swanson inc manufactures an advanced swim fin for scuba divers management is now pre 492408

Aug 29, 2021 | Uncategorized

Integration of Sales, Production, and Direct Materials Budgets

Swanson, Inc., manufactures an advanced swim fin for scuba divers. Management is now preparing detailed budgets for the third quarter, July through September, and has assembled the following information to assist in preparing the budget:

a. The Marketing Department has estimated sales as follows for the remainder of the year (in pairs of swim fins). The selling price of the swim fins is $13 per pair.

b. All sales are on account. Based on past experience, sales are expected to be collected in the following pattern:

43% in the month of sale

48% in the month following sale

9% uncollectible.

The beginning accounts receivable balance (excluding uncollectible amounts) on July 1 will be $130,000.

c. The company maintains finished goods inventories equal to 9% of the following month’s sales. The inventory of finished goods on July 1 will be 504 pairs.

d. Each pair of swim fins requires 4 pounds of geico compound. To prevent shortages, the company would like the inventory of geico compound on hand at the end of each month to be equal to 20% of the following month’s production needs. The inventory of geico compound on hand on July 1 will be 4,552 pounds.

e. Geico compound costs $2.50 per pound. Crydon pays for 60% of its purchases in the month of purchase; the remainder is paid for in the following month. The accounts payable balance for Geico compound purchases will be $11,800 on July 1.

Required:

1. Prepare a sales budget, by month and in total, for the third quarter. (Show your budget in both pairs of swim fins and dollars.) Also prepare a schedule of expected cash collections, by month and in total, for the third quarter.

2. Prepare a production budget for each of the months July through October.

3. Prepare a direct materials budget for Geico compound, by month and in total, for the third quarter. Also prepare a schedule of expected cash disbursements for Geico compound, by month and in total, for the third quarter.

acc421 the following information was taken from the records of roland carlson inc fo 492354

Aug 29, 2021 | Uncategorized

Various Reporting Formats

The following information was taken from the records of Roland Carlson Inc. for the year 2007. Income tax applicable to income from continuing operations $187,000; income tax applicable to loss on discontinued operations $25,500; income tax applicable to extraordinary gain $32,300; income tax applicable to extraordinary loss $20,400; and unrealized holding gain on available-for-sale securities $15,000.

Shares outstanding during 2007 were 100,000.

Instructions

(a) Prepare a single-step income statement for 2007.

(b) Prepare a retained earnings statement for 2007.

(c) Show how comprehensive income is reported using the second income statement format.

acc206 assume that a models and more store bought and sold a line of dolls during de 492356

Aug 29, 2021 | Uncategorized

Comparing amounts for ending inventory—perpetual inventory—FIFO and LIFO
Assume that a Models and More store bought and sold a line of dolls during December as follows:

Models and More uses the perpetual inventory system.

Requirements

1. Compute the cost of ending inventory using FIFO.

2. Compute the cost of ending inventory using LIFO.

3. Which method results in a higher cost of ending inventory?

acc206 the following transactions occurred during february 2012 for soul art gift sh 492357

Aug 29, 2021 | Uncategorized

Journalizing purchase and sales transactions—perpetual system

The following transactions occurred during February 2012, for Soul Art Gift Shop:

3-Feb Purchased $2,700 of inventory on account under terms of 4/10, n/eom (end of month) and FOB shipping point.

7 Returned $400 of defective merchandise purchased on February 3.

9 Paid freight bill of $110 on February 3 purchase.

10 Sold inventory on account for $4,350. Payment terms were 2/15, n/30. These goods cost the company $2,300

12 Paid amount owed on credit purchase of February 3, less the return and the discount.

16 Granted a sales allowance of $500 on the February 10 sale.

23 Received cash from February 10 customer in full settlement of her debt, less the allowance and the discount.

Requirement

1. Journalize the February transactions for Soul Art Gift Shop. No explanations are required.

acc206 a listing of budgeted selling and administrative expenses for glide tire comp 492359

Aug 29, 2021 | Uncategorized

A listing of budgeted selling and administrative expenses for Glide Tire Company in P7-2 for the year ended December 31, 2008, were as follows:

Required:

1. Prepare a selling and administrative expenses budget, in good form, for the year 2008.

accc505 makes 30 000 units per year of a part it uses in the products it manufacture 492361

Aug 29, 2021 | Uncategorized

Fouch Company makes 30,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows:

An outside supplier has offered to sell the company all of these parts it needs for $51.90 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $219,000 per year.

If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $6.20 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company’s remaining products.

Required:
i. How much of the unit product cost of $52.30 is relevant in the decision of whether to make or buy the part?
ii. What is the net total dollar advantage (disadvantage) of purchasing the part rather than making it?
iii. What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying all 30,000 units required each year?

acc400 the open accounts receivable aging is as follows for december 31 2008 492362

Aug 29, 2021 | Uncategorized

The Open Accounts Receivable aging is as follows for December 31, 2008:

Using the following estimated percentage uncollectible

A. Calculate the estimated uncollectible

B. Assuming there is a debit balance in Allowance for Doubtful Accounts of $1,712. Prepare the adjusting entry at December 31, 2008 to record bad debt expense.

acc400 presented here are the components in pedersen company s income statement 492363

Aug 29, 2021 | Uncategorized

Presented here are the components in Pedersen Company’s income statement.

Determine the missing amounts.

acc400 top managers of medical products inc have asked for your help in comparing th 492364

Aug 29, 2021 | Uncategorized

Top managers of Medical Products, Inc., have asked for your help in comparing the company’s profit performance and financial position with the average for the industry. The accountant has given you the company’s income statement and balance sheet and also the following data for the industry:

Medical Products, Inc.

Income Statement Compared with Industry Average

Year Ended December 31, 20X5

Medical Industry Average

Medical Products, Inc.

Balance Sheet Compared with Industry Average

December 31, 20X5

Medical Industry Average

Requirements

1. Prepare a common-size income statement and balance sheet for Medical Products. The first column of each statement should present Medical Products’ common-size statement, and the second column should show the industry averages.

2. For the profitability analysis, compute Medical Products’ (a) ratio of gross profit to net sales (b) ratio of operating income to net sales, and (c) ratio of net income to net sales. Compare these figures with the industry averages. Is Medical Products’ profit performance better or worse than the average for the industry?

3. For the analysis of financial position, compute Medical Products’ (a) ratios of current assets and current liabilities to total assets and (b) ratio of stockholders’ equity to total assets. Compare these ratios with the industry averages. Is Medical Products’ financial position better or worse than the average for the industry?

ries corporation has received a request for a special order of 8 000 units of produc 492367

Aug 29, 2021 | Uncategorized

Ries Corporation has received a request for a special order of 8,000 units of product R34 for $34.60 each. The normal selling price of this product is $36.60 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product R34 is computed as follows:

Direct labor is a variable cost. The special order would have no effect on the company’s total fixed manufacturing overhead costs. The customer would like some modifications made to product R34 that would increase the variable costs by $5.80 per unit and that would require a one-time investment of $39,000 in special molds that would have no salvage value. This special order would have no effect on the company’s other sales. The company has ample spare capacity for producing the special order.

Required:
Determine the effect on the company’s total net operating income of accepting the special order. (Do not round intermediate calculations. Round your answer to the nearest dollar amount.

schefter mining operates a copper mine in wyoming acquisition exploration and develo 492368

Aug 29, 2021 | Uncategorized

Schefter Mining operates a copper mine in Wyoming. Acquisition, exploration, and development costs totaled $8.2 million. Extraction activities began on July 1, 2011.

After the copper is extracted in approximately six years, Schefter is obligated to restore the land to its original condition, including constructing a park. The company’s controller has provided the following three cash flow possibilities for the restoration costs:

The company’s credit-adjusted, risk-free rate of interest is 5%, and its fiscal year ends on December 31.

Required:

a. What is the initial cost of the copper mine? (Round computations to nearest whole dollar.)

b. How much accretion expense will Schefter report in its 2011 income statement?

c. What is the carrying value (book value) of the asset retirement obligation that Schefter will report in its 2011 balance sheet?

d. Assume that actual restoration costs incurred in 2017 totaled $860,000. What amount of gain or loss will Schefter recognize on retirement of the liability?

dk super stores inc uses the average cost retail method to estimate its ending inven 492369

Aug 29, 2021 | Uncategorized

DK Super Stores Inc. uses the average cost retail method to estimate its ending inventory. Information at June 30, 2011, is as follows:

Required:

Compute the cost-to-retail percentage used by DK.

in 2011 kp building inc began work on a four year construction project called cincy 492374

Aug 29, 2021 | Uncategorized

In 2011, KP Building Inc. began work on a four-year construction project (called ,Cincy
One,). The contract price is $300 million. KP uses the percentage-of-completion
method of accounting. At the end of 2011, the following financial statement information
indicates the results to date for Cincy One:

INCOME STATEMENT
Gross Profit (before-taxes) recognized in 2011 $22 million

BALANCE SHEET
Accounts Receivable from construction billings $10 million
Construction in progress $66 million
Less: Billings on construction ($75 million)
Net billings in excess of construction in progress $9 million

Required: Compute the following, placing your answer in the spaces provided and
showing supporting computations:
Items to compute:
Cash collected by KP on Cincy One during 2011
Actual costs incurred by KP on Cincy One during 2011
At 12/31/2011, the estimated remaining costs to complete Cincy One
The percentage of Cincy One that was completed during 2011

canton corporation reported the following items in its adjusted trial balance for th 492377

Aug 29, 2021 | Uncategorized

Canton Corporation reported the following items in its adjusted trial balance for the year ended December 31, 2011::

Required:

Prepare the December 31, 2011, income statement for Canton Corporation, starting with income from continuing operations before income taxes.

houston based advanced electronics manufactures audio speakers for desktop computers 492378

Aug 29, 2021 | Uncategorized

Houston-based Advanced Electronics manufactures audio speakers for desktop computers. The following data relates to the period just ended when the company produced and sold 42,000 speaker sets:

Management is considering relocating its manufacturing facilities to Northern Mexico to reduce costs. Variable costs are expected to average $18 per set; annual fixed costs are anticipated to be $1,984,000. (Ignore income taxes)

Required:

1. Calculate the company’s current income and determine the level of dollar sales needed to double that figure, assuming that manufacturing operations remain in the United States.

2. Determine the break even point in speaker sets if operations are shifted to Mexico

3. Assume that management desires to achieve the Mexican break even point; however, operations remain in the United States.

a) If variable costs remain constant, what must management do to fixed costs? By how much must fixed costs change?

b) If fixed costs remain constant, what must management do to the variable cost per unit? By how much must unit variable cost change?

4. Determine the impact (increase, decrease, or no effect) of the following operating changes.

a) Effect of an increase in direct material costs on the break-even point

b) Effect of an increase in fixed administration costs on the unit contribution margin.

c) Effect of an increase in the unit contribution margin on net income.

d) Effect of an decrease in the number of units sold on the break even point.

jonathan macintosh is a highly successful pennsylvania orchardman who has formed his 492379

Aug 29, 2021 | Uncategorized

Jonathan Macintosh is a highly successful Pennsylvania orchardman who has formed his own company to produce and package applesauce. Apples can be stored for several months in cold storage, so applesauce production is relatively uniform throughout the year. The recently hired controller for the firm is about to apply the high-low method in estimating the company’s energy cost behavior. The following costs were incurred during the past 12 months:

Required:

1. Use the high-low method to estimate the company’s energy cost behavior and express it in equation form. Use the formula Y = a + bX, where Y denotes energy cost for a month and X denotes pints of applesauce produced.

2. Predict the energy cost for a month in which 26,000 pints of applesauce are produced

presented below are the monthly factory overhead cost budget at normal capacity of 5 492381

Aug 29, 2021 | Uncategorized

Flexible budget for factory overhead

Presented below are the monthly factory overhead cost budget (at normal capacity of 5,000 units or 20,000 direct labor hours) and the production and cost data for a month.

Factory Overhead Cost Budget

Fixed cost:

Required:

1. Assuming that variable costs will vary in direct proportion to the change in volume, prepare a flexible budget for production levels of 80%, 90% and 110% of normal capacity. Also determine the rate for application of factory overhead to work in process at each level of volume in both units and direct labor hours.

2. Prepare a flexible budget for production levels of 80%, 90% and 110%, assuming that variable costs will vary in direct proportion to the change in volume, but with the following exceptions. (Hint: Set up a third category for semifixed expenses).

a. At 110% of capacity, an assistant department head will be needed at a salary of $10,500 annually.

b. At 80% of capacity, the repairs epxense will drop to one-half of the amount at 100% capacity.

c. Maintenance supplies expense will remain constant at all levels of production.

d. At 80% of capacity, one part-time maintenance worker, earning $6,000 a year, will be laid off.

e. At 1105% of capacity, a machine not normally in use and on which no depreciation is normally recorded will be used in production. Its cost was $12,000, it has a ten-year life, and straight-line depreciation will be taken.

3. Using the facts and the flexible budget prepared in 1., determine the budgeted cost at 96% of capacity, using interpolation.

4. Using the flexible budget prepared in 1., determine the budgeted cost at 104% capacity, using a method other than interpolation.

logan chemicals inc which uses the process cost system has two departments a and b 492382

Aug 29, 2021 | Uncategorized

Units gained; cost of production summaries

Logan Chemicals Inc., which uses the process cost system, has two departments: A and B. In both departments, all of the materials are put into production at the beginning of the process. The materials added in Department B increase the number of units being processed by 25%. Labor and factory overhead are incurred uniformly throughout the process in all departments.

A record of the factory operations for Many follows:

Production summary

Required:

Prepare a cost of production summary for each department for the month of May.

mega oil company transports crude oil to its refinery where it is processed into mai 492383

Aug 29, 2021 | Uncategorized

Joint cost allocation with costs after split-off and by-product revenue

Mega Oil Company transports crude oil to its refinery where it is processed into main products gasoline, kerosene, and diesel fuel, and by product base oil. The base oil is sold at the split-off for $500,000 of annual revenue, and the joint processing cost to the get the crude oil to split-off are $5,000,000. Additional information includes:

Required:

Determine the allocation of joint costs, using the relative sales value method, (Hint: Reduce the amount of the joint costs to be allocated by the amount of the by-product Revenue)

acc280 on may 1 skyline flying school a company that provides flying lessons was sta 492385

Aug 29, 2021 | Uncategorized

On May 1, Skyline Flying School, a company that provides flying lessons, was started with an investment of $45,000 cash in the business. Following are the assets and liabilities of the company on May 31, 2008, and the revenues and expenses for the month of May.

No additional investments were made in May, but the company paid dividends of $1,500 during the month.

Instructions

(a) Prepare an income statement and a retained earnings statement for the month of May and a balance sheet at May 31.

(b) Prepare an income statement and a retained earnings statement for May assuming the following data are not included above: (1) $900 of revenue was earned and billed but not collected at May 31, and (2) $1,500 of fuel expense was incurred but not paid.

acc280 selected transactions for evergreen lawn care company are listed below 492386

Aug 29, 2021 | Uncategorized

Selected transactions for Evergreen Lawn Care Company are listed below.

1. Sold common stock for cash to start business.

2. Paid monthly rent.

3. Purchased equipment on account.

4. Billed customers for services performed.

5. Paid dividends.

6. Received cash from customers billed in (4).

7. Incurred advertising expense on account.

8. Purchased additional equipment for cash.

9. Received cash from customers when service was performed.

Instructions

List the numbers of the above transactions and describe the effect of each transaction on assets, liabilities, and stockholders’ equity. For example, the first answer is: (1) Increase in assets and increase in stockholders’ equity.

mesa company produces a single product operating data for the company and its absorp 492327

Aug 29, 2021 | Uncategorized

Mesa Company produces a single product. Operating data for the company and its absorption costing income statement for the last year are presented below:

Variable manufacturing costs are $4 per unit. Fixed factory overhead totals $18,000 for the year. This overhead was applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 per unit sold.

Required:

Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements.

data for january concerning del mar corporation s two major business segments fibers 492328

Aug 29, 2021 | Uncategorized

Data for January concerning Del Mar Corporation’s two major business segments- Fibers and Feedstocks-appear below:

Common fixed expenses totaled $314,000 and were allocated as follows: $129,000 to the Fibers business segment and $185,000 to the Feedstocks business segment.

Required:

Prepare a segmented income statement in the contribution format for the company. Omit percentages; show only dollar amounts.

cuisine master is a division of a major corporation the following data are for the l 492329

Aug 29, 2021 | Uncategorized

Cuisine Master is a division of a major corporation. The following data are for the latest year of operations.

Required:

i. What is the division’s margin?

ii. What is the division’s turnover?

iii. What is the division’s ROI?

iv. What is the division’s residual income?

the management of union co is considering dropping product l57v data from the compan 492330

Aug 29, 2021 | Uncategorized

The management of Union Co. is considering dropping product L57V. Data from the company’s accounting system appear below.

All fixed expenses of the company are fully allocated to products in the company’s accounting system. Further investigation has revealed that $86,000 of the fixed manufacturing expenses and $67,000 of the fixed selling and administrative expenses are avoidable if product L57V is discontinued.

Required:

i. What is the net operating income earned by product L57V according to the company’s accounting system? Show your work!

ii. What would be the effect on the company’s overall net operating income of dropping product L57V? Should the product be dropped? Show your work!

van buren co manufactures and sells medals for winners of athletic and other events 492331

Aug 29, 2021 | Uncategorized

Van Buren Co. manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 15,000 medals each month; current monthly production is 14,250 medals. The company normally charges $115 per medal. Cost data for the current level of production are shown below.

The company has just received a special one-time order for 600 medals at $102 each. For this particular order, no variable selling and administrative costs would be incurred. This order would also have no effect on fixed costs.

Required:

Should the company accept this special order? Why?

sacramento corporation uses part b78 in one of its products the company s accounting 492332

Aug 29, 2021 | Uncategorized

Sacramento Corporation uses part B78 in one of its products. The company’s accounting department reports the following costs of producing the 4,000 units of the part that are needed every year.

An outside supplier has offered to make the part and sell it to the company for $28.00 each.

If this offer is accepted, the supervisor’s salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier’s offer were accepted, only $4,000 of these allocated general overhead costs would be avoided.

Required:

i. Prepare a report that shows the effect on the company’s total net operating income of buying part B78 from the supplier rather than continuing to make it inside the company.

ii. Which alternative should the company choose?

refer to the data in the preceding exercise for golden gate construction associates 492333

Aug 29, 2021 | Uncategorized

Refer to the data in the preceding exercise for Golden Gate Construction Associates. The company has two divisions: the real estate division and the construction division. The divisions’ total assets, current liabilities, and before-tax operating income for the most recent year are as follows:

Required:

Calculate the economic value added (EVA) for each of Golden Gate Construction Associates’ divisions. (You will need to use the weighted-average cost of capital, which was computed in the preceding exercise.)

a real estate developer and building contractor in san francisco has two sources of 492334

Aug 29, 2021 | Uncategorized

Golden Gate Construction Associates , a real estate developer and building contractor in San Francisco, has two sources of long-term capital: debt and equity. The cost to Golden Gate of issuing debt is the after-tax cost of the interest payments on the debt, taking into account the fact that the interest payments are tax deductible.

The cost of Golden Gate’s equity capital is the investment opportunity rate of Golden Gate’s investors, that is, the rate they could earn on investments of similar risk to that of investing in Golden Gate Construction Associates. The interest rate on Golden Gate’s $60 million of long-term debt is 10 percent, and the company’s tax rate is 40 percent. The cost of Golden Gate’s equity capital is 15 percent. Moreover, the market value (and book value) of Golden Gate’s equity is $90 million.

Required:
Calculate Golden Gate Construction Associates’ weighted-average cost of capital.

countywide cable services inc is organized with three segments metro suburban and ou 492335

Aug 29, 2021 | Uncategorized

Countywide Cable Services, Inc. is organized with three segments: Metro, Suburban, and Outlying. Data for these segments for the year just ended follow.

In addition to the expenses listed above, the company has $95,000 of common fixed expenses. Income-tax expense for the year is $145,000.

Required:

1. Prepare a segmented income statement for Countywide Cable Services, Inc. Use the contribution format.

wyalusing industries has manufactured prefabricated houses for over 20 years the hou 492336

Aug 29, 2021 | Uncategorized

Wyalusing Industries has manufactured prefabricated houses for over 20 years. The houses are constructed in sections to be assembled on customers’ lots. Wyalusing expanded into the precut housing market when it acquired Fairmont Company, one of its suppliers. In this market, various types of lumber are precut into the appropriate lengths, banded into packages, and shipped to customers’ lots for assembly. Wyalusing designated the Fairmont Division as an investment center. Wyalusing uses return on investment (ROI) as a performance measure with investment defined as average productive assets. Management bonuses are based in part on ROI. All investments are expected to earn a minimum return of 15 percent before income taxes. Fairmont’s ROI has ranged from 19.3 to 22.1 percent since it was acquired. Fairmont had an investment opportunity in 20×1 that had an estimated ROI of 18 percent. Fairmont’s management decided against the investment because it believed the investment would decrease the division’s overall ROI. The 20×1 income statement for Fairmont Division follows. The division’s productive assets were $12,600,000 at the end of 20×1, a 5 percent increase over the balance at the beginning of the year.

FAIRMONT DIVISION

Income Statement

For the Year Ended December 31, 20×1

(in thousands)

Required:

1. Calculate the following performance measures for 20×1 for the Fairmont Division.

a. Return on investment (ROI).

b. Residual income.

2. Would the management of Fairmont Division have been more likely to accept the investment opportunity it had in 20×1 if residual income were used as a performance measure instead of ROI? Explain your answer.

acc400 at the beginning of the current period huang corp had balances in accounts re 492341

Aug 29, 2021 | Uncategorized

At the beginning of the current period, Huang Corp. had balances in Accounts Receivable of $200,000 and in Allowance for Doubtful Accounts of $9,000 (credit). During the period, it had net credit sales of $800,000 and collections of $743,000. It wrote off as uncollectible accounts receivable of $7,000. However, a $4,000 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $25,000 at the end of the period.

Instructions

(a) Prepare the entries to record sales and collections during the period.

(b) Prepare the entry to record the write-off of uncollectible accounts during the period.

(c) Prepare the entries to record the recovery of the uncollectible account during the period.

(d) Prepare the entry to record bad debts expense for the period.

(e) Determine the ending balances in Accounts Receivable and Allowance for Doubtful Accounts.

(f) What is the net realizable value of the receivables at the end of the period?

acc400 cyclone inc reports the following liabilities in thousands on its january 31 492342

Aug 29, 2021 | Uncategorized

Cyclone, Inc. reports the following liabilities (in thousands) on its January 31, 2007, balance sheet and notes to the financial statements.

Instructions

(a) Identify which of the above liabilities are likely current and which are likely long term. Say if an item fits in neither category. Explain the reasoning for your selection.

(b) Prepare the liabilities section of Cyclone’s balance sheet as at January 31, 2007.

acc400 selected comparative statement data for the giant bookseller barnes amp noble 492343

Aug 29, 2021 | Uncategorized

Selected comparative statement data for the giant bookseller Barnes & Noble are presented here. All balance sheet data are as of December 31:

Instructions

Compute the following ratios for 2004:

(a) Profit margin.

(b) Asset turnover.

(c) Return on assets.

(d) Return on common stockholders’ equity.

(e) Gross profit rate.

the production department of raredon corporation has submitted the following forecas 492345

Aug 29, 2021 | Uncategorized

Direct Labor and Manufacturing Overhead Budgets:

The production department of Raredon Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

Each unit requires 0.70 direct labor-hours, and direct labor-hour workers are paid $10.50 per hour.

In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed manufacturing overhead is $80,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $22,000 per quarter.

Requirements:

a. Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

b. Prepare the company’s manufacturing overhead budget.

the production department of hareston company has submitted the following forecast o 492346

Aug 29, 2021 | Uncategorized

Direct Materials and Direct Labor Budgets:

The production department of Hareston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

In addition, the beginning raw materials inventory for the first quarter is budgeted to be 1,400 pounds and the beginning accounts payable for the first quarter is budgeted to be $2,940.

Each unit requires 2 pounds of raw material that costs $1.40 per pound. Management desires to end each quarter with an inventory of raw materials equal to 10% of the following quarter’s production needs.

The desired ending inventory for the fourth quarter is 1,500 pounds. Management plans to pay for 80% of raw material purchases in the quarter acquired and 20% in the following quarter. Each unit requires 0.60 direct labor-hours and direct labor-hour workers are paid $14.00 per hour.

Requirements:

a. Prepare the company’s direct materials budget and schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year.

b. Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

the marketing department of jessi corporation has submitted the following sales fore 492347

Aug 29, 2021 | Uncategorized

Sales and Production Budgets:

The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):

The selling price of the company’s product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% in the following quarter, and 5% of sales are expected to be “‘uncollectible.

The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $70,200. The company expects to start the first quarter with 1,650 units in finished goods inventory.

Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,850 units.

a. Prepare the company’s sales budget and schedule of expected cash collections.

b. Prepare the company’s production budget for the upcoming fiscal year.

tiger golf accessories sells golf shoes gloves and a laser guided range finder that 492349

Aug 29, 2021 | Uncategorized

Tiger Golf Accessories sells golf shoes, gloves, and a laser-guided range-finder that measures distance. Shown below are unit cost and sales data.

Fixed costs are $620,000.

Instructions:

a. Compute the break-even point in units for the company. (Round computation for weighted-average contribution margin to 2 decimal places, e.g. 10.50, and final answer to 0 decimal places, e.g. 125.)

b. Determine the number of units to be sold at the break-even point for each product line. (Round answers to 0 decimal places, e.g. 125.)

c. Verify that the mix of sales units determined in (b) will generate a zero net income.

acc206 on january 2 2006 speedway delivery service purchased a truck at a cost of 63 492351

Aug 29, 2021 | Uncategorized

On January 2, 2006, Speedway Delivery Service purchased a truck at a cost of $63,000. Before placing the truck in service,Speedway spent $2,200 painting it, $800 replacing tires, and $4,000 overhauling the engine. The truck should remain in service for 6 years and have a residual value of $14,200. The truck’s annual mileage is expected to be 18,000 miles in each of the first four years and 14,000 miles in each of the next two years—100,000 miles in total. In deciding which depreciation method to use, Jerry Speers, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance).

Requirements

1. Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense, accumulated depreciation, and asset book value.

2. Speedway prepares financial statements using the depreciation method that reports the highest net income in the early years of asset use. For income-tax purposes, the company uses the depreciation method that minimizes income taxes in the early years. Consider the first year that Speedway uses the truck. Identify the depreciation methods that meet the general manager’s objectives, assuming the income tax authorities permit the use of any of the methods.

acc505 sandburg co inc began operations on january 1 of the current year after five 492352

Aug 29, 2021 | Uncategorized

Sandburg Co., Inc. began operations on January 1 of the current year. After five months of losses, management expects to earn a profit during June. However, Allan Johnson, the president and founder, was disappointed by the June income statement.

Sandburg Company

Income Statement

For the Month Ended June 30

Johnson was also concerned because the income statement was prepared by Stuart Smiley, a newly hired accounting assistant who had never worked for a manufacturing company before. His only experience was as an accounting clerk for a Las Vegas casino where reconciled poker chip accounts.

The former controller, Susan King, had resigned in May. Johnson recalled from his managerial accounting course, which he had taken over 20 years ago, that there was a way to calculate the cost of goods manufactured and the cost of goods sold based on cost data and inventory balances. He asked Stuart for inventory information, which looked liked this:

Inventory Balances

Johnson got out his managerial accounting textbook and stayed up all night trying to figure out whether Sandburg Co. was losing money or not. He isn’t sure how to do it, so he asks you for the following:

1. Prepare a schedule of Cost of Goods Manufactured for June.

2. Prepare a new income statement.

3. Explain to Johnson why your income statement is different from Stuart’s.

acc505 lone star express is a luxury passenger carrier in texas all seats are first 492353

Aug 29, 2021 | Uncategorized

Lone Star Express is a luxury passenger carrier in Texas. All seats are first class, and the following data are available:

Questions

a. What is the break-even point in passengers and revenues per month?

b. What is the break-even point in number of passenger train cars per month?

c. If Lone Star Express raises its average passenger fare to $190, it is estimated that the average load factor will decrease to 60 percent. What will be the monthly break-even point in number of passenger cars?

d. (Refer to original data.) Fuel cost is a significant variable cost to any railway. If crude oil increases by $ 20 per barrel, it is estimated that variable cost per passenger will rise to $90. What will be the new break-even point in passengers and in number of passenger train cars?

e. Lone Star Express has experienced an increase in variable cost per passenger to $ 85 and an increase in total fixed cost to $ 3,400,000. The company has decided to raise the average fare to $ 195. If the tax rate is 30 percent, how many passengers per month are needed to generate an after-tax profit of $ 575,000?

f. (Use original data except as noted). Lone Star Express is considering offering a discounted fare of $ 120, which the company believes would increase the load factor to 80 percent. Only the additional seats would be sold at the discounted fare. Additional monthly advertising cost would be $ 180,000. How much pre-tax income would passengers traveling on the discounted fare provide Lone Star Express if the company has 50 passenger train cars per day, 30 days per month?

g. Lone Star Express has an opportunity to obtain a new route that would be traveled 20 times per month (i.e., 20 train cars per month). The company believes it can sell seats at $ 175 on the route, but the load factor would be only 60 percent. Fixed cost would increase by $ 250,000 per month for additional personnel, additional passenger train cars, maintenance, and so on. Variable cost per passenger would remain at $ 75.

1. Should the company obtain the route?

2. How many passenger train cars must Lone Star Express operate to earn pre-tax income of $120,000 per month on this route?

3. If the load factor could be increased to 75 percent, how many passenger train cars must be operated to earn pre-tax income of $ 120,000 per month on this route?

4. What qualitative factors should be considered by Lone Star Express in making its decision about acquiring this route?

breakfasttime cereal company manufactures two breakfast cereals in a joint process c 492300

Aug 29, 2021 | Uncategorized

Breakfasttime Cereal Company manufactures two breakfast cereals in a joint process. Cost and quantity information is as follows:

Required:

Use the physical-units method to allocate the company’s joint production cost between Yummies and Crummies.

cookie creations is gearing up for the winter holiday season during the month of dec 492301

Aug 29, 2021 | Uncategorized

Cookie Creations is gearing up for the winter holiday season. During the month of December 2011, the following transactions occur.

Dec. 1 Natalie hires an assistant at an hourly wage of $8 to help with cookie making and some administrative duties.

5 Natalie teaches the class that was booked on November 25. The balance outstanding is received.

8 Cookie Creations receives a check for the amount due from the neighborhood school for the class given on November 30.

9 Cookie Creations receives $750 in advance from the local school board for five classes that the company will give during December and January.

15 Pays the cell phone invoice outstanding at November 30.

16 Issues a check to Natalie’s brother for the amount owed for the design of the website.

19 Receives a deposit of $60 on a cookie class scheduled for early January.

23 Additional revenue earned during the month for cookie-making classes amounts to $4,000. (Natalie has not had time to account for each class individually.) $3,000 in cash has been collected and $1,000 is still outstanding. (This is in addition to the December 5 and December 9 transactions.)

23 Additional baking supplies purchased during the month for sugar, flour, and chocolate chips amount to $1,250 cash.

23 Issues a check to Natalie’s assistant for $800. Her assistant worked approximately 100 hours from the time in which she was hired until December 23.

28 Pays a dividend of $500 to the common shareholder (Natalie).

As of December 31, Cookie Creations’ year-end, the following adjusting entry data are provided.

1. A count reveals that $45 of brochures and posters were used.

2. Depreciation is recorded on the baking equipment purchased in November. The baking equipment has a useful life of 5 years. Assume that 2 months’ worth of depreciation is required.

3. Amortization (which is similar to depreciation) is recorded on the website. (Credit the Website account directly for the amount of the amortization.) The website is amortized over a useful life of 2 years and was available for use on December 1.s

4. Interest on the note payable is accrued. (Assume that 1.5 months of interest accrued during November and December.) Round to nearest dollar.

5. One month’s worth of insurance has expired.

6. Natalie is unexpectedly telephoned on December 28 to give a cookie class at the neighborhood community center on December 31. In early January Cookie Creations sends an invoice for $450 to the community center.

7. A count reveals that $1,025 of baking supplies were used.

8. A cell phone invoice is received for $75. The invoice is for services provided during the month of December and is due on January 15.

9. Because the cookie-making class occurred unexpectedly on December 28 and is for such a large group of children, Natalie’s assistant helps out. Her assistant worked 7 hours at a rate of $8 per hour.

10. An analysis of the unearned revenue account reveals that two of the five classes paid for by the local school board on December 9 still have not been taught by the end of December. The $60 deposit received on December 19 for another class also remains unearned.

Instructions

Using the information that you have gathered and the general ledger accounts that you have prepared through Chapter 3, plus the new information above, do the following.

(a) Journalize the above transactions.

(b) Post the December transactions. (Use the general ledger accounts prepared in Chapter 3.)

(c) Prepare a trial balance at December 31, 2009. (c) Totals $8,160

(d) Prepare and post adjusting journal entries for the month of December.

(e) Prepare an adjusted trial balance as of December 31, 2009.

(f) Prepare an income statement and a retained earnings statement for the 2-month period ending December 31, 2009, and a classified balance sheet as of December 31, 2009.

(g) Prepare and post closing entries as of December 31, 2009.

what are the rate of return on stockholders equity and the rate of return on common 492302

Aug 29, 2021 | Uncategorized

What are the rate of return on stockholders’ equity and the rate of return on common stockholders’ equity (rounded to the nearest one-tenth of a percent) given the following information:

A. Return on Stockholders’ Equity: 6.5 %; Return on Common Stockholders’ Equity: 7.6%

B. Return on Stockholders’ Equity: 8.1 %; Return on Common Stockholders’ Equity: 9.2%

C. Return on Stockholders’ Equity: 7.8 %; Return on Common Stockholders’ Equity: 8.9%

D. Return on Stockholders’ Equity: 5.6 %; Return on Common Stockholders’ Equity: 6.7%

accelerator inc manufactures a fuel additive stomp that has a stable selling price o 492304

Aug 29, 2021 | Uncategorized

Materials and labor variances analyses

Accelerator, Inc. manufactures a fuel additive, Stomp, that has a stable selling price of $44 per drum. The company has been producing and selling 80,000 drums per month.

In connection with your examination of Accelerator’s financial statements for the year ended September 30, management has asked you to review some computations made by Accelerator’s cost accountant. Your working papers disclose the following about the company’s operations:

Standard costs per drum of product manufactured:

Stomp: 600,000 gallons purchased at a cost of $1,140,000; 645,000 gallons used.

Empty drums: 94,000 purchased at a cost of $94,000; 80,000 drums used.

Direct labor: 81,000 hours worked at a cost of $654,480.

Factory overhead: $768,000.

Required:

Calculate the following variances for September

1. Materials quantity variance.

2. Materials purchase price variance.

3. Labor efficiency variance.

4. Labor rate variance.

the standard cost summary for the most popular product of excelsior products company 492305

Aug 29, 2021 | Uncategorized

Materials and labor variance analyses

The standard cost summary for the most popular product of Excelsior Products Company is shown as follows, together with production and cost data for the period.

Standard Cost Summary

One gallon each of liquid lead and varnish are added at the start of processing. The balance of the materials is added when the process is two-thirds complete. Labor and overhead are added evenly throughout the process.

Required:

1. Calculate equivalent production. (Be sure to refer to the standard cost summary to help determine the percentage of materials in ending work in process.)

2. Calculate materials and labor variances and indicate whether they are favorable or unfavorable.

3. Determine the cost of materials and labor in the work in process account at the end of the month.

4. Prove that all materials and labor costs have been accounted for.

folsom shirts inc manufactures men s sport shirts for large stores folsom produces a 492306

Aug 29, 2021 | Uncategorized

Folsom Shirts, Inc., manufactures men’s sport shirts for large stores. Folsom produces a single quality shirt in lots of a dozen according to each customer’s order and attaches the store’s label.

The standard costs for a dozen shirts include the following:

During October, Folsum worked on three orders for shirts. Job cost records for the month disclose the following:

The following information is also available:

a. Folsom purchased 95,000 yards of materials during October at a cost of $53,200. The materials price variance is recorded when goods are purchased, and all inventories are carried at standard cost.

b. Direct labor incurred amounted to $81,400 during October. According to payroll records, production employees were paid $7.40 per hour.

c. Overhead is applied on the basis of direct labor hours. Factory overhead totaling $22,800 was incurred during October.

d. A total of $288,000 was budgeted for overhead for the year, based on estimated production at the plant’s normal capacity of 48,000 dozen shirts per year. Overhead is 40% fixed and 60% variable at this level of production.

e. There was no work in process at October 1. During October, Lots 30 and 31 were completed, and all materials were issued for Lot 32, which was 80% completed as to labor and overhead.

Required:

1. Prepare a schedule computing the October standard cost of Lots 30, 31, and 32.

2. Prepare a schedule computing the materials price variance for October and indicate whether it is favorable or unfavorable.

3. For each lot produced during October, prepare schedules computing the following (indicate whether favorable or unfavorable):

a. Materials quantity variance in yards.

b. Labor efficiency variance in hours. (Hint: Don’t forget the percentage of completion.)

c. Labor rate variance in dollars.

4. Prepare a schedule computing the total controllable and volume overhead variances for October and indicate whether they are favorable or unfavorable.

cole laboratories makes and sells a lawn fertilizer called fastgro the company has d 492307

Aug 29, 2021 | Uncategorized

Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows:

The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct-labor hours. During January, the company recorded the following activity:

– Production of Fastgro: 4,000 bags

– Direct materials purchased: 85,000 pounds at a cost of $32,300

– Direct-labor worked: 390 hours at a cost of $4,875

– Variable overhead incurred: $1,475

– Inventory of direct materials on January 31: 3,000 pounds

The materials price variance for January is

coles company inc makes and sells a single product product r three yards of material 492310

Aug 29, 2021 | Uncategorized

Coles Company, Inc. makes and sells a single product, Product R. Three yards of Material K are needed to make one unit of Product R. Budgeted production of Product R for the next five months is as follows:

The company wants to maintain monthly ending inventories of Material K equal to 20% of the following month’s production needs. On July 31, this requirement wasn’t met because only 2,500 yards of Material K were on hand. The cost of Material K is $0.85 per yard. The company wants to prepare a Direct Materials Purchase Budget for the rest of the year.

The total cost of Material K to be purchased in August is

on may 1 magnus company began the manufacture of a new mechanical device known as tr 492312

Aug 29, 2021 | Uncategorized

Analyses; Review of chapter

On May 1, Magnus Company began the manufacture of a new mechanical device known as Triple X. The company installed a standard cost system in accounting for manufacturing costs. The standard costs for a unit of Triple X follow:

Raw materials (5lbs @ $1/lb) 5.00

Direct labor (1 hr @ $8/hr) 8.00

Overhead (50% of direct labor costs) 4.00

17.00

The following data came from Magnus’ records for the month of May:

The amount shown above for the materials price variance is applicable to raw materials purchased during May.

Required:

Compute each of the following items for Matrix for the month of May. Show computations in good form.

1. Standard quantity of raw materials allowed (in pounds) for actual production.

2. Actual quantity of raw materials used (in pounds). (Hint: Be sure to consider the materials quantity variance.)

3. Standard direct labor hours allowed.

4. Actual direct labor hours worked.

5. Actual direct labor rate. (Hint: Be sure to consider the direct labor rate variance.)

6. Actual total overhead

operating data for gallup corporation are presented below 492313

Aug 29, 2021 | Uncategorized

Operating data for Gallup Corporation are presented below.

Complete the schedule showing a vertical analysis for 2012 and 2011. (List amounts from largest to smallest e.g. 10, 5, 3, 2. Round percentages to 1 decimal place, e.g. 10.5. Enter all amounts as positive amounts and subtract where necessary.)

fowler company manufactures a single product annual production costs incurred in the 492314

Aug 29, 2021 | Uncategorized

Fowler Company manufactures a single product. Annual production costs incurred in the manufacturing process are shown below for two levels of production.

Instructions

(a) Define the terms variable costs, fixed costs, and mixed costs.

(b) Classify each cost above as either variable, fixed, or mixed.

the following information is available for year 1 for dancer components 492315

Aug 29, 2021 | Uncategorized

The following information is available for year 1 for Dancer Components:

All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected to increase by 18 percent, but prices are expected to fall by 5 percent.

Material costs per unit are expected to decrease by 8 percent. Other unit variable manufacturing costs are expected to decrease by 2 percent per unit. Fixed manufacturing costs are expected to increase by 5 percent.

Variable marketing costs will change with volume. Administrative cash costs are expected to increase by 10 percent. Inventories are kept at zero. Dancer operates on a cash basis.

Required

Prepare a budgeted income statement for year 2.

lehne company which has only one product has provided the following data concerning 492316

Aug 29, 2021 | Uncategorized

Lehne Company, which has only one product, has provided the following data concerning its most recent month of operations:

The company produces the same number of units every month, although the sales in units vary from month to month. The company’s variable costs per unit and total fixed costs have been constant from month to month.

Required:

a. What is the unit product cost for the month under variable costing?

b. What is the unit product cost for the month under absorption costing?

c. Prepare an income statement for the month using the variable costing method.

d. Prepare an income statement for the month using the absorption costing method.

a cement manufacturer has supplied the following data 492317

Aug 29, 2021 | Uncategorized

A cement manufacturer has supplied the following data:

Required:

a. Calculate the company’s unit contribution margin.

b. Calculate the company’s unit contribution ratio.

c. If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would the company’s net operating income be?

lindon company uses 5 000 units of part x each year as a component in the assembly o 492318

Aug 29, 2021 | Uncategorized

Lindon Company uses 5,000 units of Part X each year as a component in the assembly of one of its products. The company is presently producing Part X internally at a total cost of $80,000 as follows:

An outside supplier has offered to provide Part X at a price of $13 per unit. If Lindon stops producing the part internally, one-third of the manufacturing overhead would be eliminated.

Required:

Prepare a make or buy analysis showing the annual advantage or disadvantage of accepting the outside supplier’s offer.

holton company makes three products in a single facility data concerning these produ 492319

Aug 29, 2021 | Uncategorized

Holton Company makes three products in a single facility. Data concerning these products follow:

The mixing machines are potentially the constraint in the production facility. A total of 14,700 minutes are available per month on these machines.

Direct labor is a variable cost in this company.

Required:

a. How many minutes of mixing machine time would be required to satisfy demand for all three products?

b. How much of each product should be produced to maximize net operating income? (Round off to the nearest whole unit.)

c. Up to how much should the company be willing to pay for one additional hour of mixing machine time if the company has made the best use of the existing mixing machine capacity? (Round off to the nearest whole cent.)

luft company uses the weighted average method in its process costing system 492322

Aug 29, 2021 | Uncategorized

Luft Company uses the weighted-average method in its process costing system.

Operating data for the first processing department for the month of June appear below:

According to the company’s records, the conversion cost in beginning work in process inventory was $79,893 at the beginning of June. Additional conversion costs of $343,830 were incurred in the department during the month.

What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

a sporting goods manufacturer buys wood as a direct material for baseball bats 492324

Aug 29, 2021 | Uncategorized

A sporting goods manufacturer buys wood as a direct material for baseball bats. The Forming Department processes the baseball bats, and the bats are then transferred to the Finishing Department where a sealant is applied. There was no beginning work in process inventory in the Forming Department in May. The Forming Department began manufacturing 15,000 Casey Slugger baseball bats during May. Costs for the Forming Department for the month of May were as follows:

A total of 10,000 bats were completed and transferred to the Finishing Department during May. The ending work in process inventory was 100% complete with respect to direct materials and 35% complete with respect to conversion costs. The company uses the weighted-average method of process costing.

The cost of the units transferred to the Finishing Department during May was: (Do not round your intermediate calculations.)

mcmullen co manufactures automatic door openers the company uses 15 000 electronic h 492325

Aug 29, 2021 | Uncategorized

McMullen Co. manufactures automatic door openers. The company uses 15,000 electronic hinges per year as a component in the assembly of the openers. You have been engaged by McMullen to assist with an evaluation of whether the company should continue producing the hinges or purchase them from an outside vendor. The Accounting Department provided the following detail regarding the annual cost to produce electronic hinges:

The Procurement Department provided the following supplier pricing:

Supplier A price per hinge $11.00

Supplier B price per hinge $10.75

Supplier C price per hinge $10.50

The supplier pricing was obtained in response to a formal request for proposal (RFP).

Procurement has determined these suppliers meet McMullen’s technical specifications and quality requirements. If McMullen stops producing the part internally, 10% of the manufacturing overhead would be eliminated.

Required:

Prepare a make-or-buy analysis showing the annual advantage or disadvantage of accepting an outside supplier’s offer.

iacollia company makes two products from a common input joint processing costs up to 492326

Aug 29, 2021 | Uncategorized

Iacollia Company makes two products from a common input. Joint processing costs up to the split-off point total $47,600 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:

Required:

a. What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?

b. What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point?

c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?

d. What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point?

the transactions that follow relate to burton enterprises for march 20×1 the company 492287

Aug 29, 2021 | Uncategorized

Transaction Analysis and Statement Preparation.

The transactions that follow relate to Burton Enterprises for March 20X1, the company’s first month of activity.

3/1: Joanne Burton, the owner invested $20,000 into the business.

3/4: Performed $2,400 of services on account.

3/7: Acquired a small parcel of land by paying $6,000 cash.

3/12: Received $700 from a client, who was billed previously on March 4.

3/15: Paid $800 to the Journal Herald for advertising expense.

3/18: Acquired $9,000 of equipment from Park Central Outfitters by paying $7,000 down and agreeing to remit the balance owed within the next 2 weeks, (Accounts Payable).

3/22: Received $300 cash from clients for services.

3/24: Paid $1,500 on account to Park Central Outfitters in partial settlement of the balance due from the transaction on March 18.

3/28: Rented a car from United Car Rental for use on March 28. Total charges amounted to $75, with United billing Burton for the amount due.

3/31: Paid $900 for March wages.

3/31: Processed a $600 cash withdrawal from the business for Joanne Burton.

Instructions

a. Determine the impact of each of the preceding transactions onBurton’s assets, liabilities, and owner’s equity. See exhibit 1.5. Use the following format:

Assets = Liabilities + Owner’s Equity

Cash, Accounts Receivable, Land, Equipment Accounts Payable (+)Investments (+) Revenues (-) Withdrawals (-) Expenses

a. Record each transaction on a separate line. Calculate balances only after the last transaction has been recorded.

b. Prepare an income statement, a statement of owner’s equity, and a balance sheet,

on november 1 of the current year richard parker established a sole proprietorship 492288

Aug 29, 2021 | Uncategorized

Basic Transaction Processing.

On November 1 of the current year, Richard Parker established a sole proprietorship. The following transactions occurred during the month:

1: Parker invested $19,000 into the business.

2: Paid $9,000 to acquire a used minivan.

3: Purchased $1,800 of office furniture on account.

4: Performed $2,100 of consulting services on account.

5: Paid $300 of repair expenses.

6: Received $800 from clients who were previously billed in item 4.

7: Paid $500 on account to the supplier of office furniture in item 3.

8: Received a $150 electric bill, to be paid next month.

9: Parker withdrew $600 from the business.

10: Received $250 in cash from clients for consulting services rendered.

Instructions

a. Arrange the following asset, liability, and owner’s equity elements of the accounting equation: Cash, Accounts Receivable, Office Furniture, Van, Accounts Payable, Investments/Withdrawals, and Revenues/Expenses.

b. Record each transaction on a separate line. After all transactions have been recorded, compute the balance in each of the preceding items.

c. Answer the following questions for Parker.

(1) How much does the company owe to its creditors at month-end? On which financial statement(s) would this information be found?

(2) Did the company have a “good” month from an accounting viewpoint? Briefly explain.

the following data relate to preston company as of december 31 19xx 492289

Aug 29, 2021 | Uncategorized

Balance Sheet Preparation.

The following data relate to Preston Company as of December 31, 19XX:

Prepare a balance sheet as of December 31, 19XX.

the following selected balances were extracted from the accounting records of rossi 492290

Aug 29, 2021 | Uncategorized

The following selected balances were extracted from the accounting records of Rossi Enterprises on December 31, 20X3:

a. Determine Rossi’s total assets as of December 31.

b. Determine the company’s total liabilities as of December 31.

c. Compute 20X3 net income or loss.

lee adkins is a portrait artist the following schedule represents lee s combined cha 492291

Aug 29, 2021 | Uncategorized

Lee Adkins is a portrait artist. The following schedule represents Lee’s combined chart of accounts and trial balance as of May 31.

The general ledger also revealed account no. 530, Legal and Accounting Expense. The following transactions occurred during June:

6/2: Collected $7,500 on account from customers.

6/7: Sold 25% of the equipment and supplies to a young artist for $700 for cash 6/10: Received a $500 bill from the accountant for preparing last quarter’s financial statements.

6/15: Paid $2,100 to creditors on account.

6/27: Adkins withdrew $1,000 cash for personal use.

6/30: Billed a customer $3,000 for a portrait painted this month.

a. Record the necessary journal entries for June on page 2 of the company’s general journal.

b. Open running balance ledger “T” accounts by entering account titles, account num¬bers, and May 31 balances.

c. Post the journal entries to the “T” accounts.

d. Prepare a trial balance as of June 30.

computer superstores inc has a strong belief in using highly decentralized managemen 492292

Aug 29, 2021 | Uncategorized

Computer Superstores, Inc., has a strong belief in using highly decentralized management. You are the new manager of the company’s store in the Mall of America.

You know much about how to buy, how to display, how to sell, and how to reduce shoplifting. You know little about accounting and finance, however. Top management is convinced that training for higher management should include the active participation of store managers in the budgeting process.

You have been asked to prepare a complete master budget for your store for June, July, and August. You are responsible for its actual full preparation. All accounting is done centrally, so you have no expert help on the premises. In addition, tomorrow the branch manager and the assistant controller will be here to examine your work; at that time, they will assist you in formulating the final budget document. The idea is to have you prepare the budget a few times so that you gain more confidence about accounting matters.

You want to make a favorable impression on your superiors, so you gather the following data as of May 31, 20X5:

Credit sales are 90% of total sales. Credit accounts are collected 80% in the month following the sale and 20% in the following month.

Assume that bad debts are negligible and can be ignored. The accounts receivable on May 31 are the results of the credit sales for April and May:

(.20 x .90 x $300,000) + (1.0 x .90 x $350,000) = $369,000.

The average gross profit on sales is 40%. ; cost of goods sold is 60% The policy is to acquire enough inventory each month to equal the following month’s projected cost of goods sold. All purchases are paid for in the month following purchase.

Salaries, wages, and commissions average 20% of sales; all other variable expenses are 4% of sales.

Fixed expenses for rent, property taxes, and miscellaneous payroll and other items are $55,000 monthly. Assume that these variable and fixed expenses require cash disbursements each month. Depreciation is $2,500 monthly.

In June, $55,000 is going to be disbursed of $25,000 is to be maintained. Also assume that all borrowings are effective at the beginning of the month and all repayments are made at the end of the month of repayment. Interest is paid only at the time of repaying principal. The interest rate is 10% per annum; round interest computations to the nearest ten dollars. All loans and repayments of principal must be made in multiples of a thousand dollars.

Requirements:

1. Prepare a budgeted income statement for the coming quarter, a budgeted statement of monthly cash receipts and disbursements (for each of the next three months), and a budgeted balance sheet for August 31, 20X5. All operations are evaluated on a beforeincome- tax basis, so income taxes may be ignored here.

2. Explain why there is a need for a bank loan and what operating sources supply cash for repaying the bank loan.

the transactions that follow relate to burton enterprises for march 20×1 the company 492293

Aug 29, 2021 | Uncategorized

Transaction Analysis and Statement Preparation.

The transactions that follow relate to Burton Enterprises for March 20X1, the company’s first month of activity.

3/1: Joanne Burton, the owner invested $20,000 into the business.

3/4: Performed $2,400 of services on account.

3/7: Acquired a small parcel of land by paying $6,000 cash.

3/12: Received $700 from a client, who was billed previously on March 4.

3/15: Paid $800 to the Journal Herald for advertising expense.

3/18: Acquired $9,000 of equipment from Park Central Outfitters by paying $7,000 down and agreeing to remit the balance owed within the next 2 weeks, (Accounts Payable).

3/22: Received $300 cash from clients for services.

3/24: Paid $1,500 on account to Park Central Outfitters in partial settlement of the balance due from the transaction on March 18.

3/28: Rented a car from United Car Rental for use on March 28. Total charges amounted to $75, with United billing Burton for the amount due.

3/31: Paid $900 for March wages.

3/31: Processed a $600 cash withdrawal from the business for Joanne Burton.

Instructions

a. Determine the impact of each of the preceding transactions onBurton’s assets, liabilities, and owner’s equity. See exhibit 1.5. Use the following format:

Assets = Liabilities + Owner’s Equity

Cash, Accounts Receivable, Land, Equipment Accounts Payable (+)Investments (+) Revenues (-) Withdrawals (-) Expenses

a. Record each transaction on a separate line. Calculate balances only after the last transaction has been recorded.

b. Prepare an income statement, a statement of owner’s equity, and a balance sheet,

indiana corporation produces a single product that it sells for 9 per unit 492294

Aug 29, 2021 | Uncategorized

Indiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations, 100,000 units were produced, and 90,000 units were sold.

Manufacturing costs and selling and administrative expenses for the year were as follows:

What was Indiana Corporation’s net operating income for the year using variable costing?

lifsey wedding fantasy company makes very elaborate wedding cakes to order 492295

Aug 29, 2021 | Uncategorized

Lifsey Wedding Fantasy Company makes very elaborate wedding cakes to order. The owner of the company has provided the following data concerning the activity rates in its activity-based costing system:

The measure of activity for the size-related activity cost pool is the number of planned guests at the wedding reception. The greater the number of guests, the larger the cake.

The measure of complexity is the number of tiers in the cake. The activity measure for the order-related cost pool is the number of orders. (Each wedding involves one order.) The activity rates include the costs of raw ingredients, such as flour, sugar, eggs, and shortening. The activity rates don’t include the costs of purchased decorations, such as miniature statues and wedding bells, which are accounted for separately.

Data concerning two recent orders are listed here:

gargymal company would like to estimate the variable and fixed components of its ele 492299

Aug 29, 2021 | Uncategorized

Gargymal Company would like to estimate the variable and fixed components of its electrical costs and has compiled the following data for the past five months of operations.

Using the high-low method of analysis, the estimated fixed cost per month for electricity is closest to which of the following?

recognition of concepts ron carroll operates a small company that books enter tainer 492272

Aug 29, 2021 | Uncategorized

Recognition of concepts. Ron Carroll operates a small company that books enter – tainers for theaters, parties, conventions, and so forth. The company’s fiscal year ends on June 30. Consider the following items and classify each as either (1) pre paid expense, (2) unearned revenue, (3) accrued expense, (4) accrued revenue, or (5) none of the foregoing.

a. Amounts paid on June 30 for a 1-year insurance policy

b. Professional fees earned but not billed as of June 30

c. Repairs to the firm’s copy machine, incurred and paid in June

d. An advance payment from a client for a performance next month at a convention

e. The payment in part (d) from the client’s point of view

f. Interest owed on the company’s bank loan, to be paid in early July

g. The bank loan payable in part (f)

h. Office supplies on hand at year-end

examine the following list of accounts 492274

Aug 29, 2021 | Uncategorized

Understanding the closing process. Examine the following list of accounts:

Which of the preceding accounts

a. appear on a post-closing trial balance?

b. are commonly known as temporary, or nominal, accounts?

c. generate a debit to Income Summary in the closing process?

d. are closed to the capital account in the closing process?

adjusting entries and financial statements the following information pertains to fix 492275

Aug 29, 2021 | Uncategorized

Adjusting entries and financial statements. The following information pertains to Fixation Enterprises:

The company previously collected $1,500 as an advance payment for services to be rendered in the future. By the end of December, one third of this amount had been earned.

Fixation provided $2,500 of services to Artech Corporation; no billing had been made by December 31.

Salaries owed to employees at year-end amounted to $1,650.

The Supplies account revealed a balance of $8,800, yet only $3,300 of supplies were actually on hand at the end of the period.

The company paid $18,000 on October 1 of the current year to Vantage Property Management. The payment was for 6 months’ rent of Fixation’s headquarters, beginning on November 1.

Fixation’s accounting year ends on December 31.

Instructions

Analyze the five preceding cases individually and determine the following:

a. The type of adjusting entry needed at year-end (Use the following codes: A, adjustment of a prepaid expense; B, adjustment of an unearned revenue; C, adjustment to record an accrued expense; or D, adjustment to record an accrued revenue.)

b. The year-end journal entry to adjust the accounts

c. The income statement impact of each adjustment (e.g., increases total revenues by $500)

adjusting entries you have been retained to examine the records of kathy s day care 492276

Aug 29, 2021 | Uncategorized

Adjusting entries. You have been retained to examine the records of Kathy’s Day Care Center as of December 31, 20X3, the close of the current reporting period. In the course of your examination, you discover the following:

· On January 1, 20X3, the Supplies account had a balance of $2,350. During the year, $5,520 worth of supplies was purchased, and a balance of $1,620 remained unused on December 31.

· Unrecorded interest owed to the center totaled $275 as of December 31.

· All clients pay tuition in advance, and their payments are credited to the Unearned

· Tuition Revenue account. The account was credited for $75,500 on August 31. With the exception of $15,500 all amounts were for the current semester ending on December 31.

• Depreciation on the school’s van was $3,000 for the year.

· On August 1, the center began to pay rent in 6-month installments of $21,000. Kathy wrote a check to the owner of the building and recorded the check in Pre paid Rent, a new account.

· Two salaried employees earn $400 each for a 5-day week. The employees are paid every Friday, and December 31 falls on a Thursday.

· Kathy’s Day Care paid insurance premiums as follows, each time debiting Pre paid Insurance:

Instructions

The center’s accounts were last adjusted on December 31, 20X2. Prepare the adjusting entries necessary under the accrual basis of accounting.

estimation and balance sheet disclosure the following pre adjusted information for t 492279

Aug 29, 2021 | Uncategorized

Allowance method: estimation and balance sheet disclosure. The following pre- – adjusted information for the Maverick Company is available on December 31:

Accounts receivable $107,000

Allowance for uncollectible accounts 5,400 (credit balance)

Credit sales 250,000

a. Prepare the journal entries necessary to record Maverick’s uncollectible accounts expense under each of the following assumptions:

(1) Uncollectible accounts are estimated to be 5% of Credit Sales.

(2) Uncollectible accounts are estimated to be 14% of Accounts Receivable.

b. How would Maverick’s Accounts Receivable appear on the December 31 balance sheet under assumption (1) of part (a)?

c. How would Maverick’s Accounts Receivable appear on the December 31 balance sheet under assumption (2) of part (a)?

the december 31 20×2 year end trial balance of targa company revealed the following 492280

Aug 29, 2021 | Uncategorized

Direct write-off and allowance methods: matching approach. The December 31, 20X2, year-end trial balance of Targa Company revealed the following account information:

Instructions

a. Determine the adjusting entry for bad debts under each of the following condi tions:

(1) An aging schedule indicates that $12,420 of accounts receivable will be uncollectible.

(2) Uncollectible accounts are estimated at 2% of net sales.

b. On January 19, 20X3, Targa learned that House Company, a customer, had declared bankruptcy. Present the proper entry to write off House’s $950 balance using the allowance method.

c. Repeat the requirement in part (b), using the direct write-off method.

d. In light of the House bankruptcy, examine the allowance and direct write-off methods in terms of their ability to properly match revenues and expenses.

at a january 20×2 meeting the president of sonic sound directed the sales staff to m 492281

Aug 29, 2021 | Uncategorized

Allowance method: analysis of receivables. At a January 20X2 meeting, the president of Sonic Sound directed the sales staff “to move some product this year.” The president noted that the credit evaluation department was being disbanded be cause it had restricted the company’s growth. Credit decisions would now be made by the sales staff.

By the end of the year, Sonic had generated significant gains in sales, and the president was very pleased. The following data were provided by the accounting department:

The $12,444,000 receivables balance was aged as follows:

Assume that no accounts were written off during 20X2.

Instructions

a. Estimate the amount of Uncollectible Accounts as of December 31, 20X2.

b. What is the company’s Uncollectible Accounts expense for 20X2?

c. Compute the net realizable value of Accounts Receivable at the end of 20X1 and 20X2.

d. Compute the net realizable value at the end of 20X1 and 20X2 as a percentage of respective year-end receivables balances. Analyze your findings and comment on the president’s decision to close the credit evaluation department.

daniel laird owns and operates an architectural firm called laird design the followi 492282

Aug 29, 2021 | Uncategorized

Analysis of transactions, balance sheet, income statement, and statement of owners equity completed.

Daniel Laird owns and operates an architectural firm called Laird Design. The following amounts summarize the financial position of his business an April 30 2009: As of April 30th, Laird had Cash of 1,720. He has 3,240 in accounts receivable, $24,100 in land. $5,400 in accounts payable, and Daniels capital is $23,660 Considering this info log below…

During May 2009, the following events occurred:

A- Laird received $12,000 as a gift and deposited the cash in the business bank account.

B- Paid off the beginning balance of Accounts Payable.

C- Performed services for a client and received cash of $1,100.

D- Collected cash from a customer on account, $750.00

E- Purchased supplies on account, $720.00

F- Consulted on the interior design of a major office building and billed the client for services performed, $5,000.

G- Invested personal cash of $1,700 in the business.

H- Paid Offices rent, $1,860

I- Sold supplies at cost to another interior designed for $80 cash

J- Withdrew cash of $4,000 for personal use.

the following information relates to action sign company for 20×2 492284

Aug 29, 2021 | Uncategorized

Analysis of prepaid account balance.

The following information relates to Action Sign Company for 20X2:

Compute the balance in the Prepaid Insurance account on January 1, 20X2.

ron carroll operates a small company that books enter tainers for theaters parties c 492285

Aug 29, 2021 | Uncategorized

Week Two Exercise Assignment – Revenue and Expenses

1. Recognition of concepts.

Ron Carroll operates a small company that books enter tainers for theaters, parties, conventions, and so forth. The company’s fiscal year ends on June 30. Consider the following items and classify each as either (1) pre paid expense, (2) unearned revenue, (3) accrued expense, (4) accrued revenue, or (5) none of the foregoing.

a. Amounts paid on June 30 for a 1-year insurance policy

b. Professional fees earned but not billed as of June 30

c. Repairs to the firm’s copy machine, incurred and paid in June

d. An advance payment from a client for a performance next month at a convention

e. The payment in part (d) from the client’s point of view

f. Interest owed on the company’s bank loan, to be paid in early July

g. The bank loan payable in part (f)

h. Office supplies on hand at year-end

acc300 selected transactions for d reyes an interior decorator in her first month of 492242

Aug 29, 2021 | Uncategorized

Selected transactions for D. Reyes, an interior decorator in her first month of business, are as follows.

Jan. 2 Invested $10,000 cash in business.

3 Purchased used car for $4,000 cash for use in business.

9 Purchased supplies on account for $500.

11 Billed customers $1,800 for services performed.

16 Paid $200 cash for advertising.

20 Received $700 cash from customers billed on January 11.

23 Paid creditor $300 cash on balance owed.

28 Withdrew $1,000 cash for personal use of owner.

Instructions

For each transaction indicate the following.

(a) The basic type of account debited and credited (asset, liability, owner’s equity).

(b) The specific account debited and credited (cash, rent expense, service revenue, etc.).

(c) Whether the specific account is increased or decreased.

(d) The normal balance of the specific account.

acc300 aussie imports purchased a specialized piece of machinery for 50 000 on janua 492246

Aug 29, 2021 | Uncategorized

Depreciation computations: change in estimate.

Aussie Imports purchased a specialized piece of machinery for $50,000 on January 1, 20X3. At the time of acquisition, the machine was estimated to have a service life of 5 years (25,000 operating hours) and a residual value of $5,000. During the 5 years of operations (20X3 – 20X7), the machine was used for 5,100, 4,800, 3,200, 6,000, and 5,900 hours, respectively.

Instructions

a. Compute depreciation for 20X3 – 20X7 by using the following methods: straight line, units of output, and double-declining-balance.

b. On January 1, 20X5, management shortened the remaining service life of the machine to 20 months. Assuming use of the straight-line method, compute the company’s depreciation expense for 20X5.

c. Briefly describe what you would have done differently in part (a) if Aussie Imports had paid $47,800 for the machinery rather than $50,000 In addition, assume that the company incurred $800 of freight charges $1,400 for machine setup and testing, and $300 for insurance during the first year of use.

acc300 lee choi opened choi s window washing inc on july 1 2008 during july the foll 492247

Aug 29, 2021 | Uncategorized

Lee Choi opened Choi’s Window Washing, Inc. on July 1, 2008. During July the following transactions were completed.

July 1 Issued $12,000 of common stock for $12,000 cash.

1 Purchased used truck for $6,000, paying $3,000 cash and the balance on account.

3 Purchased cleaning supplies for $1,300 on account.

5 Paid $2,400 cash on one-year insurance policy effective July 1.

12 Billed customers $2,500 for cleaning services.

18 Paid $1,000 cash on amount owed on truck and $800 on amount owed on cleaning supplies.

20 Paid $1,200 cash for employee salaries.

21 Collected $1,400 cash from customers billed on July 12.

25 Billed customers $5,000 for cleaning services.

31 Paid gas and oil for month on truck $200.

31 Declared and paid $900 cash dividend.

The chart of accounts for Choi’s Window Washing contains the following accounts:

No. 101 Cash, No. 112 Accounts Receivable, No. 128 Cleaning Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation—Equipment, No. 201 Accounts Payable, No. 212 Salaries Payable, No. 311 Common Stock, No. 320 Retained Earnings, No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gas & Oil Expense ,No. 634 Cleaning Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries Expense.

Instructions

(a) Journalize and post the July transactions. Use page J1 for the journal and the three column form of account.

(b) Prepare a trial balance at July 31 on a worksheet.

(c) Enter the following adjustments on the worksheet and complete the worksheet.

(1) Services provided but unbilled and uncollected at July 31 were $1,500.

(2) Depreciation on equipment for the month was $300.

(3) One-twelfth of the insurance expired.

(4) An inventory count shows $400 of cleaning supplies on hand at July 31.

(5) Accrued but unpaid employee salaries were $600.

(d) Prepare the income statement and a retained earnings statement for July and a classified balance sheet at July 31.

(e) Journalize and post adjusting entries. Use page J2 for the journal.

(f) Journalize and post closing entries and complete the closing process. Use page J3 for the journal.

(g) Prepare a post-closing trial balance at July 31.

acc300 rachel ray recently opened her own basket weaving studio she sells finished b 492248

Aug 29, 2021 | Uncategorized

Rachel Ray recently opened her own basket weaving studio. She sells finished baskets in addition to the raw materials needed by customers to weave baskets of their own. Rachel has put together a variety of raw material kits, each including materials at various stages of completion. Unfortunately, owing to space limitations, Rachel is unable to carry all varieties of kits originally assembled and must choose between two basic packages.

The basic introductory kit includes undyed, uncut reeds, (with dye included) for weaving one basket. This basic package costs Rachel $14 and sells for $30. The second kit, called Stage 2, includes cut reeds that have already been dyed. With this kit the customer need only soak the reeds and weave the basket. Rachel is able to produce the second kit by using the basic materials included in the first kit and adding one hour of her own time, which she values at $18 per hour. Because she is more efficient at cutting and dying reeds than her average customer, Rachel is able to make two kits of the dyed reeds, in one hour, from one kit of undyed reeds. The Stage 2 kit sells for $35.

Instructions:

Determine whether Rachel’s basket weaving shop should carry the basic introductory kit with undyed and uncut reeds o2 the Stage 2 kit with reeds already dyed and cut. Prepare an incremental analysis to support your answer.

kava inc manufactures industrial components one of its products which is used in the 492250

Aug 29, 2021 | Uncategorized

Kava Inc. manufactures industrial components. One of its products, which is used in the construction of industrial air conditioners, is known as K65. Data concerning this product are given below:

The above per unit data are based on annual production of 4,000 units of the component.

Direct labor can be considered to be a variable cost. (Source: CMA, adapted)

The company has received a special, one-time-only order for 500 units of component K65.

There would be no variable selling expense on this special order, and the total fixed manufacturing overhead and fixed selling and administrative expenses of the company wouldn’t be affected by the order.

Assuming that Kava has excess capacity and can fill the order without cutting back on the production of any product, what is the minimum price per unit on the special order below which the company shouldn’t go?

the management of baggerly corporation would like to investigate the possibility of 492252

Aug 29, 2021 | Uncategorized

The management of Baggerly Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity. The company’s controller has provided an example to illustrate how this new system would work. In this example, the allocation base is machine hours, and the estimated amount of the allocation base for the upcoming year is 81,000 machine hours. In addition, capacity is 95,000 machine hours, and the actual level of activity for the year is 84,900 machine hours. All od the manufacturing overhead is fixed and is $6,617,700 per year. For simplicity, its assumed that this is the estimated manufacturing overhead for the year as well as the manufacturing overhead at capacity. It’s further assumed that this is also the actual amount of manufacturing overhead for the year.

If the company bases its predetermined overhead rate on capacity, by how much was manufacturing overhead underapplied or overapplied?

the keego company is planning a 200 000 equipment investment that has an estimated f 492253

Aug 29, 2021 | Uncategorized

The Keego Company is planning a $200,000 equipment investment that has an estimated five-year life with no estimated salvage value.

The company has projected the following annual cash flows for the investment:

Assuming that the cash inflows occur evenly over the year, the payback period for the investment is _______ years.

sanker inc has provided the following data for the month of august 492254

Aug 29, 2021 | Uncategorized

Sanker Inc. has provided the following data for the month of August. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.

Manufacturing overhead for the month was overapplied by $5,000. The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.

The journal entry to record the allocation of any underapplied or overapplied overhead for August would include

the clemson company reported the following results last year for the manufacture and 492255

Aug 29, 2021 | Uncategorized

The Clemson Company reported the following results last year for the manufacture and

Clemson Company is trying to determine whether to discontinue the manufacture and sale of Tams. The operating results reported above for last year are expected to continue in the foreseeable future if the product isn’t dropped. The fixed manufacturing overhead represents the costs of production facilities and equipment that the Tam product shares with other products produced by Clemson. If the Tam product were dropped, there would be no change in the fixed manufacturing costs of the company.

Assume that discontinuing the manufacture and sale of Tams will have no effect on the sale of other product lines. If the company discontinues the Tam product line, the change in annual operating income (or loss) should be a

brittman corporation makes three products that use the current constraint a particul 492256

Aug 29, 2021 | Uncategorized

Brittman Corporation makes three products that use the current constraint-a particular type of machine. Data concerning those products appear below:

Assume that sufficient constraint time is available to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource?

part n19 is used by malouf corporation to make one of its products a total of 7 000 492258

Aug 29, 2021 | Uncategorized

Part N19 is used by Malouf Corporation to make one of its products. A total of 7,000 units of this part are produced and used every year. The company’s Accounting Department reports the following costs of producing the part at this level of activity:

Per Unit

Direct materials $2.20

Direct labor $8.50

Variable manufacturing overhead $1.30

Supervisor’s salary $5.80

Depreciation of special equipment $7.20

Allocated general overhead $4.60

An outside supplier has offered to make the part and sell it to the company for $24.50 each.

If this offer is accepted, the supervisor’s salary and all of the variable costs, including the direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. In addition, the space used to make part N19 could be used to make more of one of the company’s other products, generating an additional segment margin of $25,000 per year for that product. What would be the impact on the company’s overall net operating income of buying part N19 from the outside supplier?

universal services was organized on october 1 2012 a summary of the revenue and expe 492261

Aug 29, 2021 | Uncategorized

Income Statement

Universal Services was organized on October 1, 2012. A summary of the revenue and expense transactions for October follows:

Prepare an income statement for the month ended October 31.

kean dry cleaners is owned and operated by wally lowman a building and equipment are 492262

Aug 29, 2021 | Uncategorized

Transactions; Financial Statements

Kean Dry Cleaners is owned and operated by Wally Lowman. A building and equipment are currently being rented, pending expansion to new facilities. The actual work of dry cleaning is done by another company at wholesale rates. The assets and the liabilities of the business on March 1, 2012, are as follows: Cash, $ 15,000; Accounts Receivable, $ 31,000; Supplies, $ 3,000; Land, $ 36,000; Accounts Payable, $ 13,000. Business transactions during March are summarized as follows:

a. Wally Lowman invested additional cash in the business with a deposit of $ 28,000 in the business bank account.

b. Paid $ 14,000 for the purchase of land as a future building site.

c. Received cash from cash customers for dry cleaning revenue, $ 17,000.

d. Paid rent for the month, $ 5,000.

e. Purchased supplies on account, $ 2,500.

f. Paid creditors on account, $ 12,800.

g. Charged customers for dry cleaning revenue on account, $ 34,000.

h. Received monthly invoice for dry cleaning expense for March ( to be paid on April 10), $ 13,500.

i. Paid the following: wages expense, $ 7,500; truck expense, $ 2,500; utilities expense, $ 1,300; miscellaneous expense, $ 2,700.

j. Received cash from customers on account, $ 28,000.

k. Determined that the cost of supplies on hand was $ 1,900; therefore, the cost of supplies used during the month was $ 3,600.

l. Withdrew $ 8,000 cash for personal use.

Instructions

1. Determine the amount of Wally Lowman’s capital as of March 1 of the current year.

2. State the assets, liabilities, and owner’s equity as of March 1 in equation form similar to that shown in this chapter. In tabular form below the equation, indicate increases and decreases resulting from each transaction and the new balances after each transaction.

3. Prepare an income statement for March, a statement of owner’s equity for March, and a balance sheet as of March 31.

4. (Optional). Prepare a statement of cash flows for March.

the following selected transactions were completed during august of the current year 492263

Aug 29, 2021 | Uncategorized

Transactions and T-accounts

The following selected transactions were completed during August of the current year:

1. Billed customers for fees earned, $ 35,700.

2. Purchased supplies on account, $ 2,000.

3. Received cash from customers on account, $ 26,150.

4. Paid creditors on account, $ 800.

Instructions:

a. Journalize the above transactions in a two- column journal, using the appropriate number to identify the transactions. Journal entry explanations may be omitted.

b. Post the entries prepared in ( a) to the following T accounts: Cash, Supplies, Accounts Receivable, Accounts Payable, Fees Earned. To the left of each amount posted in the accounts, place the appropriate number to identify the transactions.

c. Assume that the unadjusted trial balance on August 31 shows a credit balance for

Accounts Receivable. Does this credit balance mean an error has occurred?

libby and sandman attorneys at law provided legal representation to williams equipme 492265

Aug 29, 2021 | Uncategorized

Job Cost Sheet for a Service Business

Libby and Sandman, Attorneys-at-Law, provided legal representation to Williams Equipment, Inc., in a product liability suit. Twenty partner hours and 65 associate hours were worked in defending the company. The cost of each partner hour is $325, which includes partner wages plus overheard based on direct labor cost. The cost of each associate hour is $145, which also includes both wages and overhead. Other costs that can be directly identified with the job are travel ($2,800) and telephone/fax charges ($1,740).

The date Williams contracted with Libby and Sandman was May 8, and the defense was successfully completed on December 21. The engagement number is 525.

Required:

Prepare a job order cost sheet, in good form, for Williams Equipment, Inc.

lynn and paul partners in a systems consulting firm budgeted the following professio 492266

Aug 29, 2021 | Uncategorized

Preparing a revenue budget and a labor budget for a service business

Lynn and Paul, partners in a systems consulting firm, budgeted the following professional labor hours for the year ended December 31, 2008:

Partners have a billing rate of $225 per hour and actually earn $110 per hour. Associates bill out at $140 per hour and earn $85 per hour. Staff has a billing rate of $95 per hour and earns $55 per hour.

Required:

1. Prepare a revenue budget

2. Prepare a professional labor budget

haille corporation has determined the following selling price and manufacturing cost 492267

Aug 29, 2021 | Uncategorized

Absorption costing versus direct costing

Haille Corporation has determined the following selling price and manufacturing cost per unit based on normal production of 72,000 units per year:

October has no beginning inventories.

Required:

Prepare comparative income statements for each month under each of the following:

1. Absorption costing (include under- or overapplied overhead)

2. Variable costing

tarbell manufacturing company has a maximum productive capacity of 210 000 units per 492268

Aug 29, 2021 | Uncategorized

Tarbell Manufacturing Company has a maximum productive capacity of 210,000 units per year. Normal capacity is 180,000 units per year. Standard variable manufacturing costs are $10 per unit. Fixed factory overhead is $360,000 per year, Variable selling expense is $5 per unit and fixed selling expenses is $252,000 per year.

The unit sales price is $20.

The operating results for the year are as follows: sales, 150,000 units; production 160,000 units; beginning inventory, 10,000 units. All variances are written off as additions to (or deductions from) the standard cost of sales.

Required:

1. What is the break-even point expressed in dollar sales?

2. How many units must be sold to earn a net income of $100,000 per year?

3. Prepare a formal income statement for the year under the following:

a. Absorption costing (Hint: Don’t forget to compute the volume variance.)

b. Variable costing.

devine and o clock architects have been using a simplified costing system in which a 492269

Aug 29, 2021 | Uncategorized

Allocations using simplified costing versus activity-based costing

Devine and O’Clock, architects, have been using a simplified costing system in which all professional labor costs are included in a single direct cost category (professional labor) and all overhead costs are included in a single indirect cost pool (professional support) and allocated to jobs using professional labor hours as the allocation base. Consider two clients: Shank Products, which required 50 hours of design work for a new addition; and Sayers Markets, which required plans for a new store that took 20 hours to draw. The firm has two partners who each earn a salary of $150,000 a year and four associates who each earn $60,000 per year. Each professional has 1,500 billable hours per year. The professional support is $590,000, which consists of $350,000 of design support and $240,000 of staff support. Shank’s job required 30 hours of partner time and 20 hours of

associate time. Sayers job required 5 hours of partner time and 15 hours of associate time.

Required:

1. Prepare job cost sheets for Shank Products and Sayers Markets, using a simplified costing system with one direct and one indirect cost pool.

2. Prepare job cost sheets for the two clients; using an activity based costing system with two direct cost categories (partner labor and associate labor) and two indirect cost categories (design support and associate labor). Use professional labor dollars as the cost allocation base for design support and use professional labor hours for staff support.

libby and sandman attorneys at law provided legal representation to williams equipme 492270

Aug 29, 2021 | Uncategorized

Job Cost Sheet for a Service Business

Libby and Sandman, Attorneys-at-Law, provided legal representation to Williams Equipment, Inc., in a product liability suit. Twenty partner hours and 65 associate hours were worked in defending the company. The cost of each partner hour is $325, which includes partner wages plus overheard based on direct labor cost. The cost of each associate hour is $145, which also includes both wages and overhead. Other costs that can be directly identified with the job are travel ($2,800) and telephone/fax charges ($1,740).

The date Williams contracted with Libby and Sandman was May 8, and the defense was successfully completed on December 21. The engagement number is 525.

Required:

Prepare a job order cost sheet, in good form, for Williams Equipment, Inc.

acc206 snowbound corporation was incorporated in july the firm s charter authorized 492219

Aug 29, 2021 | Uncategorized

Issuance of stock: organization costs.

Snowbound Corporation was incorporated in July. The firm’s charter authorized the sale of 200,000 shares of $10 par-value common stock. The following transactions occurred during the year:

1-Jul Sold 45,000 shares of common stock to investors for $18 per share. Cash was collected and the shares were issued.

11-Aug Sold 20,000 shares to investors for $22 per share. Cash was collected and the shares were issued.

1-Sep Declared a cash dividend on 9/1 for $1.00 a share for shareholders on record 10/1 with payment being made on 11/1.

Instructions

a. Prepare journal entries for the two stock issues.

b. Prepare journal entries for the cash dividend declaration and payment.

acc202 preparing pro form income statements with different assumptions 492220

Aug 29, 2021 | Uncategorized

Preparing pro form income statements with different assumptions.

Top executive officers of Zottoli Company, a merchandising firm, are preparing the next year’s budget. The controller has provided everyone with the current year’s projected income statement.

Cost of goods sold is usually 70 percent of sales revenue, and selling and administrative expenses are usually 10 percent of sales plus a fixed cost of $60,000. The president has announced that the company’s goal is to increase net income by 15 percent.

Required

a. What percentage increase in sales would enable the company to reach its goal? Support your answer with a pro forma income statement.

b. The market may become stagnant next year, and the company does not expect an increase in sales revenue. The production manager believes that an improved production procedure can cut cost of goods sold by 2 percent. What else can the company do to reach its goal? Prepare a pro forma income statement illustrating your proposal.

c. The company decides to escalate its advertising campaign to boost consumer recognition, which will increase selling and administrative expenses to $340,000. With the increased advertising, the company expects sales revenue to increase by 15 percent.

Assume that cost of goods sold remains a constant proportion of sales. Can the company reach its goal?

acc202 louis gallo owns a small retail ice cream parlor he is considering expanding 492221

Aug 29, 2021 | Uncategorized

Using the payback period and unadjusted rate of return to evaluate alternative investment opportunities

Louis Gallo owns a small retail ice cream parlor. He is considering expanding the business and has identified two attractive alternatives. One involves purchasing a machine that would enable Mr. Gallo to offer frozen yogurt to customers. The machine would cost $8,100 and has an expected useful life of three years with no salvage value. Additional annual cash revenues and cash operating expenses associated with selling yogurt are expected to be $5,940 and $900, respectively.

Alternatively, Mr. Gallo could purchase for $10,080 the equipment necessary to serve captional annual cash revenues and cash operating expenses associated with selling cappuccino are expected to be $8,280 and $2,430, respectively. Income before taxes earned by the ice cream parlor is taxed at an effective rate of 20 percent.

Required.

a. Determine the payback period and unadjusted rate or return (use average investment) for each alternative.

b. Indicate which investment alternative you would recommend. Explain your choice.

acc202 luke chou the president of digitech computer services needs your help 492222

Aug 29, 2021 | Uncategorized

Flexible Budget Planning

Luke Chou, the president of Digitech Computer Services, needs your help. He wonders about the potential effects on the firm’s net income if he changes the service rate that the firm charges its customers. The following basic data pertain to fiscal year 2012.

Standard Rate & Variable Costs:

Required

a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 30,000 hours of services in 2012.

b. A marketing consultant suggests to Mr. Chou that the service rate may affect the number of service hours that the firm can achieve. According to the consultant’s analysis, if Digitech charges customers $75 per hour, the firm can achieve 38,000 hours of services. Prepare a flexible budget using the consultant’s assumption.

c. The same consultant also suggests that if the firm raises its rate to $85 per hour, the number of service hours will decline to 25,000. Prepare a flexible budget using the new assumption.

d. Evaluate the three possible outcomes you determined in Requirements a, b, and c and recommend a pricing strategy.

during may joliet fabrics corporation manufactured 500 units of a special multilayer 492223

Aug 29, 2021 | Uncategorized

Direct-Material and Direct-Labor Variances

During May, Joliet Fabrics Corporation manufactured 500 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to May.

Direct material purchased: 18,000 yards at $1.38 per yard 24,840

Direct material used: 9,500 yards at $1.38 per yard 13,110

Direct labor: 2,100 hours at $9.15 per hour 19,215

The standard prime costs for one unit of Stylex are as follows:

Direct material: 20 yards at $1.35 per yard 27

Direct labor: 4 hours at $9.00 per hour 36

Total standard prime cost per unit of output 63

Required: Compute the following variances for the month of May, indicating whether each variance is favorable or unfavorable.

1. Direct-material price variance.

2. Direct-material quantity variance.

3. Direct-labor rate variance.

4. Direct-labor efficiency variance.

pebblebrook supply uses a sales journal a purchases journal a cash receipts journal 492225

Aug 29, 2021 | Uncategorized

Fundamental Accounting Principles

Pebblebrook Supply uses a sales journal, a purchases journal, a cash receipts journal, a cash disbursements journal, and a general journal. The following transactions occur in the month of April.

3-Apr Purchased merchandise for $3,300 on credit from Scott, Inc., terms 3/10, n/30.

9 Issued check no. 210 to Kidman Corp. to buy store supplies for $528.

12 Sold merchandise costing $578 on credit to C. Meyers for $971, terms n/30.

17 Issued check no. 211 for $1,500 to pay off a note payable to City Bank.

20 Purchased merchandise for $3,900 on credit from LeBron, terms 3/10, n/30.

28 Issued check no. 212 to LeBron to pay the amount due for the purchase of April 20, less the discount.

29 Paid salary of $2,250 to B. Decker by issuing check no. 213.

30 Issued check no. 214 to Scott, Inc., to pay the amount due for the purchase of April 3.

Journalize the April transactions that should be recorded in the cash disbursements journal assuming the perpetual inventory system is used. (Record the transactions in the given order. Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)

mccarty pointers corporation expects to begin operations on january 1 2012 it will o 492226

Aug 29, 2021 | Uncategorized

Prepare a sales budget and schedule of cash receipts

McCarty Pointers Corporation expects to begin operations on January 1, 2012; it will operate as a specialty sales company that sells laser pointers over the Internet. McCarty expects sales in January 2012 to total $200,000 and to increase 10 percent per month in February and March. All sales are on account. McCarty expects to collect 70 percent of accounts receivable in the month of sale, 20 percent in the month following the sale, and 10 percent in the second month following the sale.

Required:

a. Prepare a sales budget for the first quarter of 2012.

b. Determine the amount of sales revenue McCarty will report on the first 2012 quarterly pro forma income statement.

c. Prepare a cash receipts schedule for the first quarter of 2012.

d. Determine the amount of accounts receivable as of March 31, 2012.

aussie imports purchased a specialized piece of machinery for 50 000 on january 1 20 492228

Aug 29, 2021 | Uncategorized

Depreciation computations: change in estimate.

Aussie Imports purchased a specialized piece of machinery for $50,000 on January 1, 20X3. At the time of acquisition, the machine was estimated to have a service life of 5 years (25,000 operating hours) and a residual value of $5,000. During the 5 years of operations (20X3 – 20X7), the machine was used for 5,100, 4,800, 3,200, 6,000, and 5,900 hours, respectively.

Instructions

a. Compute depreciation for 20X3 – 20X7 by using the following methods: straight line, units of utput, and double-declining-balance.

b. On January 1, 20X5, management shortened the remaining service life of the machine to 20 months. Assuming use of the straight-line method, compute the company’s depreciation expense for 20X5.

c. Briefly describe what you would have done differently in part (a) if Aussie Imports had paid $47,800 for the machinery rather than $50,000 In addition, assume that the company incurred $800 of freight charges $1,400 for machine setup and testing, and $300 for insurance during the first year of use.

lavender company has decided to use a predetermined rate to assign factory overhead 492229

Aug 29, 2021 | Uncategorized

Lavender Company has decided to use a predetermined rate to assign factory overhead to production. The following predictions have been made for 2014:

Total factory overhead costs $150,000

Direct labor hours 40,000 hours

Direct labor costs $200,000

Required

a. Compute the predetermined factory overhead rate assuming Lavender uses direct labor hours as the activity base.

b. Assume that actual factory overhead was $152,500 and that Lavender applies factory overhead to Work in Process based on direct labor hours. If actual direct labor was 42,000 hours for 2014, was factory overhead overapplied or underapplied? By how much?

c. Lavender Company follows the policy of writing off any under- or overapplied factory overhead balance to Cost of Goods Sold at the end of the year. Make the entry necessary at the end of 2014 to dispose of the factory overhead balance (variance) determined in Part (b).

juicy manufacturing corporation incurred the following costs 492230

Aug 29, 2021 | Uncategorized

Juicy Manufacturing Corporation incurred the following costs.

Required: Calculate the following.

a. Direct materials used

b. Cost of goods manufactured

c. Cost of goods sold

d. Operating income

the condensed income statement and comparative balance sheet of jackson corporation 492231

Aug 29, 2021 | Uncategorized

Prepare a statement of cash flows.

The condensed income statement and comparative balance sheet of Jackson Corporation as of December 31, 2013 and 2012, are provided below. Other financial data is also given.

Jackson Corporation

Condensed Income Statement

Year Ended December 31, 2013

Jackson Corporation

Comparative Balance Sheet

December 31, 2013 and 2012

Instructions:

Prepare a statement of cash flows for Jackson Corporation for 2013. Additional information for the year that is pertinent to its preparations follow:

a. No items of property, plant and equipment were disposed of during the year.

b. Paid cash for the additions to property, plant and equipment during the year.

c. Paid $10,000 dividends on the common stock in cash during the year.

d. Issued common stock at par value for cash.

e. Paid cash to retire the long-term note payable.

on august 31 the balance sheet of nashville veterinary clinic showed cash 9 000 acco 492232

Aug 29, 2021 | Uncategorized

On August 31, the balance sheet of Nashville Veterinary Clinic showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Office Equipment $6,000, Accounts Payable $3,600, Common Stock $13,000, and Retained Earnings $700. During September the following transactions occurred.

1. Paid $2,900 cash on accounts payable.

2. Collected $1,300 of accounts receivable.

3. Purchased additional office equipment for $2,100, paying $800 in cash and the balance on account.

4. Earned revenue of $8,000 of which $2,500 is paid in cash and the balance is due in October.

5. Paid cash dividends of $1,000.

6. Paid salaries $1,700 rent for September $900, and advertising expenses $300.

7. Incurred utility expenses for month on account $170.

8. Received $10,000 from Capital Bank – money borrowed on a note payable.

Instructions:

(a) Complete the table below. (Show the amount of increase or decrease for each transaction using a + for an increase (+500) and a – for a decrease (-500) and a 0 for no change. Please do not leave any fields blank. List multiple entries from largest to smallest eg 10, 5, 3, 2.)

(b) Prepare an income statement for September, an retained earnings statement for September, and a balance sheet at September 30. (If there is a net loss, record amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Enter all other amounts as positive amounts and subtract where necessary. List amounts from largest to smallest e.g. 10, 5, 3, 2. For balance sheet list assets in order of liquidity

nash company was organized on april 1 2011 of the current year after six months of s 492233

Aug 29, 2021 | Uncategorized

Nash Company was organized on April 1, 2011 of the current year. After six months of startup losses, management had expected to show a profit during October. Management was disappointed however, when the income statement for October showed a loss. October’s income statement follows:

Nash Company

Income Statement

For the month ended October 31, 2011

After seeing the $69,000 loss for October, Nash’s president stated the following, “I expected to be profitable within the six month time frame and this loss for October is even worse than September’s. I am beginning to feel we should consider selling the company assets and if we do not sell the assets, we may not find a buyer. By the way, I do not believe we should look for a new controller. We will proceed with Barry for the time being.”

The company controller resigned back in September. Barry, is the new assistant in controller’s office was hired back in August, prepared the income statement above. Barry is very inexperienced when it comes to manufacturing operations.

Inventory balances at the beginning and end of September were:

The president has asked you to check over the income statement and make a recommendation as to whether the company should look for a buyer for its assets.

Requirements:

1. While gathering data for a recommendation to the president, prepare a schedule of cost of goods manufactured for October.

2. As a second step, prepare a new income statement for October.

3. Based on your statements prepared in (1) and (2) above, would you recommend that the company look for a buyer?

the ledger of elburn company at the end of the current year shows accounts receivabl 492235

Aug 29, 2021 | Uncategorized

The ledger of Elburn Company at the end of the current year shows Accounts Receivable $143,300, Sales Revenue $856,800, and Sales Returns and Allowances $29,900. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

a. If Elburn uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Elburn determines that T. Thum’s $2,000 balance is uncollectible.

b. If Allowance for Doubtful Accounts has a credit balance of $2,300 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of net sales, and (2) 11% of accounts receivable.

c. If Allowance for Doubtful Accounts has a debit balance of $310 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be (1) 2% of net sales and (2) 8% of accounts receivable.

hunsicker corporation has provided the following data for the month of january 492236

Aug 29, 2021 | Uncategorized

Hunsicker Corporation has provided the following data for the month of January:

Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.

tasha orin is unable to reconcile the bank balance at january 31 tasha s reconciliat 492237

Aug 29, 2021 | Uncategorized

Tasha Orin is unable to reconcile the bank balance at January 31. Tasha’s reconciliation is shown here.

Instructions
(a) What is the proper adjusted cash balance per bank?
(b) What is the proper adjusted cash balance per books?
(c) Prepare the adjusting journal entries necessary to determine the adjusted cash balance per books.

acc300 at reyes company checks are not prenumbered because both the purchasing agent 492238

Aug 29, 2021 | Uncategorized