Answer:
Date General Ledger Debit Credit
May 24 Accounts Receivable-Old Town Café $18,450
Sales $18,450
Cost of goods sold $11,000
Inventory $11,000
Sept. 30 Cash $6,000
Allowance for Doubtful Accounts $12,450
Accounts Receivable-Old Town Cafe $18,450
Dec. 7 Accounts Receivable-Old Town Cafe $12,450
Allowance for Doubtful Accounts $12,450
Cash $12,450
Accounts Receivable-Old Town Cafe $12,450
Skysong, Inc. compiled the following financial information as of December 31, 2022:
Service revenue $827000
Common stock 181000
Equipment 232000
Operating expenses 748000
Cash 202000
Dividends 64000
Supplies 38000
Accounts payable 113000
Accounts receivable 95000
Retained earnings, 1/1/22 444000
Skysong's retained earnings on December 31, 2022 are:_________
Answer:
$459,000
Explanation:
The computation of the ending retained earning balance is shown below:
Ending retained earning balance is
= Opening retained earning balance + net income - dividend
where
Net income
= Service revenue - operating expenses
= $827,000 - $748,000
= $79,000
Now the ending retained earnings balance is
= $444,000 + $79,000 - $64,000
= $459,000
Abbey Park was organized on April 1, 2016, by Trudy Crawford. Trudy is a good manager but a poor accountant. From the trial balance prepared by a part-time bookkeeper, Trudy prepared the following income statement for the quarter that ended March 31, 2017.
Abbay Park
Income statement
For the quarter ended March 31,2017
Revenues 83000
Rent Revenue
Operating expenses
Advertising expense 4200
Salaries and wages expense 27600
Utilities expense 1500
Depreciation expense 800
Maintenance expense 2800
Total operating expense 36900
Net income 46100
Trudy knew that something was wrong with the statement because net income had never exceeded $20,000 in any one quarter. Knowing that you are an experienced accountant, she asks you to review the income statement and other data. You first look at the trial balance. In addition to the account balances reported in the income statement, the ledger contains these selected balances at March 31, 2017.
Supplies 4500
Prepaid insurance 7200
Notes payable 20000
You then make inquiries and discover the following.
1. Rent revenue includes advanced rentals for summer-month occupancy, $21,000.
2. There were $600 of supplies on hand at March 31.
3. Prepaid insurance resulted from the payment of a 1-year policy on January 1, 2017.
4. The mail on April 1, 2017, brought the following bills: advertising for week of March 24, $110; repairs made March 10, $1,040; and utilities $240.
5. Wage expense totals $290 per day. At March 31, 3 days’ wages have been incurred but not paid.
6. The note payable is a 3-month, 7% note dated January 1, 2017. Instructions With the class divided into groups, answer the following.
(a) Prepare a correct income statement for the quarter ended March 31, 2017.
(b) Explain to Trudy the generally accepted accounting principles that she did not follow in preparing her income statement and their effect on her results.
Answer:
Abbey Park
a) Correct Income Statement for the quarter ended March 31, 2017:
Abbey Park
Income statement
For the quarter ended March 31,2017
Revenue
Rent Revenue $62,000
Operating expenses
Advertising expense 4,310
Salaries and wages expense 28,470
Utilities expense 1,740
Depreciation expense 800
Maintenance expense 3,840
Supplies Expense 3,900
Insurance expense 1,800
Interest expense 350
Total operating expense 45,210
Net income $16,790
b) The generally accepted accounting principles that Trudy did not follow in the preparation of her income statement are the accrual concept and the matching principle. Failure to follow these principles means that the net income will be misstated. The accounts were based on the cash basis instead of the accrual basis of generally accepted accounting principles. This means that records for non-cash transactions were not recognized while some others were recognized based on their cash effects.
Explanation:
a) Income Statement for the quarter ended March 31, 2017:
Abbey Park
Income statement
For the quarter ended March 31,2017
Revenue
Rent Revenue $83,000
Operating expenses
Advertising expense 4,200
Salaries and wages expense 27,600
Utilities expense 1,500
Depreciation expense 800
Maintenance expense 2,800
Total operating expense 36,900
Net income $46,100
Adjustments:
1. Rent Revenue = $62,000 ($83,000 - 21,000)
2. Supplies Expenses $3,900 ($4,500 - 600)
Supplies balance = 600
3. Prepaid Insurance = $5,400 ($7,200 - 1,800)
Insurance expense = $1,800 ($7,200/4)
4. Advertising Expense = $4,310 ($4,200 + 110)
Maintenance Expense = $3,840 ($2,800 + 1,040)
Utilities Expense = $1,740 ($1,500 + 240)
Expenses Payable = $1,390
5. Wages Expenses = $28,470 (27,600 + ($290 * 3))
Wages payable $870
6. Interest Expense = $350 ($20,000 * 7% * 3/12)
Jamie is considering leaving her current job, which pays $75,000 per year, to start a new company that develops applications for smartphones. Based on market research, she can sell about 50,000 units during the first year at a price of $4 per unit. With annual overhead costs and operating expenses amounting to $145,000. Jamie expects a profit margin of 20 percent. This margin is 5 percent larger than that of her largest competitor, Apps. Inc.
a. If Jamie decides to embark on her new venture, What will her accounting cost be during the first year of operation? Her implicit costs? Her opportunity costs?
Accounting costs: $_____
Implicit costs: $_____
Opportunity costs: $_____
b. Suppose that Jamie's estimated selling price is lower than originally projected during the first year. How much revenue would she need in order to earn positive accounting profits? Positive economic profits?
Revenue needed to earn positive accounting profits: $______
Revenue needed to earn positive economic profits:
Answer:
Follows are the solution to the given points:
Explanation:
For point A:
Cost with accounting=The actual manufacturing expenditures or spendings that appear on expensive sports or record of a company= [tex]\$ 145,000[/tex]
[tex]\text{Costs = gross pay} = 50000 \times 4 - 1.2 \times1,45,000 = 26000\\\\{ total \ cost = 120 \% \ of\ 145,000}[/tex]
Cost opportunity=75,000
Total revenue required besides positive accounting benefits=cost of accounting =145000
Income to create positive economic benefits=cost of accounts + implied cost
[tex]= 145000+26000=171000[/tex]
For point B:
Income required to make positive profit in accounts = 145,000 more than the accounting costs
Revenue necessary to earn positive profit = 220,000 more than opportunity cost
Sorter Company purchased equipment for $330,000 on January 2, 2019. The equipment has an estimated service life of 8 years and an estimated residual value of $33,000 . Required: Compute the depreciation expense for 2019 under each of the following methods: Straight-line: $ fill in the blank 1 Sum-of-the-years'-digits: $ fill in the blank 2 Double-declining-balance: $
Answer:
1. Depreciation expense for 2019(Straight-line)= (Cost of the assets - Salvage value) / life of the assets
= ($330000 - $33000)/8
= $37,125
2. Sum-of-the-years'-digits = 1+2+3+4+5+6+7+8 = 36
Depreciation Expense for 2019(Sum-of-the-years'-digits method)
= ($330000 - $33000)*8/36
= $66,000
3. Double-declining-balance depreciation rate = (100/8 years)*2 = 25%
Depreciation Expense for 2019 = 330000*25% = $82,500
Provide examples of each: consumer durable goods, consumer nondurable goods, and services.
Which of the following are consumer durable goods?
a. A new Ford Fiesta
b. Heart surgery
c. A dining room table
d. A jacket
Answer:
Consumer durable goods: cars, departments.
Consumer nondurable goods: canned food, clothes.
Services: cable, internet, energy and water.
And the correct answer is the option A: A new Ford Fiesta.
Explanation:
To begin with, the durable goods in the microeconomics theory are those that do not wear out with one ot two uses, but instead it actually has a long life with multiple uses. It does not mean that those goods stay forever new. Meanwhile the nondurable goods are those that do wear out after one or two uses of the good and the most common example of that is the food and the clothes. Finally, the services are those that the people ask for in the case they want and specific situation to happen to them, like to have water, to have cable and internet, etc.
Diaz Company owns a milling machine that cost $126,500 and has accumulated depreciation of $92,700. Prepare the entry to record the disposal of the milling machine on January 3 under each of the following independent situations. The machine needed extensive repairs, and it was not worth repairing. Diaz disposed of the machine, receiving nothing in return. Diaz sold the machine for $15,900 cash. Diaz sold the machine for $33,800 cash. Diaz sold the machine for $41,200 cash.
Answer:
A. Jan 03
Dr Accumulated depreciation—Milling machine $92,700
Dr Loss on disposal of milling machine $33,800
Cr Milling machine $126,500
B .Jan 03
Dr Cash $15,900
Dr Accumulated depreciation—Milling machine $92,700
Dr Loss on sale of milling machine $17,900
Cr Milling machine $126,500
C. Jan 03
Dr Cash $33,800
Dr Accumulated depreciation—Milling machine $92,700
Cr Milling machine $126,500
Explanation:
Preparation of journal entries
A. Jan 03
Dr Accumulated depreciation—Milling machine $92,700
Dr Loss on disposal of milling machine $33,800
($126,500-$92,700)
Cr Milling machine $126,500
B .Jan 03
Dr Cash $15,900
Dr Accumulated depreciation—Milling machine $92,700
Dr Loss on sale of milling machine $17,900
[126,500-($15,900+$92,700)
Cr Milling machine $126,500
C. Jan 03
Dr Cash $33,800
Dr Accumulated depreciation—Milling machine $92,700
Cr Milling machine $126,500
The following summarized Cash T-account reflects the total debits and total credits to the Cash account of Thomas Corporation for calendar year 2015.
Cash
Balance, Dec. 31, 2014 $212,900
Receipts from customers 9,367,600 Payments for inventory $2,482,414
Receipts from dividends 3,278,660 Payments for wages 861,819
Receipts from land sale 3,466,012 Payments for rent 496,483
Receipts from machinery sale 1,105,377 Payments for interest 337,234
Receipts from issuing stock 2,407,473 Payments for taxes 702,570
Receipts from borrowing 4,056,171 Payments for machinery 3,494,115
Payments for long-term investments3,531,585
Payments for note payable 599,526
Payments for dividends 777,511
Payments for treasury stock 337,234
Balance, Dec. 31, 2015 $
Required:
Use this information to prepare a complete statement of cash flows for year 2015. The cash provided or used by operating activities should be reported using the direct method.
Answer:
Thomas Corporation
Statement of Cash Flows for the year ended December 31, 2015:
Operating Activities:
Receipts from customers $9,367,600
Receipts from dividends 3,278,660
Payments for inventory (2,482,414)
Payments for wages (861,819)
Payments for rent (496,483)
Payments for interest (337,234)
Payments for taxes (702,570)
Net cash from operations $7,765,740
Investing Activities:
Receipts from land sale $3,466,012
Receipts from machinery sale 1,105,377
Payments for machinery (3,494,115)
Payments for long-term investments (3,531,585)
Net cash from investments ($2,454,311)
Financing Activities:
Receipts from issuing stock $2,407,473
Receipts from borrowing 4,056,171
Payments for note payable (599,526)
Payments for dividends (777,511)
Payments for treasury stock (337,234)
Net cash from financing $4,749,373
Net cash flows $10,060,802
Explanation:
a) Data and Calculations:
Cash
Balance, Dec. 31, 2014 $212,900
Receipts from customers $9,367,600
Receipts from dividends 3,278,660
Receipts from land sale 3,466,012
Receipts from machinery sale 1,105,377
Receipts from issuing stock 2,407,473
Receipts from borrowing 4,056,171
Total receipts $23,681,293
Payments for inventory $2,482,414
Payments for wages 861,819
Payments for rent 496,483
Payments for interest 337,234
Payments for taxes 702,570
Payments for machinery 3,494,115
Payments for long-term investments 3,531,585
Payments for note payable 599,526
Payments for dividends 777,511
Payments for treasury stock 337,234
Total payment $13,620,491
Balance, Dec. 31, 2015 $10,273,702 ($212,900 + 23,681,293 - 13,620,491)
Classification of receipts and payments:
Operating Activities
Receipts from customers $9,367,600
Receipts from dividends 3,278,660
Payments for inventory (2,482,414)
Payments for wages (861,819)
Payments for rent (496,483)
Payments for interest (337,234)
Payments for taxes (702,570)
Net cash from operations $7,765,740
Investing Activities
Receipts from land sale $3,466,012
Receipts from machinery sale 1,105,377
Payments for machinery (3,494,115)
Payments for long-term investments (3,531,585)
Net cash from investments ($2,454,311)
Financing Activities
Receipts from issuing stock $2,407,473
Receipts from borrowing 4,056,171
Payments for note payable (599,526)
Payments for dividends (777,511)
Payments for treasury stock (337,234)
Net cash from financing $4,749,373
Net cash flows $10,060,802
Cash Reconciliation:
Beginning Cash Balance $212,900
Net cash flows 10,060,802
Ending Cash balance $10,273,702
Find the accumulated value of $ 740 at the end of 7 years using a nominal annual rate of interest of 6 % compounded quarterly.
Answer:
$1122.74
Explanation:
We are to find the future value of $740
The formula for calculating future value:
FV = P (1 + r/m)^nm
FV = Future value
P = Present value
R = interest rate = 6
N = number of years = 7
m = number of compounding = 4
$740 x (1 + 0.06/4)^7x4 = $1122.74
Stutz Department Store will buy 10 pairs of sunglasses if the price is $81 per pair and 30 pairs if the price is $31. The supplier of the sunglasses is willing to provide 35 pairs if the price is $86 per pair but only 5 pairs if the price is $26. Assuming that the supply and demand functions for the sunglasses are linear, find the market equilibrium point.
Answer:
This question sounds harder than it really is. All it's really asking you to do is find the point of intersection of two lines... but you have to determine the lines in question.
Explanation:
2. Damaged batteries need to be placed in an acld-resistant container or tub Immediately.
A) True
B) False
Yes, Damaged or broken batteries need to be placed in an acid-resistant container.
Batteries are hazardous items that require specific handling and care while being stored, disposed of, and so on.If necessary, temporarily store the battery or gadget in a non-flammable material such as soil or kitty litter.Learn more:
https://brainly.com/question/19937973?referrer=searchResults
Consider a process that consists of three steps 1, 2 and 3. The required processing times and set-up times at each of the steps are listed below. There is unlimited space for buffer inventory between these steps, and there is no shortage of ram material. Show all work.
Process step 1 2 3
Set up time 50 min 120 min 0
Activity time 2 min/unit 1 min/unit 5 min/unit
Assume that the current production batch size is 100 units for all three steps. The demand is 10 units per hour. Which of the following statements are true for the current setting?
I. Step 1 is the bottleneck.
II. Flow rate is limited by demand.
III. We could reduce inventory in the system without decreasing flow rate.
a. I only
b. II only
c. III only
d. I and II
e. I and III
f. II and III
g. All of the above
h. None of the above
Answer:
vbnm,sdfghjkertyui
Explanation:
The County legislature approved its 2020 budget. Revenues from property taxes are estimated to be $800,000. The assessed value of all the property in the county is $40 million. The County has received certificates for property tax exemption of consisting of $3 million for homestead exemptions, $1.3 million for veterans, $700,000 for old age, and $5 million for nonprofits. In addition, the County believes all property taxes will be collectible. What property tax rate per $1,000 of net assessed value must the County charge to collect sufficient property taxes to meet its $800,000 estimate?
A. $16 for each $1,000 of net assessed value.
B. $2.67 for each $1,000 of net assessed value
C. $20 for $1,000 of net assessed value
D. $26.67 for each $1,000 of net assessed value
Answer:
The County
The property tax rate per $1,000 of net assessed value that the County must charge to collect sufficient property taxes to meet its $800,000 estimate is:
D. $26.67 for each $1,000 of net assessed value.
Explanation:
a) Data and Calculations:
Estimated Revenues from Property Taxes = $800,000
Assessed value of property in the county = $40 million
Exempted property in the county:
Homestead = $3.0 million
Veterans = 1.3 million
Old age = 0.7 million
Nonprofits = 5.0 million
Total exemptions = $10 million
Therefore, net assessed value = $30 million ($40 - 10 million)
Chargeable Rate per $1,000 = $800,000/$30,000,000 * 1,000 = $26.67
The suppliers have limited capacity, and no one supplier can meet all the company's needs. In addition, the suppliers charge different prices for the components. Component price data (in price per unit) are as follows:
Supplier
Component 1 2 3
1 $10 $12 $14
2 $10 $10 $11
Each supplier has a limited capacity in terms of the total number of components it can supply. However, as long as Edwards provides sufficient advance orders, each supplier can devote its capacity to component 1, component 2, or any combination of the two components, if the total number of units ordered is within its capacity. Supplier capacities are as follows:
Supplier 1 2 3
Capacity 600 1050 775
1. If the Edwards production plan for the next period includes 1000 units of component 1 and 800 units of component 2, how many units of each component (C1, C2) should be ordered from each supplier (S1, S2, S3)?
2. What is the total purchase cost for the components?
Answer:
Edwards
1. Units of each component (C1, C2) that should be ordered from each supplier (S1, S2, S3) are:
Supplier S1 S2 S3 Total
Capacity 600 1050 775
Orders:
C1 600 400 1,000
C2 650 150 800
Total 600 1,050 150 1,800
2. The total purchase cost for the components is:
= $18,950
Explanation:
a) Data and Calculations:
Component Price Data:
Component Supplier
1 2 3
1 $10 $12 $14
2 $10 $10 $11
Supplier 1 2 3
Capacity 600 1050 775
Requirements:
Component Units
1 1,000
2 800
Supplier 1 for C1 = 600 * $10 = $6,000
Supplier 2 for C 1 = 400 * $12 = 4,800
Supplier 2 for C2 = 650 * $10 = 6,500
Supplier 3 for C2 = 150 * $11 = 1,650
Total purchase cost = $18,950
Supplier S1 S2 S3 Total
Capacity 600 1050 775
Orders:
C1 600 400 1,000
C2 650 150 800
Total 600 1,050 150 1,800
The service-profit chain is designed to help managers better understand the key linkages in a service delivery system that drive customer loyalty, revenue growth, and higher profits.
a. True
b. False
In Year 1, Lee Inc. billed its customers $62,000 for services performed. The company collected $51,000 of the amount billed. Lee incurred $39,000 of other operating expenses on account. Lee paid $31,000 of the accounts payable. Lee acquired $40,000 cash from the issue of common stock. The company invested $21,000 cash in the purchase of land. Required (Hint: Identify the six events described in the paragraph and record them in general ledger accounts under an accounting equation before attempting to answer the questions.) Use the preceding information to answer the following questions: What amount of revenue will Lee report on the Year 1 income statement
Answer and Explanation:
LEE INC.
Effect of events on the general ledger accounts
Event Cash Account land Account Common stock Retained
receivable Payable Earnings
Sales
on account 62,000 62,000
collected 51,000 -51,000
Expenses 39,000 -39,000
Account
Payable -31,000 -31,000
Issue of stock 40,000 40,000
Purchase land -21,000 21,000
Totals 39,000 11,000 21,000 8,000 40,000 23,000
The computation of the amount of revenue recognized would be equivalent to the service performed i.e. $62,000
If a government wants to efficiently reduce a widespread negative externality like air pollution, it must know the costs of pollution abatement of the individual polluters. However, this information is difficult to obtain directly. Tradeable emissions permits are one way to solve the asymmetric information problem affecting pollution abatement efforts.
a. Because the permits are tradeable, firms with ___ abatement costs will sell some of their permits to firms with ___ abatement costs.
b. Now consider that even after a firm has sold its permits, it must still reduce its pollution output.
Since those who sell their permits would have ___ abatement costs, the negative externality is reduced at ___ possible cost to society.
Answer:
a). lower, higher
b). lower, lower
Explanation:
The abatement costs may be defined as the cost that is borne by a firm or an organization when it is necessary to remove any undesirable nuisances or any negative byproducts of the process that is created during the production process. It is cost incurred in eliminating a negative externality such as environmental externality like pollution.
In the context, for solving the pollution abatement cost, the tradeable emissions permits as they are tradebale, an organization with a lower abatement cost sells the permits to the higher abatement cost firms.
Even after selling, the firm still have to reduce the pollution output, then the firm that sold the permit would have lower abatement cost and the negative externality is also reduced at the lower possible cost.
What is the variable cost of sterilizing an instrument using the new equipment
After graduating from dental school two years ago, Dr. Lauren Farish purchased the dental practice of a long-time dentist who was retiring. In January of this year she had to replace the out-dated autoclave equipment she inherited from the previous dentist. Now as she is preparing her budget for next year, she is concerned about understanding how her cost for sterilizing her dental instruments has changed. She has gathered the following information from her records:
Month Number of instruments used Total autoclave cost
January 634 $7,466
February 534 6,526
March 734 7,148
April 934 9,028
May 834 7,744
June 1,034 8,596
July 1,234 10,009
August 1,134 9,924
What is the variable cost of sterilizing an instrument using the new equipment? (Round answer to 2 decimal places, e.g. 15.25.)
Variable cost _____ $ per instrument
What is the fixed cost of the autoclave equipment? (Round answer to 0 decimal places, e.g. 5,275.)
Fixed cost $ ________
What is the cost formula that Dr. Farish should use for estimating autoclave sterilization costs for next year
Answer:
Results are below.
Explanation:
Giving the following information:
Month Number of instruments used Total autoclave cost
January 634 $7,466
February 534 6,526
March 734 7,148
April 934 9,028
May 834 7,744
June 1,034 8,596
July 1,234 10,009
August 1,134 9,924
To determine the fixed and variable cost, we need to use the high-low method:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (10,009 - 6,526) / (1,234 - 534 )
Variable cost per unit= $4.9757 per unit
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 10,009 - (4.9757*1,234)
Fixed costs= $3,869
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 6,526 - (4.9757*534)
Fixed costs= $3,869
Total cost= 3,869 + 4.9757x
x= number of instruments
1) Consider the single factor APT. Portfolio A has a beta of 1.7 and an expected return of 19%. Portfolio B has a beta of .6 and an expected return of 15%. The risk-free rate of return is 11%. If you wanted to take advantage of an arbitrage opportunity, you should take a short position in portfolio __________ and a long position in portfolio
Answer:
A, B.
Explanation:
E(r) = Rf + beta (Risk premium on factor)
PORTFOLIO A
19% = 11% + 1.7(RP)
19% - 11% = 1.7(RP)
(RP) = 0.08/1.7
(RP) = 0.047059
(RP) = 4.706%
PORTFOLIO B
15% = 11% + 0.6(RP)
15% - 11% = 0.6(RP)
(RP) = 0.04/0.6
(RP) = 0.06667
(RP) = 6.667%
As risk premium is lower in case of portfolio A, the correct strategy is Short Position in Portfolio A and Long Position in Portfolio B
You are asked to assess the current service model for a manufacturing line featuring 8 machines. Based on empirical data you have determined that machines have a 23% likelihood of being down and in need of repair. There are currently 2 workers capable of running and repairing machines. Each of the 8 machines can produce 18 units/hour. The overhead for running each of the 8 machines is $713 per day per machine. Each operator is paid at an hourly rate of $15. [You can assume an 8-hour work day]
a. Determine the total amount of lost work time.
b. Should you hire an additional worker to run the 8 machines in this manufacturing line?
Answer:
A) 14.72 hours
B) An additional worker should be hired since the lost work time is 14.72 hours
Explanation:
Number of machines on manufacturing line = 8
percentage of machine been down = 23%
number of workers capable of running and repairing machines = 2
machine productivity ( per machine ) = 18 units/hour
overhead cost / machine = $713
hourly rate paid per worker = $15
Total number of work hours = 8 hour
A) calculate Total amount of lost worktime
= number of machines * Total number of work hours * 23%
= 8 * 8 * 23% = 14.72 hours
B) An additional worker should be hired since the lost work time is 14.72 hours
The following information was taken from the accounting records of Eb8-L4z Company for the year ended December 31, 2027:
Patent $59,000
Cost of goods sold $46,000
Inventory $55,000
Retained earnings $42,000 (at January 1, 2027)
Service revenue $37,000
Notes payable . ?
Land $88,000
Accounts receivable . $73,000
Rental revenue . ?
Utilities payable . $21,000
Salaries expense . $51,000
Accounts payable . $62,000
Equipment . $60,000
Utilities expense . $91,000
Supplies . $31,000
Income tax expense . $18,000
Dividends . $25,000
Common stock . $13,000
Cash . $82,000
Required:
Calculate the amount of gross profit reported in Eb8-L4z Company' s 2027 income statement.
Answer:
Amount of Gross Profit reported in Eb8-L4z Company 2027 Income Statement is $45,000
Explanation:
Note: "Correct question is attached as picture below"
Particulars Amount
Sales revenue $91,000
Cost of goods sold $46,000
Gross Profit $45,000
The Marchetti Soup Company entered into the following transactions during the month of June:
(a) purchased inventory on account for $245,000 (assume Marchetti uses a perpetual inventory system);
(b) paid $60,000 in salaries to employees for work performed during the month;
(c) sold merchandise that cost $160,000 to credit customers for $300,000;
(d) collected $280,000 in cash from credit customers; and
(e) paid suppliers of inventory $225,000.
Prepare journal entries for each of the above transactions.
Answer:
The Marchetti Soup Company
Journal Entries:
a) Debit Inventory $245,000
Credit Accounts Payable $245,000
To record the purchase of inventory on account.
b) Debit Salaries Expense $60,000
Credit Cash $60,000
To record the payment of salaries for the month.
c) Debit Accounts Receivable $300,000
Credit Sales Revenue $300,000
To record the sale of inventory on account
Debit Cost of Goods Sold $160,000
Credit Inventory $160,000
To record the cost of goods sold.
d) Debit Cash $280,000
Credit Accounts Receivable $280,000
To record the receipt of cash from customers.
e) Debit Accounts Payable $225,000
Credit Cash $225,000
To record the payment to suppliers on account.
Explanation:
Journal entries enable the identification of accounts involved in each transaction. They are used to make the initial record into the accounting books before they are posted to the general ledger. They show the accounts to be debited and the ones to be credited.
Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types of go-karts: Deluxe and Basic. Activity Expected Costs Expected Activity Handling materials $ 625,000 100,000 parts Inspecting product 900,000 1,500 batches Processing purchase orders 105,000 700 orders Paying suppliers 175,000 500 invoices Insuring the factory 300,000 40,000 square feet Designing packaging 75,000 2 models Required: Compute the activity rate for each activity, assuming the company uses activity-based costing. (Round activity rate answers to 2 decimal places.)
Answer:
Handling materials = $6.25 per part
Inspecting product = $600 per batch
Processing purchase = $150 per order
Handling materials = $350 per invoice
Insuring the factory = $7.50 per square feet
Designing packaging = $37,500 per model
Explanation:
Activity rate = Estimated Cost ÷ Estimated Activity
therefore,
Handling materials = $ 625,000 ÷ 100,000 parts = $6.25
Inspecting product = $ 900,000 ÷ 1,500 batches = $600
Processing purchase = $ 105,000 ÷ 700 orders = $150
Handling materials = $ 175,000 ÷ 500 invoices = $350
Insuring the factory = $ 300,000 ÷ 40,000 square feet = $7.50
Designing packaging = $ 75,000 ÷ 2 models = $37,500
Shelley is self-employed in Texas and recently attended a two-day business conference in New Jersey. After Shelley attended the conference, she had dinner with an old friend who lived nearby. Shelley documented her expenditures (described below). What amount can Shelley deduct.?
Airfare to New Jersey $2,180
Meals at the conference 238
Meal with an old friend 130
Lodging in New Jersey 432
Rental car 198
a. $3,048.
b. $1,958 if Shelley itemizes the deductions.
c. $2,929.
d. all of these expenses are deductible but only if Shelley attends a conference in Texas.
e. none of the expenses are deductible because Shelley visited her friend.
Answer:
$ 2929
Explanation:
Calculation for What amount can Shelley deduct
Airfare to New Jersey $2,180
Add Meals 119
(238/2)
Add Lodging in New Jersey 432
Add Rental car 198
Deducted amount $2929
Therefore the amount that Shelley can deduct will be $2929
Under rent control, bribery is a potential mechanism to:________
a. bring the total price of an apartment (including the bribe) closer to the equilibrium price.
b. force the total price of an apartment (including the bribe) to be less than the market price.
c. allocate housing to the most deserving tenants.
d. allocate housing to the poorest individuals in the market.
Answer:
A). bring the total price of an apartment (including the bribe) closer to the equilibrium price.
Explanation:
Rent control can be regarded as a program set up by the government which control the limit of amount that can be demanded by landlords for leasing out a home as well as renewal of a lease. The law that govern rent control are been enacted by municipalities, and it's a way to make lower-income residents have an affordable living cost. It should be noted that Under rent control, bribery is a potential mechanism to bring the total price of an apartment (including the bribe) closer to the equilibrium price.
Select the correct answer.
On May 30, 2015, XYZee Inc. paid a dividend of $10,000 to its shareholders. How will this transaction be recorded in the journal of the corporation?
A.
Cash Account (Debit) $10,000 Dividend Account (Credit) $10,000
B.
Dividend Account Debit) $10,000 Cash Account (Credit) $10,000
C.
Common Stock Account (Debit) $10,000 Cash Account Credit) $10,000
D.
Cash Account (Debit) $10,000 Common Stock Account (Credit) $10,0000
Answer:
answer is b
Explanation:
Hoffman Corporation issued $60 million of 5%, 20-year bonds at 102. Each of the 60,000 bonds was issued with 10 detachable stock warrants, each of which entitled the bondholder to purchase, for $20, one share of $1 par common stock. At the time of sale, the market value of the common stock was $25 per share and the market value of each warrant was $5. Prepare the journal entry to record the issuance of the bonds.
Answer:
Date Account titles and Explanation Debit Credit
Cash (60,000*102%) $61,200,000
Discount on bonds payable $1,800,000
(63,000,000-61,200,000)
Bond payable (Face value) $60,000,000
Equity stock warrants outstanding $3,000,000
(60,000 bonds * 10 warrants * $5)
(To record the issue of shares and the share warrants)
Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations:
Budgeted selling price per unit $92
Budgeted unit sales (all on credit)
July 9,000
August 11,300
September 10,400
October 10,800
Raw materials requirement per unit of output 4 pounds
Raw materials cost $1.00 per pound
Direct labor requirement per unit of output 2.8 direct labor hours
Direct labor wage rate $22.00 per direct labor hour
Variable selling and administrative expense $1.50 per unit sold
Fixed selling and administrative expense $70,000 per month
Credit sales are collected:
40% in the month of the sale
60% in the following month
Raw materials purchases are paid:
30% in the month of purchase
70% in the following month
The ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs.
If 41,920 pounds of raw materials are required for production in September, then the budgeted raw material purchases for August is closest to:__________
A. 57,056 pounds
B. 44,480 pounds
C. 43,712 pounds
D. 70,400 pounds
If 41,920 pounds of raw materials are required for production in September, then the budgeted cost of raw material purchases for August is closest to:__________
A. $57,056
B. $43,712
C. $44,480
D. $70,400
The estimated direct labor cost for August is closest to:____________
A. $465,000
B. $684,992
C. $31,136
D. $244,640
Answer and Explanation:
The computation is shown below:
Production Unit For August
= 11300 + (10400 × 20%) - (11300 × 20%)
= 11120 Units
Now Raw material purchase is
= (11120 × 4) + (41920 × 30%) - (11120 × 4*30%)
= 43712 Pounds
Raw material purchase Cost is
= 43712 × 1
= $43,712
The Direct labor cost is
= 11120 × 2.8 × 22
= $684,992
g Congratulations, you've just won the $2,200,000 state lottery! The lottery commission offers you the choice of $98,000 per year for 30 years or a one-time, lump-sum payment of $880,000 If your intensions are to save all of the lottery winnings (regardless of annual cash flow or lump-sum) for retirement in an account that earns 3.00% annually, which payment option should you choose
Answer:
the choice of $98,000 per year for 30 years
Explanation:
To determine the option i would prefer, i have to find the present value of fiest opotion and compare it with the value of the second option.
To find the present value of the first option, the future value has to be determined first.
The formula for determining the future value of an annuity is :
The formula for calculating future value = A (B / r)
A = amount
B = annuity factor
r = interest rate
Annuity factor = {[(1+r)^n] - 1} / r
n = number of years
$98,000 x[ (1.03)^30 - 1 ] / 0.03 = $4,662,390.74
Now we determine the present value
PV = FV x ( 1+r)^-n
$4,662,390.74 x (1.03)^-30 = $1920,843.25
The payoff of the first option is greater than that of the second so i would choose the first
Single plantwide factory overhead rate Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $127,800. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit:_______.
Budgeted Production Volume Direct Labor Hours Per Unit
Flutes 2,100 units 0.8
Clarinets 800 1.4
Oboes 1,300 1.0
If required, round all per unit answers to the nearest cent.
a. Determine the single plantwide overhead rate.
$ per direct labor hour
b. Use the overhead rate in (a) to determine the amount of total and per-unit overhead allocated to each of the three products.
Total
Factory Overhead Cost Per Unit
Factory Overhead Cost
Flutes $ $
Clarinets
Oboes
Total $
Answer:
A.$31.2 per hour
B. Factory Overhead Cost Per Unit
Flutes $24.96
Clarinets $43.68
Oboes $32.74
Factory Overhead Cost
Flutes 52,416
Clarinets 34,944
Oboes 40,560
Explanation:
A. Calculation to Determine the single plantwide overhead rate.
First step is to calculate the Total Hours
Total Direct Labor Hours
Flutes 2100 units *0.8 hour per unit= 1,680
Clarinets 800 units *1.4 hours per unit = 1,120
Oboes 1300 units *1.0 hour per unit= 1,300
Total Hours 4,100
Now let calculate the Plantwide overhead rate using this formula
Plantwide overhead rate = Total Overhead Cost / Total labor hours
Let plug in the formula
Plantwide overhead rate=$127,800/4,100
Plantwide overhead rate=$31.2 per hour
Therefore Plantwide overhead rate will be $31.2 per hour
B. Calculation to determine the amount of total and per-unit overhead allocated to each of the three products.
Product Total Labor Hours Total Overhead Overhead Per Unit
Flutes 1,680 52,416 (1,680*31.2) $24.96 (52416/2100)
Clarinets 1,120 34,944(1,120*31.2) $43.68 (34,944/800)
Oboes 1,300 40,560
(1,300*31.2) $32.74 (40,560/1,300)
Total 4,100 127,920 $101.38
Therefore Factory Overhead Cost Per Unit and Factory Overhead Cost Will be:
Factory Overhead Cost Per Unit
Flutes $24.96
Clarinets $43.68
Oboes $32.74
Factory Overhead Cost
Flutes 52,416
Clarinets 34,944
Oboes 40,560
M. K. Gallant is president of Kranbrack Corporation, a company whose stock is traded on a national exchange. In a meeting with investment analysts at the beginning of the year, Gallant had predicted that the company’s earnings would grow by 20% this year. Unfortunately, sales have been less than expected for the year, and Gallant concluded within two weeks of the end of the fiscal year that it would be impossible to report an increase in earnings as large as predicted unless some drastic action was taken. Accordingly, Gallant has ordered that wherever possible, expenditures should be postponed to the new year—including canceling or postponing orders with suppliers, delaying planned maintenance and training, and cutting back on end-of-year advertising and travel. Additionally, Gallant ordered the company’s controller to carefully scrutinize all costs that are currently classified as period costs and reclassify as many as possible as product costs. The company is expected to have substantial inventories at the end of the year.
1. Why would reclassifying period costs as product costs increase this period’s reported earnings?
2. Do you believe Gallant’s actions are ethical? Why or why not?