The transactions listed below are typical of those involving Amalgamated Textiles and American Fashions. Amalgamated is a wholesale merchandiser and American Fashions is a retail merchandiser. Assume all sales of merchandise from Amalgamated to American Fashions are made with terms n/60, and the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended December 31.
a. Amalgamated sold merchandise to American Fashions at a selling price of $270,000. The merchandise had cost Amalgamated $191,000.
b. Two days later, American Fashions returned goods that had been sold to the company at a price of $27,500 and complained to Amalgamated that some of the remaining merchandise differed from what American Fashions had ordered. Amalgamated agreed to give an allowance of $9,000 to American Fashions. The goods returned by American Fashions had cost Amalgamated $19,270
c. Just three days later, American Fashions paid Amalgamated, which settled all amounts owed
Required:
For each of the events (a) through (c), indicate the amount and direction of the effect on Amalgamated Textiles in terms of the following items. (Enter any decreases to account balances with a minus sign.) Prepare the journal entries that Amalgamated Textiles would record. TIP: When using a perpetual inventory system, the seller always makes two journal entries when goods are sold. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer:

Amalgamated Textiles

1. Effects on Items:

a. Assets + (Accounts receivable) $270,000

   Retained earnings + (Sales revenue) $270,000

   Retained earnings - (Cost of goods sold) $191,000

   Assets - (Inventory) $191,000

b. Retained earnings - (Sales returns and allowances) $36,500

   Assets - (Accounts receivable) $36,500

   Assets + (Inventory) $19,270

  Retained earnings + (Cost of goods sold) $19,270

c. Assets + (Cash) $233,500

   Assets - (Accounts receivable) $233,500

2. Journal Entries:

a. Debit Accounts receivable $270,000

Credit Sales revenue $270,000

To record the sale of goods on account.

Debit Cost of goods sold $191,000

Credit Inventory $191,000

To record the cost of goods sold.

b. Debit Sales returns and allowances $36,500

Credit Accounts receivable $36,500

To record the return of goods and allowances given.

Debit Inventory $19,270

Credit Cost of goods sold $19,270

To record the return of goods to inventory.

c. Debit Cash $233,500

Credit Accounts receivable $233,500

To record the receipt of cash from customers on account.

Explanation:

1) Data and Analysis:

a. Accounts receivable $270,000 Sales revenue $270,000

   Cost of goods sold $191,000 Inventory $191,000

b. Sales returns and allowances $36,500 Accounts receivable $36,500

  Inventory $19,270 Cost of goods sold $19,270

c. Cash $233,500 Accounts receivable $233,500

Zolas' Heaters is approached by Ms. Leila, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Zolas' Heaters has excess capacity. The following per unit data apply for sales to regular customers: Direct materials $450.00 Direct manufacturing labor 160.00 Variable manufacturing support 100.00 Fixed manufacturing support 210.00 Total manufacturing costs 920.00 Markup (25% of total manufacturing costs) 230.00 Estimated selling price $1150.00 For Zolas' Heaters, what is the minimum acceptable price of this one-time-only special order

The following cost information pertained to the Violin Division of Stringing Music Co. and was based on monthly demand and sales of 100 units:

Per-Unit Costs Variable production costs:
Direct materials $140
Direct labor 170
Variable factory overhead 80
Fixed production costs:
Depreciation (equipment) 40
Factory rent 68
Other 16
Total production cost $514
Variable selling & administrative costs $24 per unit
Fixed selling & administrative costs $36 per unit

Assume that the Violin Division was evaluating whether or not it would accept a special sales order for 10 violins at $390 per unit. For this purpose, total relevant cost per unit (given the costs stated above) is:

a. $330
b. $342
c. $390
d. $366
e. $354

Following is the stockholders’ equity section of the balance sheet for The Procter & Gamble Company along with selected earnings and dividend data. For simplicity, balances for noncontrolling interests have been left out of income and shareholders' equity information.
$ millions except per share amounts 2014 2013
Net earnings attributable to Procter $10,956 $11,797
& Gamble shareholders
Common dividends 5,883 5,534
Preferred dividends 256 233
Basic net earnings per common share $3.82 $4.12
Diluted net earnings per common share $3.66 $3.93
Shareholders' equity:
Convertible class A preferred stock, $1,195 $1,234
stated value $1 per share
Common stock, stated value $1 per share 4,008 4,008
Additional paid-in capital 63,181 62,405
Treasury stock, at cost (shares held: (69,604) (67,278)
2014--1260.8; 2013--1242.6)
Retained earnings 75,349 70,682
Accumulated other comprehensive (9,333) (2,054)
income/(loss)
Other (761) (996)
Shareholders' equity attributable to $64,035 $68,001
Procter & Gamble shareholders
a. Compute the number of common shares outstanding at the end of each fiscal year. Estimate the average number of shares outstanding during 2014. Round to one decimal place.
2014 million
2013 million
2014 Average million
b. Calculate the average cost per share of the shares held as treasury stock at the end of each fiscal year. Round to two decimal places.
2014
2013
c. In 2014, preferred shareholders elected to convert 40 million shares of preferred stock into common stock. Rather than issue new shares, the company granted 40 million shares held in treasury stock to the preferred shareholders. Prepare a journal entry to illustrate how this transaction would have been recorded. (Hint: use the cost per share for 2013 determined in b.) Enter answers in millions. Round to the nearest million.
Description Debit Credit
Preferred stockTreasury stockAdditional paid-in capital
Additional paid-in capital
Preferred stockTreasury stockAdditional paid-in capital
d. Calculate P&G's return on common equity (ROCE) for fiscal 2014. Round to one decimal place.
2014

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Many commodities have futures markets associated with them. A futures market is a prediction market that aggregates information based on uncertain events that may impact the market, and buyers commit to a financial contract in which they obligate themselves to purchasing a fixed quantity of the asset at a specified price on a certain date. In April, 2019, the national average price of unleaded gasoline was $2.87 per gallon. At the same time, the futures price for a June contract on unleaded gasoline was $2.07 per gallon.
A. The forecasted price in the futures market suggests that unleaded gasoline prices will_____by June of 2019.
B. If the information transmitted in this market is accurate and unbiased, then the predict____the actual price we will see in June.

Suppose you are the money manager of a $5.21 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 320,000 1.50 B 780,000 (0.50) C 1,260,000 1.25 D 2,850,000 0.75 If the market's required rate of return is 10% and the risk-free rate is 5%, what is the fund's required rate of return

Braun Company has one service department and two operating (production) departments. Maintenance Department costs are allocated to the two operating departments based on square feet occupied. Listed below are the operating data for the current period:
Department Direct Expenses Square Feet
Maintenance $52,500 23,000
Milling 94,500 46,000
Assembly 123,400 69,000
The total cost of operating the Assembly Department for the current period is:_____.

Presented below are long-term liability items for Pharoah Company at December 31, 2020. Bonds payable, due 2022 $625,000 Lease liability 60,000 Notes payable, due 2025 70,000 Discount on bonds payable 46,875 Prepare the long-term liabilities section of the balance sheet for Pharoah Company. (Enter account name only and do not provide descriptive information.)

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A company has two open seats, Seat A and Seat B, on its board of directors. There are 6 candidates vying for these 2 positions. There will be a single election to determine the winner of both open seats. As the owner of 100 shares of stock, you will receive one vote per share for each open seat. You decide to cast all 200 of your votes for a single candidate. What is this type of voting called?

a. democratic
b. cumulative
c. straight
d. deferred
e. proxy

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Assume that Simple Co. had credit sales of $280,000 and cost of goods sold of $165,000 for the period. It estimates that 2 percent of credit sales in uncollectible accounts when it uses the percentage of credit sales method and it estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $6,900 when it uses the aging method. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $400.

Required:
Prepare the journal entry to record the end-of-period adjustment for bad debts under the (a) percentage of credit sales method and (b) aging of accounts receivable method.

According to the rule of 70, if a country's real GDP per capita grows at a rate of 2% instead of at a rate of 3%, it would take _____ for that country to double its level of real GDP per capita. a. 35 additional years b. 11.67 additional years c. 23.3 additional years d. 30 additional years e. 15 additional years.

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in managing production worker compensation and expenditures for best practice training, the overriding objective of company managers should be to

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AAA Advertising hires Christopher as a photographer to take photographs of products for AAA’s use in its advertising campaigns. Christopher is to use his own DSLR camera. Christopher will have an office at AAA but only needs to come in 10 hours a week, of his own choosing. Christopher will work under a supervisor who will tell him exactly what photos to take and how many of each product. He will be paid a flat $2,000 salary every other week, regardless of how much work he does. 1) What is Christopher’s employment status with AAA, is he an employee or independent contractor? 2) Discuss each of the applicable factors used to determine whether a worker is an independent contractor or employee.

Tandy Company was issued a charter by the state of Indiana on January 15 of this year. The charter authorized the following:
Common stock, $6 par value, 110,000 shares authorized Preferred stock, 14 percent, par value $6 per share, 4,800 shares authorized During the year, the following transactions took place in the order presented:
A. Sold and issued 20,500 shares of common stock at $12 cash per share.
B. Sold and issued 1,200 shares of preferred stock at $16 cash per share.
C. At the end of the year, the accounts showed net income of $40,900. No dividends were declared.
Required:
Prepare the stockholders’ equity section of the balance sheet at the end of the year.
TANDY, INCORPORATED
Balance Sheet (Partial)
At December 31, this year
Stockholders’ equity:
Contributed capital:
Common stock
Preferred stock
Additional paid-in capital, common stock
Additional paid-in capital, preferred stock
Total contributed capital
Retained earnings
Total stockholders’ equity

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A)$6,770

B) $6,590

C) $7,470

D) $9,400

E) $10,000

Judge made laws are known as

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(2) Compute the equipment’s net book value at the end of the fourth year.
(3) If the equipment is impaired at the end of the fourth year, compute the impairment loss. (If the equipment is not impaired, enter 0.)
(4) Compute the annual depreciation expense

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