurred in the subsequent year.

Jan. 13 Paid the principal and interest due on the $3,500 note to Dennis Designs. (See October 15.)

15 Laura Nottingham paid her note plus interest. (See December 1.)

Apr. 18 Paid the principal on the $10,000 non-interest-bearing note to Ohler-Cupplo Savings Association. (See October 20.)