One year ago, Tyler Stasney founded Swift Classified Ads. Stasney remembers that you took an accounting course while in college and comes to you for advice. He wishes to know how much net income his business earned during the past year in order to decide whether to keep the company going. His accounting records consist of the T-accounts from his ledger, which were prepared by an accountant who moved to another city. The ledger at December 31 follows. The accounts have not been adjusted. Stasney indicates that at year-end, customers owe him $1,600 for accrued service revenue. These revenues have not been recorded. During the year, Stasney collected $4,000 service revenue in advance from customers, but he earned only $900 of that amount. Rent expense for the year was $2,400, and he used up $1,700 of the supplies. Stasney determines that depreciation on his equipment was $5,000 for the year. At December 31, he owes his employee $1,200 accrued salary.

Answers

Answer 1

Answer:

net income = $33,900

Explanation:

The T-accounts are missing, so I looked for a similar question:

Stasney indicates that at year-end, customers owe him $1,600 for accrued service revenue. These revenues have not been recorded.

Dr Accounts receivable 1,600

    Cr Service revenue 1,600

During the year, Stasney collected $4,000 service revenue in advance from customers, but he earned only $900 of that amount.

Dr Unearned revenue 900

    Cr Service revenue 900

Rent expense for the year was $2,400, and he used up $1,700 of the supplies.

Dr Rent expense 2,400

    Cr Prepaid rent 2,400

Dr Supplies expense 1,700

    Cr Supplies 1,700

Stasney determines that depreciation on his equipment was $5,000 for the year.

Dr Depreciation expense 5,000

    Cr Accumulated depreciation 5,000

At December 31, he owes his employee $1,200 accrued salary.

Dr Wages expense 1,200

    Cr Wages payable 1,200

Total expense for the year = $17,000 (paid wages) + $1,200 (accrued wages) + $800 (utilities) + $2,400 (rent) + $1,700 (supplies) + $5,000 (depreciation) = $28,100

total revenues = $59,500 (previously recorded) + $1,600 (unrecorded service revenue) + $900 (accrued service revenue) = $62,000

net income = $62,000 - $28,100 = $33,900

One Year Ago, Tyler Stasney Founded Swift Classified Ads. Stasney Remembers That You Took An Accounting

Related Questions

today ,I am happy I help my grandma ​

Answers

thats good to hear! i hope you and your grandma are doing well!

Maria Boyd has been hired by Barnum Hotels to manage staffing for the regional hotel chain. Barnum intends to open two new hotels within the next three years and will have many job positions to fill. Historically, employee turnover is high at Barnum as employees remain with the company for one or two years before quitting. Maria realizes that Barnum needs to make significant changes in its personnel strategy in order to meet the company's goals for the future and improve employee retention rates. All of the following questions are relevant to Mari's decision to fill top positions at the new hotels with internal candidates EXCEPT::_______

a. What are the key managerial positions that are available at the new hotels?
b. What percentage of employers in the service industry use succession planning?
c. What skills, education, and training have been provided to potential candidates?
d. What is the designated procedure for assessing and selecting potential candidates?

Answers

Answer:

b. What percentage of employers in the service industry use succession planning?

Explanation:

The answer choice number B would not be relevant for Maria Boyd strategy. Succession planning is related to the passing of ownership of the business. and Maria is not in charge of devising ownership schemes, but in charge of implementing a corporate policy in order to improve employee retetion, and reduce in this way, employee turnover.

Answer:

b. What percentage of employers in the service industry use succession planning

Explanation:

GOT IT RIGHT ON TEST 2020

Larkspur Incorporated factored $124,300 of accounts receivable with Cullumber Factors Inc. on a without-recourse basis. Cullumber assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable for possible adjustments.

Required:
Prepare the journal entry for Larkspur Incorporated and Cullumber Factors to record the factoring of the accounts receivable to Cullumber.

Answers

Answer:

Larkspur Incorporated

DR Cash                                                           115,599

     Due from Factor (Cullumber)                       6,215

     Loss on Sale of Receivables                       2,486

     CR Accounts Receivable                                               124,300

Working

Due from Factor = 5% * 124,300

= $‭6,215‬

Loss on sale of receivables = 2% * 124,300

= $‭2,486‬

Cash = 124,300 - 6,215 - 2,486

= $‭115,599‬

Cullumber Factors Inc.

DR Accounts Receivable                                       124,300

     CR Due to Larkspur                                                             6,215

           Financing Revenue                                                        2,486

           Cash                                                                              115,599

Definition of economic costs
Darnell lives in Philadelphia and runs a business that sells pianos. In an average year, he receives $842,000 from selling pianos. Of this sales revenue, he must pay the manufacturer a wholesale cost of $452,000; he also pays wages and utility bills totaling $301,000. He owns his showroom; if he chooses to rent it out, he will receive $38,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Darnell does not operate this piano business, he can work as an accountant and receive an annual salary of $48,000 with no additional monetary costs. No other costs are incurred in running this piano business.
Identify each of Darnell's costs in the following table as either an implicit cost or an explicit cost of selling pianos.
Implicit Cost
Explicit Cost
The wholesale cost for the pianos that Darnell pays the manufacturer
The salary Darnell could earn if he worked as an accountant
The wages and utility bills that Darnell pays
The rental income Darnell could receive if he chose to rent out his showroom
Complete the following table by determining Darnell's accounting and economic profit of his piano business.
Profit
(Dollars)
Accounting Profit
Economic Profit
If Darnell's goal is to maximize his economic profit, he( should, should not) stay in the piano business because the economic profit he would earn as an accountant would be $______.

Answers

Answer:

Definition of Economic Costs

Implicit and Explicit Costs:

The wholesale cost for the pianos that Darnell pays the manufacturer  Explicit Cost

The salary Darnell could earn if he worked as an accountant  Implicit Cost

The wages and utility bills that Darnell pays  Explicit Costs

The rental income Darnell could receive if he chose to rent out his showroom  Implicit Cost

Complete the following table by determining Darnell's accounting and economic profit of his piano business.

Profit

(Dollars)

Accounting Profit        $89,000

Economic Profit             $3,000 ($89,000 - 86,000)

If Darnell's goal is to maximize his economic profit, he( should, should not) stay in the piano business because the economic profit he would earn as an accountant would be $__86,000____.

This economic profit includes the rental and salary income that Darnell can earn.

Explanation:

a) Data:

Sales Revenue = $842,000

Cost of goods sold 452,000

Wages & Utilities = 301,000

Opportunity cost of showroom = $38,000

Opportunity cost of employment = $48,000

Total opportunity cost = $86,000

Profit           (Dollars)

Sales Revenue =   $842,000

Cost of goods sold 452,000

Gross profit            $390,000

Wages & Utilities =   301,000

Net Income             $89,000

Opportunity cost of showroom = $38,000

Opportunity cost of employment = $48,000

Total opportunity cost = $86,000

In its first year of business, Borden Corporation had sales of $2,020,000 and cost of goods sold of $1,210,000. Borden expects returns in the following year to equal 6% of sales. The adjusting entry or entries to record the expected sales returns is (are):

Answers

Answer:  Please see answers in explanation column

Explanation:

Accounts title and explanation            Debit          Credit

Sales returns and allowances       $121,200      

Sales refund payable                                               $121,200

Calculation

Expected Sales returns and allowances = sales x expected percentage

= 2,020,000 x 6%=   $121,200

Accounts title and explanation            Debit              Credit

Inventory returns estimated               $72,600

Cost of goods sold                                                     $72,600

Calculation

expected Cost of goods sold =  Cost of goods soldx expected percentage

= 1,210,000 x6%=$72,600

The lowest amount a manufacturer can pay factory workers is an example of

an incentive.
a price floor.
a price ceiling.
an elastic service.

Answers

Answer:

The answer to this question is given below in the explanation section.

Explanation:

The correct answer to this question is the price floor.

The Price floor is the lowest amount that is imposed by the government or group-imposed lowest price limit for a product or service. The government uses the price floor to keep prices at a certain level from going to low. So price floors for workers set by the government that the employer should not pay less than the set amount.

while other options are not correct because::

The price ceiling is the high amount set by the government or the by other groups for a product or service.

An incentive is an amount or something that can be given to employees or someone for motivation or encouraging them to do something.  

An elastic service is given by amazon to develop and run the application with different tools etc.

Answer:price floor

Explanation:

Cari created a list of ways to reduce her spending. Which activity should she omit from her list? Choose the correct answer below. use less expensive places for services such as haircuts wear items of clothing for an extra season buy store brands instead of name brands for food and other items rely on friends to treat me when I am out of money

Answers

Answer:

b

Explanation:

Determine the selling price PV, per $1,000 maturity value, of the bond. HINT [See Example 8.] (Assume twice-yearly interest payments. Do not round those payments to the nearest cent. Round your selling price PV to the nearest cent.) 20-year, 4.225% bond, with a yield of 4.23%

Answers

Answer:

$999.60

Explanation:

For computing the selling price i.e. present value we have to use the present value function i.e. shown below:

Given that

NPER = 20 × 2 = 40

PMT = $1,000 × 4.225% ÷ 2 = $21.125

RATE = 4.23% ÷ 2 = 2.115%

FV = $1,000

the formula is shown below:

PV =-PV(RATE;NPER;PMTFV;TYPE)

After applying the above formula, the present value is $999.60

Suppose you receive at the end of each year for the next three years. a. If the interest rate is ​, what is the present value of these cash​ flows? b. What is the future value in three years of the present value you computed in ​(a​)? c. Suppose you deposit the cash flows in a bank account that pays interest per year. What is the balance in the account at the end of each of the next three years​ (after your deposit is​ made)? How does the final bank balance compare with your answer in ​(b​)?

Answers

Answer:

the question is missing the numbers, so I looked for a similar question:

Suppose you receive $100 at the end of each year for the next three years. a. If the interest rate is 8%, what is the present value of these cash flows? (Answer: $257) b. What is the future value in three years of the present value you computed in (a)? (Answer: $324.61) c. Suppose you deposit the cash flows in a bank account that pays 8% interest per year. What is the balance in the account at the end of each of the next three years (after your deposit is made)? How does the final bank balance compare with your answer in (b)?

a) PV = $100/1.08 + $100/1.08² + $100/1.08³ = $257.71

b) FV = $257.71 x (1 + 8%)³ = $324.64

c) FV = ($100 x 1.08²) + ($100 x 1.08) + $100 = $324.64

it is exactly the same as the answer for (b)

Mcmurtry Corporation sells a product for $250 per unit. The product's current sales are 13,600 units and its break-even sales are 10,608 units. The margin of safety as a percentage of sales is closest to:

Answers

Answer:

22%

Explanation:

Margin of Safety is the amount by which sales can fall before making a loss.

Margin of Safety = Expected Sales - Break-even Sales ÷ Expected Sales

                           = (13,600 - 10,608) ÷ 13,600

                           = 0.22 or 22%

A check register shows a balance of $152.34. The bank statement shows that a check for $75.00 deposited by the account owner was drawn against insufficient funds and was returned. A charge for $2.00 was also deducted by the bank because of the return. Compute the adjusted cash balance of the check register.

Answers

Answer:

$150.34

Explanation:

The $75 check has been drawn against insufficient funds and has been returned so this check won't be included in the adjusted cash balance of the check register.

A charge for $2.0 will be deducted from the balance shown by the cash register above to calculate the adjusted cash balance of the check register.

Adjusted cash balance of the check register = $152.34 - $2

Adjusted cash balance of the check register = $150.34

In early 2016, the same Germany machinery company has interest from four prospective clients from emerging markets: Indonesia, Brazil, Russia, and South Africa. They all want to buy ten machines, but the factory can only produce ten in time. Therefore, the company has to choose only one client. Given the volatility of the domestic currencies of the four prospective clients, the CFO would like to choose the client which is least likely to cancel the order due to currency volatility. The invoice comes due on June 30, 2016. According to volatility alone, which prospective client would be most likely to cancel the order?

Answers

Answer:

Brazil

Explanation:

According to the picture below, Brazilian real is the currency that has the lowers currency volatility, its spot is 4.0685, and its forward is 4.1820. These values are way lower than the values of the other three currencies, and for this reason, the CFO should choose the Brazilian client, clearly.

Indonesia is the country that is most likely to cancel this order. This is due to its high volatility.

Following the volatility chart that is attached to this question we can clearly spot that Indonesia has the most likelihood to cancel the order.

The volatility of the currency of the country Indonesia is shown to be high and this high volatility is very much going to have an impact on trade.

When there is a weakness in the currency of a nation, the cost of import would go up.

Read more on https://brainly.com/question/13694329?referrer=searchResults

Silver Enterprises has acquired All Gold Mining in a merger transaction. The following balance sheets represent the premerger book values for both firms:
Silver Enterprises
Current assets $ 10,000
Current liabilities $ 7,840
Other assets 3,100
Long-term debt 5,110
Net fixed assets 17,300
Equity 17,450
Total $ 30,400
Total $ 30,400
All Gold Mining
Current assets $ 2,920
Current liabilities $ 2,620
Other assets 1,380
Long-term debt 0
Net fixed assets 6,110
Equity 7,790
Total $ 10,410
Total $ 10,410
Construct the balance sheet for the new corporation if the merger is treated as a purchase for accounting purposes. The market value of All Gold Mining's fixed assets is $7,510; the market values for current and other assets are the same as the book values. Assume that Silver Enterprises issues $14,660 in new long-term dept to finance the acquisition.

Answers

Answer:

                   Silver Enterprises Post Merger Balance Sheet

Current Assets                  12,920    Current liabilities          10,460

Other Asset                       4,480      Long-term debt            19,770

Net Fixed Asset                24,810     Equity                           17,450

Goodwill                            5,470                                                          

                                         $47,880                                         $47,680

Explanation:

Current assets = 10,000 + 2,920 = 12,920

Other assets = 3,100 + 1,380 = 4,480

Current liabilities = 7,840 + 2,620 = 10,460

Net fixed assets = 17,300 + 7,510= 24,810

Long-term debt = 5,110 + 14,660  = 19,770

Equity = $17,450

SY Manufacturers (SYM) is producing T-shirts in three colors: red, blue, and white. The monthly demand for each color is 3,487 units. Each shirt requires 0.75 pound of raw cotton that is imported from the Luft-Geshfet-Textile (LGT) Company in Brazil. The purchasing price per pound is $1.55 (paid only when the cotton arrives at SYM's facilities) and transportation cost by sea is $0.70 per pound. The traveling time from LGT’s facility in Brazil to the SYM facility in the United States is two weeks. The cost of placing a cotton order, by SYM, is $186 and the annual interest rate that SYM is facing is 32 percent of total cost per pound.
a. What is the optimal order quantity of cotton? (Round your answer to the nearest whole number.)
Optimal order quantity pounds
b. How frequently should the company order cotton? (Round your answer to 2 decimal places.)
Company orders once every months
c. Assuming that the first order is needed on 1-Jul, when should SYM place the order?
17-Jun
1-Jul
15-Jul
d. How many orders will SYM place during the next year? (Round your answer to 2 decimal places.)
Number of orders times
e. What is the resulting annual holding cost? (Round your answer to the nearest whole number.)
Annual holding cost $ per year
f. What is the resulting annual ordering cost?
Annual ordering cost $
g. If the annual interest cost is only 5 percent, how will it affect the annual number of orders, the optimal batch size, and the average inventory?

Answers

Answer: See explanation

Explanation:

a. The optimal order quantity can be calculated as:

= √2DS/H

where

D = 3 × 12 × 3487 × 0. 75

= 94149

Total cost incurred during purchase

= $1.55 + $0.70

= $2.25

Setup cost (S) = $186

Holding cost

= 32% × $2.25

= 0.32 × $2.25

= $0.72

Optimal order quantity

= √(2 × 94149 × 186)/0.72

= 6974.50

b. This will be calculated as:

Annual demand / EOQ

= 94149/6974.50

= 13.50

The company should order cotton 13.5 times per year.

c. Since the first order is needed on 1-July and lead time is 2 weeks, SYM should place the order before 17th June.

d. This will be:

= Annual demand / EOQ

= 94149/6974.50

= 13.5 orders

e. The resulting annual holding cost will be:

= 0.72 × (6974.50/2)

= 0.72 × 3487.25

= $2510.82

f. The resulting annual ordering will be:

= 94149/6974.50 × $186

= 13.5 × $186

= $2511

You are invested in two hedge funds. The probability that hedge fund Alpha generates positive returns in any given year is 60%. The probability that hedge fund Omega generates positive returns in any given year is 70%. Assume the returns are independent. What is the probability that both funds generate positive returns in a given year? What is the probability that both funds lose money?

Answers

Answer:

42% and 12%

Explanation:

The computation is shown below:

For Alpha Fund

Positive return = 60%

Lose money is

= 1 - 0.60

= 40%

For Omega Fund

 Positive return = 70%

Lose money is

= 1 - 0.70

= 0.30

Also the returns are non-dependent

Now the positive return is

= 60% × 70

= 42%

And, the probability of lose money is

= 40% × 30%

= 12%

The transactions of Spade Company:

a. Kacy Spade, owner, invested $16,750 cash in the company in exchange for common stock.
b. The company purchased office supplies for $486 cash.
c. The company purchased $9,263 of office equipment on credit.
d. The company received $1,977 cash as fees for services provided to a customer.
e. The company paid $9,263 cash to settle the payable for the office equipment purchased in transaction c.
f. The company billed a customer $3,551 as fees for services provided.
g. The company paid $520 cash for the monthly rent.
h. The company collected $1,491 cash as partial payment for the account receivable created in transaction f.
g. The company paid a $800 cash dividend to the owner (sole shareholder).

Required:
Prepare the Trial Balance. Use May 31 as its report date.

Answers

Answer:

Please see attached trial balance as requested.

Explanation:

Please find attached solved trial balance for Spade Company as at May 31.

Darby Company, operating at full capacity, sold 500,000 units at a price of $94 per unit during the current year. Its income statement is as follows:
Sales $47,000,000
Cost of goods sold 25,000,000
Gross profit $22,000,000
Expenses:
Selling expenses $4,000,000
Administrative expenses 3,000,000
Total expenses 7,000,000
Income from operations $15,000,000
The division of costs between variable and fixed is as follows:
Variable Fixed
Cost of goods sold 70% 30%
Selling expenses 75% 25%
Administrative expenses50% 50%
Management is considering a plant expansion program for the following year that will permit an increase of $3,760,000 in yearly sales. The expansion will increase fixed costs by $1,800,000 but will not affect the relationship between sales and variable costs.
Required:
1. Determine the total variable costs and the total fixed costs for the current year.
Total variable costs $_____
Total fixed costs $_____
2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year.
Unit variable cost $_____
Unit contribution margin $_____
3. Compute the break-even sales (units) for the current year.
4. Compute the break-even sales (units) under the proposed program for the following year.
5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $15,000,000 of income from operations that were earned in the current year.
6. Determine the maximum income from operations possible with the expanded plant.
7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year?
8. Based on the data given, would you recommend accepting the proposal?
a. In favor of the proposal because of the reduction in break-even point.
b. In favor of the proposal because of the possibility of increasing income from operations.
c. In favor of the proposal because of the increase in break-even point.
d. Reject the proposal because if future sales remain at the current level, the income from operations will increase.
e. Reject the proposal because the sales necessary to maintain the current income from operations would be below the current year sales.

Answers

Answer:

1. Determine the total variable costs and the total fixed costs for the current year.

Total variable costs = $17,500,000 + $3,000,000 + $1,500,000 = $22,000,000 Total fixed costs = $10,000,000

2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year.

Unit variable cost = $22,000,000 / 500,000 = $44 Unit contribution margin = $94 - $44 = $50

3. Compute the break-even sales (units) for the current year.

break even point = $10,000,000 / $50 = 200,000 units

4. Compute the break-even sales (units) under the proposed program for the following year.

break even point = $11,800,000 / $50 = 236,000 units

5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $15,000,000 of income from operations that were earned in the current year.

units = ($11,800,000 + $15,000,000) / $50 = 536,000 units

6. Determine the maximum income from operations possible with the expanded plant.

total units sold 500,000 + 40,000 = 540,000total contribution margin = 540,000 x $50 = $27,000,000operating income = $27,000,000 - $11,800,000 = $15,200,000

7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year?

operating income = (500,000 x $50) - $11,800,000 = $13,200,000represents a decrease of $15,000,000 - $13,200,000 = $1,800,000

8. Based on the data given, would you recommend accepting the proposal?

b. In favor of the proposal because of the possibility of increasing income from operations.

Landhill Corporation is authorized to issue 49,000 shares of $5 par value common stock. During 2020, Sandhill took part in the following selected transactions.

1. Issued 4,500 shares of stock at $45 per share, less costs related to the issuance of the stock totaling $7,900.
2. Issued 1,100 shares of stock for land appraised at $49,000. The stock was actively traded on a national stock exchange at approximately $46 per share on the date of issuance.
3. Purchased 470 shares of treasury stock at $41 per share. The treasury shares purchased were issued in 2016 at $38 per share.

Required:
a. Prepare the journal entry to record item 1.
b. Prepare the journal entry to record item 2.
c. Prepare the journal entry to record item 3 using the cost metho

Answers

Answer: Please see answer in explanation column

Explanation:

1. Journal to record common stock issued

Account title                                             Debit               Credit

  Cash                                                 $210,400

Common stock                                                           $22,500

Paid in capital in excess of par                                  $187,900

common stock

Calculation:

Cash = 4,500 x $45 + $7900= $210,400

Common stock =4,500 x $5=$22,500

Paid in capital in excess of par common stock = Cash - Common stock =$210,400-$22,500=$187,900

 

2) To reccord Land purchased in exchange of common stock

Account title                                             Debit               Credit

  Land                                                     $50,600

Common stock                                                             $ 5,500

Paid in capital in excess of par                                     $45,100

common stock

Calculation:

Land= 1,100 x $46 = $50,600

Common stock =1,100 x $5=$5,500

Paid in capital in excess of par common stock = 1100 x (46-5)$41=45,100

3) To record purchase of treasury stock

Account title                                             Debit               Credit

  Treasury stock                                  $19,270                  

   Cash                                                                              $19,270

Calculation:

Treasury stock       =  470 shares x$41= $19,270

Blight Financial has an investment in bonds issued by Searing Industries that are classified as trading securities. At December 31, Year 2, the Investment in Searing bonds account had a debit balance of $500,000, and the bonds were purchased at par so the $500,000 equals amortized cost. The Fair Value Adjustment account had a debit balance of $20,000. On December 31, Year 3, the amortized cost of those bonds has not changed, but the fair value of those bonds was $515,000. Which of the following will be included in the related journal entry dated December 31, Year 3?

a. Debit to Fair value adjustment for $5,000.
b. Credit to Fair value adjustment for $5,000.
c. Debit to Fair value adjustment for $25,000.
d. Credit to Fair value adjustment for $25,000.

Answers

Answer:

b. Credit to Fair value adjustment for $5,000.

Explanation:

Particulars                                                               Amount

Beginning balance of fair value adjustment         $20,000

Less: Unrealized gain on Dec 31                            $15,000

          (515,000 - 500,000)

Credit to fair value adjustment                              $5,000

Fields Company has two manufacturing departments, forming and painting. The company uses the weighted-average method of process costing. At the beginning of the month, the forming department has 36,000 units in inventory, 70% complete as to materials and 30% complete as to conversion costs. The beginning inventory cost of $82,100 consisted of $58,000 of direct materials costs and $24,100 of conversion costs.
During the month, the forming department started 520,000 units. At the end of the month, the forming department had 40,000 units in ending inventory, 85% complete as to materials and 35% complete as to conversion. Units completed in the forming department are transferred to the painting department. Cost information for the forming department is as follows:
Beginning work in process inventory $82,100
Direct materials added during the month 1,942,930
Conversion added during the month 1,359,730
1A. Calculate the equivalent units of production for the forming department.
1B. Calculate the costs per equivalent unit of production for the forming department.
1C. Using the weighted-average method, assign costs to the forming department’s output—specifically, its units transferred to painting and its ending work in process inventory.

Answers

Answer:

Please see attached detailed solution

Explanation:

1a. Direct material 550,000

Conversion 530,000

1b. Direct materials $3.64 per EUP

Conversion $2.61 per EUP

1c. Costs assigned to the forming department's output

• Total cost of ending work in process $160,300

• Total costs assigned $3,384,760

Please see attached detailed solution to the above questions and answers.

Hart Attorney at Law experienced the follwoing transactions in 2016, the first year of operations:

1. Accepted $36,000 on 4/1/16, as a retainer for services to be performed evenly over the next 12 months.
2. Performed legal services for cash of $54,000.
3. Purchased $2,800 of office suppies on account.
4. Paid $2,400 of the amount due on accounts payable.
5. Paid a cahs dividend to the stockholders of $5,000.
6. Paid cash for operationg expenses of $31,000.
7. Determined that at the end of the accounting period $200 of office supplies remained on hand.
8. On 12/31/16, recognized the revenue that had been earned for services performed in accordance with Transaction 1

Required:
Show the effects of the events on the fianncial statements using a horizontal statement model.

Answers

Answer:

I used an excel spreadsheet since there is not enough room here.              

Explanation:

Major League Bat Company manufactures baseball bats. In addition to its work in process inventories, the company maintains inventories of raw materials and finished goods. It uses raw materials as direct materials in production and as indirect materials. Its factory payroll costs include direct labor for production and indirect labor. All materials are added at the beginning of the process, and conversion costs are applied uniformly throughout the production process. Required: You are to maintain records and produce measures of inventories to reflect the July events of this company. The June 30 balances: Raw Materials Inventory, $22,000; Work in Process Inventory, $9,690 ($2,810 of direct materials and $6,880 of conversion); Finished Goods Inventory, $140,000; Sales, $0; Cost of Goods Sold, $0; Factory Payroll Payable, $0; and Factory Overhead, $0. 1. Prepare journal entries to record the following July transactions and events. Purchased raw materials for $130,000 cash (the company uses a perpetual inventory system). Used raw materials as follows: direct materials, $52,540; and indirect materials, $11,500. Recorded factory payroll payable costs as follows: direct labor, $206,000; and indirect labor, $26,500. Paid factory payroll cost of $232,500 with cash (ignore taxes). Incurred additional factory overhead costs of $83,000 paid in cash. Allocated factory overhead to production at 50% of direct labor costs. 2. Information about the July inventories follows. Use this information with that from part 1 to prepare a process cost summary, assuming the weighted-average method is used. (Round "Cost per EUP" to 2 decimal places.) Units Beginning inventory 6,500 units Started 14,000 units Ending inventory 8,000 units Beginning inventory Materials—Percent complete 100 % Conversion—Percent complete 80 % Ending inventory Materials—Percent complete 100 % Conversion—Percent complete 30 % 3.
Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: Total costs transferred to finished goods for July. Sale of finished goods costing $273,200 for $640,000 in cash.Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: Total costs transferred to finished goods for July. Sale of finished goods costing $273,200 for $640,000 in cash. Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: Total costs transferred to finished goods for July. Sale of finished goods costing $273,200 for $640,000 in cash.

Answers

Answer:

Major League Bat Company

1. Journal Entries:

a. Debit Raw Materials Inventory $130,000

Credit Cash Account $130,000

To record the purchase of raw materials.

b. Debit Work in Process $52,540

Debit Manufacturing Overhead $11,500

Credit Raw Materials $64,040

To record materials used.

c.  Debit Factory Wages $232,500

Credit Cash Account $232,500

To record factory payroll paid in cash.

d. Debit Work in Process $206,000

Debit Manufacturing Overhead $26,500

Credit Factory Wages $232,500

To record factory payroll costs.

e. Debit Manufacturing Overhead $83,000

Credit Cash Account $83,000

To record additional factory overhead costs.

f. Debit Work In Process $103,000

Credit Manufacturing Overhead $103,000

To allocate factory overhead to production at 50% of direct labor costs.

2. Computation of Equivalent Units of Production:

                                                           Materials  Conversion   Total

Beginning inventory   6,500 units      6,500         5,200

Started                       14,000 units     14,000        14,000

Ending inventory        8,000 units      8,000         2,400

Total equivalent unit                         22,000       16,400

3. Costs of Production:

Beginning Inventory                           $2,810         $6,880

Raw materials                                    52,540      309,000

Total costs                                       $55,350     $315,880

Total equivalent unit                         22,000         16,400

Cost per equivalent unit                     $2.52         $19.26

Total costs:

Started                       14,000   $35,280     14,000  $269,640  $304,920

Ending inventory        8,000      20,160      2,400      46,224     $66,384

Total                         22,000   $55,440     16,400  $315,864    $371,304

4. Journal Entries:

Debit Finished Goods Inventory $304,920

Credit Work In Process $ 304,920

To record the transfer of goods.

Debit Cost of Goods Sold $273,200

Credit Finished Goods Inventory $273,200

To record the cost of goods sold.

Debit Cash Account $640,000

Credit Sales Revenue $640,000

To record the sale of goods for cash.

5. Ledger accounts:

Raw Materials Inventory

Accounts Titles       Debit         Credit

Balance                $22,000

Cash Account       130,000

Work in Process                     $52,540

Manufacturing Overhead          11,500

Work In Process

Accounts Titles       Debit         Credit

Balance                $9,690

Raw materials      52,540

Factory Wages 206,000

Manufacturing

Overhead         103,000

Finished Goods Inventory    $ 304,920

Balance                                      66,384

Manufacturing Overhead

Accounts Titles       Debit         Credit

Raw materials       $11,500

Factory wages      26,500

Other overheads  83,000

Work in Process applied       $103,000

Underapplied overhead            18,000

6. Income Statement:

For July

Sales Revenue                             $640,000

Cost of goods sold        273,200

Underapplied overhead  18,000  $291,200

Gross profit                                   $348,800

Explanation:

a) Data and Calculations:

June 30 Balances:

Raw Materials Inventory, $22,000;

Work in Process Inventory, $9,690 ($2,810 of direct materials and $6,880 of conversion);

Finished Goods Inventory, $140,000;

Sales, $0;

Cost of Goods Sold, $0;

Factory Payroll Payable, $0; and

Factory Overhead, $0. 1.

At year-end 2018, Marvel Company total assets were $4.5 million, and its accounts payable were $850,000. Sales, which in 2018 were $5.5 million, are expected to increase by 25% in 2019. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Marvel typically uses no current liabilities other than accounts payable. Common stock amounted to $ 2.25 million in 2018, and retained earnings were $150,000. Marvel has arranged to sell $25,000 of new common stock in 2019 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2019. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 2.5%, and 55% of earnings will be paid out as dividends.

Required:
a. What were Marvel's total long-term debt and total liabilities in 2018?
b. How much new long-term debt financing will be needed in 2019?

Answers

Answer:

Marvel Company

a. Marvel's total long-term debt in 2018 = $1,250,000

a2. Marvel's total liabilities = $2,100,000 ($850,000 +$1,250,000)

b. New long-term debt financing needed in 2019 = $810,156

Explanation:

a) Data and Calculations:

Year-end 2018:

Total assets = $4.5 million

Accounts payable $850,000

Sales = $5.5 million

Common Stock = $2.25 million

Retained Earnings = $150,000

Long-term debt = Total assets Minus (Accounts payable + Equity)

= $4,500,000 - ($850,000 + 2,250,000 + 150,000)

= $1,250,000

Year 2019:

Sales = $6,875,000 ($5.5 million * 1.25)

Net profit margin on sales = $171,875 (2.5% * $6,875,000)

Dividends = 55% of earnings = $94,531 (55% * $171,875)

Retained earnings for the year =  $77,344

Retained earnings for 2018:         150,000

Retained earnings, 2019:           $227,344

Common Stock = $2,275,000 ($2,250,000 + $25,000)

Total equity = $2,502,344 ($2,250,000 + 227,344)

Total assets = $5,625,000 ($4.5 million * 1.25)

Accounts payable = $1,062,500 ($850,000 * 1.25)

Long-term debt = Total Assets - (Total equity + Accounts Payable)

= $5,625,000 - ($2,502,344 + 1,062,500)

= $2,060,156

Increase in long-term debt = $810,156 ($2,060,156 - $1,250,000)

Daily demand for a certain product is normally distributed with a mean of 138 and a standard deviation of 13. The supplier is reliable and maintains a constant lead time of 7 days. The cost of placing an order is $17 and the cost of holding inventory is $0.40 per unit per year. There are no stock-out costs, and unfilled orders are filled as soon as the order arrives. Assume sales occur over 358 days of the year.
Your goal here is to find the order quantity and reorder point to satisfy a 73 percent probability of not stocking out during the lead time.
a. To manage inventory, the company is using
Continuous review system
Periodic review system
b. Find the order quantity. (Round your answer to the nearest whole number.)
Order quantity books
c. Find the reorder point. (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.)
Reorder point

Answers

Answer:

A. Continuous review system

B. Order quantity = 2,049 Books

C. Reorder point=987

Explanation:

a. To manage inventory, the company is using CONTINUOUS REVIEW SYSTEM

b. Calculation to find the order quality

Using this formula

Order quantity = √((2DS)/H)

Let plug in the morning

Order quantity=√ ((2 x 49,404 x 17)/0.40)

Order quantity = 2,049 Books

Calculation for annual demand

Annual demand=138*358 days

Annual demand=49,404

C. Calculation for reorder point

First step is to find the σL

73 % S.L. - z = 0.613

Using this formula to find the σL

σL = (Lσ^2)

Let plug in the formula

σL=√(7(13)^2)

σL= 34.39

Second step is to find the Reorder point using this formula

Reorder point = d bar(L) + zσL

Let plug in the formula

Reorder point = (138)(7) + 0.613(34.39)

Reorder point = 966+21

Reorder point=987

What is a sum of money that is borrowed and is expected to be paid back with interest?

Answers

The sum of money that is borrowed and is expected to be paid back with interest is called debt.

Explanation: when someone borrows money from someone else or even from the bank it is done on the condition that the money would eventually be paid back in a certain period of time with an interest payment
a sum of money that is borrowed and is expected to be paid back with interest is a loan

A common step in the testing for accounts payable is to test subsequent disbursements for improper/proper inclusion/exclusion in year-end accounts payable CONCEPT REVIEW A common way to test accounts payable is to examine the check register after period end and make selections for testing. Items are selected and then examined for detail. A determination is then made to conclude whether the amount should have been a liability as of year-end and, if so, if it was recorded as such
1. When searching for unrecorded liabilities, the auditors consider transactions recorded__________year end.
2. Accounts payable __________can be mailed to vendors from whom substantial purchases have been made.
3. To gain overall assurance as to the reasonableness of accounts payable, the auditor may consider _________.
4. When auditors find unrecorded liabilities, before adjusting they must consider __________.
5 Auditiors need to consider_______ terms for determining ownership and whether a liability should be recorded.

Answers

Answer:

1. When searching for unrecorded liabilities, the auditors consider transactions recorded after year end.

Auditors consider transactions recorded after year end to determine if it was supposed to be recorded in the current period.

2. Accounts payable confirmation can be mailed to vendors from whom substantial purchases have been made.

As a way to keep a document trail, creditors from whom substantial goods were bought from can be mailed a confirmation.

3. To gain overall assurance as to the reasonableness of accounts payable, the auditor may consider ratios.

Ratios such as the Payables turnover can be used to evaluate the reasonableness of Accounts payable.

4. When auditors find unrecorded liabilities, before adjusting they must consider materiality.

They must consider if the adjustment is material or significant enough to record.

5 Auditiors need to consider shipping terms terms for determining ownership and whether a liability should be recorded.

Shipping terms need to be considered because they can tell who owns goods in transit and therefore if a liability is needed for them. Shipping terms such as FOB Shipping point mean that the business incurs the liability as soon as the seller ships the goods.

You have a tax basis of ​$ and a useful life of five years and no salvage value. Provide a depreciation schedule ​(dk for k1​5) for ​% declining balance with switchover to straight line. Specify the year to switchover. Determine the depreciation amounts using the ​% declining balance and​ straight-line methods and BV amounts for each year

Answers

Answer:

the numbers are missing, so I will use another question as an example:

the asset's cost is $100,000useful life is 5 yearsno salvage value150% declining balance

straight line depreciation = $100,000 / 5 = $20,000

150% declining balance depreciation year 1 = 1.5 x $100,000 x 1/5 = $30,000, since it is higher than straight line we will use declining balance

book value at end of year 1 = $100,000 - $30,000 = $70,000

straight line deprecation = $70,000 / 4 = $17,500

150% declining balance depreciation year 2 = 1.5 x $70,000 x 1/5 = $28,000, since it is higher than straight line we will use declining balance

book value at end of year 2 = $70,000 - $28,000 = $42,000

straight line depreciation = $42,000 / 3 = $14,000, since it is higher than declining balance we will use straight line ⇒ switchover year

150% declining balance depreciation year 3 = 1.5 x $42,000 x 1/5 = $12,600

book value at end of year 3 = $42,000 - $14,000 = $28,000

depreciation year 4 = $14,000 (straight line)

book value at end of year 4 = $28,000 - $14,000 = $14,000

depreciation year 5 = $14,000 (straight line)

book value at end of year 5 = $14,000 - $14,000 = $0

A company issues $50 million of bonds at par on January 1, 2018. The bonds pay 10% interest semi-annually on 12/31 and 6/30 and mature in 20 years. The journal entry when the bonds are sold is:

Answers

Answer: Please see explanation for answer

Explanation:

Journal entry to record sale of bonds

Account titles                           Debit                       Credit

Cash                                     $50,000,000

Bonds Payable                                                      $50,000,000

Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $900,000 of total manufacturing overhead for an estimated activity level of 75,000 machine-hours.

During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company’s warehouse. The company’s cost records revealed the following actual cost and operating data for the year:


Machine-hours 76,000
Manufacturing overhead cost $637,000
Inventories at year-end:
Raw materials $20,000
Work in process (includes overhead applied of $36,480) $115,800
Finished goods (includes overhead applied of $91,200) $289,500
Cost of goods sold (includes overhead applied of $480,320) $1,524,700

Required:

a. Compute the underapplied or overapplied overhead.
b. Assume that the company closes any underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
c. Assume that the company allocates any underapplied or over appliedoverhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate journal entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
d. How much higher or lower will net operating income be if the underapplied or overapplied overhead is allocated to Work in Process, Finished Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold?

Answers

Answer:

Please solution below

Explanation:

a. Compute the under applied or over applied overhead

First, we need to determine the predetermined overhead rate.

Predetermined overhead rate = Estimated total manufacturing overhead / Estimated total machine hours

= $900,000 / 75,000 hours

= $12.0 per hour

But;

Actual manufacturing overhead = $637,000

Manufacturing overhead applied to work in process during the year = 76,000 actual MHs × $12.00 per MH $912,000

Over applied overhead cost = $275,000

b. Journal entry

Cost of goods sold Dr $275,000

To Manufacturing over head applied Cr $275,000

c. The over applied over head would be allocated using the following percentages;

Overhead applied during the year ;

Work in process = $36,480. 6%

Finished goods = $91,200. 15%

Cost of goods sold = $480,320 79%

Total = $608,000 100%

The entry to record the allocation of the overhead applied would be ;

Work in process [6% × $275,000] = $16,500

Finished goods [15% × $275,000] = $41,250

Cost of goods sold [79% × $275,000] = $217,250

d. Comparing the two method;

Cost of goods sold if the over applied overhead is closed to the cost of goods sold [$1,524,700 + $275,000] = $1,799,700

Cost of goods sold if the overhead applied is closed to work in process, finished goods, and cost of goods sold = [$1,524,700 + $217,250] =

$1,741,950

Difference in cost of goods sold = $57,750

"The​ ________ includes all international economic transactions with income or payment flows occurring within the year."

Answers

Answer:

Current account

Explanation:

The current account is the account that involves all the transactions deals in an economic way and have international transactions. This shows the income generated and the flows of payment arise within the year or for the present period.

It could be in terms of trading of goods, trading of services, income, present transfers

Therefore the given situation represent the current account

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