Answer:
Dividends for the year $63,000
Explanation:
Phil Graves Cemetery
Jan. 1 Shares issued and outstanding 63,000
June 1 2-for-1 stock split x 2
June 1 Shares issued and outstanding 126,000
Oct. 15 Cash dividend declared (per share)x $ .50
Dividends for the year $63,000
Therefore the amount that Graves should report as dividends is $63,000
Joe Jenkins, the owner of Jenkins Manufacturing, is considering whether to produce a new product. Joe will be selling the product for a price of $70 per unit. If he uses the current equipment, Joe estimates the fixed costs per year to be $40,000 and variable costs for each unit produced to be $50. However, Joe is considering the purchase of new equipment that would produce the product more efficiently. Joe’s fixed cost would be raised to $60,000 per year, but the variable cost would be reduced to $25 per unit. If Joe's demand forecast is 900 units, should Joe produce the product using the existing or the new equipment? Produce using the existing equipment. Produce using the new equipment. Does not matter, which equipment is used. The product should not be produced at all.
Answer:
Jenkins Manufacturing
Joe should produce using the new equipment.
Explanation:
a) Costs incurred using the old equipment:
Variable costs = $45,000 ($50 x 900)
Fixed costs = $40,000
Total costs = $85,000
Operating Loss = $22,000 ($63,000 - 85,000)
b) Costs incurred using the new equipment:
Variable costs = $22,500 ($25 x 900)
Fixed costs = $60,000
Total costs = $82,500
Operating Loss = $19,500 ($63,000 - 82,500)
Production using the new equipment would reduce the operating loss by $2,500.
The company should produce by using the new equipment.
Based on thw information given, the cost that's incurred using the old equipment will be
Variable costs = ($50 x 900) = $45,000
Fixed costs = $40,000
Total costs = Fixed cost + Variable cost
= $40000 + $45,000
= $85,000
Operating Loss will be:
= ($63,000 - 85,000) = -$22000
The costs incurred using the new equipment will be:
Variable costs = ($25 x 900) = $22,500
Fixed costs = $60,000
Total costs = $60000 + $22500 = $82,500
Operating Loss = ($63,000 - 82,500) = -$19,500
Based on the calculation, the company should produce by using the new equipment.
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Anderson Steel Company began 2018 with 550,000 shares of common stock outstanding. On March 31, 2018, 140,000 new shares were sold at a price of $50 per share. The market price has risen steadily since that time to a high of $55 per share at December 31. No other changes in shares occurred during 2018, and no securities are outstanding that can become common stock. However, there are two agreements with officers of the company for future issuance of common stock. Both agreements relate to compensation arrangements reached in 2017. The first agreement grants to the company president a right to 42,000 shares of stock each year the closing market price is at least $53. The agreement begins in 2019 and expires in 2022. The second agreement grants to the controller a right to 47,000 shares of stock if she is still with the firm at the end of 2026. Net income for 2018 was $5,200,000.
Required:
Compute Anderson Steel Company's basic and diluted EPS for the year ended December 31, 2018. (Enter your answers in thousands.)
Answer:
EPS = $7.94
diluted EPS = $7.94, since there are no diluted shares in 2018
Explanation:
January 2018 = 550,000 common stocks
March 31 = 140,000 new shares issued = 105,000 weighted stocks
net income = $5,200,000
EPS = net income / weighted common stocks = $5,200,000 / (550,000 + 105,000) = $5,200,000 / 655,000 stocks = $7.939 ≈ $7.94 per stock
there are no diluted shares since the agreement with the president of the board starts in 2019, and we are calculating the EPS for 2018. The same applies to the controller, since her agreement starts in 2026.
Harvard Company is selling a piece of equipment on June 30, 2019. Information related to this sale is as follows: Cost of equipment .................................................... $400,000 Accumulated Depreciation as of June 30, 2019........... 150,000 Proceeds from sale........................................................... 350,000
Based on the above information, the journal entry to record the sale will include:
Answer:
June 30, 2019 Accumulated depreciation 150000 Dr
Cash 350000 Dr
Equipment 400000 Cr
Gain on disposal 100000 Cr
Explanation:
The equipment is being sold by the business. So, we will write off this from the account by crediting the equipment account by the amount of the cost of the equipment. The related depreciation expense will also be written off from the books by debiting the account by the amount of depreciation on this equipment.
To calculate the gain or loss on disposal, we fill first calculate the Net book value of the equipment.
NBV = Cost - Accumulated depreciation
NBV = 400000 - 150000 = $250000
The equipment is sold for 350000 thus there is a gain on disposal of,
Gain on disposal = 350000 - 250000 = $100000
The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year. If Burkett Corporation is able to achieve the budgeted level of sales, its margin of safety in dollars would be?
Sales (50,000 units) $1,000,000
Costs:
Direct materials $270,000
Direct labor 240,000
Fixed factory overhead 100,000
Variable factory overhead 150,000
Fixed marketing costs 110,000
Variable marketing costs 50,000 920,000
Pretax income $80,000
Answer:
Margin of safety= $275,862
Explanation:
Giving the following information:
Sales (50,000 units) $1,000,000
Costs:
Direct materials $270,000
Direct labor 240,000
Fixed factory overhead 100,000
Variable factory overhead 150,000
Fixed marketing costs 110,000
Variable marketing costs 50,000
First, we need to calculate the total variable costs and total fixed costs:
Total variable costs= 270,000 + 240,000 + 150,000 + 50,000
Total variable costs= 710,000
Total fixed costs= 100,000 + 110,000= 210,000
Now, we need to determine the break-even point in dollars:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 210,000 / [(1,000,000 - 710,000)/1,000,000]
Break-even point (dollars)= 210,000/0.29
Break-even point (dollars)= 724,138
Finally, the margin of safety in dollars:
Margin of safety= (current sales level - break-even point)
Margin of safety= 1,000,000 - 724,138
Margin of safety= $275,862
The following information is taken from the accounts of Latta Company. The entries in the T-accounts are summaries of the transactions that affected those accounts during the year. Manufacturing Overhead (a) 486,144 (b) 405,120 Bal. 81,024 Work in Process Bal. 10,880 (c) 754,000 298,500 90,500 (b) 405,120 Bal. 51,000 Finished Goods Bal. 39,000 (d) 662,000 (c) 754,000 Bal. 131,000 Cost of Goods Sold (d) 662,000 The overhead that had been applied to production during the year is distributed among Work in Process, Finished Goods, and Cost of Goods Sold as of the end of the year as follows: Work in Process, ending $ 24,480 Finished Goods, ending 62,880 Cost of Goods Sold 317,760 Overhead applied $ 405,120 For example, of the $51,000 ending balance in work in process, $24,480 was overhead that had been applied during the year. Required: 1. Identify reasons for entries (a) through (d). 2. Assume that the underapplied or overapplied overhead is closed to Cost of Goods Sold. Prepare the necessary journal entry. 3. Assume that the underapplied or overapplied overhead is closed proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the necessary journal entry.
Answer and Explanation:
As per the data given in the question,
1.
a) Cost of goods manufactured.
b) Cost of goods sold.
c) Overhead cost applied to work in process
d) Actual manufacturing overhead cost.
2. Journal Entry
Manufacturing overhead A/c Dr. 81,024
To cost of goods sold A/c. 81,024
3.
Work in process ending $24,480 =6.04%
Finished goods ending $62,880 =15.52%
Cost of goods sold $317,760 =78.44%
Total cost $405.120 =100%
To calculate overhead allocation :
Work in process ending = ($81,024× 6.04%) =$4,894
Finished goods ending = ($81,024 × 15.52%) =$12,575
Cost of goods sold = ($81,024 × 78.44%) = $63,355
Total cost = $81,024
Journal Entry
Manufacturing overhead A/c Dr. 81,024
To work in process A/c. $4,893
To finished goods A/c. $12,575
To cost of goods sold A/c. $63,555
Your bagel shop uses both capital and labor in the production of bagels. In this production process capital and labor are substitutes. If you install a new oven and the marginal product of capital increases, you will:
a. reduce the number of workers you employ
b. increase the number of workers you employ
c. reduce the amount of capital you are using not make any changes since you are already maximizing profit
Answer:
The answer is option A) reduce the number of workers you employ
Explanation:
Installing a new oven is capital intensive. So, for a business person to incur an additional capital cost to aid the efficiency of production, something has to give.
In this case, where capital and labor are substitutes, installing a new oven will drastically reduce the workload thereby necessitating a reduction in the number of workers.
By implication, the cost of paying wages which is a recurrent expenditure will reduce. In the long run and if the oven is maintained, it will e a very cost effective option.
Installing a new oven also suggests a marginal increment in capital.
Dan Bumblauskas is the owner of a small Iowa company that produces electric knives used to cut fabric. The annual demand is for 10 comma 500 knives, and Dan produces the knives in batches. On average, Dan can produce 190 knives per day; during the production process, demand has been about 70 knives per day. The cost to set up the production process is $85, and it costs Dan $1.10 to carry a knife for 1 year. How many knives should Dan produce in each batch?
Answer:
1,012.36 knives produced in each month
Explanation:
Data provided in the question
Annual demand = 10,500
Ordering cost = $85
Holding cost = $1.10
Daily demand = 70 knives per day
Production knives per day = 190 knives
Based on the given information, we need to apply the formula which is shown below:[tex]Economic\ order\ quantity = \sqrt{\frac{2\times annual\ demand \times ordering\ cost}{holding\ cost} \times 1 - \frac{daily\ demand}{production}[/tex]
[tex]Economic\ order\ quantity = \sqrt{\frac{2\times 10,500 \times\$85}{\$1.10} \times 1 - \frac{70}{190}[/tex]
= 1,012.36 knives produced in each month
We simply applied the above formula to find out the knives produced in each batch
Flagstaff Company has budgeted production units of 7,900 for July and 8,100 for August. The direct materials requirement per unit is 2 ounces (oz.). The company requires to have safety stock of direct materials on hand at the end of each month to complete 20% of the units of budgeted production in the following month. There was 3,160 ounces of direct material in inventory at the start of July. The total ounces of direct materials to be purchased in July is:
Answer:
Purchases= 15,880 ounces
Explanation:
Giving the following information:
Production:
July= 7,900
August= 8,100
The direct materials required per unit is 2 ounces (oz.).
Ending inventory= 20% of the units of budgeted production in the following month.
There were 3,160 ounces of direct material in inventory at the start of July.
To calculate the direct material purchase required, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Purchases= 7,900*2 + (8,100*2)*0.2 - 3,160
Purchases= 15,880 ounces
Hollis, an individual, makes a cash contribution to Orchestra Y, a nongovernmental not-for-profit organization, unrestricted as to use and lacking any conditions which must be met before it can be used. Hollis considers the cash contribution an investment in the cultural future of the city where Orchestra Y is located. Hollis’s contribution should be reported in Orchestra Y’s statement of cash flows as an inflow from Multiple Choice Capital and related financing activities Operating activities Investing activities Financing activities
Answer:
Operating activities
Explanation:
Operating activity of a business is the function that a business performs that is directly related to provision of goods and services to customers. It is the core business activity.
For example a car production company has manufacturing as its core operating activity.
In this scenario Hollis, an individual, makes a cash contribution to a nongovernmental not-for-profit organisation and is considered as an investment in the cultural future of the city where Orchestra Y is located.
Since the contribution is for investment in the community and this is a core function of the NGO, it can be reported as cash flow from its operating activities
Blue Inc. is preparing its annual budgets for the year ending December 31, 2017. Accounting assistants furnish the data shown below. Product JB 50 Product JB 60 Sales budget: Anticipated volume in units 403,900 201,200 Unit selling price $23 $28 Production budget: Desired ending finished goods units 26,400 16,700 Beginning finished goods units 32,900 12,600 Direct materials budget: Direct materials per unit (pounds) 2 2 Desired ending direct materials pounds 33,900 18,900 Beginning direct materials pounds 42,700 11,000 Cost per pound $2 $3 Direct labor budget: Direct labor time per unit 0.4 0.6 Direct labor rate per hour $11 $11 Budgeted income statement: Total unit cost $14 $21 An accounting assistant has prepared the detailed manufacturing overhead budget and the selling and administrative expense budget. The latter shows selling expenses of $665,000 for product JB 50 and $363,000 for product JB 60, and administrative expenses of $544,000 for product JB 50 and $341,000 for product JB 60. Interest expense is $150,000 (not allocated to products). Income taxes are expected to be 30%. Collapse question part (a) Prepare the sales budget for the year.
Answer:
Total Sales budget $14,923,300.00
Explanation:
The sales budget shows the total estimated amount of sales income for a future accounting period
Sales budget
Product Units Price Sales revenue($)
Product JB 50 403,900 $23 9,289,700
Product JB 60 201,200 $28 5,633,600
Total Sales budget 14,923,300.
a doctor works in a....
Answer:
Clinic or Hospital
Explanation:
:)
On November 27, the board of directors of Armstrong Company declared a $.50 per share dividend. The dividend is payable to shareholders of record on December 7 on December 24. Armstrong has 25,500 shares of $1 par common stock outstanding at November 27. Journalize the entries needed on the declaration and payment dates. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Answer:
On November 27
Debit Retained earnings $12,750
Credit Dividend payable $12,750
(To record the dividend declared)
On December 24
Debit Dividend payable $12,750
Credit Cash $12,750
(To record dividend paid)
Explanation:
Dividends on gains on shares bought by the shareholders. They arise due to appreciation in share price and improvement in company's net income.The dividend payable was calculated as $.5 x 25,500 shares = $12,750.Dividends are usually paid out of retained earnings.The dividend payable account is debited when payment is to be made.If all goes according plan, Robo-Tech will soon have access to a new valuable external financing resource, that it can use to finance it future growth potential. To Do a. For Robo-Tech, what are the advantages of being a publicly listed company? b. For Robo-Tech, what are the disadvantages of being a publicly listed company? c. If Robo-Tech prefers that its shares trade on a centralized exchange, what listing exchanges make the most sense for Robo-Tech and why? d. Once Robo-Tech has sold its shares to the public does it care whether capital markets are efficient? In other words, how does market efficiency affect Robo-Tech?
Answer:
The overview of the offer problem is listed in the segment below on the explanation.
Explanation:
Becoming a publicly traded business gives access to that information or fund that it wants to expand. Shareholders can receive cash if a payout is not received, without getting the right to refer the organization to bankruptcy proceedings.Making it public gives the business the opportunity to even get a come back through his as well as her hard work. The proprietor can consolidate his and perhaps her business plan by releasing information. In reality, it's hard to evaluate the corporation's worth without making it public.So that the above is the right answer.
Answer:
????
Explanation:
On January 1, 2021, Hoosier Company purchased $940,000 of 10% bonds at face value. The bond market value was $985,000 on December 31, 2021. Required: Prepare the appropriate journal entry on December 31, 2021, to properly value the bonds assuming the bonds are classified as: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Trading securities. Securities available-for-sale. Held-to-maturity securities.
Answer:
1.
Dr Bonds 940,000
Cr Cash 940,000
Dr Fair Value adjustment 45,000
Cr Net Unrealized holding gains & losses 45,000
2.
Dr Fair Value adjustment 45,000
Cr Net Unrealized holding gains & Losses 45,000
3.
Dr Investment in bonds 985,000
Cr Discount on bond investment 45,000
Cr Cash 940,000
Explanation:
Hoosier Company Journal entries
1.
Dr Bonds 940,000
Cr Cash 940,000
Dr Fair Value adjustment 45,000
($985,000-$940,000)
Cr Net Unrealized holding gains & losses 45,000
2.
Dr Fair Value adjustment 45,000
Cr Net Unrealized holding gains & Losses 45,000
3.
Dr Investment in bonds 985,000
Cr Discount on bond investment 45,000
Cr Cash 940,000
Suppose that in April 2023, policymakers undertake the type of policy that is necessary to bring the economy back to the natural level of output, given the scenario just described. In June 2023, exports decrease because Japan implements trade restrictions on goods. Because of the _______ associated with implementing monetary and fiscal policy, the impact of the policymakers' stabilization policy will likely _____________________ once the effects of the policy are fully realized.
Explanation:
Suppose that in April 2023, policymakers undertake the type of policy that is necessary to bring the economy back to the natural level of output, given the scenario just described. In June 2023, exports decrease because Japan implements trade restrictions on goods. Because of the LAGS associated with implementing monetary and fiscal policy, the impact of the policymakers' stabilization policy will likely to push the economy below the poverty line once the effects of the policy are fully realized.
When a certain level of taxation, restrictions, interest rates and barriers are imparted on trade deals and activities by the government then it is called economic policy.
The correct answer for the blanks are:
Blank 1: LAGS
Blank 2: to push the economy below the poverty line
LAGS is the period of time used by the administration or the bank to counter while the state of economical collapses.It is the lag in achieving the financial or the fiscal strategies.The economy during these situations will be below the poverty limit.To learn more about LAGS and the economical crisis follow the link:
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Sweet Acacia uses LIFO inventory costing. At January 1, 2020, inventory was $334,640 at both cost and market value. At December 31, 2020, the inventory was $425,820 at cost and $400,440 at market value. Prepare the necessary December 31 entry under (a) the cost-of-goods-sold method and (b) loss method. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer:
January 1, 2020, inventory was $334,640 at both cost and market value.
December 31, 2020, the inventory was $425,820 at cost and $400,440 at market value.
When using lower of cost or market value, we must record our inventory at whichever is lower. The total loss of inventory value = $425,820 - $400,440 = $25,380.
a) the cost-of-goods-sold method
December 31, adjustments to record loss on inventory's market value.
Dr Cost of goods sold 25,380
Cr Inventory* 25,380
b) loss method
December 31, adjustments to record loss on inventory's market value.
Dr Loss due to decline of inventory to market value 25,380
Cr Inventory* 25,380
*Depending on what account you are told to use (instead of inventory account) you might be required to use the Allowance to reduce inventory to market value account.
What are ethics? How do they apply to the hospitality and tourism industry?
A company produces a single product. Last year, fixed manufacturing overhead was $30,000, variable production costs were $48,000, fixed selling and administration costs were $20,000, and variable selling administrative expenses were $9,600. There was no beginning inventory. During the year, 3,000 units were produced and 2,400 units were sold at a price of $40 per unit. Under variable costing, net operating income would be
Answer:
Net operating income= (2,000)
Explanation:
Giving the following information:
fixed manufacturing overhead was $30,000
variable production costs were $48,000
fixed selling and administration costs were $20,000
variable selling administrative expenses were $9,600.
During the year, 3,000 units were produced and 2,400 units were sold for $40 per unit.
First, we need to calculate the unitary product variable cost:
Unitary product cost= 48,000/3,000= $16
Income statement:
Sales= 2,400*40= 96,000
Total variable cost= (2,400*16) + 9,600= (48,000)
Contribution margin= 48,000
fixed manufacturing overhead= (30,000)
fixed selling and administration costs were= (20,000)
Net operating income= (2,000)
g Based on the Keynesian model, one reason to support government spending increases over tax cuts as a tool for stimulating the economy is: Group of answer choices the government-spending multiplier is smaller than the tax multiplier. the government-spending multiplier is larger than the tax multiplier. tax cuts do not cause the budget deficit to increase. increases in government spending do not cause the budget deficit to increase.
Answer:
The answer is: The multiplier of public spending is greater than the tax multiplier.
Explanation:
Unemployment is caused by insufficient global demand. Therefore, to combat unemployment, aggregate demand (Da) will have to be increased, and for this, according to Keynes' formula, the following components must be acted on:
-Increase demand for consumer goods (C)
To stimulate consumption, taxes will have to be reduced, thus causing an increase in the disposable income of families.
-Increase the demand for investment goods (I)
This increase will be achieved by reducing the cost of money; in other words, lowering interest rates, thus encouraging companies to invest.
-Increase public sector demand (G)
It comes from the increase in public spending by the State (more roads, more hospitals).
-Increase the demand of international markets (X-M)
To promote exports, the exchange rate will have to be reduced. Increasing exports boosts domestic production.
Stefani Company has gathered the following information about its product. Direct materials: Each unit of product contains 3.90 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 1.10 pounds. Materials cost $4 per pound, but Stefani always takes the 2.00% cash discount all of its suppliers offer. Freight costs average $0.40 per pound. Direct labor. Each unit requires 1.60 hours of labor. Setup, cleanup, and downtime average 0.10 hours per unit. The average hourly pay rate of Stefani’s employees is $10.90. Payroll taxes and fringe benefits are an additional $3.20 per hour. Manufacturing overhead. Overhead is applied at a rate of $7.60 per direct labor hour. Compute Stefani’s total standard cost per unit
Answer:
$58.49 per unit
Explanation:
According to the scenario, computation of the given data are as follow:-
We can calculate the total standard cost by using following formula:-
Material Cost Per Unit = Material Cost × (1 - Cash Discount Rate) + Freight Average Cost
= $4 × (1 - 0.02) + .40
= $4 × 0.98 + .40
= $4.32 per pound
Material Used Per Unit = Each Unit Product Contain Material + Average Waste and Spoilage Per Unit Produced
= 3.90 + 1.10
= 5
Direct Material Cost= Material Cost Per Unit × Material Used Per Unit
= $4.32 × 5
= $21.6 per unit
Cost Per hour = Average hour Pay Rate + Payroll Taxes and Fringe Benefits Cost
= $10.90 + $3.20
= $14.1
Direct Labor hour = Cost Per hour × Each Unit Required hour
= $14.1 × (1.60 + 0.10)
= $14.1 × 1.70
= $23.97 per unit
Manufacturing Overhead
= Overhead Applied Rate Per Direct Labor hour × Each Unit Required Hour
= $7.60 × (1.60 + 0.10)
= $7.60 × 1.70
= $12.92 per unit
Total Standard Cost Per Unit = Direct Material Cost + Direct Labor Cost + Manufacturing Overhead
= $21.6 + $23.97 + $12.92
= $58.49 per unit
The Computation of Stefani's total standard cost per unit will give result of $58.49 per unit.
Total Standard Cost
To Calculate Total Standard Cost we need to add Direct Material Cost, Direct Labor Cost and Manufacturing Overhead.
A. Direct Material Cost = Material Cost Per Unit × Material Used Per Unit
Material Cost Per Unit = Material Cost × (1 - Cash Discount Rate) + Freight Average Cost
= $4 × (1 - 0.02) + .40
= $4.32 per pound.
Material Used Per Unit = Each Unit Product Contain Material + Average Waste and Spoilage Per Unit Produced
= 3.90 + 1.10
= $5
Direct Material Cost = $4.32 × 5 = $21.6 per unit.
B. Direct Labor Cost
It equals to Cost Per hour × Each Unit Required hour.
Cost Per hour = Average hour Pay Rate + Payroll Taxes and Fringe Benefits Cost
= $10.90 + $3.20
= $14.1
Direct Labor Cost = $14.1 × (1.60 + 0.10) = $23.97 per unit
C. Manufacturing Overhead
It equals to Overhead Applied Rate Per Direct Labor hour × Each Unit Required Hour
= $7.60 × (1.60 + 0.10)
= $12.92 per unit.
Total Standard Cost Per Unit = A + B + C = $21.6 + $23.97 + $12.92
= $58.49 per unit
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A company sold $12,000 worth of bicycles with an extended warranty. The company’s experience is that warranty expense averages 2% of sales. The current period’s entry to record the warranty expense is: Multiple Choice Debit Warranty Expense $240; credit Cash $240. Debit Prepaid Warranties $240; credit Warranty Expense $240. Debit Estimated Warranty Liability $240; credit Cash $240. Debit Sales Allowances $240; credit Estimated Warranty Liability $240. Debit Warranty Expense $240; credit Estimated Warranty Liability $240.
Answer:
Debit Warranty Expense $240; credit Estimated Warranty Liability $240.
Explanation:
The Journal entry is shown below:-
Warranty expenses Dr, $240
To Estimated warranty liability $240
(Being warranty expense is recorded)
When the company sells warranty items, the warranty expenses & warranty liability will only be considered in the selling year.
Working note:-
Warranty expenses & Estimated warranty liability to be recognize = Sales × Estimated percentage of warranty work
= $12,000 × 2%
= $240
The current period’s entry to record the warranty expense is Debit Warranty Expense $240; credit Estimated Warranty Liability $240.
The Journal entry is as below:-
Warranty expenses Dr, $240 (2% of $12,000)
To Estimated warranty liability $240
(Being warranty expense is recorded)
Therefore we can conclude that The current period’s entry to record the warranty expense is Debit Warranty Expense $240; credit Estimated Warranty Liability $240.
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Aquatic Equipment Corporation decided to switch from the LIFO method of costing inventories to the FIFO method at the beginning of 2021. The inventory as reported at the end of 2020 using LIFO would have been $59,000 higher using FIFO. Retained earnings at the end of 2020 was reported as $770,000 (reflecting the LIFO method). The tax rate is 35%. Required: 1. Calculate the balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years. 2. Prepare the journal entry at the beginning of 2021 to record the change in accounting principle.
Answer:
1. The balance in retained earnings at the time of the change is $808,350
2. The journal entry at the beginning of 2021 to record the change in accounting principle woud be as follows:
Inventoty $59,000
Retained Earnings $38,350
Tax Payable $20,650
Explanation:
1. In order to calculate the balance in retained earnings at the time of the change (beginning of 2021) as it would have been reported if FIFO had been used in prior years we would have to make the following calculation:
balance in retained earnings at the time of the change=Begining Retained earnings of 2021+Adjusted net income
Adjusted net income=Ending inventory higher by amount×(1-tax rate)
Adjusted net income=$59,000×(1-0.35)
Adjusted net income=$38,350
balance in retained earnings at the time of the change=$770,000+$38,350
balance in retained earnings at the time of the change=$808,350
2. The journal entry at the beginning of 2021 to record the change in accounting principle woud be as follows:
Inventoty $59,000
Retained Earnings $38,350
Tax Payable $20,650= $59,000×0.35
The corporate charter of Andromeda Co. authorized the issuance of 21 million, $1 par common shares. During 2021, its first year of operations, Andromeda had the following transactions: January 1 sold 6 million shares at $26 per share June 3 purchased 13 million shares of treasury stock at $29 per share December 28 sold the 4 million shares of treasury stock at $31 per share What amount should Andromeda report as additional paid-in capital in its December 31, 2021, balance sheet
Answer:
$158 million
Explanation:
The computation of total additional paid in capital is shown below:-
Paid in capital in excess of par value-Common Stock = ($26 - 1) × 6 million
= 25 × 6 million
= $150 million
Paid in capital from sale of treasury Stock = ($31 - $29) × 4 million
= $8 million
Total additional paid in capital = Paid in capital in excess of par value-Common Stock + Paid in capital from sale of treasury Stock
= $150 million + $8 million
= $158 million
So, for computing the total additional paid in capital we simply applied the above formula.
The following information relates to the pension plan for the employees of Turner Co.: 1/1/20 12/31/20 12/31/21 Projected benefit obligation 9,765,000 10,458,000 14,007,000 Fair value of plan assets 8,925,000 10,920,000 12,054,000 AOCI – net (gain) or loss -0- (1,512,000) (1,680,000) Settlement rate (for year) 11% 11% Expected rate of return (for year) 8% 7% Turner estimates that the average remaining service life is 16 years. Turner's contribution was $1,323,000 in 2021 and benefits paid to retired employees was $987,000. The amount of AOCI (net gain) amortized in 2021 is
Answer:
The amount of AOCI (net gain) amortized in 2021 is $26,250
Explanation:
In order to calculate the calculate the amount of AOCI (net gain) amortized in 2021 we would have to use the following formula:
amount of AOCI (net gain) amortized in 2021=(AOCI net gain 12/31/20-Corridor amount for 2021)/Average remaining service life
AOCI net gain 12/31/20=$1,512,000
Corridor amount for 2021=$1,092,000=10,920,000*10%
Average remaining service life=16
Therefore, AOCI (net gain) amortized in 2021=($1,512,000-$1,092,000)/16
AOCI (net gain) amortized in 2021=$26,250
A transferminuspricing method leads to goal congruence when ________. A. managers act in their own best interest and the decision is in the longminusterm best interest of the company B. there is a low degree of centralization C. managers do not act for their own best interest and work for the longminusterm best interest of the manager's subunit D. there is a price difference in different markets due to market inefficiencies
Answer:
The correct answer is the option A: managers act in their own best interest and the decision in in the long-term.
Explanation:
To begin with, a transfer-pricing is a method used in the companies in order to achieve a sale from a product between one subsidiary to another within a company and is commonly used in situations where the subsidiaries of a parent company are measured as separate profit centers. And regarding the price, the manager of the subsidiary treats it the same way as it would be a sale of a product outside of the company. That is why that this method leads to the goal when the managers act in their own best interest.
P5-18 Calculating deposit needed. You put $10,000 in an account earning 5%. After 3 years, you make another deposit into the same account. Four years later (7 years after your original $10,000 deposit), the account balance is $20,000. What was the amount of the deposit at the end of year 3
Answer:
$4877.80
Explanation:
The computation of amount of the deposit at the end of year 3 is shown below:-
Future value = Present value × (1 + Rate of interest ÷ 100)^number of years
$20,000 = 10,000 × (1 + 5 ÷ 100)^7 + Deposit at end of year 3 × (1 + 5 ÷ 100)^4
$20,000 = 10,000 × (1.05)^7 + Deposit at end of year 3 × (1.05)^4
$20,000 = 14071.00423 + Deposit at end of year 3 × (1.05)^4
Deposit at end of year 3 = ($20,000 - 14071.00423 ) ÷ (1.05)^4
= $5928.995773 ÷ 1.21550625
= $4877.799496
or
= $4,877.80
We simply applied the above formula to find out the amount of deposit at the year 3 end
Foreman Mining purchased land containing a copper deposit for $2,640,000 on January 7, 2021. The company expects to mine 770,000 tons of copper over the next 10 years, and the land is expected to have a residual value of $1,408,000. The company has also purchased mining equipment for $570,000 that will be used only at this site over the 10 years with an estimated residual value of $54,100. By the end of the first year, the company has mined and sold 61,000 tons of copper. What is the cost attributed to copper inventory for 2021, assuming the company uses the units-of-production method?
Answer:
$138,470
Explanation:
cost of mine = $2,640,000
residual value of the land = $1,408,000
cost of equipment = $570,000
residual value = $54,100
it should contain 770,000 tons of copper
units of production depreciation method:
depreciation of mine = ($2,640,000 - $1,408,000) / 770,000 tons of copper = $1.60 per ton of copperdepreciation of equipment = ($570,000 - $54,100) / 770,000 tons of copper = $0.67 per ton of coppertotal depreciation per ton of copper = $1.60 + $0.67 = $2.27since 61,000 tons were extracted, then the depreciation expense = 61,000 x $2.27 = $138,470
Information on Carney Company's fixed overhead costs follows: Overhead applied $ 361,200 Actual overhead 387,300 Budgeted overhead 372,000 Required: What are the fixed overhead price and production volume variances? (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
Answer:
The Fixed overhead price is "U" (unfavorable) and the The fixed overhead production volume is "U" (unfavorable)
Explanation:
Solution
Given that:
Fixed overhead price Variance is computed as:
Fixed overhead price Variance = Actual - Budgeted
= 387,300 - 372,000
= 15,300 U
Thus,
The Fixed overhead production volume variance is computed as:
Fixed overhead production volume variance = = Budgeted - applied
= 372,000 - 361,200
= 10,800 U
All of the following statements about the geography of meat production in the United States and Canada are true EXCEPT:
O Industrial farmers are raising ever-increasing numbers of animals on their farms.
O Animal slaughtering and meat-processing activities are dominated by a few large corporations.
O The development of the poultry industry has made chicken the least expensive kind of meat consumed in the United States and Canada.
O Fast-food restaurants have created a demand for increased standardization and homogeneity of animals raised for meat.
O Consumer demand for organic foods has significantly decreased the amount of meat produced by most agribusiness firms.
Answer:
All of the following statements about the geography of meat production in the United States and Canada are true EXCEPT: Consumer demand for organic foods has significantly decreased the amount of meat produced by most agribusiness firms.
Explanation:
Organic foods are grown without the use of synthetic additives like fertilizer and pesticides for plants, antibiotics and growth hormones for animals.
Consumer demand for organic products due to its health benefits has not significantly decreased the amount of meat produced by most agribusiness firms. Instead, it has created another lucrative business niche for meat production corporations.
Organic foods are now being produced to meet the demand for it along side with those that are not organic.
There is however a higher charge associated with organic foods.
Answer
Consumer demand for organic foods has significantly decreased the amount of meat produced by most agribusiness firms .
Explanation:
Financial statement data for the years ended December 31 for Parker Corporation are as follows: Current Year Prior Year Sales $2,595,600 $2,409,498 Fixed assets (net): Beginning of year $901,070 $820,000 End of year 829,330 901,070 a. Determine the fixed asset turnover ratio for the current and prior years. Round your answers to one decimal place. Current Year: Prior Year: b. Does the change in fixed asset turnover ratio from the prior year to the current year indicate a favorable or unfavorable trend
Answer:
we need to calculate the Average Fixed assets for both the periods.
Average Fixed Assets = (Fixed Assets at the beginning + Fixed assets at the ending period)/2
Current Year = ($901070+829330)/2
= 1730400/2
=$865200
Prior Year = $820000+901070
= 1721070/2
= $860535
Fixed Assets Turnover = Sales/Average Fixed Assets
Current year = $2595600/865200
= 3
Prior Year = $2409498/860535
= 2.8
b) There is an increase in the Fixed asset turnover which indicates an increase in efficiency of using fixed assets to generate sales.
Answer:
a. Current year 1.5 Prior year 1.4
b. Yes it indicates a favorable trend as it shows that sales of $1.50 was generated for every $1 invested in current year as against $1.40 for every $1 invested in prior year.
Explanation:
Fixed Asset turnover is the ratio of revenue to average Fixed assets of a company.
It is a financial indicator that shows how much revenue a company generates in an accounting period for each $ 1 invested in assets (fixed asset in this case).
Average assets in the
current year
= $901,070 + $829,330
= $1,730,400
Prior year
= $820,000 + $901,070
= $1,721,070
As such fixed assets turnover for
current year
= $2,595,600/$1,730,400
= 1.5
prior year
= $2,409,498/$1,721,070
= 1.4
