Answer:
Product margin= $9,332
Explanation:
First, we need to allocate the activity cost to product M5:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Processing= 5,945/14,500= $0.41 per machine hour
Supervising= 19,680/800= $24.6 per batch
Product M5:
Processing= 0.41*800= $328
Supervising= 24.6*400= $9,840
Finally, the total cost and the product margin:
Total cost= 32,300 + 42,600 + (328 + 9,840)
Total cost= $85,068
Product margin= 94,400 - 85,068
Product margin= $9,332
Swifty Corporation had the following selected transactions.
1. Kim Leppard invested $7,274 cash in the business in exchange for common stock.
2. Paid office rent of $1,382.
3. Performed consulting services and billed a client $6,838.
4. Declared and paid a $873 cash dividend.
Answer:
Missing word "Indicate the effect each transaction has on the accounting equation, (Assets = Liabilities + Stockholders' Equity), using plus and minus signs."
Assets = Liabilities + Stockholders' Equity
1. Increase(+) No Effect Increase(+)
2. Decrease(-) No Effect Decrease(+)
3. Increase(+) No Effect Increase(+)
4. Decrease(-) No Effect Decrease(+)
What skills and interests might someone in a trade career have?
Answer:
Confidence.
Numerical skills.
IT skills.
Communication skills.
An interest in financial markets.
Analytical skills.
Interpersonal skills.
Teamworking skills.
Slapshot Company makes ice hockey sticks and sold 1,890 sticks during the month of June at a total cost of $378,000. Each stick sold at a price of $360. Slapshot also incurred two types of selling costs: commissions equal to 10% of the sales price and other selling expense of $64,700. Administrative expense totaled $53,800.
Required:
Prepare an income statement for Slapshot for the month of June
Answer:
Slapshot Company
Income statement for the month of June
Sales ( 1,890 x $360) $680,400
Less Costs of Sales ($378,000)
Gross Profit $302,400
Selling Costs :
Commissions $68,040
Other Selling Expense $64,700
Administrative Expense $53,800 ($186,540)
Net Income $115,860
Explanation:
The Income statement shows the Profit earned during the reporting period. This is determined as Gross Profit (Sales - Cost of Sales) minus the Operating Expenses.
Would you prefer to buy an existing business or start from scratch? Why?
Answer:
I would start from scratch Because It helps u feel accomplished about your work
Indicate whether it would appear on the statement of cash flows as a(n): operating activity, investing activity, or financing activity.
a. Cash receipts from customers. choose a type of business activity
b. Issuance of common stock for cash. choose a type of business activity
c. Payment of cash dividends. choose a type of business activity
d. Cash purchase of equipment. choose a type of business activity
e. Cash payments to suppliers. choose a type of business activity
f. Sale of old machine for cash. choose a type of business activity
Answer:
a. Cash receipts from customers.
Statement of cash flows: Operating activity
b. Issuance of common stock for cash
Statement of cash flows: Financing activity
c. Payment of cash dividends
Statement of cash flows: Financing activity
d. Cash purchase of equipment
Statement of cash flows: Investing Activities
e. Cash payments to suppliers
Statement of cash flows: Operating activities
f. Sale of old machine for cash
Statement of cash flows: Investing Activities
In the market for financial capital,
a. those who supply financial capital pay interest on loans.
b. those who demand financial capital receive interest on loans.
c. the demand for financial capital comes from savings, and the supply goes to making loans.
d. the supply of financial capital comes from savings, and the demand goes to making loans.
Answer:
d. the supply of financial capital comes from savings, and the demand goes to making loans.
Explanation:
Capital markets refer to the areas where deposits and investment are transferred between the capital providers and others in need of capital. Capital markets consist of the main market, where new shares are released and exchanged, and the secondary market, where already issued securities are exchanged by investors.
Question 7 of 10
Your company emphasizes the important of conserving (not wasting)
resources. How can you support that value when you print an 8-page report
you were asked to bring to your department's monthly meeting?
A. Use the Print option for two-sided printing.
B. Post the report online before printing it.
C. Use the Print option to create extra copies.
D. Use the Save option to choose a format readers can open.
SUBMIT
Answer:
A. Use the Print option for two-sided printing.
I'd choose A, although I don't really understand what option D means..
On December 31, 2020, Wildhorse Company had $1,211,000 of short-term debt in the form of notes payable due February 2, 2021. On January 21, 2021, the company issued 23,700 shares of its common stock for $46 per share, receiving $1,090,200 proceeds after brokerage fees and other costs of issuance. On February 2, 2021, the proceeds from the stock sale, supplemented by an additional $120,800 cash, are used to liquidate the $1,211,000 debt. The December 31, 2020, balance sheet is issued on February 23, 2021. Show how the $1,211,000 of short-term debt should be presented on the December 31, 2020, balance sheet.
Answer and Explanation:
The presentation is as follows;
Particulars Amount ($)
Current Liabilities
Notes payable $120,800
Long term debt
Notes payable refinanced in February 2021 $1,090,200
An outside supplier has offered to sell the component for $17. If Damon purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $10,000. If Damon purchases the component from the supplier instead of manufacturing it, the effect on income would be:
Answer:
C. a $10,000 decrease.
Explanation:
Calculation for what the effect on income would be
First step is to calculate Make
Make=$100,000 + $160,000 + $60,000
Make = $320,000
Second step is to calculate Buy
Buy= $20,000 × $17 = $340,000 – $10,000
Buy = $330,000
Now let calculate the effect on income
Effect on income = $320,000 – $330,00
Effect on income = –$10,000 decrease
Therefore the effect on income would be –$10,000 decrease
Tardis Intertemporal(TI) has 16,800,000 shares issued and outstanding and is trading at $83.20 per share. The company issues 2,400,000 new shares with a subscription price of $52.00. Under the terms of the offering, 7 rights are required to subscribe to one new share at the subscription price, and each shareholder is issued one right for each share owned.
If all the shares offered are taken up then Tardis Intertemporal(TI) will raise _____________
and, after the capital infusion, the market capitalization of the company will be ______________
After the new shares are issued the market price should be ______________
The fair market value of the right should thus be __________
Answer:
If all the shares offered are taken up then Tardis Intertemporal(TI) will raise = $52 x 2,400,000 = $124,800,000
and, after the capital infusion, the market capitalization of the company will be = ($83.20 x 16,800,000) + $124,800,000 = $1,397,760,000 + $124,800,000 = $ 1,522,560,000
After the new shares are issued the market price should be = $1,522,560,000 / (16,800,000 + 2,400,000) = $1,522,560,000 / 19,200,000 = $79.30
The fair market value of the right should thus be = ($83.20 - $52) / (7 + 1) = $31.20 / 8 = $3.90
The next dividend payment by Zone, Inc., will be $2.08 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. If the stock currently sells for $42 per share, what is the required return
Answer:
10.95%
Explanation:
According to the gordon growth model,
the value of stock (price) = dividend / required return - growth rate
42 = 2.08/ r - 0.06
42(r-0.06) = 2.08
2.08/42 = r - 0.06
r = 10.95%
Tamar Co. manufactures a single product in two departments. All direct materials are added at the beginning of the Forming process. Conversion costs are added evenly throughout the process. During May, the Forming department started 21,600 units, and transferred 22,200 units of product to the Assembly department. Its 3,000 units of beginning work in process consisted of $19,800 of direct materials and $221,940 of conversion costs. It has 2,400 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $496,800 of direct material costs and $2,165,940 of conversion costs were charged to production.
Required:
Prepare the company's process cost summary for May using the weighted-average method.
Answer:
Tamar Co.
Process Cost Summary for May, using the weighted-average method:
Process Cost Summary for May:
Materials Conversion Total
Units transferred $466,200 $2,197,800 $2,664,000
Ending WIP 50,400 190,080 240,480
Total cost $516,600 $2,387,880 $2,904,480
Explanation:
a) Data and Calculations:
Units started = 21,600
Units transferred = 22,200
Beginning work in process = 3,000 units
Cost of beginning work in process:
Direct materials $19,800
Conversion costs = $221,940
Ending work in process = 2,400 units
Degree of completion:
Materials = 100%
Conversion = 80%
Actual costs incurred:
Direct materials = $496,800
Conversion = $2,165,940
Calculation of Equivalent Units:
Materials Conversion
Units transferred out 22,200 (100%) 22,200 (100%)
Ending WIP 2,400 (100%) 1,920 (80%)
Total equivalent unit 24,600 24,120
Cost of production:
Materials Conversion Total
Beginning WIP $19,800 $221,940 $241,740
Current period 496,800 2,165,940 2,662,740
Total production cost $516,600 $2,387,880 $2,904,480
Cost per equivalent unit:
Materials Conversion Total
Total production cost $516,600 $2,387,880 $2,904,480
Total equivalent unit 24,600 24,120
Cost per equivalent unit $21 $99
Process Cost Summary for May:
Materials Conversion Total
Units transferred $466,200 $2,197,800 $2,664,000
($21 *22,200) ($99 * 22,200)
Ending WIP 50,400 190,080 240,480
($21 *2,400) ($99 * 1,920)
Total cost $516,600 $2,387,880 $2,904,480
preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable manufacturing overhead rate is $1.70 per direct labor-hour; the budgeted fixed manufacturing overhead is $116,000 per month, of which $30,000 is factory depreciation. If the budgeted direct labor time for December is 4,000 hours, then the predetermined manufacturing overhead per direct labor-hour for December would be:
Testbank Multiple Choice Question 145 Sheffield Corp. had 330 units of product A on hand at January 1, 2020, costing $22 each. Purchases of product A during January were as follows: Date Units Unit Cost Jan. 10 410 $23 18 450 24 28 180 25 A physical count on January 31, 2020 shows 440 units of product A on hand. The cost of the inventory at January 31, 2020 under the LIFO method is $10740. $9790. $9490. $10190.
Answer:
$9790
Explanation:
LIFO means last in first out. It means it is the last purchased inventory that is the first to be sold.
If LIFO method is used, the reaming inventory would consist of the earliest purchased inventories.
If 440 units remain, they wold consist of beginning inventory and inventory purchased on 10th of January
(330 x $22) + [(440 - 330) x $23) = $9790
Cost flow relationships The following information is available for the first year of operations of Creston Inc., a manufacturer of fabricating equipment:
Sales $ 12,755,000
Gross profit 5,359,700
Indirect labor 422,600
Indirect materials 185,500
Other factory overhead 834,900
Materials purchased 4,251,600
Total manufacturing costs for the period 8,122,000
Materials inventory, end of period 298,900
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Determine the following amounts. Round your answers to the nearest dollar. Cost of goods sold $fill in the blank 2 Direct materials cost $fill in the blank 3 Direct labor cost $fill in the ______
Answer:
a. Cost of goods sold = Sales - Gross profit
Cost of goods sold = $12,755,000 - $5,359,700
Cost of goods sold = $7,395,300
b. Direct Material Cost = Materials purchased - Indirect materials - Materials inventory
Direct Material Cost = $4,251,600 - $185,500 - $298,900
Direct Material Cost = $3,767,200
c. Direct labor cost = Total manufacturing costs for the period - Direct materials cost - Other factory overhead - Indirect labor
Direct labor cost = $8,122,000 - $3,767,200 - $834,900 - $422,600
Direct labor cost = $3,097,300
The bonds in our model have a maturity close to zero; they just pay the current interest rate, i, as a flow over time. We could consider, instead, a discount bond, such as a U.S. Treasury Bill. This type of asset has no explicit interest payments (called coupons) but pays a principal of, say, $1000 at a fixed date in the future. A Bill with one- year maturity pays off one year from the issue date, and similarly for 3-month or 6-month Bills. Let PB be the price of a discount bond with one-year maturity and principal of $1000. a. Is PB greater than or less than $1000.
a. Is P^B greater than or less than $1000?
b. What is the one-year interest rate on these discount bonds?
c. If prises, what happens to the interest rate on these bonds?
d. Suppose that, instead of paying $1000 in one year, the bond pays $1000 in two years. What is the interest rate per year on this two-year discount bond?
Answer:
Answer is explained in the explanation section below.
Explanation:
Part a.
[tex]P^{B}[/tex] will be less than $1000.
Reason: [tex]P^{B}[/tex] + interest = $1000, since interest >0 (Cannot be negative)
Hence,
[tex]P^{B}[/tex] < $1000
Part b.
Assuming the amount of interest to be i, [tex]P^{B}[/tex] would be $1000 - I
Rate of interest would be:
($1000 - ($1000-i)) / ($1000 - i) = i / ($1000 - i)
Rate of interest = i / ($1000 - i)
Part c.
If [tex]P^{B}[/tex] rises, the interest rate on these bonds would come down. Going back to a. [tex]P^{B}[/tex] = $1000 - i, and if [tex]P^{B}[/tex] rises, it implies that i reduces, which means that rate of interest will be reduced.
Part d.
If $1000 is a payment two years later, it implies that i (refer to b.) is the interest for two years. Assuming annual compounding, let's calculate rate of interest as follows:
Interest for two year (i) = $1000 - [tex]P^{B}[/tex] at the rate of i per year
= [tex]P^{B}[/tex] X i / 100 + ([tex]P^{B}[/tex] X (1+i/100))X i/100
We can solve for i to get annual rate of interest.
When developing baseline standards, it is vital to use industry best practices. Industry best practices standards enable one to justify choices being made to regulators. Furthermore, there is increased efficiency to be gained by modifying an existing standard as opposed to creating one from the ground up.
A. True
B. False
Answer:
A. True
Explanation:
A baseline may be defined as the minimum amount of security that a network, a device or a system must adhere to. They are generally mapped to the industry standards. It is applied to the several layers of the IT infrastructure of an organization.
When developing them, it is very important to make use of the industry best practices. It enables to justify the choices that are being made to the regulators.
Hence the answer is true.
An economic profit includes implicit costs and accounting profit does not. A distinction between them is important because an accounting profit is a relative amount of money. Some amount of accounting profit may or may not be a sufficient amount of profit to keep an entrepreneur in:________
Answer:
his/ her present line of business
Explanation:
Economic profit is accounting profit less implicit cost
Accounting cost is total revenue less explicit cost
Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives
Explicit cost is the actual cost incurred in carrying out an activity.
In determining profit, it is essential to consider implicit cost to determine if the business is earning economic profit
The Coyote Watershed has two large reservoirs built and operating on-stream to capture storm runoff in the upper watershed. They are named Coyote and Anderson Reservoirs. The capacities of these two reservoirs are 23,244 ac-ft and 90,373 ac-ft, respectively. Coyote Reservoir is approximately five miles upstream from the high water line of Anderson Reservoir and is regulated by releasing water downstream into Anderson Reservoir.
In January, 2017, storms added considerable volume of water to this set of reservoirs, approximately 20,000 ac-ft of runoff were captured. Assuming the upper watershed is 200 square miles and is saturated (100% runoff), calculate the total inches of rain needed to add this amount of runoff to yield this net increase in the two reservoirs combined. Hint: 1 sq. mi. = 640 acres 1 acre-ft= 12 acre inches
Answer:
The answer is "1.875 in of rain"
Explanation:
The reservoir size is negligible. It's just a problem how often rain is required for 20000 acre-feet across an area of 200 square miles.
Calculating the area in acre:
[tex]= 200 \ mi^{2} \times 640 \frac{acre}{mi^2}\\\\= 128,000 \ acres[/tex]
calculating the value of the rainfall in feet:
[tex]= \frac{20,000 \ acre\-feet}{128,000 \ acres}\\\\= 0.15625 \ ft[/tex]
calculating the value of Rainfall in inches:
[tex]= 0.15625 \ ft \times 12 \frac{in}{ft}\\\\= 1.875 \ \text{in of rain}[/tex]
Account of a supplier would be found
The purchase ledger contains the individual accounts of suppliers from whom the business has made purchases on credit.
Mark as brainlist
The individual accounts of suppliers that the company has made credit-based purchases from are listed in the purchase ledger.
What is the Account of a supplier?The term "supplier accounts" refers to all accounts generated by a borrower or domestic subsidiary for a specific account debtor or its affiliates in the event that a borrower or domestic subsidiary has established a supplier agreement with respect to any of an account debtor's accounts.
Every supplier and client that the business deals with will be handled as a distinct account. Items can be linked to an account that are both material and immaterial.
All transactions relating to each and every Supplier, including all invoices issued and paid for beginning on the first day, are kept in the Supplier ledgers.
Thus, The individual accounts of suppliers that the company has made credit-based purchases.
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Bill and Ted are deciding what musical instruments they want to learn to play for their band. They can pick between the guitar, keyboard, and the drums.They both want to have a good band, but also each has a preference over what toplay. Both like the drums over all else. However, Bill likes the keyboard more thanthe guitar and Ted likes the guitar more than the keyboard. What is crucial is that each chooses a different instrument, otherwise the band is pretty terrible. The actual combination does not affect the quality of the band. One night, Bill and Ted simultaneously reveal to each other what instrument they have bought decided to learn. Since they bought the instrument they are committedto learning it! Given the information above,
1. Does either Bill or Ted have a dominant/dominated strategy? Explain.
2. If Bill picks the keyboard, is it a best response for Ted to pick the drums? Explain.
3. If Ted picks the guitar, is it a best response for Bill to pick the keyboard? Explain.
4. Can there exista Nash equilibrium in which Bill picks the drums and Ted picks the keyboard? Explain.
5. Can there exist a Nash Equlibrium in which Bill picks the guitar and Ted picks the drums? Explain.
Answer:
1. Does either Bill or Ted have a dominant/dominated strategy? Explain.
No, since both like playing the drums. But if both choose the drums, then there is no band.
2. If Bill picks the keyboard, is it a best response for Ted to pick the drums? Explain.
yes, since Ted likes the drums more than the guitar.
3. If Ted picks the guitar, is it a best response for Bill to pick the keyboard? Explain.
No, Bill should pick the drums since he likes them more.
4. Can there exist a Nash equilibrium in which Bill picks the drums and Ted picks the keyboard? Explain.
No, because they both prefer the drums, but Ted doesn't like the keyboard.
5. Can there exist a Nash Equilibrium in which Bill picks the guitar and Ted picks the drums? Explain.
No, because they both prefer the drums, but Bill doesn't like the guitar.
Question 2. (6)
Briefly explain why Investors, Competitors and Suppliers take interest in
accounting information related to a business. (Please include examples)
Answer:
They like googIe
Explanation:
Zeitler's Department Stores sells its products online and through traditional brick-and-mortar stores. The following parallel coordinates plot displays data from a sample of 20 customers who purchased clothing from Zeitler's either online or in-store. The data include variables for the customer's age, annual income, and the distance from the customer's home to the nearest Zeitler's store. According to the parallel coordinates plot, how are online customers differentiated from in-store customers?
Question Completion:
Choose the correct answer below
(1) in-store customers appear to be middle aged, have higher annual income and live further distance away from a store
(2) in-store customers appear to be generally younger, have lower annual income and live near a store
(3) Online customers appear to be generally younger, have higher annual income and live further distance away from a store
(4) Online customers appear to be middle aged, have lower annual income and live near a store
Answer:
Zeitler's Department Stores
Online and In-store Customers:
According to the parallel coordinates plot, online customers are differentiated from in-store customers in the following ways:
(3) Online customers appear to be generally younger, have higher annual income and live further distance away from a store
Explanation:
Younger persons tend to embrace technology more than their older counterparts. Based on this, they also engage on online purchasing of goods and services instead of visiting the traditional brick-and-mortar stores. With online purchase, a customer is in better control because she can search for the best deals from any location.
Suppose we want to highlight the year number for each year during which sales were at least 5% higher than the previous year. We would begin by selecting the cell range D6:D12 and choose Conditional Formatting from the Ribbon. Then you would select new rules followed by the Use a Formula option. Finally you would enter the following formula.
Year Actual Sales Cumulative Sales
1 77 77
2 58 135
3 78 213
4 40 253
5 42 295
6 44 339
7 74 413
8 83 496
A. (E5/E4)>1.05.
B. ($E$6/E5)>1.05.
C. (E6/E5)>1.05.
D. (E6/E5)>.05.
Answer:
c) E6/E5 > 1.05
Option C is the correct option.
Explanation:
Data Given:
Year Actual Sales Cumulative Sales
1 77 77
2 58 135
3 78 213
4 40 253
5 42 295
6 44 339
7 74 413
8 83 496
The formula, we have to use in this question is:
c) E6/E5 > 1.05
Option C is the correct option.
Actual Sales/Previous Sales > (1+r)
r = 5%
r = 0.05
Actual Sales/Previous Sales > (1 + 0.05)
Actual Sales/ Previous Sales > (1.05)
Here, the sales were at least 5% higher than the previous year sales. Therefore, the correct formula here we need to enter in Excel Spread Sheet is "E6/E5 > 1.05"
Where, E is the name of the cell in the Excel Spreadsheet.
Tom and Linda are married taxpayers who file a joint return. They have itemized deductions of $13,050 and four exemptions. Assuming an adjusted gross income of $40,000, what is their taxable income for 2017
Answer:
$13,000
Explanation:
Standard deduction for Married filling jointly = 24,000
Adjusted gross income = $40,000
Greater of itemized deduction ($13,050) and Standard deduction ($24,000) = $27,000
Taxable income = Adjusted gross income - The greater of the 2 above
Taxable income = $40,000 - $27,000
Taxable income = $13,000
So therefore, their taxable income for 2017 is $13,000
A purchase of a pair of Italian designer jeans by a resident of Japan would be considered an_____when counting GDP in Japan. As a result, this purchase would be_____Japanese GDP. A purchase of a light pickup truck made in Japan and sold in Canada would be considered an_____for Japanese GDP, which would be_____Japanese GDP.
Answer and Explanation:
In the case when the purchase of Italian jeans made by the Japan resident so it would be considered an import at the time of counting GDP in Japan. So the purchase would be deducted or excluded from Japanese GDP
In the case when the purchase of truck would be made in Japan and then sold it in Canada so it would be considered as an export so the same would be included or added in Japanese GDP.
The following information is available for the adjusting entries. Accrued interest on the notes payable at year-end amounted to $4,000 and will be paid January 1, 2022. Accrued salaries at year-end amounted to $3,000 and will be paid on January 5, 2022. Supplies remaining on hand at the end of the year equal $3,800. Problem 3-9B Part 9 9. Record closing entries.
Question Completion:
Assume that Supplies were purchased during the year worth $13,000.
Record the adjusting entries.
Answer:
Adjusting Journal Entries on December 31, 2021:
Debit Interest Expense $4,000
Credit Interest payable $4,000
To record the accrued interest on the notes payable.
Debit Salaries Expense $3,000
Credit Salaries payable $3,000
To record the accrued salaries at year end.
Debit Supplies Expense $9,200
Credit Supplies $9,200
To record supplies expense for the year.
Explanation:
a) Data and Calculations:
Supplies purchased = $13,000
Supplies at year-end = 3,800
Supplies consumed = $9,200 ($13,000 - $3,800)
b) Adjusting entries are journal entries done at the end of a financial period to ensure that expenses and revenues are matched to the period they occur instead of when cash is exchanged. This accords with the accrual concept and the matching principle of accounting.
Kara files her income tax return 64 days after the due date of the return without obtaining an extension from the IRS. Along with the return, she remits a check for $15,400, which is the balance of the tax she owes. Note: Assume 30 days in a month.
Required:
Disregarding the interest element, enter Kara's penalty amount for each, failure to file and failure to pay.
Failure to pay________$
Failure to file________$
Answer:
failure to file :$2079
failure to pay:$231
Explanation:
given data
remits a check = $15,400
days in a month = 30
return = 64 days
solution
computation of Kara's penalty amount for failure to pay
failure to pay will be
failure to pay = 0.5% of tax owed × number of months .......................1
failure to pay = 0.5% × $15400 × 3
failure to pay = $231
and
Computation of Kara's penalty amount for failure to file
failure to file will be
failure to file = (5% of tax owed × number of months or part thereof) - failure to pay penalty .......................2
failure to file = (5% × $15400 × 3) - $231
failure to file = $2310 - $231
failure to file = $2079
Wang Company accumulates the following adjustment data at December 31.
For each item, indicate the (1) type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense) and (2) the status of the accounts before adjustment (overstated or understated). (Enter your answers in alphabetical order.)
(1)Type of Adjustment (2) Accounts Before Adjustment
(a) Services performed but unbilled totals $600.
(b) Store supplies of $160 are on hand. The supplies account shows a $1,900 balance.
(c) Utility expenses of $275 are unpaid.
(d) Service performed of $490 collected in advance.
(e) Salaries of $620 are unpaid.
(f) Prepaid insurance totaling $400 has expired.
Answer:
(a)Type of adjustment is accrued revenue. The account was understated before adjustment.
(b) The type of adjustment is prepaid expense. The account was overstated.
(c) The type of adjustment is accrued expense which has been understated.
(d) Adjustment type is unearned revenue. The account was understated.
(e) Salaries of $620 are unpaid. - Adjustment type is accrued expense and the account was understated.
(f) Prepaid expense which was overstated before adjustment.
Explanation:
(a) Services performed but unbilled totals $600 - Since the service has been provided, revenue has been earned and should have been recognized with the corresponding debit to the accrued revenue account. Before adjustment, the accrued revenue account would have been understated.
(b) Store supplies of $160 are on hand. The supplies account shows a $1,900 balance. - This shows that stores supplies of $1,740 (the difference between $1,900 and $160) had been used up and should have been recognized as expense. As such, the type of adjustment is to prepaid expense. The account was overstated before adjustment as the balance should be $160 and not $1,900.
(c) Utility expenses of $275 are unpaid - The adjustment should have been posted to expense and accrued expense. Hence the type of adjustment is accrued expense which has been understated before adjustments.
(d) Service performed of $490 collected in advance - When the advance was collected, unearned revenue should have been recognized. Since it was not recognized before adjustment, the account was understated.
(e) Salaries of $620 are unpaid. - This is an accrued expense as the expense has been incurred but is yet to be paid. A non recognition before adjustment means the account was understated.
(f) Prepaid insurance totaling $400 has expired - This means that the prepaid insurance should have been derecognized since it has expired. As such, the account was overstated before adjustment.
Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2017 with three assets: cash of 20,000 dinars, accounts receivable of 80,000 dinars, and land that cost 200,000 dinars when acquired on April 1, 2016. On January 1, 2017, Zugar has a 150,000 dinar note payable, and no other liabilities. On May 1, 2017, Zugar renders services to a customer for 120,000
dinars, which was immediately paid in cash. On June 1, 2017, Zugar incurred a 100,000 dinar operating expense, which was immediately paid in cash. No other transactions occurred during the year.
Currency exchange rates for 1 dinar follow:
April 1, 2016 . . . . .. . $0.33 = 1 dinar
January 1, 2017 . . . . .. . . 0.36 = 1
May 1, 2017 . . . . . . . . .. . . 0.37 = 1
June 1, 2017 . . . . . .. . . . . 0.39 = 1
December 31, 2017 . . . . . 0.41 = 1
a. Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S.
dollar as its reporting currency. Assume also that the dinar is the subsidiary’s functional currency. What is the translation adjustment for this subsidiary for the year 2017?
b. Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S.
dollar as its reporting currency. Assume also that the U.S. dollar is the subsidiary’s functional currency. What is the remeasurement gain or loss for 2017?
c. Assume that Zugar is a foreign subsidiary of a U.S. multinational company. On the December 31, 2017, balance sheet, what is the translated value of the Land account? On the December 31, 2017, balance sheet, what is the remeasured value of the Land account?