Answer:
a. Assets = Liabilities + Stockholders' Equity = $8,250
b. We have:
Net income = $8,250
Assets = Liabilities + Stockholders' Equity = $8,250
Ending cash balance = $7,000
Explanation:
Note: The data in this question are merged together and the question also contains some errors in terms of irrelevant data and date/year inconsistency. These errors are therefore fixed by picking the actual question with the sorted data before answering the question as follows:
Life, Inc. experienced the following events in Year 1, its first year of operation:
1. Performed counseling services for $22,000 cash.
2. On February 1, Year 1, paid $15,000 cash to rent office space for the coming year.
3. Adjusted the accounts to reflect the amount of rent used during the year.
Required
Based on this information alone:
a. Record the events under an accounting equation.
b. Prepare an income statement, balance sheet, and statement of cash flows for the Year 1 accounting period.
The explanation of the answer is now presented as follows:
a. Record the events under an accounting equation.
Note: See Part a of the attached excel file for the record of the events under an accounting equation.
From Part of the attached excel file, we have:
Use rent = Rent paid = (Number of months used in Year 1 / Number of months in a year) = $15,000 * (11 / 12) = $13,750
Assets = Cash + Prepaid rent = $7,000 + $1,250 = $8,250
Liabilities = $0
Stockholders' Equity = $8,250
Therefore, we have:
Assets = Liabilities + Stockholders' Equity = $8,250
b. Prepare an income statement, balance sheet, and statement of cash flows for the Year 1 accounting period.
Note: See Part b of the attached excel file for the income statement, balance sheet, and statement of cash flows for the Year 1 accounting.
From Part of the attached excel file, we have:
Net income = $8,250
Assets = Liabilities + Stockholders' Equity = $8,250
Ending cash balance = $7,000
Note:
Increase in prepaid rent = Rent expense to be recognized in Year 2 = Rent paid - Rent used = $15,500 - $13,750 = $1,250
The following account balances are taken from the December 31, 2018, financial statements of ABZ Advertising Company. The company uses accrual basis accounting.
Advertising Revenue $46,982
Cash 41,516
Accounts Receivable 7,296
Interest Expense 2,299
Accounts Payable 5,000
Operating Expenses 37,460
Deferred Revenue 1178
Equipment 18,648
Income Tax Expense 2,326
The following activities occurred in 2019:
1. Performed advertising services on account, $55,000.
2. Received cash payments from customers on account, $10,400.
3. Received deposits from customers for advertising services to be performed in 2020, $2,500.
4. Made payments to suppliers on account, $7,000.
5. Incurred $45,000 of operating expenses; $39,000 was paid in cash and $6,000 was on account and unpaid as of the end of the year.
Required:
What is the amount of revenue that will be reported on the income statement for the year ended December 31, 2019?
Answer:
the amount of the revenue that should be recorded is $51,896
Explanation:
The computation of the amount of the revenue that should be recorded is shown below:
= Opening balance of account receivable + service revenue balance on the account - cash payment
= $7,296 + $55,000 - $10,400
= $51,896
Hence, the amount of the revenue that should be recorded is $51,896
If budgeted beginning inventory is $8,300, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted purchases should be: Group of answer choices $9,160 $11,360 $1,960 $860 $1,100
Answer: $11,360
Explanation:
Budgeted cost of goods sold = Budgeted beginning inventory + Budgeted purchases - Budgeted ending inventory
10,260 = 8,300 + Budgeted purchases - 9,400
Budgeted purchases = 10,260 - 8,300 + 9,400
= $11,360
Sayid is the sole shareholder of an S corporation in Hattiesburg, Mississippi. At a time when his stock basis is $20,000, the corporation distributes appreciated property worth $40,000 (basis of $20,000). There is no built-in gain. Sayid's taxable gain is:
Answer:
$20,000
Explanation:
The computation of the taxable gain is shown below:
The corporate gain is
= $40,000 - $20,000
= $20,000
Now the stock basis is increased i.e.
= $20,000 + $20,000
= $40.000
Now the stock basis decreased to zero i.e.
= $40,000 - $40,000
= $0
So, here the taxable gain is of $20,000
May 1 Prepared a company check for $450 to establish the petty cash fund.
May 15 Prepared a company check to replenish the fund for the following expenditures made since May 1.
a. Paid $160 for janitorial services.
b. Paid $120 for miscellaneous expenses.
c. Paid postage expenses of $80.
d. Paid $41 to The County Gazette (the local newspaper) for an advertisement.
e. Counted $63 remaining in the petty cash box.
May 16 Prepared a company check for $150 to increase the fund to $600.
May 31 The petty cashier reports that $240 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15.
f. Paid postage expenses of $205.
g. Reimbursed the office manager for business mileage, $103.
h. Paid $34 to deliver merchandise to a customer, terms FOB destination.
May 31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $120, leaving a total of $480.
Required:
Journalize the entries.
Answer:
Journal Entries:
May 1 Debit Petty Cash $450
Credit Cash $450
To establish the petty cash fund.
May 15 Debit Petty Cash $387
Credit Cash $387
To replenish the fund for expenses.
a. Debit Janitorial Expenses $160
Credit Petty Cash $160
b. Debit Miscellaneous expenses $120
Credit Petty Cash $120
c. Debit Postage expenses $80
Credit Petty Cash $80
d. Debit Advertisement $41
Credit Petty Cash $41
e. Debit Petty Cash $14
Credit Cash overage $14
To recognize the cash overage.
May 16 Debit Petty Cash $150
Credit Cash $150
To increase the petty cash fund to $600.
May 31 Debit Petty Cash $360
Credit Cash $360
To replenish the fund for expenses.
f. Debit Postage expenses $205
Credit Petty Cash $205
g. Debit Transport expense $103
Credit Petty Cash $103
h. Debit Freight-out $34
Credit Petty Cash $34
Debit Shortage $18
Credit Petty Cash $18
May 31 Debit Cash $120
Credit Petty Cash $120
To reduce the petty cash fund to $480.
Explanation:
a) Data and Analysis:
May 1 Petty Cash $450 Cash $450
May 15 Petty Cash $387 Cash $387
a. Janitorial Expenses $160 Petty Cash $160
b. Miscellaneous expenses $120 Petty Cash $120
c. Postage expenses $80 Petty Cash $80
d. Advertisement $41 Petty Cash $41
e. Petty Cash $14 Cash overage $14
May 16 Petty Cash $150 Cash $150
May 31 Petty Cash $360 Cash $360
f. Postage expenses $205 Petty Cash $205
g. Transport expense $103 Petty Cash $103
h. Freight-out $34 Petty Cash $34
Shortage $18 Petty Cash $18
May 31 Cash $120 Petty Cash $120
Assume the following information from a schedule of cost of goods manufactured:
Beginning work in process inventory 30,000
Direct materials used in production 50,000
Direct labor 60,000
Total manufacturing costs to account for 219,000
Ending work in process inventory 72,000
What is the manufacturing overhead applied to work in process?
A. $15,800
B. $144,500
C. $150.000
D. $79,000
Answer:
The manufacturing overhead applied to work in process is:
D. $79,000
Explanation:
a) Data and Calculations:
Beginning work in process inventory 30,000
Direct materials used in production 50,000
Direct labor 60,000
Total manufacturing costs to account for 219,000
Manufacturing overhead applied to WIP 79,000 (219,000 - 140,000)
Ending work in process inventory 72,000
b) The manufacturing overhead applied to Work in Process is the difference between the total manufacturing costs to account for and the costs of beginning work in process, direct materials, and direct labor for the period. When the ending work in process is deducted from the total manufacturing costs, the resulting figure represents the cost of goods transferred to finished goods inventory.
NoFly Corporation sells three different models of a mosquito "zapper." Model A12 sells for $53 and has variable costs of $45. Model B22 sells for $101 and has variable costs of $81. Model C124 sells for $406 and has variable costs of $315. The sales mix of the three models is A12, 59%; B22, 27%; and C124, 14%. What is the weighted-average unit contribution margin? (Round answer to 2 decimal places, e.g. 15.50.) Weighted-Average Unit Contribution Margin $ ______.
Answer:
$22.86
Explanation:
Model A12 Model B22 Model C124
Selling price per unit $53 $101 $406
Variable costs per unit $45 $81 $315
Contribution margin per unit $8 $20 $91
Weighted-Average Unit Contribution Margin = (Model A12 Contribution margin per unit * Sales mix) + (Model B22 Contribution margin per unit * Sales mix) + (Model C124 Contribution margin per unit * Sales mix)
Weighted-Average Unit Contribution Margin = ($8 * 59%) + ($20 * 27%) + ($91 * 14%)\
Weighted-Average Unit Contribution Margin = $4.72 + $5.4 + $12.74
Weighted-Average Unit Contribution Margin = $22.86
During June, Cisco Company produced 12,000 chainsaw blades. The standard quantity of material allowed per unit was 1.5 pounds of steel per blade at a standard cost of $8 per pound. The actual cost was $7 per pound. The actual pounds of steel that Cisco purchased were 19,500 pounds. All materials purchased were used. Calculate Cisco's materials usage variance.
Answer:
Direct material quantity variance= $12,000 unfavorable
Explanation:
To calculate the direct material quantity variance, we need to use the following formula:
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (1.5*12,000 - 19,500)*8
Direct material quantity variance= (18,000 - 19,500)*8
Direct material quantity variance= $12,000 unfavorable
What annual rate of return is earned on a $13,000 investment made in year 2 when it grows to $17,000 by the end of year 7?
A. 10.64%.
B. 4.28%.
C. 8.04%.
D. 5.51%.
Answer:
It would be D. 5.51%
Answer:
D
Explanation:
It's accumulating for 5 years
[tex]17000=13000(1+i)^5\\1.307692308=(1+i)^5\\\sqrt[5]{1.307692308} =1+i\\i=.05511[/tex]
2019 2018 2017 2016 2015 Sales $ 282,880 $ 270,800 $ 252,600 $ 234,560 $ 150,000 Cost of goods sold 128,200 122,080 115,280 106,440 67,000 Accounts receivable 18,100 17,300 16,400 15,200 9,000 Compute trend percents for the above accounts, using 2015 as the base year.
Answer:
Sales
2019 Net Sales = 188.59%
2018 Net Sales = 180.53%
2017 Net Sales = 168.4%
2016 Net Sales = 156.37%
Cost of Goods Sold
2019Cost of Goods Sold = 191.34%
2018 Cost of Goods Sold = 182.21%
2017 Cost of Goods Sold = 172.06%
2016 Cost of Goods Sold = 158.87%
Accounts Receivable:
2019 Accounts Receivable = 201.11%
2018Accounts Receivable = 192.22%
2017Accounts Receivable = 182.22%
2016Accounts Receivable = 168.89%
Explanation:
Computation forn trend percents for the above accounts, using 2015 as the base year:
FOR SALES:
2019:
Net Sales = Sales 2019 / Sales 2015*100
Net Sales = $282,880 / $150,000 * 100
Net Sales = 188.59%
2018:
Net Sales = Sales 2018 / Sales 2015*100
Net Sales = $270,800 / $150,000 * 100
Net Sales = 180.53%
2017:
Net Sales = Sales 2017 / Sales 2015*100
Net Sales = $252,600 / $150,000 * 100
Net Sales = 168.4%
2016:
Net Sales = Sales 2016 / Sales 2015*100
Net Sales = $234,560 / $150,000 * 100
Net Sales = 156.37%
COST OF GOODS SOLD:
2019:
Cost of Goods Sold = Cost of Goods Sold 2019 / Cost of Goods Sold 2015 *100
Cost of Goods Sold = $128,200 / $67,000 * 100
Cost of Goods Sold = 191.34%
2018:
Cost of Goods Sold = Cost of Goods Sold 2018 / Cost of Goods Sold 2015 *100
Cost of Goods Sold = $122,080 / $67,000 * 100
Cost of Goods Sold = 182.21%
2017:
Cost of Goods Sold = Cost of Goods Sold 2017 / Cost of Goods Sold 2015 *100
Cost of Goods Sold = $115,280 / $67,000 * 100
Cost of Goods Sold = 172.06%
2016:
Cost of Goods Sold = Cost of Goods Sold 2016 / Cost of Goods Sold 2015 *100
Cost of Goods Sold = $106,440 / $67,000 * 100
Cost of Goods Sold = 158.87%
ACCOUNTS RECEIVABLE:
2019:
Accounts Receivable = Accounts Receivable 2019 / Accounts Receivable 2015 * 100
Accounts Receivable = $18,100 / $9,000 * 100
Accounts Receivable = 201.11%
2018:
Accounts Receivable = Accounts Receivable 2018 / Accounts Receivable 2015 * 100
Accounts Receivable = $17,300 / $9,000 * 100
Accounts Receivable = 192.22%
2017:
Accounts Receivable = Accounts Receivable 2017 / Accounts Receivable 2015 * 100
Accounts Receivable = $16,400 / $9,000 * 100
Accounts Receivable = 182.22%
2016:
Accounts Receivable = Accounts Receivable 2016 / Accounts Receivable 2015 * 100
Accounts Receivable = $15,200 / $9,000 * 100
Accounts Receivable = 168.89%
On April 1, Cyclone Co. purchases a trencher for $280,000. The machine is expected to last five years and have a salvage value of $40,000. Compute depreciation expense at December 31 for both the first year and second year assuming the company uses the double-declining-balance method
Answer:First Year Depreciation= $84,000
Second Year Deprecation= $78,400
Explanation:
Using Double declining
We have that :
Depreciation value = Cost - Salvage value
$280,000 - $40,000 =$240,000
Since machine is expected to depreciate for 5 years, Annual depreciation = 240,000 / 5 years
= $48,000
Annual Depreciation Rate = 48,000 / 240,000 = 20%
Therefore, Double declining = 20 x 2 = 40%
First Year Depreciation: from April to December
= 40% x 280,000 x 9/12 months
= $84,000
Second Year Deprecation:
= 40% x (280,000 - 84,000)
= $78,400
For each of the below, indicate where each item should be presented in the statement of cash flows (using the indirect method) using the legend below. Also, indicate how cash flows are affected. Legend for BLANK 1: A - operating activities B - investing activities C - financing activities D - significant noncash investing and financing activities Legend for BLANK 2: I - Increase D - Decrease N - No effect
Answer:
Blank 1 Blank 2
i. Depreciation expense A I
ii. Purchase of office equipment B D
iii. Decrease in accounts receivable A I
iv. Payment of cash dividends C D
v. Conversion of bonds into common stock D N
vi. Sold land and warehouse used in the corp. B I
vii. Gain on sale of land and warehouse in part vi. A D
viii. Issued common stock for cash C I
ix. Decrease in accounts payable A D
x. Increase in inventory A D
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question. See the attached pdf for the complete question.
How each of the item will appear in the the statement of cash flows (using the indirect method) is also provided below:
XYZ Company
Statement of Cash Flows (Indirect Method Format)
For the year...
Details $ $
Operating activities:
Net profit xxx
Adjustment to reconcile net income:
i. Depreciation expense xx
iii. Decrease in accounts receivable xx
vii. Gain on sale of land and warehouse in part vi. (xx)
ix. Decrease in accounts payable (xx)
x. Increase in inventory (xx)
Net cash flows from operating activities xxx
Investing activities:
ii. Purchase of office equipment (xx)
vi. Sold land and warehouse used in the corporation xx
Net cash flows from investing activities xxx
Financing activities:
iv. Payment of cash dividends (xx)
viii. Issued common stock for cash xx
Net cash flows from investing activities xxx
Net cash flow for the year xxx
Beginning cash balance xxx
Ending cash balance xxx
Note: The does not affect the cash flows statement:
v. Conversion of bonds into common stock
The question, "What are the distinguishing characteristics of effective leaders?" sparked which approach to the study of leadership?
Answer:
behavioral approach to the study of leadership
Explanation:
In simple words, The behavioral approach is only concerned with what managers do and what they behave. The behavioral approach broadened the science of leadership to encompass the activities of leaders toward followers in diverse settings by moving the study of leadership to leader behaviors. Monitoring and analyzing a leader's movements and behaviors in response to a given circumstance is central to behavioral leadership theory.
The question, "What are the distinguishing characteristics of effective leaders?" sparked the:
Behavioral approach to the study of leadership
According to the given question, we can see that a question was asked which wants to mirror on the unique features of an effective leader and asked us to show the type of approach which was sparked as a result of this question.
As a result of this, we can see that the type of approach which was sparked as a result of the question about the distinguishing characteristics of effective leaders is behavioral approach.
This is because, this type of approach focuses on leaders and how their activities impacts the followers.
Read more here:
https://brainly.com/question/18229926
aner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices—one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company’s most recent year is given: Assume that Minneapolis’ sales by major market are: Market Minneapolis Medical Dental Sales $ 600,000 100 % $ 400,000 100 % $ 200,000 100 % Variable expenses 360,000 60 % 260,000 65 % 100,000 50 % Contribution margin 240,000 40 % 140,000 35 % 100,000 50 % Traceable fixed expenses 72,000 12 % 20,000 5 % 52,000 26 % Market segment margin 168,000 28 % $ 120,000 30 % $ 48,000 24 % Common fixed expenses not traceable to markets 18,000 3 % Office segment margin $ 150,000 25 % The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The campaign would cost $8,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $70,000 or increase sales in the Dental market by $60,000. Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? 3. In which of the markets would you recommend that the company focus its advertising campaign?
Answer:
1. $ 136,500
2. $70000
3. Medical market
Explanation:
1. Calculation to determine How much would the company's profits increase (decrease) if it implemented the advertising campaign in the MEDICAL MARKET
First is to calculate the sales
Sales = (400 000 + 70 000)
Sales = $470 000
Second step is to calculate the profit
Variable cost =$470 000 *65%
Variable cost=$305 500
Contribution =$470 000*35%
Contribution =$164,500
Fixed Expense= $28 000
Profit = $ 136,500
Now let calculate the Difference made by advertisement
Difference = 136500 - 120000
Difference=16500
2. Calculation to determine How much would the company's profits increase (decrease) if it implemented the advertising campaign in the
DENTAL MARKET
vcr Of The Dental market = 50%
Variable cost =50% $260 000
Variable cost = $130 000
Contribution = $130 000
Fixed expenses = $60 000
Profit = $70000
Now let determine difference made by the advertisement
Difference =(70000) - 48000
Difference= 22000
3. Based On the above calculation the markets I would recommend that the company focus its advertising campaign is medical market
A factory wishes to maximize its profit by choosing how many of each of its products to produce every week. The factory cannot produce more than 32 units in total each week. A linear programming problem is formed and the part of the sensitivity report corresponding to this constraint is provided below. If the company could produce 10 more units each week, which of the following can be concluded about the optimal profit?
Nam Final Value Shadow Constraint R.H. Allowable Allowable
Price Side Increase Decrease
Total
Production 32 32 90 15.333 8.667
a. Optimal profit increases by 90.
b. Optimal profit increases by 900.
c. Optimal profit increases by 15.3.
d. Optimal profit increases by 153.3.
e. The impact on optimal profit cannot be determined with the given information.
Renaldo Cross Company views share buybacks as treasury stock. Renaldo repurchased shares and then later sold the shares at more than their acquisition price. What is the effect of the sale of the treasury stock on each of the following?
Retained earnings Total paid-in capital
a. no effect increase
b. no effect no effect
c. increase no effect
d. increase increase
a) Option A
b) Option B
c) Option C
d) Option D
Answer: a) Option A
Explanation:
There will be no effect on retained earnings because retained earnings do not increase as a result of shares being sold. It increases when net income increases.
Total paid-in capital increases when stock is sold for higher than its par value or when treasury stock is sold for higher than its acquisition price. The treasury stock here was sold for higher than it was bought so this would increase the total paid in capital.
Journalize the following sales transactions for Antique Mall. Explanations are not required. The company estimates sales returns at the end of each month.
Jan. 4 Sold $14,000 of antiques on account, credit terms are n/30. Cost of goods is $7,000.
8 Received a $400 sales return on damaged goods from the customer. Cost of goods damaged is $150.
13 Antique Mall received payment from the customer on the amount due from Jan. 4, less the return.
20 Sold $4,900 of antiques on account, credit terms are 1/10, n/45, FOB destination. Cost of goods is $2,450.
20 Antique Mall paid $70 on freight out.
29 Received payment from the customer on the amount due from Jan. 20, less the discount.
Answer:
Antique Mall
Journal Entries:
Jan. 4 Debit Accounts Receivable $14,000
Credit Sales Revenue $14,000
credit terms are n/30.
Debit Cost of goods sold $7,000
Credit Inventory $7,000
Jan. 8 Debit Sales Returns $400
Credit Accounts Receivable $400
Debit Damaged Goods $150
Credit Cost of goods sold $150
Jan. 13 Debit Cash $13,600
Credit Accounts Receivable $13,600
Jan. 20 Debit Accounts Receivable $4,900
Credit Sales Revenue $4,900
credit terms are 1/10, n/45, FOB destination.
Debit Cost of goods sold $2,450
Credit Inventory $2,450
Jan. 20 Debit Freight-out Expense $70
Credit Cash $70
Jan. 29 Debit Cash $4,851
Debit Cash Discounts $49
Credit Accounts Receivable $4,900
Explanation:
a) Data and Analysis:
Jan. 4 Accounts Receivable $14,000 Sales Revenue $14,000
credit terms are n/30.
Cost of goods sold $7,000 Inventory $7,000
Jan. 8 Sales Returns $400 Accounts Receivable $400
Damaged Goods $150 Cost of goods sold $150
Jan. 13 Cash $13,600 Accounts Receivable $13,600
Jan. 20 Accounts Receivable $4,900 Sales Revenue $4,900
credit terms are 1/10, n/45, FOB destination.
Cost of goods sold $2,450 Inventory $2,450
Jan. 20 Freight-out Expense $70 Cash $70
Jan. 29 Cash $4,851 Cash Discounts $49 Accounts Receivable $4,900
We learned about Cost-Volume-Profit analysis. Review a few of the break even examples in the chapter.
1. If only the selling price per unit of a product increases (variable cost per unit and total fixed costs do not change), does the breakeven point increase or decrease?
2. Using Break Even Analysis, provide a unique mathematical example to support you answer. (Calculate the breakeven point for a base example, then increase the selling price and re-calculate your breakeven point.) Label all numbers in your examples."
Answer:
decrease
1. fixed cost is 100
variable cost is 10
price = 20
100 / ( 20 - 10) = 10
2. fixed cost is 100
variable cost is 10
price = 30
100 / (30 - 10) = 5
Explanation:
In an effort to simplify the multiple production department factory overhead rate method, the same rate can be used for all departments.
A. True
B. False
Answer: False
Explanation:
Different departments incur different types of costs based on the product that they are producing. It would therefore not be right to use the same rate for all departments as it might capture cost inadequately.
The overhead rate should always take into account the unique circumstances of a department such that costs can be assigned as accurately as possible.
current year depreciation expense is 25000 what amount should the company report as net income for 2013
Answer:
Note:The full question is attached as picture below
1 Jan 31 Dec Increase/(Decrease)
Accounts receivables $80,000 $100,000 $20,000
Inventory $60,000 $70,000 $10,000
Prepaid Expenses $100,000 $75,000 ($25,000)
Accounts Payable $120,000 $100,000 ($20,000)
Deferred Revenue $65,000 $95,000 $30,000
Particulars Amount
Net Cash Flows from Operating Activities $200,000
Less Increase in Current Liabilities
Deferred Revenue ($30,000)
Less Decrease in Current Assets
Prepaid Expenses ($25,000)
Add Decrease in Current Liabilities
Accounts Payable $20,000
Add Increase in Current Assets
Accounts receivables $20,000
Inventory $10,000
Less: Depreciation Expenses ($25,000)
Net Income for 2013 $170,000
The approved detail design resulting from the __________ serves as a basis for making the decision to begin production. Systems Requirement Review Test Readiness Review Preliminary Design Review Critical Design Review
Answer: Critical Design Review
Explanation:
A Critical Design Review is referred to as a review that's fine in order o ensure that a system can be able to move into fabrication, and test and also ensure that the stated performance requirements are met.
The approved detail design resulting from the critical design review serves as a basis for making the decision to begin production.
resented below is information related to Sandhill Enterprises.
Jan. 31 Feb. 28 Mar. 31 Apr. 30
Inventory at cost $15,750 $15,855 $17,850 $14,700
Inventory at LCNRV 15,225 13,230 16,380 13,965
Purchases for the month 17,850 25,200 27,825
Sales for the month 30,450 36,750 42,000
From the information, prepare as far as the data permit monthly income statements in columnar form for february march and april.
Answer:
Sandhill Enterprises
Sandhill Enterprises
Income Statements
For the months ended Feb. 28, March 31, and April 30, 2020:
Feb. 28 March 31 April 30
Sales for the month $30,450 $36,750 $42,000
Cost of goods sold 19,845 22,050 30,240
Gross profit $10,605 $14,700 $11,760
Explanation:
a) Data and Calculations:
Jan. 31 Feb. 28 Mar. 31 Apr. 30
Inventory at cost $15,750 $15,855 $17,850 $14,700
Inventory at LCNRV 15,225 13,230 16,380 13,965
Purchases for the month 17,850 25,200 27,825
Sales for the month 30,450 36,750 42,000
Determining the ending inventory based on LCNRV:
Jan. 31 Feb. 28 Mar. 31 Apr. 30
Inventory at cost $15,750 $15,855 $17,850 $14,700
Inventory at LCNRV 15,225 13,230 16,380 13,965
Ending inventory 15,225 13,230 16,380 13,965
Beginning inventory 15,225 13,230 16,380
Determining the Cost of Goods Sold:
Beginning inventory 15,225 13,230 16,380
Purchases for the month 17,850 25,200 27,825
Ending inventory 13,230 16,380 13,965
Cost of goods sold 19,845 22,050 30,240
1. Inventory that consists of the costs of the direct and indirect materials that have not yet entered the manufacturing process is known as ________. work in process inventory materials inventory finished goods inventory None of these choices are correct.
Answer:
materials inventory
Explanation:
An inventory is a term used to describe a list of finished goods, goods still in the production line and raw materials that would be used for the manufacturing of more goods in a bid to meet the unending consumer demands.
Basically, an inventory can be classified into three (3) main categories and these are; finished goods, work in progress, and raw materials.
An inventory is recorded as a current asset on the balance sheet because it's primarily the most important source of revenue for a business entity.
Generally, the three (3) main cost concept associated with an inventory include;
1. First In First Out (FIFO).
2. Last In First Out (LIFO).
3. Weighted average cost.
In Financial accounting, direct cost can be defined as any expense which can easily be connected to a specific cost object such as a department, project or product. Some examples of direct costs are cost of raw materials, machineries or equipments.
On the other hand, any cost associated with the running, operations and maintenance of a company refers to indirect costs. Some examples of indirect costs are utility bill, office accessories, diesel etc.
Materials inventory can be defined as an inventory that comprises of direct and indirect materials costs which have not been used in a manufacturing process.
A firm that purchases a commercial-off-the-shelf (COTS) information system benefits by getting a standardized system without having to absorb development costs, but risks getting a system that does not align with the firm's businesses processes and existing technologies.
a. True
b. False
Answer: True
Explanation:
Commercial-off-the-shelf (COTS) software refers to the software products which are readily made and hence are available in the market for purchase.
One benefit of this is that when it's purchased, the company gets a standardized system without having to absorb development cost. Despite this advantage, it has a disadvantage as the company can risk getting a system which doesn't align with the businesses processes and existing technologies of the company.
Pace Company has the following plan information available for 2019: Month Total Sales January $166,000 February $150,000 March $136,000 April $182,000 May $152,000 June $135,000 July $110,000 The normal pattern of cash collections on sales is 10% in the month of the sale, 50% in the month following the sale and 40% in the second month following the sale. The expected total cash collections for May should be
Answer:
the expected total cash collections for May is $160,600
Explanation:
The computation of the expected total cash collections for May is given below
= 10% of $152,000 + 50% of $182,000 + 40% of $136,000
= $15,200 + $91,000 + $54,400
= $160,600
Hence, the expected total cash collections for May is $160,600
The same should be considered
On December 31, 2016, Bart Inc. purchased a machine from Fell Corp. in exchange for a noninterest-bearing note requiring eight payments of $20,000. The first payment was made on December 31, 2016, and the remaining seven payments are due annually on each December 31, beginning in 2017. At the date of the transaction, the prevailing rate of interest for this type of note was 11%. Present value factors are as follows: Period Present value of ordinary annuity of 1 at 11% Present value of an annuity due of 1 at 11% 7 4.712 5.231 8 5.146 5.712 The initial value of the machine is
Answer:
Bart Inc.
The initial value of the machine is:
= $114,240.
Explanation:
a) Data and Calculations:
Date of purchase of machine from Fell Corp. = December 31, 2016
Annual payments for a non-interest-bearing note = $20,000
Appropriate present value of the annuity due = 5.712
PV of the annual payments for 8 years = $114,240 ($20,000 * 5.712)
First payment date = December 31, 2016
Period of payments = 8 years
Prevailing interest rate for this type of note = 11%
Check from an online financial calculator:
N (# of periods) 8
I/Y (Interest per year) 11
PMT (Periodic Payment) 20000
FV (Future Value) 0
Results
PV = $114,243.93
Sum of all periodic payments = $160,000.00
Total Interest = $45,756.07
XYZ Company manufactures a unique device that is used by internet users to boost Wi-fi signals. The following data relates to the first month of operation:
Beginning inventory 0 units
Units produced 40,000 units
Units sold 35,000 units
Selling price $120 per unit
Marketing and administrative expenses
Variable marketing and administrative expenses per unit $4
Fixed marketing and administrative expenses per month $1,120,000
Manufacturing costs
Direct materials cost per unit $30
Direct labor cost per unit $14
Variable manufacturing overhead cost per unit $4
Fixed manufacturing overhead cost per month $1,280,000
Using the information given, above:
a. Calculate unit product cost under the variable costing method and the absorption costing method.
b. Prepare an Income Statement under the variable costing method, as well as the absorption costing method.
c. Prepare a schedule to reconcile the net operating income under the variable and absorption costing methods
Answer:
XYZ Company
a. Unit product cost under:
1. variable costing method
Direct materials cost per unit $30
Direct labor cost per unit $14
Variable manufacturing overhead cost per unit $4
Variable marketing and administrative expenses per unit $4
Total variable cost $52
2. absorption costing method:
Direct materials cost per unit $30
Direct labor cost per unit $14
Variable manufacturing overhead cost per unit $4
Fixed manufacturing overhead cost $32 ($1,280,000/40,000)
Total product cost per unit $80
b1. Income Statement under the variable costing method
Sales revenue $4,200,000 ($120 * 35,000)
Cost of goods sold:
Variable cost of goods sold 1,680,000 ($48 * 35,000)
Variable marketing and admin 140,000 ($4 * 35,000)
Total cost of goods sold 1,820,000
Contribution margin $2,380,000
Fixed expenses:
Fixed marketing and
administrative expenses $1,120,000
Fixed manufacturing overhead 1,280,000
Total fixed expenses $2,400,000
Net operating loss $20,000
b2. Income Statement under the absorption costing method
Sales revenue $4,200,000 ($120 * 35,000)
Cost of goods sold:
Variable cost of goods sold 1,920,000 ($48 * 40,000)
Fixed manufacturing overhead 1,280,000
Less Ending inventory (400,000)
Total cost of goods sold 2,800,000
Contribution margin $1,400,000
Period expenses:
Marketing and Administrative:
Fixed $1,120,000
Variable 140,000 $1,260,000
Net operating income $140,000
c. Schedule to reconcile the net operating income under the variable and absorption costing methods:
Net operating income under absorption = $140,000
Fixed cost absorbed in ending inventory = 160,000 ($32 * 5,000)
Net operating loss under variable = ($20,000)
Explanation:
a) Data and Calculations:
Beginning inventory 0 units
Units produced 40,000 units
Units sold 35,000 units
Ending inventory 5,000 units
Selling price $120 per unit
Marketing and administrative expenses:
Variable marketing and administrative expenses per unit $4
Fixed marketing and administrative expenses per month $1,120,000
Manufacturing costs:
Direct materials cost per unit $30
Direct labor cost per unit $14
Variable manufacturing overhead cost per unit $4
Fixed manufacturing overhead cost per month $1,280,000
Texas Curtain Works is in the process of preparing its budget for next year. Cost of goods sold has been estimated at 70 percent of sales. Fabric purchases and payments are to be made during the month preceding the month of sale. Wages are estimated at 20 percent of sales and are paid during the month of sale. Other operating costs amounting to 25 percent of sales are to be paid in the month following the month of sales. Sales revenue is forecasted as follows:
Month Sales
February $440,000
March $450,000
April $480,000
May $500,000
June $510,000
What is the amount of fabric purchases during the month of March?
a) $480,000
b) $336,000
c) $288,000
d) $300,000
Answer:
b. $336,000
Explanation:
Here, the Fabric purchases & payments are to be made during the month before the month of sale.
The Amount of fabric purchases during the month of march = 70% of sales of the month of April
Purchases of March = 70% * $480,000
Purchases of March = 0.70 *$480,000
Purchases of March = $336,000
So, the amount of fabric purchases during the month of March is $336,000.
The controller of Oriole Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs.
Month Total Total
Maintenance Costs Machine Hours
January $2,860 320
February 3,160 370
March 3,760 520
April 4,660 670
May 3,360 520
June 5,260 720
Determine the variable cost components using the high-low method. (Round answer to 2 decimal places e.g. 2.25.)
Variable cost per machine hour $
Determine the fixed cost components using the high-low method.
Total fixed costs $
Answer:
Results are below.
Explanation:
Giving the following information:
Maintenance Costs Machine Hours
January $2,860 320
February 3,160 370
March 3,760 520
April 4,660 670
May 3,360 520
June 5,260 720
To calculate the variable and fixed costs, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (5,260 - 2,860) / (720 - 320)
Variable cost per unit= $6
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 5,260 - (6*720)
Fixed costs= $940
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 2,860 - (6*320)
Fixed costs= $940
a) Take a real time example of a company of your own choice working in Pakistan and then discuss the factors that lead to pressure for local responsiveness. Discuss it in detail. Draw diagram to show the effect.
Answer:
This responsiveness also promotes the local market orientation of a subsidiary and therefore the strength of its existing network with the businessmen and government authorities.
Explanation:
Usually, firms working within the global market confront two sorts of competitive pressure. They face pressure to scale back costs and pressure to react locally. These competing forces throw a corporation into conflict. It's going to also need a corporation to supply a consistent product on the international market to downstream the experience curve as soon as feasible. In response to local pressures, however, it's necessary for a firm to differentiate its product offering and marketing strategy from one country to a different in an effort to satisfy the various demands arising from domestic consumer preferences, business practices, channels of distribution, competitive conditions and public policies. Because it's going to entail substantial redundancy and a scarcity of product standards to adapt products to varied domestic needs, the result could also be a rise in prices.
While some organizations, like Company A, face a high to scale back cost and low for the reaction of locally, while others, like Company B, face low to scale back costs and high for local reaction, many companies are within the situation of Company C. It suggests and supports three layers of variables, including environmental, structural, and organizational responsiveness. The analysis of 168 MNE companies within the People's Republic of China shows that environmental complexity and therefore the uniqueness of business culture increase local reaction. Structural variables like the intensity of competition, heterogeneity of demand and localisation of components increase local reaction.
King, CPA, is auditing the financial statements of Cycle company, a client that has receivables from customers arising from the sale of goods in the normal course of business. King is aware that the confirmation of accounts receivable is a generally accepted auditing procedure.
Required:
a. Under what circumstances could King justify omitting the confirmation of Cycle’s accounts receivable? In designing confirmation request, what factors are likely to affect King’s assessment of the reliability of confirmations that King sends?
b. What alternative procedures could King consider performing when replies to positive confirmation requests are not received?
Answer:
King, CPA
Auditing the financial statements of Cycle Company
a-1 Circumstances under which the omission of the confirmation of accounts receivable may be justified by King:
1. Accounts receivable are immaterial because of their values.
2. Low risk concerning accounts receivable.
3. Reliance can be placed on analytics and substantive tests to detect misstatements.
4. Using confirmations may be ineffective.
a-2) Factors that are likely to affect King's assessment of the reliability of confirmations:
1. The assessed skills of the recipients to confirm their balances.
2. The existence of verifiable customer records.
3. Proper documentations of transactions.
b. The alternative procedures that King could consider performing when replies to positive confirmation requests are not received are:
1. The auditor can conduct substantive tests, with tests of detailed transactions and analytical procedures.
2. Examination of cash receipts, sales orders, invoices, shipping documents, and correspondence files.
Explanation:
Where accounts receivable balances are material, the auditor is required to send out requests to customers to confirm their balances. The confirmation may be in the form of a negative, positive, or blank confirmation, depending on the prevailing circumstances and the assessed risks.
