Presented below is information related to Novak Corp., which sells merchandise with terms 2/10, net 60. Novak Corp. records its sales and receivables net. July 1 Novak Corp. sold to Warren Harding Co. merchandise having a sales price of $11,000. 5 Accounts receivable of $14,000 (gross) are factored with Andrew Jackson Credit Corp. without recourse at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. (These accounts were all past the discount period.) 9 Specific accounts receivable of $14,000 (gross) are pledged to Alf Landon Credit Corp. as security for a loan of $6,500 at a finance charge of 7% of the amount of the loan. The finance company will make the collections. (All the accounts receivable are past the discount period.) Dec. 29 Warren Harding Co. notifies Novak that it is bankrupt and will pay only 20% of its account. Give the entry to write off the uncollectible balance using the allowance method. (Note: First record the increase in the receivable on July 11 when the discount period passed.) Prepare all necessary entries in general journal form for Novak Corp

Answer:

1-Jul

Dr Accounts Receivable-Warren Harding Co $10,780

Cr Sales $10,780

5-Jul

Dr Cash $12,740

Dr Loss On Sale Of Receivable (Bal) $1,260

Cr Accounts Receivable $13,720

Cr Sales Discount Forfeited $280

9-Jul

Dr Accounts Receivable $280

Cr Sales Discount Forfeited $280

9-Jul

Dr Cash $6,045

Dr Interest Expenses $455

Cr Notes Payable $6,500

11-Jul

Dr Accounts Receivable-Warren Harding Co $220

Cr Sales Discount Forfeited $220

29-Dec

Dr Allowance For Doubtful Debts $8,800

Cr Accounts Receivable-Warren Harding Co $8,800

Explanation:

Preparation of all necessary entries in general journal form for Novak Corp

1-Jul

Dr Accounts Receivable-Warren Harding Co $10,780

Cr Sales (11000*98%) $10,780

5-Jul

Dr Cash (14,000*(1-.09)) $12,740

Dr Loss On Sale Of Receivable (Bal) $1,260

($13,720+$280-$12,740)

Cr Accounts Receivable (14,000*98%) $13,720

Cr Sales Discount Forfeited (14,000*2%) $280

9-Jul

Dr Accounts Receivable $280

Cr Sales Discount Forfeited (14,000*2%) $280

9-Jul

Dr Cash $6,045

(6500-455)

Dr Interest Expenses (6500*7%) $455

Cr Notes Payable $6,500

11-Jul

Dr Accounts Receivable-Warren Harding Co $220

Cr Sales Discount Forfeited (11000*2%) $220

29-Dec

Dr Allowance For Doubtful Debts (11,000*80%) $8,800

Cr Accounts Receivable-Warren Harding Co $8,800

Current information for the Healey Company follows:
Beginning raw materials inventory $ 16,600
Raw material purchases 61,400
Ending raw materials inventory 18,000
Beginning work in process inventory 23,800
Ending work in process inventory 29,400
Direct labor 44,200
Total factory overhead 31,400
All raw materials used were traceable to specific units of product. Healey Company's direct materials used for the year is:__________
a.) $116,200.
b.) $124,600
c.) $121,800.
d.) $127,400.
e.) $131,200.

Clement Manufacturing Company uses two departments to make its products. Department I is a cutting department that is machine intensive and uses very few employees. Machines cut and form parts and then place the finished parts on a conveyor belt that carries them to Department II, where they are assembled into finished goods. The assembly department is labor intensive and requires many workers to assemble parts into finished goods. The companyâs manufacturing facility incurs two significant overhead costs: employee fringe benefits and utility costs. The annual costs of fringe benefits are $420,000 and utility costs are $300,000. The typical consumption patterns for the two departments are as follows:

Department I Department II Total
Machine hours used 20,000 4,000 24,000
Direct labor hours used 2,000 14,000 16,000

The supervisor of each department receives a bonus based on how well the department controls costs. The companyâs current policy requires using a single allocation base (machine hours or labor hours) to allocate the total overhead cost of $720,000.

Required
Assume that you are the supervisor of Department

a. Calculate the allocation base that would minimize your departmentâs share of the total overhead cost.
b. Calculate the allocation base that would minimize your departmentâs share of the total overhead cost.
c. Calculate the amount of overhead that would be allocated to both departments using the base that you selected.
d. Compute of allocation rates for total overhead cost

The manager at the Overton Hotel in Lubbock believes that the success of the Texas Tech Red Raider Basketball team has an impact on the occupancy rate at the hotel during the first quarter of every year. Below are the number of victories for the Red Raiders in during the last three seasons and the hotel occupancy rate. This year, (year 4) the Red Raiders Basketball Team is expected to have another phenomenal season and win 31 games and the manager at the Overton has asked you to determine their first quarter occupancy rate for the upcoming year (year 4) using associative forecasting, given that the SLOPE = 0.0474 and the INTERCEPT =0.4743

Year Wins First Quarter Occupancy Rate
1 15 60%
2 28 90%
3 31 93%

a. 93.4%
b. 88.1%
c. 91.7%
d. 36.9%
e. 90.0%

Jennifer couldn't believe her bad luck. The business planning cycle at Allworld Insurance was almost over. The only thing her boss had asked her to do was to make copies of four sets of final plans. Each set contained a different level of planning and each was supposed to be delivered to a different manager for review. But now those documents are all over the floor. Everything has to be back in the right order as quickly as possible. Knowing that you are a planning expert, Jennifer asks for your help. She tells you that Allworld Insurance uses an aligned, or cascading, goal system. You can expect to see each set of plans now in a logical way throughout the company.
Chose the best plan for each of the following statement:
(1) We are known for our operating efficiency and for reducing insurance costs for our customers.
(2) The Human Resource Division will reduce the overall cost of fulfilling employment requisitions by eliminating the use of outside recruiting agencies.
(3) We will eliminate redundancies throughout the corporation to decrease our overall expenses by 20%.
(4) Each human resource employee will use advertisements and personal networking to attract at least 10 qualified applicants per open position.
(A) Tactical
(B) Mission statement
(C) Operational
(D) Strategic

Sheridan Enterprises reported cost of goods sold for 2020 of $1,322,900 and retained earnings of $4,854,000 at December 31, 2020. Sheridan later discovered that its ending inventories at December 31, 2019 and 2020, were overstated by $106,470 and $36,820, respectively. Determine the corrected amounts for 2020 cost of goods sold and December 31, 2020, retained earnings. Corrected cost of goods sold $enter a dollar amount Corrected 12/31/20 retained earnings $enter a dollar amount

Sarasota Company sells on credits goods that cost $310,000 to Ricard Company for $409,500 on January 2, 2020. The sales price includes an installation fee, which has a standalone selling price of $42,500. The standalone selling price of the goods is $367,000. The installation is considered a separate performance obligation and is expected to take 6 months to complete. (a) Prepare the journal entries (if any) to record the sale on January 2, 2020

Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value on December 31, 2018, of a five-period annual annuity of $5,000 under each of the following situations: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
1. The first payment is received on December 31, 2019, and interest is compounded annually.
2. The first payment is received on December 31, 2018, and interest is compounded annually.
3. The first payment is received on December 31, 2019, and interest is compounded quarterly.

What is the correct order for applying the following three items to adjust a partner's tax basis in his partnership interest: (1) Increase for share of ordinary business income, (2) Decrease for share of separately stated loss items, and (3) Decrease for distributions

Brooke needs a $6,000 personal loan.
Which loan option would require her to pay back the least amount of money?
A)24-month loan with an 8% annual simple interest rate
B)36-month loan with a 6% annual simple interest rate
C)60-month loan with a 4% annual simple interest rate
S) 72-month loan with a 2 annual simple interest rate



20 POINTS!!!!

Real business cycle theory argues that: a. changes in inventories are the cause of the business cycle. b. fluctuations in the rate of growth of total factor productivity cause the business cycle. c. aggregate demand is more important than aggregate supply in identifying the causes of the business cycle. d. changes in the money supply are the primary cause of the business cycle. e. changes in foreign exchange rates are the cause of the business cycle.

Mortensen Industries, which uses a process-costing system, adds material at the beginning of production and incurs conversion cost evenly throughout manufacturing. The following selected information was taken from the company's accounting records:
Total equivalent units of materials: 5,000
Total equivalent units of conversion: 4,400
Units started and completed during the period: 3,500
On the basis of this information, the ending work-in-process inventory's stage of completion is:_____.
a. 80%.b. 70%.c. 60%.d. 40%.

Cane Company manufactures two products called Alpha and Beta that sell for $210 and $172, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 128,000 units of each product. Its unit costs for each product at this level of activity are given below :
Alpha Beta
Direct materials $40 $24
Direct labor $38 $34
Variable manufacturing overhead $25 $23
Traceable fixed manufacturing overhead $33 $36
Variable selling expenses $30 $26
Common fixed expenses $33 $28
Total cost per unit $199 $171
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars.
Assume that Cane expects to produce and sell 113,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 28,000 additional Alphas for a price of $152 per unit. If Cane accepts the customer's offer, it will decrease Alpha sales to regular customers by 13,000 units.
a. Calculate the incremental net operating income if the order is accepted. (Loss amount should be indicated with a minus sign.)
b. Assume that Cane normally produces and sells 108,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?
c. Assume that Cane normally produces and sells 58,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?
d. Assume that Cane normally produces and sells 78,000 Betas and 98,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 11,000 units. If Cane discontinues the Beta product line, how much would profits increase or decrease?
e. Assume that Cane expects to produce and sell 98,000 Alphas during the current year. A supplier has offered to manufacture and deliver 98,000 Alphas to Cane for a price of $152 per unit. If Cane buys 98,000 units from the supplier instead of making those units, how much will profits increase or decrease?
f. Assume that Cane expects to produce and sell 73,000 Alphas during the current year. A supplier has offered to manufacture and deliver 73,000 Alphas to Cane for a price of $152 per unit. If Cane buys 73,000 units from the supplier instead of making those units, how much will profits increase or decrease?

A small town is considering paving paradise hotel to put up a parking lot. The land will cost $25,000 and the construction of the lot is estimated to be $150,000. Each year, costs associated with the parking lot are estimated to be $17,500. The income from the lot is expected to be $18,000 the first year and increase by $3,500 each year for the 12 year life of the lot. Determine the B/C ratio if interest rate is 12%. [4 points]

If a 10 percent increase in both capital and labor causes output to increase by less than 10 percent, the production function is said to exhibit decreasing returns to scale. If it causes output to increase by more than 10 percent, the production function is said to exhibit increasing returns to scale. Why might a production function exhibit decreasing or increasing returns to scale in below mention scenarios?

Scenario A: A small economy has many unemployed workers and much unused capital. However, unemployed workers have less work experience and education than those currently working. An increase in consumer demand causes all firms in the economy to hire 10% more workers and lease 10% more capital.

Scenario B: A developing national economy currently employs a small percentage of its available labor force and capital. Increased global demand for the nation's output requires its firms to employ 10% more labor and 10% more capital. This change allows firms to try new and novel combinations of labor and capital in their production processes.

Scenario C: A small island nation's economy consists solely of commercial fishing firms. These firms currently employ modest boats manned by small crews to efficiently harvest all of the 10-mile offshore perimeter of the nation's sovereign ocean waters. Each day, these boats go out to sea and return to the island to deliver their catch to buyers. A new treaty expands this legal fishing area to a 20-mile offshore perimeter. The firms respond by employing 10% more boats and 10% more crews to exploit this new opportunity.

Sheen Co. manufactures laser printers. It has outlined the following overhead cost drivers. Overhead Costs Pool Cost Driver Overhead Cost Budgeted cost driver Quality control Number of inspections $ 64,800 1,080 Machine operation Machine hours 132,000 1,100 Materials handling Number of batches 900 30 Miscellaneous overhead cost Direct labor hours 48,000 4,000 Sheen Co. has an order for 1,000 laser printers that has the following production requirements: Number of Inspections 175 Machine Hours 180 Number of Batches 5 Direct Labor Hours 650 Use activity-based costing to determine a unit cost for the laser printers

Sam bought brushes for $8, a palette for $5, and oil paints for $15. He paid $29.82 in all. What sale-tax rate did Sam pay?

A.
0.06%
B.
0.65%
C.
6.5%

Natalia needs to create a subreport to provide information about suppliers for a particular category of item in a table. What should she do?

Choose from a list.
Define a list.
Show suppliers for each record using foreign/primary key relationship.
Create a data report that shows the entire list of suppliers.

Suppose Lana lives in a small college town where, every weekend, 10 independent food cart owners set up shop and sell hot dogs on the street. They are popular with students, and they frequently locate where students hang out. One evening, Lana overhears the conversation of three of the food cart owners as they conspire to raise the price of their hot dogs. That same night, she reports the conversation to the Department of Justice via their antitrust complaint website. Why might the Department of Justice NOT send an agent to investigate the collusion attempt that Lana witnessed?
a) Antitrust laws are applicable only to collusion attempts that occur on federal government property and the collusion attempt occurred on private property
b) Collusion among small competitors like street vendors is actually beneficial to consumers.
c) The Department of Justice lacks the resources to investigate every case of collusion reported.
To ensure small businesses a fair shot at competing with larger businesses, President Obama issued an official executive order to the Department of Justice in 2012 to stop pursuing antitrust violations involving small businesses only
d) There is not a law that prohiblts collusion among competitors

The following table presents Generic Motors Company's production budget. GM's inventory policy is to have ending inventory equal to20% of next month's sales.
February March April
Ending inventory 5,000
Beginning inventory 2,000
Budgeted sales 13,000 17,000 18,000
Budgeted production
Required:
a) Fill in the missing numbers in the table above.
(Hint if you get stuck: What is the relation between ending inventory for one month and beginning inventory for the following month?)
b) Why do firms want to hold inventory of finished goods? (an alternative could be to produce exactly the amount they are going to sell, and hold zero inventories)

On October 29, 2012, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is S20 and its retail selling price is S75 in both 2012 and 2013. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred.

2012
Nov. 11 Sold 105 razors for S7,875 cash.
30 Recognized warranty expense related to November sales with an adjusting entry.
Dec. 9 Replaced 15 razors that were returned under the warranty.
16 Sold 220 razors for S16,500 cash.
29 Replaced 30 razors that were returned under the warranty.
31 Recognized warranty expense related to December sales with an adjusting entry.

2013
Jan. 5 Sold 150 razors for S11,250 cash.
17 Replaced 50 razors that were returned under the warranty.
31 Recognized warranty expense related to January sales with an adjusting entry.

Required:
a. Prepare journal entries to record these transactions and adjustments for 2012 and 2013.
b. How much warranty expense is reported for November 2012 and for December 2012?
c. How much warranty expense is reported for January 2013?
d. What is the balance of the Estimated Warranty Liability account as of December 31, 2012?

Extend the application of a method or conclusion


a.Segmentation b.Extrapolate


c.Diffusion d.Multinational

On January 1, 2021, Majestic Mantles leased a lathe from Equipment Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there is no purchase option or guarantee of a residual value by Majestic. Portions of the Equipment Leasing’s lease amortization schedule appear below: Jan. 1 Payments Effective Interest Decrease in Balance Outstanding Balance 308,032 2021 30,000 30,000 278,032 2022 30,000 23,633 6,367 271,665 2023 30,000 23,092 6,908 264,757 2024 30,000 22,504 7,496 257,261 2025 30,000 21,867 8,133 249,128 2026 30,000 21,176 8,824 240,303 2027 30,000 20,426 9,574 230,729 — — — — — — — — — — — — — — — 2038 30,000 6,513 23,487 53,135 2039 30,000 4,516 25,484 27,651 2040 30,000 2,350 27,650 0 Required: 1. What is Majestic’s lease liability after the first lease payment?2. What amount would Majestic record as a right-of-use asset? 3. What is the lease term in years? 4. What is the effective annual interest rate? (Round your percentage answers to 1 decimal place.) 5. What is the total amount of lease payments? 6. What is the total effective interest expense recorded over the term of the lease?

Braam Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 11,500 hours. At the end of the year, actual direct labor-hours for the year were 9,700 hours, the actual manufacturing overhead for the year was $143,350, and manufacturing overhead for the year was underapplied by $18,220. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been: (Do not round your intermediate calculations.)

A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year: (3 points)
Debit Credit
Cash sales……………………………………………….. $188,000
Credit sales……………………………………………… 275,000
Accounts receivable…………………………………….. $76,000
Allowance for doubtful accounts……………………….. 1,000
Prepare the adjusting entry to estimate bad debts assuming an aging analysis estimates that 8% of the outstanding accounts receivable will be uncollectible.

You want to save at least $10,000 for a down payment on a new car. In cell B6, enter a formula to calculate how much you will have saved by putting away $500 per month for 24 months at a 1.5% annual interest rate. Use the appropriate cell references. Remember to use a negative value for the Pmt argument. There is no money in the account yet and payments are applied at the end of every month, so omit both the Pv and Type arguments. (Hint: Use the FV function.)

For each of the following accounts indicate the effect of a debit or a credit on the account and the normal balance.

a. Salaries and Wages Payable select an option select an option select an option
b. Unearned Service Revenue select an option select an option select an option
c. Rent Revenue select an option select an option select an option
d. Prepaid Insurance select an option select an option select an option
e. Advertising Expense select an option select an option select an option

You just got a job and plan to save for the college expenses for your kids. You have a son and a daughter. Your son is 4 years old, and your daughter is only 1 year old. Both of them plan to go to a four-year college at the age of 18. The estimated college expense is about $40,000 per year. Assume you plan to invest into a portfolio that offers you return about 6% per year until your daughter is graduated from college. How much money do you need to save every year if your first saving is in one year

A technological improvement in apple production will: A. Increase the demand for apples, lowering the equilibrium price but raising the equilibrium quantity of apples. B. Increase the supply of apples, raising the equilibrium price but lowering the equilibrium quantity of apples. C. Increase the supply of apples, lowering the equilibrium price and quantity of apples. D. Increase the supply of apples, lowering the equilibrium price but raising the equilibrium quantity of apples. E. Increase the supply apples, raising the equilibrium price and quantity of apples.

The adjusted trial balance of George Cooper Co. as of December 31, 2020, contains the following.

GEORGE COOPER CO. ADJUSTED TRIAL BALANCE DECEMBER 31, 2020
Debit Credit
Cash $20,397
Accounts Receivable 7,845
Prepaid Rent 3,205
Equipment 18,975
Accumulated Depreciation-Equipment $5,820
Notes Payable 6,625
Accounts Payable 6,397
Common Stock 20,925
Retained Earnings 12,235
Dividends 3,925
Service Revenue 12,515
Salaries and Wages Expense 7,765
Rent Expense 2,190
Depreciation Expense 215
Interest Expense 153
Interest Payable 153
$64,670 $64,670

Required:
a. Prepare an income statement.
b. Prepare a statement of retained earnings.
c. Prepare a classified balance sheet.

The factor-endowment theory predicts that because the United States is relatively abundant in capital and relatively scarce in labor, it will export capital-intensive goods, and its import-competing goods will be labor intensive. In the 1950s, Wassily Leontief, a Russian-American economist, tested this proposition by analyzing the capital/labor ratios of export industries and import-competing industries, using U.S. data. He found that the capital/labor ratio for U.S. export industries was lower than that of the United Statesâ import-competing industries, which means that U.S. exports were less capital intensive than import-competing goods. These findings appeared to contradict the predictions of the factor-endowment theory and became known as the Leontief paradox.

Replicate Leontief's test using the date shown in the following table. Compute the ratio for exports and imports, and enter each value in the last column of the table.

Used to produce $1 Million Worth of⦠Capital (Dollars) Labor(Person-years) Capital/ Labor Ratio (Dollars per person- year)
Exports 1,800,000 80
Imports 3,000,000 100

The numbers in the previous table show that US. exports are __________ and U.S. imports are_________

What do the results of your test illustrate? Check all that apply.

a. The Leontief paradox
b. The Heckschner-Ohlin theory