Answer:
7/1/20
Dr Treasury Stock $18,200
Cr Cash $18,200
9/1/20
Dr Cash $8,160
Cr Treasury Stock $7,280
Cr Paid-in Capital - Treasury Stock $880
1/1/20
Dr Cash $8,400
Dr Paid-in Capital - Treasury Stock $2,520
Cr Treasury Stock
Explanation:
Preparation of Sprinkle's journal entries to record these transactions using the cost method.
7/1/20
Dr Treasury Stock $18,200
(200 shares * $91 per share)
Cr Cash $18,200
(Being To record the reacquired 200 shares)
9/1/20
Dr Cash $8,160
(80 shares * $102 per share)
Cr Treasury Stock $7,280
(80 shares * 91 per share)
Cr Paid-in Capital - Treasury Stock $880
($8,160-$7,280)
(Being To record the reissue of treasury stock)
1/1/20
Dr Cash $8,400
(120 shares * $70per share)
Dr Paid-in Capital - Treasury Stock $2,520
($91- $70 = $21* 120 shares)
Cr Treasury Stock
(120 shares * $91 per share) $10,920
(Being To record the reissue of treasury stock)
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the company sold 60,000 of these balls, with the following results:
Sales (60,000 balls) $1,500,000
Variable expenses 900,000
Contribution margin 600,000
Fixed expenses 375,000
Net operating income $225,000
Required:
a. Compute the CM ratio and the break-even point in balls.
b. Compute the the degree of operating leverage at last year
Answer:
A. 37,500 balls
B.2.67
Explanation:
A. Compution for the CM ratio and the break-even point in balls.
First step is to calculate the Contribution margin
Selling price $25 100%
Variable expenses $15 60%
Contribution margin $10 40%
($25-$15)
Now let calculate the CM ratio and the break-even point in balls using this formula
Unit sales to break even=Fixed expenses/Unit contribution margin
Let plug in the formula
Unit sales to break even=$375,000/$10
Unit sales to break even= 37,500 balls
Therefore the CM ratio and the break-even point in balls will be 37,500 balls
b. Computation for the degree of operating leverage at last year
Using this formula
Degree of operating leverage =Contribution margin/Net operating income
Let plug in the formula
Degree of operating leverage=$600,000/$225,000=
Degree of operating leverage = 2.67 (rounded)
Therefore the degree of operating leverage at last year will be 2.67
On July 1, 2013, a Japanese company enters into a forward contract to buy $1 million with yen on January 1, 2014. On September 1, 2013, it enters into a forward contract to sell $1 million on January 1, 2014. Describe the profit or loss the company will make in dollars as a function of the forward exchange rates on July 1, 2013 and September 1, 2013.
Answer:
Profit (loss) from the contract = (FER2 - FER1) million yen
Explanation:
Let FER1 represents the forward exchange rates for the contracts entered into by the company on July 1, 2013, and let FER2 represents the forward exchange rates for the contracts entered into by the company on September 1, 2013.
Also, let SPOT represents the spot rate on January 1, 2014.
Since all exchange rates are measured as yen per dollar, we therefore have:
First contract profit = (SPOT - FER1) million yen
Second contract profit = (FER2 - SPOT) million yen
Profit (loss) from the contract = First contract profit + Second contract profit
Removing the million yen first and later add to the final answer, we have:
Profit (loss) from the contract = (SPOT - FER1) + (FER2 - SPOT)
Profit (loss) from the contract = SPOT - FER1 + FER2 - SPOT
Profit (loss) from the contract = (FER2 - FER1) million yen
Therefore, the profit or loss the company will make in dollars as a function of the forward exchange rates on July 1, 2013 and September 1, 2013 is Profit (loss) from the contract = (FER2 - FER1) million yen.
Which of the following best describes what investment is?
A required payment to owners of a company
An amount of money to pay for larger operations
A new company with several shareholders
A renewable technology in a developing country
Duce, Inc. produces two different products (Product A and Product X) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $125 per machine hour, and the activity rate for Inspection is $500 per batch. The activity drivers are used as follows:
Product A Product X Total
Machine hours 1,900 3,900 5,800
Number of batches 45 22 67
What is the amount of Machining cost assigned to Product X?
a. $780,000
b. $22,500
c. $380,000
d. $950,000
Answer:
Machinning= $487,500
Explanation:
Giving the following information:
The activity rate for Machining is $125 per machine hour.
Product A Product X Total
Machine hours 1,900 3,900 5,800
To assign costs to Product X, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Machinning= 125*3,900
Machinning= $487,500
During the summer you have made the decision to attend summer school, which precludes you from working at your usual summer job in which you normally earn $6,000 for the summer. Your tuition cost is $3,000, books and supplies cost $300, and room and board cost $1,000. The opportunity cost of attending summer school is....
Answer:
the opportunity cost of attending summer school is $10,300
Explanation:
The computation of the opportunity cost of attending summer school is shown below:
= Earnings for the summer + tuition cost + books and supplies cost + room and board cost
= $6,000 + $3,000 + $300 + $1,000
= $10,300
hence, the opportunity cost of attending summer school is $10,300
You are the creative director at a Milwaukee ad agency. Today, your copywriters are presenting you with their ideas for several 30-second radio spots for the City of Milwaukee Tourism Bureau, which wants to feature its own information center and tours, as well as city museums, art galleries, concerts, festivals, and special events. When they are ready, the best ideas will be taken to the marketing director at the City of Milwaukee for review and approval.(Scenario ) One copywriter shows you an idea that involves an announcer reading a "top ten" list of cool reasons to visit Milwaukee. What basic guidelines of radio copywriting does this technique address?a. Repeat the brand name.b. Stress the main selling points.c. Stimulate the imagination.d. Tailor copy to a time, place, and audience.
Answer:
City of Milwaukee Tourism Bureau
The basic guideline of radio copywriting that this technique addresses is:
b. Stress the main selling points.
Explanation:
Exploiting the city's selling points and communicating the benefits derivable from touring the city's museums, art galleries, concerts, festivals, and special events are the top guidelines for radio copywriting. Other guidelines will include focusing on the "you" and not "we," not providing too much information, and including a call for action.
The Osgood county refuse department runs two recycling centers. Center 1 costs $40 to run for an eight hour day. In a typical day, 140 pounds of glass and 60 pounds of aluminum are deposited at Center 1. Center 2 costs $50 for an eight hour day, with 100lbs of glass and 180lbs of aluminum deposited per day. The county has a commitment to deliver at least 1540lbs of glass and 1440lbs of aluminum per week. How many days per week should the county open each center to minimize its cost and still meet the requirements?
Answer:
Center 1 should be open 7 days a week, and center 2 should be open 6 days a week. Total cost = $580
Explanation:
minimize the following equation 40A + 50B
where:
A = center 1
B = center 2
constraints:
140A + 100B ≥ 1540
60A + 180B ≥ 1440
A ≤ 7
B ≤ 7
A, B ≥ 0
using Solver, the optimal solution is 7A + 6B = 580
Indirect labor includes:______.
1. labor of employees working directly on the product.
2. labor of the maintenance employees.
3. labor of the clerical staff.
Answer:
2, 3
Explanation:
Indirect labour includes labour not included in the production process of a good or service. They are involved in the running of the business instead
They include
Accountants
Lawyers
Administrative staffs
Maintenance employees
Direct labour includes labor of employees working directly on the product.
Black Bear Construction Company has a contract to construct a $6,000,000 bridge at an estimated cost of $5,300,000. The contract is to start in July 2017, and the bridge is to be completed in October 2019. The following data pertain to the construction period.
2015 2016 2017
Costs to date $1,325,000 $3,780,000 $5,430,000
Estimated costs to complete 3,975,0001, 620,000 —
Progress billings during the year 1,200,000 3,200,000 1,600,000
Cash collected during the year 1,000,000 2,340,000 2,660,000
What amount of gross profit should Black Bear recognize in 2017 using the percentage-of-completion method?
a. $150,000
b. $169,000
c. $210,000
d. $530,000
Answer:
a. $150,000
Explanation:
Calculation for What amount of gross profit should Black Bear recognize in 2017 using the percentage-of-completion method
First step is to calculate the Total estimated contract costs at 2016
Total estimated contract costs at 2016=$3,780,000+$1,620,000
Total estimated contract costs at 2016=$5,400,000
Second step is to calculate the Percentage of completion
Percentage of completion = $3,780,000 / ($3,780,000+$1,620,000)
Percentage of completion =$3,780,000 / $5,400,000
Percentage of completion =0.7*100
Percentage of completion =70%
Now let calculate the gross profit
Using this formula
Gross profit=Percentage of completion *(Contract Price-Total estimated contract costs at 2016)
Let plug in the formula
Gross profit=70%*($6,000,000-$5,400,000)
Gross profit=70%*$600,000
Gross profit=$150,000
Therefore amount of gross profit should Black Bear recognize in 2017 using the percentage-of-completion method will be $150,000
In the midst of closing procedures, Echo Corporation's accountant became ill and was hospitalized. You have volunteered to complete the closing of the books, and you find that all revenue and expense accounts have zero balances. The Dividends account has a debit balance of $18,750. The Retained Earnings accounts has a beginning credit balance of $134,000. Expenses totaled $325,500 and revenues totaled $364,400.
Prepare journal entries to complete the closing procedures as of year-end. To close the Dividends account.
Answer:
Revenues Dr $364,400
Income summary Cr $364,400
(Closing revenue accounts)
Income summary Dr $325,500
Expenses Cr $325,500
(Closing expense accounts)
Income summary Dr $38900
Retained earnings Cr $38900
(Transferring balance in income summary to retained earnings)
Dividends Dr $18,750
Retained earnings Cr $18,750
(Closing of dividends)
Transactions for Sunland Company for the month of June are presented below.
June
1 Issues common stock to investors in exchange for $4,080 cash.
2 Buys equipment on account for $1,720.
3 Pays $910 to landlord for June rent.
12 Bills Wil Wheaton $800 for welding work done.
Journalize the transactions. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
Answer:
Date Account Detail Debit Credit
June 1 Cash $4,080
Common Stock $4,080
Date Account Detail Debit Credit
June 2 Equipment $1,720
Accounts Payable $1,720
Date Account Detail Debit Credit
June 3 Rental expense $910
Cash $910
Date Account Detail Debit Credit
June 12 Accounts Receivable $800
Welding Revenue $800
Countries' real GDP per capita growth rates differ largely due to disparities in the rates at which they accumulate ____________ , as well as the rate of _________. In many countries, growth has been achieved through high rates _________ and________ spending.
Answer:
Human and physical capital; technological change; savings; investment.
Explanation:
The Gross Domestic Products (GDP) is the measure of the total market value of all finished goods and services made within a country during a specific period.
Simply stated, GDP is a measure of the total income of all individuals in an economy and the total expenses incurred on the economy's output of goods and services in a particular country. The Gross Domestic Products (GDP) of a country's economy gives an insight to it's social well-being, these includes;
I. Real Gross Domestic Product should be adjusted for any price level change using a price index. This simply means, it is adjusted for inflation to measure the value of goods and services produced by a country in a specific period of time.
Mathematically, [tex]{Real \; GDP} = \frac{Nominal \; GDP}{GDP \; deflator}[/tex]
Countries' real GDP per capita growth rates differ largely due to disparities in the rates at which they accumulate human and physical capital, as well as the rate of technological change. In many countries, growth has been achieved through high rates savings and investment spending.
Hence, an inflationary gap, also known as the expansionary gap in economics is used to measure the difference between the gross domestic product (GDP) and the current level of Real Gross Domestic Products that exists when a country's economy is gauged at a full employment rate.
You are asked to study the causal effect of hours spent on employee training (measured in hours per worker per week) in a manufacturing plant on the productivity of its workers (output per worker per hour). Describe EITHER ONE a-an ideal randomized controlled experiment to measure this causal effect.
Answer and Explanation:
An ideal randomized controlled experiment to measure the productivity of the factory would be established in the following way: owners of all sectors of the factory would be selected. This selection would be done completely randomly so that it was possible to select individuals different from each other. These employees would be divided into two groups. The first group would receive training, the second group would not receive training.
In this case, the productivity of one group would be compared to the productivity of the other, after both groups were submitted to a period of work, after the first group received training.
Friends Appliance uses a perpetual inventory system. The following are three recent merchandising transactions: May 10 Purchased 10 televisions from Sony Center on account. Invoice price, 30,000 per unit. The terms of purchase were 2/10, n/30. May 15 Sold one of these televisions for 35,000 cash. May 18 Sold Two of these television for 37,000 on Account. The credit term is 2/10, n/30. May 20 Paid the account payable to Sony Center within the discount period. May 25 Friends received cash of two televisions with in discount period. Instructions a. Prepare journal entries to record these transactions assuming that Friends records purchases of merchandise at: 1. Net cost 2. Gross invoice price b. Assume that Friends did not pay Sony Center and received cash within the discount period. Prepare journal entries to record this payment and receipt assuming that the original liability and Asset had been recorded at: 1. Net cost 2. Gross invoice price
I do not know You know
Swifty Corporation records all prepayments in income statement accounts. At April 30, the trial balance shows Supplies Expense $2,700, Service Revenue $9,400, and zero balances in related balance sheet accounts. Prepare the adjusting entries at April 30 assuming: (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) (a) $800 of supplies on hand and (b)$3,200 of service revenue should be reported as unearned
Answer:
Apr. 30
Dr Supplies Expense $1,900
Cr Supplies $1,900
Dr Unearned Service Revenue 3200
Cr Service Revenue 3200
Explanation:
Preparation of the adjusting entries at April 30
Based on the information given the adjusting entries at April 30 will be :
Apr. 30
Dr Supplies Expense $1,900
Cr Supplies $1,900
($2,700-$800)
(Being to record supplies on hand)
Dr Unearned Service Revenue 3200
Cr Service Revenue3200
(Being to record Unearned Service Revenue)
Frederick Group uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows:
Activity Total budgeted manufacturing overhead cost Allocation base
Material handeling 8700 Number of parts
Machine setup 4650 Number of setups
Insertion of parts 49300 Number of parts
Finishing 75600 Finishing direct labour hours
Total 138250
Frederick Group expects to produce 1,000 chrome wheels during the year.
The wheels are expected to use 2,900 parts, require 15 setups, and consume 1,800 hours of finishing time. Job 420
Job 420 used 150 parts, required 4 setups, and consumed 120 finishing hours.
Job 510 used 500 parts, required 5 setups, and consumed 320 finishing hours.
Requirements
1.Compute the cost allocation rate for each activity.
2. Compute the manufacturing overhead cost that should be assigned to Job 420.
3. Compute overhead cost that should be assigned to Job510.
Answer:
Results are below.
Explanation:
First, we need to calculate the activities allocation rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Material handeling= 8,700/2,900= $3 per part
Machine setup= 4,650/15= $310 per setup
Insertion of parts= 49,300/2,900= $17 per part
Finishing= 75,600/1,800= $42 per direct labor hour
Now, we can allocate overhead to Job 420:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Material handeling= 3*150= $450
Machine setup= 310*4= $1,240
Insertion of parts= 17*150= $2,550
Finishing= 42*120= $5,040
Total allocated costs= $9,280
Finally, allocated costs to Job 510:
Material handeling= 3*500= $1,500
Machine setup= 310*5= $1,550
Insertion of parts= 17*500= $8,500
Finishing= 42*320= $13,440
Total allocated costs= $24,990
MacGuffins have a demand function of QD = 70 – P and a supply function of QS = 2P + 10. Determine the price at equilibrium
Answer: 20
Explanation:
For us to calculate the equilibrium price, we must equate the quantity demanded with the quantity supplied. In this case, Qd = Qs where,
QD = 70 – P
QS = 2P + 10.
QD = QS
70 - P = 2P + 10
70 - 10 = 2P + P
60 = 3P
P = 60/3
P = 20
The equilibrium price is 20
Forming a joint venture with an existing foreign company offers all of the following advantages excepta.providing control over product attributes.b.joining an established firm.c.requiring less commitment from all parties involved in the joint venture.d.providing immediate marketing knowledge.e.providing reduced risk.
Answer:
The correct answer is the option C: Requiring less commitment from all parties involved in the joint venture.
Explanation:
To begin with, the name of "joint venture" in the field of business refers to the method and strategy whose process consists of incorporating two or more parties into one only form of company with the final purpose of increasing the sales of every party included in the agreement and doing that by different ways. Moreover, generally this strategy has its focus on the fact of entering a new market or acquiring new management that will come with more resources and more. So that is why that it brings a lot of advantages as stated in the case presented but absolutely not less commintment from every party involved in it.
Problem 10-3A The following section is taken from Hardesty's balance sheet at December 31, 2016. Current liabilities Interest payable $ 46,500 Long-term liabilities Bonds payable (9%, due January 1, 2020) 565,000 Interest is payable annually on January 1. The bonds are callable on any annual interest date. (a) Journalize the payment of the bond interest on January 1, 2017. (b) Assume that on January 1, 2017, after paying interest, Hardesty calls bonds having a face value of $160,000. The call price is 107. Record the redemption of the bonds. (c) Prepare the adjusting entry on December 31, 2017, to accrue the interest on the remaining bonds.
Answer:
Hardesty
a) January 1, 2017:
Debit Interest payable $46,500
Credit Cash $46,500
To record the payment of interest on bonds.
b) January 1, 2017:
Debit Long-term liabilities Bonds payable $160,000
Debit Bonds Redemption Expense $11,200
Credit Cash $171,200
To record the redemption of bonds at 107.
c) December 31, 2017:
Debit Interest Expense $36,450
Credit Interest Payable $36,450
To record interest expense for balance of bonds.
Explanation:
a) Data and Calculations:
Current liabilities
Interest payable $ 46,500
Long-term liabilities Bonds payable (9%, due January 1, 2020) $565,000
Interest payment date = January 1
Face value of bonds called = $160,000
Call price = 107
Bond redemption expense = ($160,000 * 107/100) - $160,000 = $11,200
Interest expense for 2017:
= ($565,000 - $160,000) * 9% = $36,450
The trial balance of Woods Company includes the following balance sheet accounts. Identify the accounts that might require adjustment. For each account that requires adjustment, indicate (1) the type of adjusting entry and (2) the related account in the adjusting entry.
Account Type of Adjustment Related Account
(a) Accounts Receivable Prepaid ExpensesAccrued RevenuesNot requiredAccrued ExpensesUnearned Revenues Interest ExpenseInsurance ExpenseService RevenueNot requiredDepreciation Expense
(b) Prepaid Insurance Unearned RevenuesAccrued RevenuesPrepaid ExpensesNot requiredAccrued Expenses Service RevenueInsurance ExpenseNot requiredDepreciation ExpenseInterest Expense
(c) Equipment Accrued RevenuesNot requiredPrepaid ExpensesAccrued ExpensesUnearned Revenues Interest ExpenseService RevenueDepreciation ExpenseInsurance ExpenseNot required
(d) Accumulated Depreciation's Equipment Prepaid ExpensesAccrued RevenuesNot requiredAccrued ExpensesUnearned Revenues Depreciation ExpenseService RevenueNot requiredInsurance ExpenseInterest Expense
(e) Notes Payable Not requiredUnearned RevenuesAccrued ExpensesAccrued RevenuesPrepaid Expenses Interest ExpenseNot requiredInsurance ExpenseService RevenueDepreciation Expense
(f) Interest Payable Prepaid ExpensesNot requiredAccrued RevenuesUnearned RevenuesAccrued Expenses Insurance ExpenseNot requiredDepreciation ExpenseInterest ExpenseService Revenue
(g) Unearned Service Revenue Unearned RevenuesPrepaid ExpensesAccrued ExpensesAccrued RevenuesNot required Not requiredDepreciation ExpenseService RevenueInterest ExpenseInsurance Expense
Answer:
Woods Company
Accounts Requiring Adjustment, Type of Adjusting Entry, and the Related Account:
Account Type of Adjustment Related Account
a) Account receivable Accrued revenue Service revenue
b) Prepaid insurance Prepaid expense Insurance expense
c) Equipment Not required Not required
d) Accumulated depreciation Accrued expense Depreciation expense
e) Notes Payable Not required Not required
f) Interest Payable Accrued expense Interest expense
g) Unearned service revenue Unearned revenue Service revenue
Explanation:
End of period adjustments are made to accounts in order to bring them in line with the accrual concept and matching principle of accounting. These principles require that expenses and revenues for the period are matched in order to determine the appropriate profit generated for the period. The implication is that transactions are recorded when they are incurred and not when cash is exchanged. For example, if rent expense is incurred for the year and payment is made in the following year, the expense must be recognized in the current year. The same applies to revenue.
Which of the statements is the best description of a business cycle? the relationship between the returns on Treasury securities and the time to maturity the time it takes a firm to convert raw materials into a final good or service alternating periods of increasing and decreasing economic output a calendar year divided into four quarters, each containing three months
Answer:
alternating periods of increasing and decreasing economic output
Explanation:
The business cycle represent the boom and recession period. At the time of boom, the company earned huge profits while at the time of recession period this situation would be reverse that leads to rise and reduction in the economic output
Therefore according to the options given, the last second option is correct as it denotes the business cycle
Now imagine that Tiger Pros is 60% financed with equity and 40% financed with debt. Cost of equity is 16.5% and after-tax cost of debt is 11%. It has the same perpetual EBIT of $500 a year but has a $120 perpetual interest expense. The firm is subject to a 21% tax rate. What is the market value of Tiger Pros
Answer:
$2,762.24
Explanation:
The computation of the market value as follows:
But before that WACC is
WACC is
= Weight of Equity × Cost of Equity + Weight of Debt × Cost of Debt × (1 -Tax Rate)
= 60% × 16.5% + 40% × 11%
= 14.30%
Now the Market Value is
= (EBIT) × (1 - Tax rate) ÷ WACC
= $500 × (1 - 21%) ÷ 14.30%
= $2,762.24
Adjusting Entries and Adjusted Trial Balances
Emerson Company is a small editorial services company owned and operated by Suzanne Emerson. On October 31, 20Y6, Emerson Company's accounting clerk prepared the following unadjusted trial balance:
Emerson Company
Unadjusted Trial Balance
October 31, 20Y6
Debit Credit
Balances Balances
Cash 3,930
Accounts Receivable 35,640
Prepaid Insurance 6,640
Supplies 1,810
Land 104,800
Building 269,090
Accumulated Depreciation—Building 128,060
Equipment 125,950
Accumulated Depreciation—Equipment 91,210
Accounts Payable 11,180
Unearned Rent 6,340
Suzanne Emerson, Capital 285,400
Suzanne Emerson, Drawing 13,890
Fees Earned 302,030
Salaries and Wages Expense 180,010
Utilities Expense 39,570
Advertising Expense 21,140
Repairs Expense 16,010
Miscellaneous Expense 5,740
824,220 824,220
The data needed to determine year-end adjustments are as follows:
Unexpired insurance at October 31, $4,450.
Supplies on hand at October 31, $540.
Depreciation of building for the year, $2,950.
Depreciation of equipment for the year, $2,550.
Unearned rent at October 31, $1,650.
Accrued salaries and wages at October 31, $2,880.
Fees earned but unbilled on October 31, $16,910.
Required:
1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense. If an amount box does not require an entry, leave it blank.
2. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance.
Answer:
Emerson Company
1. Adjusting Journal Entries
Debit Insurance expense $2,190
Credit Prepaid Insurance $2,190
To record expired insurance expense for the year.
Debit Supplies expense $1,270
Credit Supplies $1,270
To record supplies expense for the year.
Debit Depreciation expense of building $2,950
Credit Accumulated depreciation - building $2,950
To record depreciation expense for the year.
Debit Depreciation expense of equipment $2,550
Credit Accumulated depreciation - equipment $2,550
To record depreciation expense for the year.
Debit Unearned rent $4,690
Credit Rent Revenue $4,690
To record rent earned for the year.
Debit Salaries and wages Expense $2,880
Credit Salaries and wages payable $2,880
To record accrued salaries and wages.
Debit Accounts receivable $16,910
Credit Fees earned $16,910
To record fees earned but unbilled.
2. Adjusted Trial Balance as of October 31, 20Y6
Emerson Company
Adjusted Trial Balance as of October 31, 20Y6
Debit Credit
Cash $3,930
Accounts Receivable 52,550
Prepaid Insurance 4,450
Supplies 540
Land 104,800
Building 269,090
Accumulated Depreciation—Building $131,010
Equipment 125,950
Accumulated Depreciation—Equipment 93,760
Accounts Payable 11,180
Salaries and Wages Payable 2,880
Unearned Rent 1,650
Suzanne Emerson, Capital 285,400
Suzanne Emerson, Drawing 13,890
Fees Earned 318,940
Rent Revenue 4,690
Salaries & Wages Expense 182,890
Utilities Expense 39,570
Advertising Expense 21,140
Repairs Expense 16,010
Miscellaneous Expense 5,740
Insurance Expense 2,190
Supplies Expense 1,270
Depreciation Exp. Building 2,950
Depreciation Exp. Equip. 2,550
Totals $849,510 $849,510
Explanation:
a) Data and Calculations:
Emerson Company
Unadjusted Trial Balance as of October 31, 20Y6
Debit Credit
Cash $3,930
Accounts Receivable 35,640
Prepaid Insurance 6,640
Supplies 1,810
Land 104,800
Building 269,090
Accumulated Depreciation—Building $128,060
Equipment 125,950
Accumulated Depreciation—Equipment 91,210
Accounts Payable 11,180
Unearned Rent 6,340
Suzanne Emerson, Capital 285,400
Suzanne Emerson, Drawing 13,890
Fees Earned 302,030
Salaries & Wages Expense 180,010
Utilities Expense 39,570
Advertising Expense 21,140
Repairs Expense 16,010
Miscellaneous Expense 5,740
Totals $824,220 $824,220
Adjustments:
Prepaid Insurance balance = $4,450
Insurance expense = $2,190 (6,640 -4,450)
Supplies balance = $540
Supplies expense = $1,270 (1,810 - 540)
Depreciation expense of building = $2,950
Accumulated depreciation - building = $131,010 (128,060 + 2,950)
Depreciation expense of equipment = $2,550
Accumulated depreciation - equipment = $93,760 (91,210 + 2,550)
Unearned rent = $1,650
Rent Revenue = $4,690 (6,340 - 1,650)
Salaries and wages payable = $2,880
Salaries and wages = $182,890 (180,010 + 2,880)
Accounts receivable = $52,550 (35,640 + 16,910)
Fees earned = $318,940 (302,030 + 16,910)
Port Ormond Carpet Company manufactures carpets. Fiber is placed in process in the Spinning Department, where it is spun into yarn. The output of the Spinning Department is transferred to the Tufting Department, where carpet backing is added at the beginning of the process and the process is completed. On January 1, Port Ormond Carpet Company had the following inventories:
Finished Goods..................................... $62,000
Work in Process-Spinning Department.........35,000
Work in Process-Tufting Department............28,500
Materials............................................... 17,000
Departmental accounts are maintained for factory overhead, and both have zero balances on January 1. Manufacturing operations for January are summarized as follows:
A. Materials purchased on account . . . . . . . . . . . . . . . .$500,000
B. Materials requisitioned for use:
Fiber—Spinning Department . . . . . . . . . . . . . . . . . . . . . $275,000
Carpet backing—Tufting Department . . . . . . . . . . . . . . . .110,000
Indirect materials—Spinning Departme . . . . . . . . . . . . . . . 46,000
Indirect materials—Tufting Departme. . . . . . . . . . . . . . . . . 39,500
C. Labor used:
Direct labor—Spinning Department . . . . . . . . . . . . . . . . $185,000
Direct labor—Tufting Department. . . . . . . . . . . . . . . . . . . . 98,000
Indirect labor—Spinning Department .. . . . . . . . . . . . . . . . 18,500
Indirect labor—Tufting Department . . . . . . . . . . . . . . . . . . . 9,000
D. Depreciation charged on fixed assets:
Spinning Department . . . . . . . . . . . . . .. . . . . . . . . . . . . . $12,500
Tufting Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,500
E. Expired prepaid factory insurance
Spinning Department . . . . . . . . . .. . . . . . . . . . . . . . . . . . . $2,000
Tufting Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
F. Applied factory overhead:
Spinning Department . . . . . . . . . . . . . . . . . . . . . . . . . . . .$80,000
Tufting Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,000
G. Production costs transferred from Spinning Department to Tufting Department .
$547,000
H. Production costs transferred from Tufting Department to Finished Goods .
$807,200
I. Cost of goods sold during the period . . . . . . . . . . . . . . .$795,200
Instructions
1. Journalize the entries to record the operations, identifying each entry by letter.
2. Compute the January 31 balances of the inventory accounts.
3. Compute the January 31 balances of the factory overhead accounts.
Answer:
1. Journal Entries:
A. Debit Materials $500,000
Credit Accounts payable $500,000
To record the purchase of materials on account.
B. Debit Work-in-Process - Spinning $275,000
Credit Materials $275,000
To record the materials requisitioned.
B. Debit Work-in-Process -Tufting $110,000
Credit Materials $110,000
To record carpet backing
B. Debit Overhead - Spinning $46,000
Debit Overhead - Tufting $39,500
Credit Materials $85,500
To record indirect materials used.
C. Debit Work-in-Process - Spinning $185,000
Debit Work-in-Process - Tufting $98,000
Credit Factory labor $283,000
To record direct labor costs.
C. Debit Overhead - Spinning $18,500
Debit Overhead - Tufting $9,000
Credit Factory labor $27,500
To record indirect labor costs.
D. Debit Overhead - Spinning $12,500
Debit Overhead - Tufting $8,500
Credit Factory Depreciation $21,000
To record depreciation costs.
E. Debit Overhead - Spinning $2,000
Debit Overhead - Tufting $1,000
Credit Factory Insurance $3,000
To record insurance costs.
F. Debit Work-in-Process - Spinning $80,000
Debit Work-in-Process - Tufting $55,000
Credit Factory Overhead $135,000
To record overhead costs applied.
G. Debit Work-in-Process - Tufting $547,000
Credit Work-in-Process - Spinning $547,000
To record the transfer to Tufting department.
H. Debit Finished Goods Inventory $807,200
Credit Work-in-Process- Tufting $807,200
To record the transfer to Finished Goods.
I. Debit Cost of Goods Sold $795,200
Credit Finished Goods $795,200
To record the cost of goods sold.
2. January 31 balances of the inventory accounts:
Finished Goods = $74,000
Work-in-Process - Spinning = $28,000
Work-in-Process - Tufting = $32,300
Materials = $46,500
3. Factory Overhead Accounts:
Overhead - Spinning:
B. Materials (Indirect) 46,000
C. Indirect labor 18,500
D. Depreciation exp. 12,500
E. Factory insurance 2,000
F. Applied overhead 80,000
Overapplied overhead 1,000
Overhead - Tufting:
B. Materials (Indirect) 39,500
C. Indirect labor 9,000
D. Depreciation exp. 8,500
E. Insurance expense 1,000
F. Applied overhead 55,000
Underapplied overhead 3,000
Explanation:
a) Data and Calculations:
January 1 Inventories:
Finished Goods = $62,000
Work in Process- Spinning = $35,000
Work in Process - Tufting = $28,500
Materials = $17,000
Finished Goods
Account Titles Debit Credit
Beginning balance $62,000
Work-in-Process-Tufting 807,200
Cost of Goods Sold $795,200
Ending balance 74,000
Work-in-Process - Spinning
Account Titles Debit Credit
Beginning balance $35,000
B. Materials 275,000
C. Direct labor 185,000
F. Applied overhead 80,000
G. Work-in-Process -Tufting $547,000
Ending balance 28,000
Work-in-Process - Tufting
Account Titles Debit Credit
Beginning balance $28,500
B. Carpet backing 110,000
C. Direct labor 98,000
E. Insurance expense 1,000
F. Applied overhead 55,000
G. WIP- Spinning 547,000
H. Finished Goods $807,200
Ending balance 32,300
Cost of Goods Sold
I. Finished Goods $795,200
Materials
Account Titles Debit Credit
Beginning balance $17,000
A. Accounts receivable 500,000
B. Work-in-Process - Spinning $275,000
B. Work-in-Process - Spinning 46,000
B. Work-in-Process - Tufting 39,500
B. Work-in-Process - Tufting 110,000
Ending balance 46,500
Don operates a taxi business, and this year one of his taxis was damaged in a traffic accident. The taxi was originally purchased for $15,500 and the adjusted basis was $1,050 at the time of the accident. The taxi was repaired at a cost of $2,975 and insurance reimbursed Don $757 of this cost. What is the amount of Don's casualty loss deduction
Answer:
$293
Explanation:
Calculation for the amount of Don's casualty loss deduction
Using this formula
Casualty loss deduction amount=Adjusted basis -Insurance reimbursed
Let plug in the formula
Casualty loss deduction amount=$1,050- $757
Casualty loss deduction amount=$293
Therefore the amount of Don's casualty loss deduction will be $293
Skysong Corporation reported the following for 2020: net sales $1,236,500, cost of goods sold $732,900, selling and administrative expenses $331,400, and an unrealized holding gain on available-for-sale debt securities $24,400.Prepare a statement of comprehensive income using the one statement format. (Ignore income taxes and earnings per share.)Prepare a statement of comprehensive income, using the two statement format. (Ignore income taxes and earnings per share.)
Answer:
A. $196,600
B. $196,600
Explanation:
A. Preparation of a statement of comprehensive income using the one statement format.
SKYSONG CORPORATION Statement of Comprehensive Income For the Year Ended
Sales revenue $1,236,500
Less Cost of goods sold ($732,900)
Gross profit $503,600
($1,236,500-$732,900)
Selling and administrative expenses $331,400
Net income $172,200
($503,600-$331,400)
Add Unrealized holding gain, net of tax $24,400
Comprehensive income $196,600
($172,200+$24,400)
Therefore the statement of comprehensive income using the one statement format will be $196,600
(b) Preparation of a statement of comprehensive income using the two statement format
SKYSONG CORPORATION Income Statement and Comprehensive Income Statement For the Year Ended
Sales $1,236,500
Cost of goods sold ($732,900)
Gross profit $503,600
($1,236,500-$732,900)
Selling and administrative expenses $331,400
Net income $172,200
($503,600-$331,400)
COMPREHENSIVE INCOME
Net income $172,200
Unrealized holding gain $24,400
Comprehensive income $196,600
($172,200+$24,400)
Therefore the statement of comprehensive income using the two statement format will be $196,600
A mortgage is a document in which a lender reclaims a property due to lack of payment by the borrower.
True
False
Answer:
False!
Explanation:
A foreclosure document is what a lender uses to reclaim a property due to lack of borrower payment.
The following Information applies to the questions displayed below.) Bargain Rental Car offers rental cars in an off-airport location near a major tourist destination in California. Management would like to better understand the variable and fixed portions of It car washing costs. The company operates its own car wash facility in which each rental car that is returned is thoroughly cleaned before being released for rental to another customer. Management belleves that the variable portion of its car washing costs relates to the number of rental returns. Accordingly, the following data have been compiled:
Month Rental Returns Car Wash Costs
January 2,380 $ 10,825
February 2,421 $ 11,865
March 2,586 $ 11,332
April 2725 $ 12422
May 2968 $ 13850
June 3281 $ 14419
July 3,353 $ 14,935
August 3,489 $ 15,738
September 3,057 $ 13,563
October 2,876 $ 11,889
November 2,735 $ 12,683
December 2,983 $ 13,796
Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost Incurred to wash cars. (Round Fixed cost to the nearest whole dollar amount and the Varlable cost per unit to 2 decimal places.)
Answer:
a. The variable cost per rental return is $4.04.
b. The monthly fixed cost Incurred to wash cars is $1,376.
Explanation:
Note: See the attached excel file for the calculations of Rental Returns (x), Car Wash Costs (y), xy, and x^2.
Since Σ = Total of or summation of, we can therefore obtain the following from the attached excel file:
Σx = 34,854
Σy = 157,317
Σxy = 462,541,971
Σx^2 = 102,623,516
N = Number of months = 12
a. calculation of variable cost per rental return
To calculate the variable cost per rental return, the following formula is used:
Variable cost per rental return = (NΣxy − ΣxΣy) /((NΣx²) − (Σx)²) ……………… (1)
Substituting the relevant values into equation (1), we have:
Variable cost per rental return = ((12 * 462,541,971) - (34,854 * 157,317)) / (((12 * 102,623,516) - 34,854^2)
Variable cost per rental return = 4.03917240317595
Rounding to 2 decimal places as required, we have:
Variable cost per rental return = $4.04
Therefore, the variable cost per rental return is $4.04.
b. Calculation of monthly fixed cost Incurred to wash cars
To calculate the monthly fixed cost Incurred to wash cars, the following formula is used:
Fixed Cost per month = {Σy - (Variable cost per rental return * Σx) / N ....... (2)
Substituting the relevant values into equation (2), we have:
Fixed Cost per month = (157,317 - (4.04 * 34,854)) / 12
Fixed Cost per month = $1,375.57
Rounding to the nearest whole dollar amount as required, we have:
Fixed Cost per month = $1,376
Therefore, the monthly fixed cost Incurred to wash cars is $1,376.
The variable cost per rental return is $4.04 and the fixed cost per month is $1378.
The following can be depicted from the question
Σx = 34,854
Σy = 157,317
Σxy = 462,541,971
Σx² = 102,623,516
N = number of months = 12
Variable cost per rental return will be:
= ( N Σxy − Σx Σy)/{(N Σx²) − (Σx)²}
= {( 12 × 462,541,971) - (34,854 × 157,317) } / {(12 ×102,623,516) - (34,854)²}
= (5,550,503,652 - 5,483,126,718) / (1231482192 - 1214801316)
= 67,376,934 / 16680876
= $4.04
Fixed Cost per month will be:
= {Σy - ( Variable cost per rental return × Σx )/N
= {157,317 - (4.04 × 34,854)} /12
= ( 157,317 - 140,810.16) /12
= $1378
Learn more about fixed cost on:
https://brainly.com/question/14846723
Consider the following transactions.
1. Receive cash from customers, $15,000.
2. Pay cash for employee salaries, $9,000.
3. Pay cash for rent, $3,000.
4. Receive cash from sale of equipment, $8,000.
5. Pay cash for utilities, $1,000.
6. Receive cash from a bank loan, $4,000.
7. Pay cash for advertising, $7,000.
8. Purchase supplies on account, $3,000.
Required: Post transactions to the Cash T-account and calculate the ending balance. The beginning balance in the Cash T-accow1t is $5,000.
Answer:
Cash accountTransaction Debit Credit
Big. bal. 5,000
1. 15,000
2. 9,000
3. 3,000
4. 8,000
5. 1,000
6. 4,000
7. 7,000
8. NO ENTRY
Ending bal. 12,000
Transaction number 8 is not included since an accounts payable is created, there is no cash outflow.
Explanation:
Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 11 years because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $16.25 per share 12 years from today and will increase the dividend by 5.5 percent per year thereafter. The required return on the stock is 13.5 percent. What is the price of the stock 11 years from today?
Answer:
P11 = $203.125
Explanation:
Using the constant growth model of dividend discount model, we can calculate the price of the stock in year 11. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price under this model is,
P0 = D0 * (1+g) / (r - g)
Where,
D1 is dividend expected for the next period /year
g is the growth rate
r is the required rate of return or cost of equity
P11 = 16.25 / (0.135 - 0.055)
P11 = $203.125