The following are selected 2015 transactions of Pedigo Corporation.
Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite.
May 1 Purchased for $75,000 a patent with an estimated useful life of 5 years and a legal life of 20 years.
Required:
Prepare necessary adjusting entries at December 31 to record amortization required by the events above.
Answers
Answer:
Explanation:
The necessary adjusting entries at December 31 to record amortization required by the events above has been prepared.
It should also be noted that due to the goodwill having an indefinite life, no entry was made to amortize the goodwill.
It should be noted that the amortization expense was gotten as:
Annual amortization = $75,000/5
= $15,000
2015 amortization= $15,000 × 8/12months
= $15,000 × 2/3
= $30,000/3
= $10,000
Kindly check the attached file forthe adjusting entries
Related Questions
Eastwood Cake Factory sells chocolate cakes, birthday cakes, and specialty cakes. The factory is experiencing a bottleneck and is trying to determine which cake is most profitable. Even though Eastwood may have to limit its orders, it is concerned about customer service and satisfaction.
Chocolate Cake Birthday Cake Specialty Cake
Sales price $20.00 $45.00 $60.00
Variable cost per cake $5.00 $12.00 $20.00
Hours needed to bake, frost, and decorate 1 hour 2.5 hours 2 hours
Required:
a. Calculate the contribution margin per hour per cake.
b. Determine which cakes the company should try to sell more of first, second, and then last.
Answers
Answer:
a.
Chocolate Birthday Specialty
Cake Cake Cake
Contribution per hour $15 / hour $13.2 / hour $20 per hur
b.
Chocolate Birthday Specialty
Cake Cake Cake
Contribution per hour Second Third First
Explanation:
a.
Contribution margin is the net of sales price and variable cost of an product.
Contribution margin per hour is the rate of contribution margin earned by a product in an hour.
Chocolate Birthday Specialty
Cake Cake Cake
Sales price $20.00 $45.00 $60.00
Variable cost per cake $5.00 $12.00 $20.00
Contribution Margin $15.00 $33.00 $40.00
Hours to bake, frost & decorate 1 hour 2.5 hours 2 hours
Contribution per hour $15 / hour $13.2 / hour $20 per hur
(Contribution / Numbers of hours)
b.
Company should try to sell the cask with highest contribution per hour rate.
In this given question Speciality cake have highest contribution per hour rate of $20. So, company should sell it more.
The should should try to sell cholcolate cake at second place and birthday cake in third place.
On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltd issued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of Eldorado Ltd. The costs of issuing the shares by Quick Buck Ltd cost $1,600. At this date the statement of financial position of Eldorado Ltd was as follows: Carrying amount Fair value Machinery $40,000 $67,000 Fixtures & fittings 60,000 68,000 Vehicles 35,000 35,000 Current assets 10,000 12,000 Current liabilities (16,000) (18,000) Total net assets $129,000 Share capital (80,000 shares at $1.00 per share) $80,000 General reserve 20,000 Retained earnings 29,000 Total equity $129,000 Required: Prepare the journal entries in the records of Quick Buck Ltd at 1 July 2019 for the acquisition. (10 marks)
Answers
Answer and Explanation:
The journal entries are shown below:
1. On July 1 2019
Machinery Dr $67,000
Fixture & Fittings Dr $68,000
Vehicles Dr $35,000
Current assets Dr $12,000
Goodwill Dr $28,000
To Current liabilities $18,000
To Share Capital (80,000 × $1 ) $80,000
To Paid in capital in excess of par 112,000 {80,000 × ($2.40 - $1)}
(Being the acquisition is recorded)
For recording this we debited all assets as it increased the values of assets and credited the liabilities and stockholder equity as it also increased
2. On July 1 2019
Paid in capital in excess of par $1,600
To Cash $1,600
(Being the share issuance cost is recorded)
For recording this we debited the paid in capital as it reduced the stockholder equity and credited the cash as it reduced the assets
Working notes:
For goodwill amount
= Purchase consideration - net identifiable assets
= $192,000 - $164,000
= $28,000
The net identifiable asset come from
= $67,000 + $68,000 + $35,000 + $12,000 - $18,000
= $164,000
Question 8 (1 point)
is a classless social system in which property is collectively owned and income
from labor is equally and indiscriminately divided among members.
Socialism
Capitalism
Anarchism
Fascism
Answers
Answer:
Socialism; a sociaty that is regulated by the community as a whole
Exercise 06-2 Computing unit and inventory costs under variable costing LO P1 Trio Company reports the following information for the current year, which is its first year of operations. Assume instead that Trio Company uses variable costing. Direct materials $15 per unit Direct labor $16 per unit Overhead costs for the year Variable overhead $4 per unit Fixed overhead $160,000 per year Units produced this year 20,000 units Units sold this year 14,000 units Ending finished goods inventory in units 6,000 units1. Compute the product cost per unit using variable costing. Cost per unit of finished goods using: Variable costing Cost per unit of finished goods 2. Determine the cost of ending finished goods inventory
Answers
Answer:
Trio Company
1. Using Variable Costing:
a. Product Cost per unit = $35 (see below)
b. Cost per unit of finished goods = $35 (see below)
2. Using variable cost, the cost of ending finished goods inventory = 6,000 * $35 = $210,000
b. Using total cost, the cost of ending finished goods inventory =
6,000 * $43 = $258,000
Explanation:
a) Calculation of Costs:
Cost per unit Total Costs
Direct materials $15 $300,000
Direct labor $16 $320,000
Variable overhead $4 $80,000
Total Variable $35 $700,000
Fixed Cost $8 $160,000
Total Cost $43 $860,000
b) Cost of Goods sold 14,000 x $43 = $602,000 using total cost per unit.
c) Cost of Goods sold 14,000 x $35 = $490,000 using variable cost per unit.
d) Variable costing is a method of assigning only variable costs to a product while the fixed overheads are treated as period expenses.
Which of the following is a difference between leased employees and part-time employees? a. Unlike leased employees, part-time employees are usually covered by benefits from the organization. b. Unlike part-time employees, leased employees are regularly expected to work less than 40 hours a week. c. Unlike part-time employees, leased employees provide considerable scheduling flexibility to the organization that hires them. d. Unlike leased employees, part-time employees reduce the labor costs of an organization.
Answers
Answer:
D. Unlike leased employees, part-time employees reduce the labor costs of an organization.
Explanation:
Employee leasing is a contractual arrangement where a leasing company, is the official employer. And Employment responsibilities are shared between the leasing company and the business owner.
A part-time employee is a type of worker whose employment carries fewer hours per week than a full-time job. They work in shifts.
Part-time employees reduce the labor costs of an organization. They do not receive certain benefits as full-time employees.
Elliott Engines Inc. produces three products—pistons, valves, and cams—for the heavy equipment industry. Elliott Engines has a very simple production process and product line and uses a single plantwide factory overhead rate to allocate overhead to the three products. The factory overhead rate is based on direct labor hours. Information about the three products for 20Y2 is as follows: Budgeted Volume (Units) Direct Labor Hours Per Unit Price Per Unit Direct Materials Per UnitPistons 5000 0.50 $45 $8 Valves 12,500 0.30 17 3Cams 1,500 0.20 60 40 The estimated direct labor rate is s30 per direct labor hour Beginning and ending inventories are negligible and are, thus, assumed to be zero. The budgeted factory overhead for Elliott Engines is $163,750 If required, round all per unit answers to the nearest cent a. Determine the plantwide factory overhead rate. per dih b. Determine the factory overhead and direct labor cost per unit for each product.
Answers
Answer:
Kindly see attacked picture
Explanation:
Elliott Engines Inc. produces three products—pistons, valves, and cams—for the heavy equipment industry. Elliott Engines has a very simple production process and product line and uses a single plantwide factory overhead rate to allocate overhead to the three products. The factory overhead rate is based on direct labor hours. Information about the three products for 20Y2 is as follows: Budgeted Volume (Units) Direct Labor Hours Per Unit Price Per Unit Direct Materials Per UnitPistons 5000 0.50 $45 $8 Valves 12,500 0.30 17 3Cams 1,500 0.20 60 40 The estimated direct labor rate is s30 per direct labor hour Beginning and ending inventories are negligible and are, thus, assumed to be zero. The budgeted factory overhead for Elliott Engines is $163,750 If required, round all per unit answers to the nearest cent a. Determine the plantwide factory overhead rate. per dih b. Determine the factory overhead and direct labor cost per unit for each product.
Kindly check attached picture for solution
The predetermined manufacturing overhead rate is $10.00 per direct labor hour ($16.00 ÷ 1.6). It was computed from a master manufacturing overhead budget based on normal production of 8,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $60,000 ($7.50 per hour) and total fixed overhead costs of $20,000 ($2.50 per hour). The actual costs for October in producing 4,800 units were as follows.
Direct materials (5,100 pounds) $ 36,720
Direct labor (7,400 hours) 92,500
Variable overhead 59,700
Fixed overhead 21,000
Total manufacturing costs $209,920
The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.
a. Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.)
b. Compute the total overhead variance.
Answers
The company's adjusted trial balance as follows includes the following accounts balances:
Cash: $15,000
Equipment: $85,000
Accumulated Depreciation: $25,000
Accounts Payable: $10,000
Retained earnings: $59,000
Dividends: $2,000
Fees Earned: $56,000
Depreciation Expense: $25,000
Salaries Expense: $23,000.
All accounts have normal balances.
Required:
Prepare closing entry.
Answers
Answer:
Closing Journal Entries:
1. Debit Fees Earned $56,000
Credit Income Statement $56,000
To close the account for the period.
2. Debit Income Statement $25,000
Credit Depreciation Expense $25,000
To close the account for the period.
3. Debit Income Statement $23,000
Credit Salaries Expense $23,000
To close the account for the period.
4. Debit Income Statement (Retained Earnings) $2,000
Credit Dividends $2,000
To close the account for the period.
Explanation:
Closing entries are journal entries that are made to close temporary (periodic) accounts, revenue and expenses to the Income Statement. This paves the way for only permanent accounts to remain for the Balance Sheet. Temporary accounts are not carried forward to the next period unlike permanent accounts.
Closing entries transfer all revenue and expense accounts at the end of an accounting period to an income summary account, for the purpose of calculating the financial performance results (called gross profit and net income or loss) for the period.
Maya Company reports the following amounts for the year ending on December 31, 2004:Merchandise Inventory, January 1, 2004 : $70,000 Cost of Transportation : $2,300Invoice Cost of Merchandise Purchases : $195,000 Purchase Returns and Allowances: $4,650Purchase Discounts Received: $3,500 Cost of Goods Sold: $158,700Cost of merchandise returned by customers and restored to inventory: $17,300Calculate the Merchandise Inventory, December 31, 2004.A) $117,750B) $83,150C) $45,150D) $113,150E) $129,450
Answers
Answer:
$117,750
Explanation:
Maya Company Merchandise Inventory for the year ended December 31 2004
Merchandise inventory at the beginning $70,000
Add: Cost of transportation 2,300
Merchandise Purchase 195,000
Less: Purchase return and allowances (4,650)
Discount on purchase (3,500)
Cost of goods sold (158,700)
Add: Merchandise return 17,300
Merchandise inventory $117,750
Your enterprising uncle opens a sandwich shop that employs 15 people. The employees are paid $20 per hour, and a sandwich sells for $5. If your uncle is maximizing his profit, the value of the marginal product of the last worker he hired is______ $ , and that worker's marginal product is sandwiches per hour.
Answers
Answer:
The value of the marginal product of the last worker hired is $20
The marginal product of the last worker hired is 4 sandwiches per hour
Please kindly note the difference between the terms, value of marginal product and the term marginal product
Explanation:
Since the uncle is trying to maximize profit, then he will hire workers up to a point where the wages of the workers equals their marginal product value
Now, from the question, the value of the wages is $20 per hour, this also means that their marginal product too will be $20 per hour
This automatically means that the value of the marginal product of the last worker hired is also $20
Mathematically;
Value of marginal product = Marginal product * price
Thus, marginal product = value of marginal product/ price
= $20/$5 = 4
This means that the new worker hired marginal product is 4 sandwiches per hour
1. The discount rate is the:________. a. lowest interest rate that banks can charge for loans to their most creditworthy customers. b. interest rate at which banks can borrow reserves from the Federal Reserve. c. lowest interest rate that banks can charge for lending reserves to other banks or financial institutions. d. interest rate at which banks can borrow reserves from other banks. 2. If the Fed were to decrease the discount rate, banks will borrow:______. a. more reserves, causing an increase in lending and the money supply. b. fewer reserves, causing an increase in lending and the money supply. c. fewer reserves, causing a decrease in lending and the money supply. d. more reserves, causing a decrease in lending and the money supply.
Answers
Answer(1)
b. interest rate at which banks can borrow reserves from the Federal Reserve
Explanation:
The discount rate is known in America as the rate of interest which a central bank charges on its loans and advances to a commercial bank. This loans and advances are from the federal reserve.
Answer (2)
a. more reserves, causing an increase in lending and the money supply
Explanation:
Excess lending from the national reserve due to a lowered discount rate will lead to a reserve supply excess into commercial banks throughout the economy and expands the money supply .
Answer:
Michelle needs to calculate the interest for the length of each loan. Bank A will charge $2430 in interest and Bank B will charge $1980 in interest. She will save by borrowing from Bank B.
Explanation:
Loring Company incurred the following costs last year:
Costs
Amounts
Direct materials $216,000
Factory rent 24,000
Direct labor 120,000
Factory utilities 6,300
Supervision in the factory 50,000
Indirect labor in the factory 30,000
Depreciation on factory
equipment 9,000
Sales commissions 27,000
Sales salaries 65,000
Advertising 37,000
Depreciation on the
headquarters building 10,000
Salary of the corporate
receptionist 30,000
Other administrative costs 175,000
Salary of the factory
receptionist 28,000
Required:
1. Classify each of the costs using the table provided. Be sure to total the amounts in each column.
2. What was the total product cost for last year?
3. What was the total period cost for last year?
4. If 30,000 units were produced last year, what was the unit product cost?
Answers
Answer and Explanation:
1. The classification of each cost using the table provided i.e shown in the attachment is presented on the spreadsheet. Kindly find it below
2. Total product cost is
= Direct materials + Direct labor + Manufacturing overhead
= $216,000 + $120,000 + $147,300
= $483,300
The product cost includes direct material, direct labor and manufacturing overhead cost
3. Total period cost is
= Selling expenses + Administrative expenses
= $129,000 + $215,000
= $344,000
The period cost includes all selling and admin expenses
4. The total unit product cost is
= Total product cost ÷ Number of units produced
= $483,300 ÷ 30,000 units
= $16.11 per unit
Capital One produces a single product, which it sells for $8.00 per unit. Variable costs per unit equal $3.20. The company expects short-term fixed costs to be $7,200 for the coming month, at the projected sales level of 20,000 units. Management is considering several alternative actions designed to improve operating results. In conjunction with this, they have created a profit-planning (that is, a CVP) model, which can be used to evaluate different scenarios. What is Capital One's current break-even point in terms of number of units for the month? a) 1,500 units. b) 2,250 units. c) 4,000 units d) 3,330 units.
Answers
Answer:
Capital One's current break-even point in terms of number of units for the month is 1500 units
Explanation:
Break-even point in terms of number of units is the sales units required such that the company makes neither gain nor loss
break-even point in sales units=fixed costs/contribution margin per unit
fixed costs is $7,200
contribution margin=sales price per unit-variable cost per unit
sales price per unit is $8
variable cost per unit is $3.20
contribution margin=$8-$3.20=$4.80
break-even point=$7,200/$4.80=1,500 units
The correct option is A ,1500 units
Determine which moral standard of social responsibility the business is observing. Meg's company decided to build an additional factory in a small community. When the community started a protest because of the negative impact the factory would potentially have, Meg's company promised to prevent and pay for any negative impact to the community. It also offers to build a community park to balance out the negative impact the factory might cause.a) Indeterminable b) Moral Minimum Standard c) Profit-Maximizing Moral Standard d) Stakeholder Theory Moral Standard e) Corporate Citizenship Moral Standard
Answers
Answer:
e) Corporate Citizenship Moral Standard
Explanation:
Social responsibility is defined as the ethical framework that guides companies and individuals to give back to the environment in which they operate. It is a balance between pursuing economic benefits and protecting the ecosystem.
In this secanrio when the community started a protest because of the negative impact the factory would have, Meg's company promised to prevent and pay for any negative impact to the community. It also offers to build a community park to balance out the negative impact the factory might cause.
The moral used here is corporate citizenship moral standard. Where a company is ameliorating negative effect of its processes and also building a community park for the community
Answer:
The correct answer is: b) Moral Minimum Standard
Explanation:
In the scenario exemplified by the above question, it can be said that Meg's company acted according to a moral minimum standard.
That is, the company was responsible for the negative impacts that it could bring to the small community, acting in accordance with the law and exhibiting ethical behavior, as the company proposed to prevent and pay for any negative impact on the community, as well as to build a community park to balance the negative impact that the plant can cause.
Therefore, this is an ethical standard whose principle is not to cause intentional damage, considered only the minimum necessary to maintain ethical behavior.
Barry is the branch manager of a large toy store. He has been given the responsibility to communicate with, coach, and motivate supervising managers. In this scenario, Barry most likely requires _____ to perform his role efficiently.
Answers
Answer:
Human skills
Explanation:
As the branch manager Barry requires human skills to perform his roles well. The human skills can also be referred to as interpersonal skills. These are those skills that would present Barry's ability to interact, work or relate effectively with people.
Human skills would enable Barry to make use of human potential in the company and also motivate the supervising managers for better results
Anthony is 17 years of age and attending college in Maine. One day, while skiing he breaks his leg and is taken to the emergency room of the local hospital. When filling out the necessary paperwork, whom should Anthony name as the party responsible for the charges incurred?
Answers
Good luck!
Answer:
his parents
Explanation:
Anthony is a minor, so his parents are legally responsible for any costs he may incur. Anthony should name his parents as the party responsible.
Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 60,000 shares of cumulative preferred 2% stock, $60 par and 300,000 shares of $20 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $51,000; second year, $105,000; third year, $81,000; fourth year, $120,000. Determine the dividends per share on each class of stock for each of the four years. Round your answers to two decimal places. If no dividends are paid in a given year, enter "0".
Answers
Answer:
Year 1: Dividend paid to cumulative preferred stock = $51,000; Dividend paid to common stock = 0.
Year 2: Dividend paid to cumulative preferred stock = $93,000; Dividend paid to common stock = $12,000.
Year 3: Dividend paid to cumulative preferred stock = $72,000; Dividend paid common stock = $9,000.
Year 4: Dividend paid to cumulative preferred stock = $72,000; Dividend paid common stock = $48,000.
Explanation:
Year 1
Dividend distributed = $51,000
Cumulative preferred stock dividend payable = 60,000 * $60 * 2% = $72,000
Dividend paid to cumulative preferred stock = $51,000
Carried forward cumulative preferred stock dividend = $72,000 - $51,000 = $21,000
Dividend paid to common stock = 0
Year 2
Dividend distributed = $105,000
Year 2 cumulative preferred stock dividend due = 60,000 * $60 * 2% = $72,000
Cumulative preferred stock dividend payable = Due in year 2 + Carried down from year 1 = $72,000 + $21,000 = $93,000
Dividend paid to cumulative preferred stock = $93,000
Dividend paid to common stock = $105,000 - $93,000 = $12,000
Year 3
Dividend distributed = $81,000
Cumulative preferred stock dividend payable = 60,000 * $60 * 2% = $72,000
Dividend paid to cumulative preferred stock = $72,000
Dividend paid common stock = $81,000 - $72,000 = $9,000
Year 4
Dividend distributed = $120,000
Cumulative preferred stock dividend payable = 60,000 * $60 * 2% = $72,000
Dividend paid to cumulative preferred stock = $72,000
Dividend paid common stock = $120,000 - $72,000 = $48,000
A small neighborhood comprised of 10 homes has a problem with break-ins and find the local police to be effective. They are considering hiring private security. Each household can calculate their marginal benefit of having a private security guard by the formula MB=100/(1+S) where S is the number of hours of security patrol provided per week.
If private security is a public good and the cost is $20 per hour, what is the efficient level of security? Do you expect this to be the equilibrium outcome?
Answers
Answer:
The efficient level of security is 4 hours of security.
The equilibrium may not be sustainable.
Explanation:
In order to calculate the efficient level of security we would Set MB=MC i.e. guard's wage for net benefit maximization.
Hence, 100/(1+S)=20
20*(1+S)=10
1+S=5
S=4
Therefore, 4 hours of security is needed . The efficient level of security is 4 hours of security.
In the followig case Security guards is public good in this case, Public good is non-excludable and non-rivalrous. People cannot be stopped from using it without paying for it. Payment for security guard is voluntary. So, equilibrium may not be sustainable.
Techuxia Corporation worked on four jobs during October: Job A256, Job A257, Job A258, and Job A260. At the end of October, the job cost sheets for these jobs contained the following data: Job A256 Job A257 Job A258 Job A260 Beginning balance $ 1,200 $ 500 $ 0 $ 0 Charged to the jobs during October: Direct materials $ 2,600 $ 3,500 $ 1,400 $ 3,500 Direct labor $ 800 $ 1,000 $ 600 $ 400 Manufacturing overhead applied $ 1,200 $ 1,500 $ 900 $ 600 Units completed 100 0 200 0 Units in process at the end of October 0 400 0 500 Units sold during October 80 0 40 0 Jobs A256 and A258 were completed during October. The other two jobs had not yet been completed at the end of October. There was no finished goods inventory on October 1. In October, overhead was overapplied by $800. The company adjusts its cost of goods sold every month for the amount of the underapplied or overapplied overhead. Required: 1. Using the direct method, what is the cost of goods sold for October?
Answers
Answer:
1. Job A256 20
Job A258 160
2.$3,760
3.$10,400
Explanation:
Calculation of cost per unit Job A256 =
Beginning balance 1200
Charged to the jobs during October:
Direct material 3600
Direct labor 800
Manufacturing overhead applied 1200
Total 6800
6800/Units completed 100
=68
Calculation of Cost per unit Job A258
Beginning balance $0
Charged to the jobs during October:
Direct material 1400
Direct labor 600
Manufacturing overhead applied 900
Total 2900
2900/Unit completed 200
=15
1.
Cost of goods sold
= (80 X $68) + (40 X $15) - $800
=5440+600-800
=6040-800
= $5,240
Finished goods JobA256
= 100- 80
= 20
Finished goods JobA258
=200 - 40
= 160
2.
Finished goods
= (20 X $68) + (160 X $15)
= $1,360+$2,400
=$3,760
3.
Calaculation of total value of work in process Cost of JobA257 and JobA260
Job A257
Beginning balance 500
Charged to the jobs during October:
Direct material 3500
Direct labor 1000
Manufacturing overhead applied 900
Total 5900
JobA260
Beginning balance $0
Charged to the jobs during October:
Direct materials $3,500
Direct labor 400
Manufacturing overhead applied 600
Total $4,500
Addition of the total of both JobA257 and JobA260
$5900 +$4,500=$10,400
Prepare Job-Order Cost Sheets, Predetermined Overhead Rate, Ending Balance of WIP, Finished Goods, and COGS At the beginning of March, Mendez Company had two jobs in process, Job 86 and Job 87, with the following accumulated cost information: Job 86 Job 87 Direct materials $4,800 $1,600 Direct labor 1,200 3,000 Applied overhead 888 2,220 Balance, March 1 $6,888 $6,820 During March, two more jobs (88 and 89) were started. The following direct materials and direct labor costs were added to the four jobs during the month of March: Job 86 Job 87 Job 88 Job 89 Direct materials $3,000 $7,000 $2,100 $1,500 Direct labor 800 6,000 900 500 At the end of March, Jobs 86, 87, and 89 were completed. Only Job 87 was sold. On March 1, the balance in Finished Goods was zero.
Answers
Answer and Explanation:
1. The computation of overhead rate based on direct labor cost is shown below:-
Overhead rate = Overhead applied × 100 ÷ Direct labor cost
= 888 × 100 ÷ 1,200
= 74%
2. The Preparation of job-order cost sheet for the four jobs is shown below:
Particulars Job 86 Job 87 Job 88 Job 89
Beginning balance $6,888 $6,820
Direct materials $3,000 $7,000 $2,100 $1,500
Direct labor $800 $6,000 $900 $500
Applied overhead
is 74% of direct labor $592 $4,440 $666 $370
Total $11,280 $24,260 $3,666 $2,370
3. The computation of ending balances of Work in Process and Finished Goods is shown below:-
Work in process of Job 88 = $3,666
Finished goods = Total of Job 86 + Total of Job 89
= $11,280 + $2,370
= $13,650
4. The computation of the Cost of Goods Sold for March is shown below:-
Cost of goods sold is
= Job 87
= $24,260
You graduate and get a $10,000 check from your grandparents. You decide to save it toward a down payment on a house. You invest it earning 10% per year and you think you will need to have $20,000 saved for the down payment. How long will it be before the $10,000 has grown to $20,000?
Answers
Lvanhoe Co. wishes to enter receipts and payments in such a manner that adjustments at the end of the period will not require reversing entries at the beginning of the next period. Record the following transactions in the indicated manner and give the adjusting entry on December 31, 2020. (Two entries for each part.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
1. An insurance policy for two years was acquired on April 1, 2010 for $8,000.2. Rent of $12,000 for six months for a portion of the building was received on November 1, 2020.
Answers
Answer and Explanation:
The journal entries are shown below:
1. On Apr 1
Prepaid insurance $8,000
To Cash $8,000
(Being the cash paid is recorded)
For recording this we debited the prepaid insurance as it increased the assets and credited the cash as it decreased the assets
Insurance expense ($8,000 × 9 months ÷ 24 months) $3,000
To Prepaid insurance $3,000
(Being the insurance expense is recorded)
For recording this we debited the insurance expense as it increased the expenses and credited the prepaid insurance as it decreased the assets
We should considered April 1 2020 instead of April 1 2010
2. On Nov 1
Cash $12,000
To Deferred rent revenue $12,000
(Being cash receipt is recorded)
For recording this we debited the cash as it increased the assets and credited the deferred rent revenue as it increased the liabilities
Deferred rent revenue ($12,000 × 2 months ÷ 6 months) $4,000
To Rent revenue $4,000
(Being rent revenue is recorded)
For recording this we debited the deferred rent revenue as it decreased the liabilities and credited the rent revenue as it increased the revenue
Lauer Corporation provided the following information about one of its laptop computers: Date Transaction Number of Units Cost per Unit 1/1 Beginning Inventory 290 $ 990 5/5 Purchase 390 $ 1,090 8/10 Purchase 490 $ 1,190 10/15 Purchase 295 $ 1,240 During the year, Lauer sold 1,225 laptop computers. What was cost of goods sold using the FIFO cost flow assumption
Answers
Answer:
Cost of Goods sold under FIFO is $1,363,500
Explanation:
The FIFO or First In First Out method is a method for closing inventory or Cost of goods sold valuation. It values the inventory based on the assumption that the units that are purchased first will be the ones to be sold first and the closing inventory consists of the most recently purchased inventory which is not sold yet.
The total units that are available for sale for the month are,
Total units available for sale = 290 + 390 + 490 + 295 = 1465 laptops
The units sold are 1225.
The closing inventory is thus = 1465 - 1225 = 240 laptops
Units sold from 10/15 Purchase = 295 - 240 = 55 units
As we are using FIFO, the 240 laptops left as closing inventory will be from the last purchase made on 10/15. Thus, the cost of goods sold will consist of the cost of,
Cost of goods sold
Beginning inventory (290 * 990) 287100
5/5 Purchase (390 * 1090) 425100
8/10 Purchase (490 * 1190) 583100
10/15 Purchase (55 * 1240) 68200
Total 1,363,500
Alvarado Company sells a machine for $7,400 with a 12-month warranty agreement that requires the company to replace all defective parts and to provide the repair labor at no cost to the customers. With sales being made evenly throughout the year, the company sells 600 machines in 2017 (warranty expense is incurred half in 2017 and half in 2018). As a result of product testing, the company estimates that the total warranty cost is $390 per machine ($170 parts and $220 labor).
Required:
Assuming that actual warranty costs are incurred exactly as estimated, what journal entries would be made relative to the following facts?
a. Sale of machinery and warranty expense incurred in 2017.
b. Warranty accrual on December 31, 2017.
c. Warranty costs incurred in 2018.
d. What amount, if any, is disclosed in the balance sheet as a liability for future warranty costs as of December 31, 2017?
Answers
Answer:
a.
Sale of machinery
Cash $4,440,000 (debit)
Revenue $4,440,000 (credit)
When Warranty expense incurrs 2017
Warranty Provision $117,000 (debit)
Parts Inventory $51,000 (credit)
Salaries and Wages $66,000 (credit)
b.
Warranty expense recognised 2017
Warranty Expense $117,000 (debit)
Warranty Provision $117,000 (credit)
c.
When Warranty expense incurrs 2018
Warranty Provision $117,000 (debit)
Parts Inventory $51,000 (credit)
Salaries and Wages $66,000 (credit)
d.
No future warranty costs are disclosed as of December 31, 2017
Explanation:
Sale of machinery and warranty expense incurred in 2017
Sale of machinery
Cash $4,440,000 (debit)
Revenue $4,440,000 (credit)
Being Sale of Machine in ordinary course of business
Revenue Calculation = $7,400 × 600 machines
= $4,440,000
Warranty expense recognised 2017
Warranty Expense $117,000 (debit)
Warranty Provision $117,000 (credit)
Being Recognition of Warranty Expense and Provision
Warranty Expense Calculation = $390 × 600 machines
= $234,000
Warranty Expense Calculation 2017 = $234,000 / 2
= $117,000
When Warranty expense incurrs 2017
Warranty Provision $117,000 (debit)
Parts Inventory $51,000 (credit)
Salaries and Wages $66,000 (credit)
Warranty expense recognised 2018
Warranty Expense $117,000 (debit)
Warranty Provision $117,000 (credit)
Being Recognition of Warranty Expense and Provision
Warranty Expense Calculation = $390 × 600 machines
= $234,000
Warranty Expense Calculation 2018 = $234,000 / 2
= $117,000
When Warranty expense incurrs 2018
Warranty Provision $117,000 (debit)
Parts Inventory $51,000 (credit)
Salaries and Wages $66,000 (credit)
Disclosure
The Provision for Warranty is already utilised in full when actual warranty costs are incurred exactly as estimated, thus No future warranty costs as of December 31, 2017 are disclosed
1B) Akwamba made this statement ‘organisations cannot be successful if managers fail to pay attention to the forces in the external environment’. Do you agree or not? Justify using practical examples (9 marks)
Answers
Answer:
I agree
Explanation:
One needs to pay attention
example firms based on technology will be at risk when other competitors upgrade.
A firm sells two products, Regular and Ultra. For every unit of Regular the firm sells, two units of Ultra are sold. The firm's total fixed costs are $1,612,000. Selling prices and cost information for both products follow. The contribution margin per composite unit is:______
Product Unit Sales Price Variable Cost Per Unit
Regular $20 $8
Ultra 24 4
a. 62,000 of A and 31,000 of B.
b. 31,000 of A and 62,000 of B.
c. 10,333 of A and 20,667 of B.
d. 31,000 of A and 31,000 of B.
e. 36,167 of A and 72,333 of B.
Answers
Answer:
Instructions are below.
Explanation:
Giving the following information:
Sales proportion:
Regulas= 1/3= 0.33
Ultra= 2/3= 0.67
Fixed costs= $1,612,000.
Product Unit Sales Price Variable Cost Per Unit
Regular $20 $8
Ultra 24 4
To calculate the contribution margin per composite unit, we need to use the following formula:
Weighted average contribution margin= (weighted average selling price - weighted average unitary variable cost)
weighted average selling price= (0.33*20) + (0.67*24)
weighted average selling price= $22.68
weighted average unitary variable cost= (0.33*8) + (0.67*4)
weighted average unitary variable cost= $5.32
Weighted average contribution margin= 22.68 - 5.32
Weighted average contribution margin= $17.36
Now, we can calculate the break-even point for the company as a whole:
Break-even point (units)= Total fixed costs / Weighted average contribution margin
Break-even point (units)= 1,612,000/17.36= 92,857
Finally, for each product:
Regular= 92,857*0.33= 30,643
Ultra= 92,857*0.67= 62,214
Please prepare the multi-step income statement, the statement of stockholders' equity and the classified balance sheet.
Accounts Payable $28,000 Accounts Receivable $150,000
Equipment $220,000 Cost of Goods Sold $400,000
Supplies $36,000 Notes Payable (Due in 2years) $40,000
Rent Expense $12,000 Interest Expense $6,000
Sales Revenue $545,000 Sales Discount $45,000
Accumulated Depreciation $20,000 Depreciation Expense $10,000
Buildings $65,000 Income Tax Expense $8,000
Salaries Expenses $25,000 Cash $12,000
In addition, the company has common stock of $250,000 at the beginning of the year and issued additional shares for $50,000. The company also had retained earinings of $60,000 at the beginning of the year and paid dividend of $4,000 during the year.
Operating Income
Net Income $484,000
Ending balance of common stock
Ending balance of retained earnings
Ending total stockholders' equity
Total current assets
Total long-term assets
Total assets
Total liabilities
Answers
Answer:
Operating Income = $53,000
Net Income = $39,000
Ending balance of common stock = $300,000
Ending balance of retained earnings = $95,000
Ending total stockholders' equity = $395,000
Total current assets = $198,000
Net long-term assets = $265,000
Total long-term assets = $285,000
Total assets = $463,000
Total liabilities = 68,000
Explanation:
a. Multi-step Income Statement
Multi-step Income Statement put each revenues and expenditures items into different categories to show gross profit and net income. This can be prepared as follows:
Multi-step Income Statement
For the year ended
Details $
Sales Revenue 545,000
Sales Discount (45,000)
Net Sales Revenue 500,000
Cost of Goods Sold (400,000)
Gross profit 100,000
Operating expenses:
Rent Expense (12,000)
Depreciation Expense (10,000)
Salaries Expenses (25,000)
Operating Income 53,000
Non-operating expenses:
Interest Expense (6,000)
Income before tax 47,000
Income Tax Expense (8,000)
Net income 39,000
Dividend paid (4,000)
Retained earning for the year 35,000
b. Changes in Retained Earnings
Details $
Beginning retained earnings 60,000
Retained earning for the year 35,000
Ending retained earnings 95,000
c. Movement in Common Stock
Details $
Beginning balance of common stock 250,000
Additional shares issued 50,000
Ending balance of common stock 300,000
c. Statement of stockholders' equity
Details $
Beginning balance of common stock 250,000
Additional shares issued 50,000
Ending balance of common stock 300,000
Ending retained earnings 95,000
Ending total stockholders' equity 395,000
d. Classified Balance Sheet
Classified balance sheet shows each of the componets of assets, liabilities and equity. This can be prepared as follows:
Classified Balance Sheet
As at the year ended
Details $ $
Long-Term Assets
Buildings 65,000
Equipment 220,000
Total Long-Term Assets 285,000
Accumulated Depreciation 20,000
Net Long-Term Assets 265,000
Current Assets
Cash 12,000
Accounts Receivable 150,000
Supplies 36,000
Total Current Assets 198,000
Total Assets 463,000
Financed by:
Ending total stockholders' equity 395,000
Current Liability
Accounts Payable 28,000
Long-Term Liability
Notes Payable (Due in 2years) 40,000
Total Liabilities 68,000
Total Equity $ Liabilities 463,000
Conclusion
As both the Total Assets and Total Equity and Liabilities are each equal to $463,000, it implies the financial statement is accurately prepared since both must always be equal.
1. The preparation of the Multi-step Income Statement is as follows:
Sales Revenue $545,000
Sales Discount $45,000
Net Sales $500,000
Cost of Goods Sold $400,000
Gross profit $100,000
Operating Expenses:
Rent Expense $12,000
Salaries Expenses $25,000
Depreciation Expense $10,000
Total operating expense $47,000
Operating income $53,000
Interest Expense ($6,000)
Earnings before tax $47,000
Income Tax Expense $8,000
Net income $39,000
2. The Statement of Stockholders' Equity is as follows:
Common Stock $300,000
Retained earnings 95,000
Stockholders' equity $395,000
3. Classified Balance Sheet
Assets
Current Assets:
Cash $12,000
Accounts Receivable $150,000
Supplies $36,000
Total current assets $198,000
Long-term assets:
Buildings $65,000
Equipment $220,000
Accumulated Depreciation($20,000) $265,000
Total assets $463,000
Liabilities and Equity
Current Liabilities:
Accounts Payable $28,000
Long-term liabilities:
Notes Payable (Due in 2years) $40,000
Total liabilities $68,000
Equity:
Common stock $300,000
Retained Earnings $95,000 $395,000
Total liabilities and equity $463,000
Data and Calculations:
Cash $12,000
Accounts Receivable $150,000
Supplies $36,000
Buildings $65,000
Equipment $220,000
Accumulated Depreciation $20,000
Accounts Payable $28,000
Notes Payable (Due in 2years) $40,000
Common stock $300,000
Sales Revenue $545,000
Sales Discount $45,000
Net Sales $500,000
Cost of Goods Sold $400,000
Rent Expense $12,000
Salaries Expenses $25,000
Depreciation Expense $10,000
Interest Expense $6,000
Income Tax Expense $8,000
The Common Stock ending balance is $300,000 ($250,000 + $50,000).
Statement of Retained Earnings:
Retained Earnings $60,000
Net income $39,000
Dividend paid ($4,000)
Retained earnings, ending $95,000
Thus, the total stockholders' equity ending balance is $395,000 ($300,000 + $95,000).
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Which of the following statements about portfolio diversifications are correct? Check all that apply. The risk of a portfolio declines as the number of stocks in the portfolio increases. By adding enough partially correlated stocks, risk can be completely eliminated. The higher the stocks’ correlation coefficients, the lower the portfolio’s risk. Stocks with perfectly negatively correlated returns do not exist.
Answers
Answer:
The risk of a portfolio declines as the number of stocks in the portfolio increases.
Explanation:
In simple words, diversification refers to the benefit of lesser risk that a manager gets by adding negatively or less correlates securities in the portfolio.
However, it is a fact that risk can only be minimized and cannot be eliminated completely. The risk that is specific to the business is called systematic risk and due to its unpredictability it cannot be diversified away.
Thus, from the above we can conclude that the correct option is A.
On January 1, 2018, the general ledger of ACME Fireworks includes the following account balances:
Accounts Debit Credit
Cash $25,800
Accounts Receivable 47,600
Allowance for Uncollectible Accounts $4,900
Inventory 20,700
Land 53,000
Equipment 18,500
Accumulated Depreciation 2,200
Accounts Payable 29,200
Notes Payable (6% due April 1, 2016) 57,000
Common Stock 42,000
Retained Earnings 30,300
Totals $165,600 $165,600
During January 2018, the following transactions occur:
January 2 Sold gift cards totaling $9,400. The cards are redeemable for the merchandise within one year of the purchase date.
January 6 Purchase additional inventory on account $154,000
January 15 Firework sales for the first half of the month total $142,000. All of these sales are on account. The cost of the units sold is $77,300
January 23 Receive $126,100 from customers on accounts receivable
January 25 Pay $97,000 to inventory suppliers on accounts payable
January 28 Write off accounts receivable as uncollectible, $5,500
January 30 Firework sales for the second half of the month total $150,000. Sales include $15,000 for cash and $135,000 on account. The cost of the units sold is $83,000
January 31 Pay cash for monthly salaries $52,700
1. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated residual value of $4,700 and two-year service life.
2. The company estimates the future uncollectible accounts. The company determines $18,000 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
3. Accrued interest expense on notes payable for January.
4. Accrued income taxes at the end of January are $13,700.
5. By the end of January, $3,700 of the gift cards sold on January 2 have been redeemed.
Required:
Record the adjusting entries on January 31 for the above transactions.
Answers
Answer:
1. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated residual value of $4,700 and two-year service life.
Equipment cost = 18,500 - 4,700 (residual value) = 13,800 / 24 months = $575 per month
January 31, depreciation expense
Dr Depreciation expense 575
Cr Accumulated depreciation - equipment 575
2. The company estimates the future uncollectible accounts. The company determines $18,000 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
total accounts receivable Jan. 31 = 47,600 (beginning) + 142,000 - 126,100 - 5,500 + 135,000 = 193,000
overdue balance = 18,000
current accounts balance = 193,000 - 18,000 = 175,000
total bad debt = ($18,000 x 30%) + ($175,000 x 5%) = $5,400 + $8,750 = $14,150
January 31, bad debt expense
Dr Bad debt expense 14,150
Cr Allowance for doubtful accounts 14,150
3. Accrued interest expense on notes payable for January.
4. Accrued income taxes at the end of January are $13,700.
notes payable $57,000 x 6% x 1/12 = $285
January 31, interest expense
Dr Interest expense 285
Cr Interest payable 285
5. By the end of January, $3,700 of the gift cards sold on January 2 have been redeemed.
January 31, accrued revenue
Dr Unearned revenue 3,700
Cr Sales revenue 3,700
Using straight-line method Equipment cost is = 18,500 - 4,700 (residual value) = 13,800 / 24 months = $575 per month
Prepare the journal entries
1. Depreciation on the tools for January is computed using the straight-line method. At the juncture the equipment was purchased, the company evaluated a residual value of $4,700 and two-year service life.
Then the Equipment cost is = 18,500 - 4,700 (residual value) = 13,800 / 24 months = $575 per month
January 31, depreciation expenses are:
Dr. Depreciation expense 575
Cr Accumulated depreciation - equipment 575
2. The company evaluates the prospective uncollectible accounts. The company determines $18,000 of accounts receivable on January 31 are one-time due, and 30% of these accounts are assessed to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are evaluated to be uncollectible. (Suggestion: Use the January 31 accounts receivable balance estimated in the general ledger.)
Then the total accounts receivable Jan. 31 is = 47,600 (beginning) + 142,000 - 126,100 - 5,500 + 135,000 is = 193,000
After that overdue balance is = 18,000
Then the current accounts balance is = 193,000 - 18,000 = 175,000
Now the total bad debt is = ($18,000 x 30%) + ($175,000 x 5%) = $5,400 + $8,750 = $14,150
January 31, bad debt expense are:
Dr Bad debt expense 14,150
Cr Allowance for doubtful accounts 14,150
3. The Accrued interest expense on notes payable for January.
4. When Accrued income taxes at the fate of January are $13,700.
After that, notes payable $57,000 x 6% x 1/12 = $285
January 31, interest payment
Dr. Interest expense 285
Cr Interest payable 285
5. Then By the end of January, $3,700 of the grant cards sold on January 2 have been saved.
January 31, accrued revenue is:
Dr. Unearned revenue 3,700
Cr Sales revenue 3,700
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Compute cost of goods sold, assuming Waterway uses: (Round average cost per unit to 4 decimal places, e.g. 2.7631 and final answers to 0 decimal places, e.g. 6,548.) Cost of goods sold (a) Periodic system, FIFO cost flow $ (b) Perpetual system, FIFO cost flow $ (c) Periodic system, LIFO cost flow $ (d) Perpetual system, LIFO cost flow $ (e) Periodic system, weighted-average cost flow $ (f) Perpetual system, moving-average cost flow
Answers
Answer:
The average cost per unit is = 24.7917
The Periodic FIFO =163000
The Perpetual FIFO=163000
The Periodic FIFO = 195600
The Perpetual LIFO =186800
The Periodic weighted average cost flow= 176021
The Perpetual moving average cost flow= 169669
Explanation:
Solution
Given that:
The first step to take is to compute average cost per unit
Unit Unit cost Total cost
Beginning inventory 2200 16 35200
Purchase 1 3200 24 76800
Purchase 2 4200 30 126000
The Total 9600 238000
Hence,
The Average cost per unit = 238000/9600 = 24.7917 per unit
Now, we calculate for the cost of goods sold which is given as :
The Periodic FIFO (35200+76800+1700*30) =163000
The Perpetual FIFO=163000
The Periodic LIFO (4200*30+2900*24)=195600
The Perpetual LIFO (76800+500*16+3400*30)=186800
The Periodic average (7100*24.7917)= 176021
The Perpetual (3700*20.7407+3400*27.3320)= 169669
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