Answer:
2020:
Sales revenue = Net Sales + Sales returns
= 345,615 + 13,790
= $359,405
Freight-In = Cost of goods sold - Beginning inventory - Purchases + Purchase returns + Ending inventory
= 252,735 - 34,400 - 260,690 + 43,065 + 7,410
= $8,120
2021:
Beginning inventory = Ending inventory 2020 = $43,065
Gross Profit on sales = Net sales - Cost of goods sold
= 396,103 - 292,523
= $103,580
Assume the following: The standard price per pound is $2.00. The standard quantity of pounds allowed per unit of finished goods is 4 pounds. The actual quantity of materials purchased and used in production is 50,800 pounds. The actual purchase price per pound of materials was $2.20. The company produced 13,000 units of finished goods during the period. What is the materials price variance
Answer:
Direct material price variance =$10,160 unfavorable
Explanation:
Direct material price variance occurs when the actual quantity of materials are purchased at an actual price per unit higher or lower than the standard price.
Direct material price variance $
50,800 pounds should have cost (50,800× $2) = 101,600
but did cost (50,800× $2.20) = 111,760
Direct material price variance 10,160 unfavorable
Direct material price variance =$10,160 unfavorable
The materials price variance is $10,160 Unfavorable.
The difference between the standard cost and actual cost for the purchased actual quantity of material is the direct material price variance
The formulae for the direct Materials price variance is (Standard price – Actual price) * Actual quantity purchasedDirect Materials price variance = ($2.00 per pound – $2.20per pound) * 50800 pounds
Direct Materials price variance = ($0.20 * 50,800 pounds) Unfavorable
Direct Materials price variance = $10,160 Unfavorable
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Round Hammer is comparing two different capital structures: An all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 175,000 shares of stock outstanding. Under Plan II, there would be 125,000 shares of stock outstanding and $2.23 million in debt outstanding. The interest rate on the debt is 8 percent and there are no taxes.
a. Use M&M Proposition I to find the price per share. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. What is the value of the firm under each of the two proposed plans? (Do not round intermediate calculations and round your answers to the nearest whole dollar amount, e.g., 32.)
Answer:
A) total debt = $2,230,000 and it represents 175,000 - 125,000 = 50,000 outstanding shares
price per share = $2,230,000 / 50,000 = $44.60 per share
B) enterprise value = 175,000 x $44.60 = $7,805,000
According to M&M proposition I, the enterprise value is the same with or without any outstanding debt. So the company's value is the same for both alternatives.
You are getting paid biweekly at the rate of $12 per hour. Calculate your net pay, the gross pay, and every deduction applicable utilizing the image above for reference.
Answer:
i need to quit that job if i'm only getting payed 12 bucks an hour hell i need a better job....
Explanation:
Journalizing Sales Transactions Enter the following transactions in a general journal. Use a 6% sales tax rate. May 1 Sold merchandise on account to J. Adams, $2,000 plus sales tax. Sale No. 488. 4 Sold merchandise on account to B. Clark, $1,800 plus sales tax. Sale No. 489. 8 Sold merchandise on account to A. Duck, $1,500 plus sales tax. Sale No. 490. 11 Sold merchandise on account to E. Hill, $1,950 plus sales tax. Sale No. 491. If an amount box does not require an entry, leave it blank.
Answer:
See the journal entries below.
Explanation:
The journal entries will look as follows:
Date Description Debit ($) (Credit)
May 1 Accounts receivable - J. Adams 2,120
Sales 2,000
Sales tax payable (6% * $2,000) 120
(To record Sale No. 488.)
May 4 Accounts receivable - B. Clark 1,908
Sales 1,800
Sales tax payable (6% * $1,800) 108
(To record Sale No. 489.)
May 8 Accounts receivable - A. Duck 1,590
Sales 1,500
Sales tax payable (6% * $1,500) 90
(To record Sale No. 490.)
May 11 Accounts receivable - E. Hill 2,067
Sales 1,950
Sales tax payable (6% * $1,950) 117
(To record Sale No. 491.)
What is a factor that does NOT go into an economic analysis?
1. marginal analysis
2. societal concerns
3 ethical concerns
4 sunk costs
All of the following statements are true regarding the periodic inventory system except Under the periodic system, a company uses separate accounts to record freight costs, returns, and discounts. Using the periodic inventory system affects the balance sheet contents differently than when the perpetual system is used. Under the periodic inventory system, the balance of cost of goods sold is calculated at the end of the period. Under the periodic inventory system, the balance in ending inventory is calculated at the end of the period.
Answer:
Using the periodic inventory system affects the balance sheet contents differently than when the perpetual system is used
Explanation:
Periodic inventory system can be regarded as a method used in inventory valuation for the purpose of
financial reporting whereby physical count of the inventory is carried out at specific intervals. There is no effort made in keeping up-to-date records patterning the cost of goods sold as well as inventory under this system. It should be noted that these followings as regards to periodic inventory system
✓ Under the periodic system, a company uses separate accounts to record freight costs, returns, and discounts.
✓Under the periodic inventory system, the balance of cost of goods sold is calculated at the end of the period. ✓Under the periodic inventory system, the balance in ending inventory is calculated at the end of the period.
The ink-jet printing division of Environmental Printing has grown tremendously in recent years. Assume the following transactions related to the ink-jet division occur during the year ended December 31, 2018
1. Environmental Printing is being sued for $10.7 million by Addamax. Plaintiff alleges that the defendants formed an unlawful joint venture and drove it out of business. The case is expected to go to trial later this year. The likelihood of payment is reasonably possible.
2. Environmental Printing is the planiffin an $8.7 million lawsuit filed against a competitor in the high-end color-printer market. Environmental Printing expects to win the case and be awarded between $6.2 and $8.7 million.
3. Environmental Printing recently became aware of a design flaw in one of its ink-jet printers. A product recall appears probable. Such an action would likely cost the company between $470,000 and $870,000.
Answer:
1. No journal entry required
2. No journal entry required
3 Dr Loss $470,000
Cr Contingent liability $470,000
Explanation:
Preparation of the journal entry to Record any amounts as a result of each of these contingencies
1. Based on the information given we were told that The likelihood of the payment is reasonably possible which means that contingent liability amount was not recognized and therefore NO JOURNAL ENTRY IS REQUIRED
No journal entry required
2. Based on the information given we were told that Environmental Printing was expecting to win the case and be awarded the cash amount involved which means NO JOURNAL ENTRY IS REQUIRED reason been the CONTINGENT GAIN will not be recognized until the amount is received.
No journal entry required
3. Contingent liability was recorded because the payment is reasonably possible and Estimated.
Dr Loss $470,000
Cr Contingent liability $470,000
According to the video, an interactive website needs to be able to do what things? Check all that apply. invite people to provide information remove unwanted viewers send information, products, and services automatically play videos process payments send viewers to other websites
Answer:
A,C,E
Explanation:
Answer:
A,C,E
Explanation:
Stockholders of Hudson Enterprises recently received an annual dividend of $2.50 per share. Three analysts are trying to determine the value of this stock based on expected future dividends. Each analyst uses a required return of 14%. Use appropriate dividend valuation models to find the value of Hudson stock under each of the following sets of assumptions:
a. Analyst A assumes dividends will remain constant at $2.50 for the indefinite future. Show D0, D1, r, g and Analyst A's price.
b. Analyst B assumes dividends will grow at a constant rate of 7% per year for the indefinite future. Show D0, D1, r, g and Analyst B's price.
c. Analyst C assumes dividends will grow at 14% for the next 2 years and will thereafter grow at a constant rate of 7% for the indefinite future. Show D0, D1, D2, D3, r, g and Analyst C's price.
d. Analyst D uses the market multiple approach to value a company's stock. Hudson has had an average P/E of 15 and an average P/S of 2 over the last few years. Earnings per share of $3 and sales per share of $20 are forecast for next year. What is Analyst D's price based on earnings? Based on Sales?
Lewis Co. reports the following results for May. Prepare a flexible budget report showing variances between budgeted and actual results.
Budgeted Actual
Sales 950 per unit $1,470,000
Variable expenses 380 per unit 588,000
Fixed expenses (total) $144,500 135000
Units produced and sold 1,530 1,330
List variable and fixed expenses separately.
Answer:
See below
Explanation:
Variance
Sales $1,263,500 $1,470,000 $206,500 Favourable
Less:
Variable expenses ($505,400) ($588,000) $82,600 Unfavorable
Contribution $758,100 $882,000 $123,900 Favourable
Less:
Fixed cost ($144,500) ($135,000) Favourable
Income(loss) $613,600 $747,000 $133,400 Unfavourable
Michelle is an active participant in the rental condominium property she owns. During the year, the property generates a ($17,500) loss; however, Michelle has sufficient tax basis and at-risk amounts to absorb the loss. If Michelle has $120,000 of salary, $10,500 of long-term capital gains, $3,500 of dividends, and no additional sources of income or deductions, how much loss can Michelle deduct?
Answer: $8,000
Explanation:
A special rule allows Michelle to classify up to $25,000 as losses against her nonpassive income.
If Michelle's modified adjusted gross income (MAGI) exceeds $100,000 however, the amount that exceeds the $100,000 will be reduced by 50% and deducted from the exemption allowed.
Loss deduction = Exemption allowed - [(Nonpassive income - MAGI limit) * 50%)
= 25,000 - [ (120,000 + 10,500 + 3,500 - 100,000) * 50%]
= $8,000
The following information pertains to Sandhill Company.
1. Cash balance per books, August 31, $7,374.
2. Cash balance per bank, August 31, $7,338.
3. Outstanding checks, August 31, $708.
4. August bank service charge not recorded by the depositor $60.
5. Deposits in transit, August 31, $3,710.
In addition, $3,026 collected for Sandhill Company in August by the bank through electronic funds transfer. The accounts receivable collection has not been recorded Sandhill Company.
1. Prepare a bank reconciliation at August 31, 2022. (List items that increase balance as per bank & books first.)
CULLUMBER COMPANY
Bank Reconciliation
2. Journalize the adjusting entries at August 31 on the books of Cullumber Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
July 31 (To record electronic funds transfer received by bank)
July 31 (To record bank service charge)
Answer:
Sandhill Company
Bank Reconciliation Statement for August
$
Cash balance per books 7374
Outstanding checks 708
August bank service charge (60)
Deposits in transit (3710)
Electronic funds transfer 3026
Balance per bank 7338
Adjusting entries
August bank service charge
Dr Bank charge $60
Cr Cash account $60
Being entries to record the bank charge for August
Electronic funds transfer
Dr Cash Account $3026
Cr Accounts receivable $3026
Being entries to record cash received from a customer
Explanation:
The bank reconciliation statement identifies transactions that have been correctly recorded by the bank but are yet to be correctly recorded in the books (if recorded).
Considering the given transactions;
Outstanding checks have been deducted from the cash book but are yet to be deducted from the bank.
The bank charge has been deducted from the bank balance but is yet to be recorded in the cash book.
Deposits in transit has been added to the cash book balance but is yet to be added to the bank balance hence it is deducted from the cash book balance to reconcile it to the bank balance.
Electronic funds transfer has been added to the bank balance and will be added to the cash book balance.
Only the bank charge and electronic transfer are yet to be adjusted for in the books hence adjusting entries are required for these 2 items.
Calculate free cash flow for 2017 for Monarch Textiles, Inc., based on the financial information that follows. Assume that all current liabilities are non-interest-bearing liabilities and that no fixed assets were sold or disposed of during 2017. (Enter your answer in 1000s.) Monarch Textiles, Inc. ($ thousands) Income statement Selected balance sheet items 2017 2016 2017 Sales 1,580 Current assets 460 640 Cost of sales 860 Net fixed assets 164 328 Operating expenses 180 Current liabilities 280 360 Depreciation 82 Interest expense 50 Earnings before taxes 408.00 Tax 163.20 Net income 244.80
Answer:
See below
Explanation:
Computation of free cash flow for Monach textiles, 2017
EBIT = EBT + Interest expense EBIT
EBIT = $408 + $50
EBIT = $458
Tax rate = Tax / EBT
Tax rate = $163.20 / $408
Tax rate = 0.4 = 40%
Operating cash flow = EBIT × (1 - Tax rate) + Depreciation - Change in net working capital - Capital expenditure
= $458 × (1 - 0.4) + $82 - ($640 - $360) - ($460 - $280)
= $274.8 + $82 - $280 - $180
= $274.8 + $92 - $100
= $256.8
Schweitzer realized that in many cases individuals could only accomplish direct human service in collaboration with official organization. What he wanted was: to help fund such organizations. to be a leader in such organizations. an absolutely personal and independent activity. to increase the number of official organizations dedicated to direct human service.
Answer: an absolutely personal and independent activity
Explanation:
Since Schweitzer realized that direct human service can only be accomplished when one collaborates with an official organization, this shows that he wanted to be an absolutely personal and independent activity.
In such case, he wants an activity that will be free from the outside control. Other options are wrong as he wasn't really interested in funding of organizations, or increasing the number of official organizations that are dedicated to direct human service.
Eco Cycle, an eco-friendly bicycle manufacturer has developed a new product known as Green Ride. Green Ride is a stationary bicycle for home use which generates power for electronics and household appliances, such as televisions, video game consoles, dishwashers, and washing machines. Given the recent shift toward sustainable living, renewable energy sources, and a focus on positively impacting climate change, Eco Cycle expects this product to do well in the market. While the company knows that all consumers follow a similar adoption process for products, not all consumers follow it at the same time. In one or more fully formed paragraphs, identify each of the five types of adopters and explain in detail the characteristics of each type of adopter for Eco Cycle and the Green Ride.
Answer:
Explanation:
The Green Ride is an ecologically friendly bicycle product from Eco-Cycle. It is to be utilized at home to produce power for gadgets and family things in this way giving an inexhaustible wellspring of energy.
The milestone book " Diffusion of Innovations" by sociologist Everett Rogers in 1962 originally sorted the adopter types premise on specific attributes as recorded beneath:
1) Innovators: These arrangement of individuals receive new innovation or product as they are recently dispatched. This arrangement of individuals are prepared to face challenges and they are the boldest. For this situation, some corporates may get intrigued to evaluate the Green Ride alternative to perceive how it tends to be utilized to save cost on the force front.
2) Early Adopters: This arrangement of individuals make trends and need to see them on the ball, subsequently they will become the early adopters. For this situation, individuals who are lethargic towards open-air exercises will get their hands on this bicycle as it is locally (home) established and be the early adopter of this product.
3) Early Majority: These arrangements of individuals settle on choices dependent on utilities and the useful benefits of the product. For this situation, everyone who is worried about the use and benefits of Green Ride will get input from Early Adopters and can continue likewise.
4) Late Majority: This arrangement of individuals imparts a few qualities to the Early Majority set of individuals yet they are generally careful prior to submission. For this situation, youngsters may not get intrigued to utilize a bicycle which is kept to Indoors as it were.
5) Laggards: These arrangements of individuals are delayed to adjust to new innovation or product. They will in general embrace just when they are constrained. For this situation, the arrangement of individuals who are customary bicycle clients won't be prepared to acknowledge this new product except if compelled to do as such because of the limited development during circumstances such as the present.
is Company uses an ABC system. Which of the following statements is/are correct with respect to ABC? I. All cost allocation bases used in ABC systems are cost drivers. II. ABC systems are useful in manufacturing, but not in merchandising or service industries. III. ABC systems can eliminate cost distortions because ABC develops cost drivers that have a cause-and-effect relationship with the activities performed.
Answer:
I. All cost allocation bases used in ABC systems are cost drivers.
III. ABC systems can eliminate cost distortions because ABC develops cost drivers that have a cause-and-effect relationship with the activities performed.
Explanation:
I. is TRUE since the basis of ABC costing is determining, quantifying, and using cost drivers to allocate overhead costs.
III, is TRUE since the advantage of ABC costing is allocating costs based on cause and effect relationships.
II. ABC systems are useful in manufacturing, but not in merchandising or service industries. ⇒ FALSE
ABC costing can also be used for merchandising and service industries, although, it is mostly used in manufacturing businesses.The following information describes production activities of Mercer Manufacturing for the year.
Actual direct materials used 31,000 1bs. at $5.80 per lb
Actual direct labor used 10,600 hours for a total of $217,300
Actual units produced . 63,000
Budgeted standards for each unit produced are 0.50 pounds of direct material at $5.75 per pound and 10 minutes $21.50 per hour.
AQ = Actual Quantity
SQ=Standard Quantity
AP =Actual Price
SP =Standard Price
AH =Actual Hours
SH= Standard Hours
AR= Actual Rate
SR= Standard Rate
(1) Compute the direct materials price and quantity variances
(2) Compute the direct labor rate and efficiency varian rect labor rate and efficiency variances.
Answer:
Results are below.
Explanation:
To calculate the direct material price and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (5.75 - 5.8)*31,000
Direct material price variance= $1,550 unfavorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (63,000*0.5 - 31,000)*5.75
Direct material quantity variance= $2,875 favorable
To calculate the direct labor rate and efficiency variance, we need to use the following formulas:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (10,500 - 10,600)*21.5
Direct labor time (efficiency) variance= $2,150 unfavorable
Standard quantity= (10/60)*63,000= 10,500 hours
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor rate variance= (21.5 - 20.5)*10,600
Direct labor rate variance= $10,600 favorable
Actual rate= 217,300 / 10,600= $20.5
During January, Luxury Cruise Lines incurs employee salaries of $2.4 million. Withholdings in January are $183,600 for the employee portion of FICA, $360,000 for federal income tax, $150,000 for state income tax, and $24,000 for the employee portion of health insurance (payable to Blue Cross Blue Shield). The company incurs an additional $148,800 for federal and state unemployment tax and $72,000 for the employer portion of health insurance.
Record the employee salary expense, withholdings, and salaries payable.
This is what i have so far please help!
Debit 2Million
Credit FICA 153,000
Credit Income Tax 425000
Credit Account payable ????
Credit Salaries Payable ????
Answer and Explanation:
The journal entry to record the employee salary expense, withholdings, and salaries payable is shown below:
Salaries expense Dr $2,400,000
To Income tax payable ($360,000 + $150,000) $510,000
To FICA tax payable $183,600
To Account payable $24,000
To Salaries payable $1,682,400
(being employee salary expense, withholdings, and salaries payable is recorded)
Here the expenses are debited and payable are credited as it increased the expenses and liabilities
Reuse of large amounts of copyrighted film in a documentary would not constitute a copyright infringement.
a) True
b)False
Answer:
B. False
Explanation:
I majored in Business
Suppose two types of firms wish to borrow in the bond market. Firms of type A are in good financial health and are relatively low risk. The appropriate premium over the risk-free rate for lending to these firms is 2%. Firms of type B are in poor financial health and are relatively high risk. The appropriate premium over the risk-free rate for lending to these firms is 6%. As an investor, you have no other information about these firms except that type A and type B firms exist in equal numbers.
A. At what interest rate would you be willing to lend if the risk-free rate were 6%?
B. Would this market function well? What type of asymmetric information problem does this example illustrate?
Answer:
A. I would be willing to lend at average rate of 10%
B-1. No, this market will not function well.
B-2. This example illustrates an adverse selection problem.
Explanation:
A. At what interest rate would you be willing to lend if the risk-free rate were 6%?
Appropriate interest rate for type A firm bond = Premium over the risk-free rate of Type A firm + Risk-free rate = 2% + 6% = 8%
Appropriate interest rate for type B firm bond = Premium over the risk-free rate of Type B firm + Risk-free rate = 6% + 6% = 12%
Average rate = (Appropriate interest rate for type A firm bond + Appropriate interest rate for type B firm bond) / 2 = (8% + 12%) / 2 = 10%
Since the probability of any of the two firms is equal and I do not have the knowledge of which type of firm they are dealing with, I would be willing to lend at average rate of 10%.
B-1. Would this market function well?
No, this market will not function well.
The reason is that the average rate of 10% is higher than the Appropriate interest rate for type A firm bond of 8%. This would make the type A firm to withdraw from the market and only type B firm will be left in the market.
B-2. What type of asymmetric information problem does this example illustrate?
This example illustrates an adverse selection problem. This is because after type A firm which is a desirable leaves the market, only type B firm which is the less desirable firms will be willing to borrow. This makes the quality of the market to detoriorate.
X Company uses determined that the net realizable value of its accounts receivable at December 31, 2018, based on an aging of the receivables, was $63,500. Additional information is as follows:
Allowance for doubtful account, 1/1/2018 $3,200 Uncollectible accounts written off during 2018 $650 Uncollectible accounts recovered during 2018 $300 Unadjusted accounts receivable at 12/31/2018 $67,200
For the year ended December 31, 2018, Ace's bad debt expense would be:_______.
Answer:
$850
Explanation:
Calculation to determine what Ace's bad debt expense would be:
First step is to calculate Ending Allowance for doubtful account
Ending Allowance for doubtful account=$67,200-$63,500
Ending Allowance for doubtful account=$3,700
Now let calculate what Ace's bad debt expense would be
Using this formula
Bad debt expense=[Ending Allowance for doubtful account-(Beginning Allowance for doubtful account-Uncollectible accounts written off+Uncollectible accounts recovered)]
Let plug in the formula
Bad debt expense=[$3,700-($3,200-$650+$300)]
Bad debt expense=$3,700-$2,850
Bad debt expense=$850
Therefore For the year ended December 31, 2018, Ace's bad debt expense would be:$850
Jake's Sound Systems has 210,000 shares of common stock outstanding at a market price of $36 a share. Last month, Jake's paid an annual dividend in the amount of $1.593 per share. The dividend growth rate is 4%. Jake's also has 6,000 bonds outstanding with a face value of $1,000 per bond. The bonds carry a 7% coupon, pay interest annually, and mature in 4.89 years. The bonds are selling at 99% of face value. The company's tax rate is 34%. What is Jake's weighted average cost of capital
Answer:
WACC = 6.92%
Explanation:
total equity = 210,000 x $36 = $7,560,000,weight of equity = 56%
cost of equity:
36 = 1.65672 / (Re - 4%)
Re = 8.602%
total bonds = $5,940,000, weight of bonds = 44%
bond YTM = 7.24%
after tax cost = 7.24% x 66% = 4.78%
WACC = (.56 x 8.602$) + (.44 x 4.78%) = 4.817 + 2.103 = 6.92%
YTM = (70 + 10/4.89) / (1990/2) = 72.04 / 995 = 7.24%
715
Prepare summary journal entries to record the following transactions and events a through g for a company in its first month of operations.
a. Raw materials purchased on account, $92,000.
b. Direct materials used in production, $40,000. Indirect materials used in production, $25,000.
c. Paid cash for factory payroll, $65,000. Of this total, $45,000 is for direct labor and $20,000 is for indirect labor.
d. Paid cash for other actual overhead costs, $7,750.
e. Applied overhead at the rate of 120% of direct labor cost.
f. Transferred cost of jobs completed to finished goods, $69,000.
g. Jobs that had a cost of $69,000 were sold.
h. Sold jobs on account for $98,000.
Answer:
Journal Entries:
a. Debit Raw materials $92,000
Credit Accounts payable $92,000
To record the purchase of raw materials on account.
b. Debit Work-in-Process $40,000
Debit Manufacturing overhead $25,000
Credit Raw materials $65,000
To record direct and indirect materials.
c. Debit Payroll Expense $65,000
Credit Cash $65,000
To record the payment of payroll.
Debit Work-in-Process $45,000 (direct labor)
Debit Manufacturing overhead $20,000 (indirect labor)
Credit Payroll Expenses $65,000
To record the payment of direct and indirect labor.
d. Debit Manufacturing overhead $7,750
Credit Cash $7,750
To record the payment for other overhead costs.
e. Debit Work-in-Process $54,000
Credit Manufacturing overhead $54,000
To record overhead applied at the rate of 120% of direct labor cost.
f. Debit Finished goods $69,000
Credit Work-in-Process $69,000
To record the transfer of completed jobs to finished goods inventory.
g. Debit Cost of goods sold $69,000
Credit Finished goods $69,000
To record the cost of goods sold.
h. Debit Accounts receivable $98,000
Credit Sales revenue $98,000
To record the sale of goods on account.
Explanation:
a. Raw materials $92,000 Accounts payable $92,000
b. Work-in-Process $40,000 Manufacturing overhead $25,000 Raw materials $65,000
c. Payroll Expense $65,000 Cash $65,000 Work-in-Process $45,000 (direct labor) Manufacturing overhead $20,000 (indirect labor) Payroll Expenses $65,000
d. Manufacturing overhead $7,750 Cash $7,750
e. Work-in-Process $54,000 Manufacturing overhead $54,000 (at the rate of 120% of direct labor cost)
f. Finished goods $69,000 Work-in-Process $69,000
g. Cost of goods sold $69,000 Finished goods $69,000
h. Accounts receivable $98,000 Sales revenue $98,000
Grey Corp owns 100% of Blue Company. On January 1, 2017 Grey sold Blue a machine for $66,000. Immediately prior to the sale, the machine was recorded on Grey's books at a net book value of $25,000. Prior to the sale, Grey was depreciating the machine on a straight-line basis with 9 years of remaining life and no salvage value. Blue plans to adopt the same depreciation assumptions as Grey. What elimination adjustments with respect to this sale must be made to consolidated net income in 2018 (ignoring income tax effects)
Answer:
Journal 1 - Eliminate gain on sale :
Debit : Other Income ($66,000 - $25,000) $41,000
Credit : Machinery $41,000
Journal 2 - Eliminate the unrealized profit from the sale :
Debit : Accumulated depreciation $4,556
Credit : Depreciation $4,556
Explanation:
Grey Corp and Blue Company are in a group of Companies. Grey Corp is the Parent and should prepare Consolidated Financial Statements . Blue Company is a subsidiary (Grey owns more that 50 % of voting rights in Blue Company).
When preparing Consolidated Financial Statements, intragroup transaction must be eliminated. As they happen, a Company trades within its-self that is the reason they should be eliminated.
Concerning the sale of machine by Grey (Parent) to Blue (Subsidiary), we must first eliminate the Income (gain on sale) in Parent as well as the asset that sits in the Subsidiary.
Debit : Other Income ($66,000 - $25,000) $41,000
Credit : Machinery $41,000
Also, we have to eliminate the unrealized profit on the gain of the asset sold.
Debit : Accumulated depreciation $4,556
Credit : Depreciation $4,556
Deprecation calculation :
Deprecation = $41,000 ÷ 9 = $4,556
Last month when Holiday Creations, Inc., sold 41,000 units, total sales were $282,000, total variable expenses were $214,320, and fixed expenses were $36,900. Required: 1. What is the company’s contribution margin (CM) ratio? 2. What is the estimated change in the company’s net operating income if it can increase total sales by $1,700? (Do not round intermediate calculations.)
Answer:
1. Company’s contribution margin (CM) ratio = 24%
2. Estimated change in the company’s net operating income = $408
Explanation:
1. What is the company’s contribution margin (CM) ratio?
Contribution margin (CM) = Total sales - Total variable expenses = $282,000 - $214,320 = $67,680
Contribution margin (CM) ratio = Contribution margin / Total sales = $67,680 / $282,000 = 0.24, or 24%
2. What is the estimated change in the company’s net operating income if it can increase total sales by $1,700? (Do not round intermediate calculations.)
Estimated change in the company’s net operating income = Increase total in sales * Contribution margin (CM) ratio = $1.700 * 24% = $408
Three major transportation segments and a major company within each segment are as follows:
Segment Company Motor carriers YRC Worldwide Inc. (YRCW) Railroads Union Pacific Corporation (UNP) Transportation Arrangement C.H. Robinson Worldwide Inc. (CHRW) YRC Worldwide Union Pacific C.H. Robinson Worldwide Sales $4,832 $21,813 $13,470 Average long-term operating assets 1,016 47,569 1,092
a. Determine the asset turnover for all three companies. Round to two decimal places.
YRC Worldwide ________
Union Pacific _______
C.H. Robinson Worldwide ______
b. Based on your calculations above which of the following statements are correct.
Answer:
Segment Company Motor
a) The asset turnover ratios for all three companies. Round to two decimal places are:
YRC Worldwide ___4.76_____
Union Pacific ___0.46____
C.H. Robinson Worldwide __12.34____
b) Based on the Asset Turnover Ratio computed above, Transportation Arrangement is the most efficient. It outperformed YRC Worldwide and Union Pacific Corporation in deploying assets to generate revenue. The performance of Union Pacific Corporation in comparison is very abysmal.
Explanation:
a) Data and Calculations:
YRC Worldwide Railroads Union Transportation
Inc. (YRCW) Pacific Corporation Arrangement C.H.
(UNP)
Sales $4,832 $21,813 $13,470
Average long-term
operating assets 1,016 47,569 1,092
Asset turnover = Sales/Average operating assets
= 4.76 0.46 12.34
Waterway Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms.
a. Shamrock Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms. 1. Shamrock Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection service contract is $469. The standalone selling price of the tablet is $230 (the cost to Shamrock Company is $157). Shamrock Company sells the Internet access service independently for an upfront payment of $292. On January 2, 2017, Shamrock Company signed 100 contracts, receiving a total of $46,900 in cash.
b. Shamrock Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $574. Shamrock Company provides the 3-year tablet service plan as a separate product with a standalone selling price of $145. Shamrock Company signed 220 contracts for Shamrock Bundle B on July 1, 2017, receiving a total of $126,280 in cash.
Required:
a. Prepare any journal entries to record the revenue arrangement for Headland Bundle A on January 2, 2017, and December 31, 2017.
b. Prepare any journal entries to record the revenue arrangement for Headland Bundle B on July 1, 2017, and December 31, 2017.
Answer:
Waterway or Shamrock Company
Journal Entries:
Bundle A:
Debit Cash $46,900
Credit Tablet Revenue $20,665
Credit Annual Internet Access Revenue $8,745
Credit Deferred Revenue: Internet Access $17,490
To record revenue from Bundle A.
Debit Cost of Sale of Tablets $15,700
Credit Tablet Inventory $15,700
To record the cost of tablets sold.
Bundle B:
Debit Cash $126,280
Credit Tablet Revenue $43,545
Credit Annual Tablet Service Plan $9,151
Credit Annual Internet Access Revenue $18,428
Credit Deferred Revenue: Service Plan $18,300
Credit Deferred Revenue: Internet Access $36,856
To record revenue from Bundle B.
Debit Cost of Sale of Tablets $34,540
Credit Tablet Inventory $34,540
To record the cost of tablets sold.
Explanation:
a) Data and Calculations:
Bundle A contract = $469
Tablet standalone selling price = $230 (Total = $23,000 ($230 * 100)
Cost of tablet = $157 (Total costs of 100 tablets = $15,700)
Internet access service standalone selling price = $292 (Total = $29,200)
Total standalone selling price per bundle = $522 (Total = $52,200)
Contracts signed = 100
Revenue received = $46,900
Revenue from Tablet = $23,000/$52,200 * $46,900 = $20,665
Revenue from Internet Access = $29,200/$52,200 * $46,900 = $26,235
Annual interest access = $8,745 ($26,235/3)
Bundle B contract = $574
Tablet standalone selling price = $230 (Total = $50,640 ($230 * 220)
Cost of tablet = $157 (Total costs = $34,540 ($257 * 220)
3-year Tablet Service Plan standalone selling price = $145 (Total = $31,900 ($145 * 220)
Internet access service standalone selling price = $292 (Total = $64,240 ($292 * 220)
Total standalone selling price per bundle = $667 (Total = $146,740 ($667 * 220)
Contracts signed = 220
Revenue received = $126,200
Revenue from Tablet = $50,600/$146,740 * $126,280 = $43,545
Revenue from 3-year Tablet Service Plan = $31,900/$146,740 * $126,280 = $27,452
Annual revenue = $9,151 ($27,452/3)
Revenue from Internet Access = $64,240/$146,740 * $126,280 = $55,283
Annual revenue from internet access = $18,428 ($55,283/3)
Starbright manufactures child car seats, strollers, and baby swings. Starbright's manufacturing costs are budgeted as follows: Factory utilities: $85,000 Factory foremen salaries: $86,000 Machinery setup costs: $30,000 Total manufacturing overhead: $201,000 The company uses activity-based costing to allocate its manufacturing overhead costs to products based on the following schedule: Overhead Cost Allocation Base Estimated Activity Level Factory Utilities Direct labor-hours 14,500 Factory foremen salaries Machine hours 18,850 Setup costs Number of production runs 137 During the current month, the following levels of activities were incurred: Car Seats Strollers Baby Swings Total Direct Labor Costs $ 41,800 $ 71,250 $ 24,700 $ 137,750 Direct Labor Hours 4,400 7,500 2,600 14,500 Machine Hours 5,450 10,000 3,400 18,850 Production Runs 35 62 40 137 Units Produced 1,100 3,000 970 5,070 What are the factory foremen salaries allocated to Car Seats during the current month
Answer: $24865
Explanation:
The factory foremen salaries allocated to car Seats during the current month will be calculated as:
Factory foremen salaries = $86,000
Factory foremen salaries Machine hours = 18,850
Machine Hours for car seats = 5,450
Therefore, the factory foremen salaries allocated to car Seats during the current month will be:
= (86000 / 18850) × 5450
= $24865
Tomorrow Publications collects magazine subscriptions from customers at the time subscriptions are sold. Subscription revenue is recognized over the term of the subscription. Tomorrow Publications collected $20 million in subscription sales during its first year of operations. At December 31, the average subscription was one-fourth expired. When Tomorrow Publications collects the subscriptions from customers, which of the following account will be credited?
a. Subscriptions Expense.
b. Unearned Subscriptions Revenue.
c. None of the other three answers is correct.
d. Cash
Answer:
b. Unearned Subscriptions Revenue.
Explanation:
In the case when the tomorrow publications wants to collect the subscriptions from customers so the following journal entry to be recorded
Cash Dr $20
To Unearned Subscriptions Revenue $20
(Being collection is recorded)
Here cash is debited as it increased the assets and credited the Unearned Subscriptions Revenue as it also increased the liabilities
Therefore the option b is correct
Teecorp Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Labor $320,000 8,000 hours Gas $36,000 6,000 gallons Invoices $40,000 2,500 invoices Total costs $396,000 The above activities used by their three departments are: Lawn Department Bush Department Plowing Department Labor 2,500 hours 1,200 hours 4,300 hours Gas 1,700 gallons 800 gallons 3,500 gallons Invoices 1,600 invoices 400 invoices 500 invoices How much of the labor cost will be assigned to the Bush Department
Answer:
7000,000
Explanation:
