Answer:
Denis Savard Inc
Classified Balance sheet
Amount$ Amount$ Amount$
Assets
Current Assets
Cash xxx
Less Cash Restricted for Plant xxx xxx
Expansion
Accounts Receivable xxx
Less Allowance for Doubtful debt xxx xxx
Notes Receivable xxx
Receivables-Officers xxx
Inventory
Finished goods xxx
Work in Process. xxx
Raw Materials xxx xxx
Total Current Assets xxx
Stockholders Equity
Common Stock xxx
Add Paid-in Capital in Excess of xxx
Par-Common Stock.
Total paid in capital xxx
Add Retained Earnings. xxx
Total paid in capital and retained earnings xxx
Less Treasury Stock (at cost) xxx
Total Stockholders Equity xxx
Total Liability and Stockholders Equity xxx
Liability and Stockholders Equity
Current Liability
Salaries and Wages Payable. xxx
Unearned Subscriptions Revenue. xxx
Unearned Rent Revenue. xxx
Total Current Liability. xxx
Long term liabilities
Bonds Payable (due in 4 years) xxx
Less Discount on Bonds Payable xxx xxx
Total Long term liabilities. . xxx
Long term Investment
Preferred Stock (Equity) Investments. xxx
Land Held for Future Plant Site.. xxx
Cash Restricted for Plant Expansion. xxx
Total Long term Investment. xxx
Property, Plants and Equipment
Building. xxx
Less Accumulated Depreciation xxx xxx
- Buildings
Total Property, Plants and . xxx
Equipment
Intangible Assets
Copyrights. . xxx
Total Intangible Assets. . xxx
Total Assets. . xxx
nterest rates on 2-year Treasury securities are currently 6.0%, while 6-year Treasury securities yield 6.5%. If the pure expectations theory is correct, what does the market believe that 4-year securities will be yielding 2 years from now
Answer:
The market believes that 4-years from now, the 4-year securities will be 6.75%
Explanation:
We proceed as follows using the pure expectations theory .
The theory states that the future rates are exclusively represented by the forward rate.
Mathematically;
(1 + .065)^6 = (1 + .^206)2 * (1 + x)^4
1.4591 = 1.1236 * (1 + x)^4
Divide both sides by 1.1236
1.2986 = (1 + x)^4
Take both sides to the 1/4 power to get rid of the power of 4
1.0675= 1 + x
x = .0675 or 6.75%
Adjusting entries affect at least one balance sheet account and at least one income statement account. For the entrie below, identify the account to be debited and the account to be credited. Indicate which of the accounts is the incom statement account and which is the balance sheet account. Assume the company records prepayments of expenses asset accounts, and cash receipts of unearned revenues in liability accounts.
a. Entry to record consulting services performed but not yet billed (nor recorded).
b. Entry to record Interest revenue earned but not yet collected (nor recorded).
c. Entry to record service revenues performed but not yet billed (nor recorded).
d. To record janitorial expense incurred but not yet paid.
e. To record rent expense incurred but not yet paid
Accounts Account Title Financial Statement
a. Account to be debited Accounts receivable Balance sheet
Account to be credited Consulting services revenue Income statement
b. Account to be debited Interest receivable Balance sheet
Account to be credited interest revenue earned Income statement
c. Account to be debited Accounts receivable Balance sheet
Account to be credited Services revenue earned Income statement
d. Account to be debited Janitorial expense Balance sheet
Account to be credited Accrued expenses payable Income statement
e. Account to be debited Rent expense Balance sheet
Account to be credited Accrued expenses payable Income statement
Answer and Explanation:
According to the given situation, the income statement and balance sheet as per parts is shown below:-
Accounts Account Title Financial statements
For Part A
Debit Accounts receivable Liability account Balance sheet
Credit Consulting service Income statement
revenue
For Part B
Debit Interest receivable Liability account Balance sheet
Credit Interest revenue Income statement
For Part C
Debit Accounts receivable Assets account Balance sheet
Credit Service Revenue Income statement
For Part D
Debit Janitorial expense Income statement
Credit Janitorial expense Liability account Balance sheet
Payable
For Part E
Debit Rent expenses Income statement
Credit Rent expenses Liability account Balance sheet
payable
intext:"The description of the relation between a company’s assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the"
Answer:
Accounting equation
Explanation:
The accounting equation is the basis of the double-entry accounting system.
The accounting equation ensures that each entry made on the debit side of the balance sheet should have a corresponding entry on the credit side. This ensures that the balance sheet remains balanced
Zebra, Inc., a calendar year S corporation, incurred the following items this year. Sammy is a 40% Zebra shareholder throughout the year.
Operating income (sales) $100,000
Cost of goods sold (40,000)
Depreciation expense (MACRS) (10,000)
Administrative expenses (5,000)
§1231 gain 21,000
Depreciation recapture income $25,000
Short-term capital loss from stock sale (6,000)
Long-term capital loss from stock sale (4,000)
Long-term capital gain from stock sale 15,000
Charitable contributions (4,500)
a. Calculate Sammy’s share of Zebra’s nonseparately computed income or loss.
b. Calculate Sammy’s share of any Zebra long-term capital gain.
Answer:
a. $70,000
b. $6,000
Explanation:
Non separately income = Operating income +Depreciation recapture income -COGS -ADM expense -depreciation
= $100,000 + $25,000 - $40,000 - $5,000 - $10,000
= $70,000
a. Sammy share of Zebra’s non-separately computed income or loss
= $70,000 * 0.40
= $28,000
b. Sammy share in Long term capital gain
= $15,000 * 0.40
= $6,000
InstaTrack is a newly emerging athletic shoe manufacturing company. After extensive market research, InstaTrack divides its market into professional athletes, "hobbyists" or amateur players, and people who wear shoes as part of their casual attire. Each category has its own needs, traits, and marketing goals. In this scenario, which of the following most accurately reflects Insta Track's marketing strategy?
a) diversification
b) development
c) positioning
d) segmentation
Answer:
The answer is D
Explanation:
Market segmentation is the process of dividing a larger consumers or market into a smaller group(segments) based on some criteria.
One of the importances is that it allows a business to know what their customers' demands, or needs are.
Customers in the same segment respond similarly to market strategies.
Your company has used competitive bidding to select a supplier for janitorial services. Three suppliers returned acceptable bids within the allotted time frame.
Category Weight Supplier A Rating Supplier B Rating Supplier C Rating
Quality systems 40% 2 3 2
Financial stability 29% 2 2 3
Management experience 20% 4 2 3
Price 11% 1 4 4
All scores on a five-point scale with 1poor, 5 excellent.
a. Calculate the total weighted score for each supplier. (Round your answers to 2 decimal places.)
Total Weighted Score
Supplier A
Supplier B
Supplier C
b. Based on these ratings from the supplier assessment, which supplier appears to be the best?
Supplier A
Supplier B
Supplier C
Answer:
Competitive Bidding based on Weighted Score
a. Calculation of the total weighted score for each supplier:
Supplier A :
Quality systems 40% x 2/5 = 16%
Financial stability 29% x 2/5 = 11.6%
Management experience 20% x 4/5 = 16%
Price 11% 1/5 = 2.2%
Total weighted score = 45.8%
Supplier B :
Quality systems 40% x 3/5 = 24%
Financial stability 29% x 2/5 = 11.6%
Management experience 20% x 2/5 = 8%
Price 11% x 4/5 = 8.8%
Total weighted score = 52.4%
Supplier C
Quality systems 40% x 2 /5 = 16%
Financial stability 29% x 3 /5 = 17.4%
Management experience 20% x 3 /5 = 12%
Price 11% x 4/5 = 8.8%
Total weighted score = 54.2%
b. Best Supplier:
Supplier C
Explanation:
a) Data and Calculations:
Category Weight Supplier A Supplier B Supplier C
Ranking Ranking Ranking
Quality systems 40% 2 3 2
Financial stability 29% 2 2 3
Management experience 20% 4 2 3
Price 11% 1 4 4
A July sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit. The management forecasts 2% growth in sales each month. Total July sales are anticipated to be:
Answer:
Budgeted sales July= $63,000
Explanation:
Giving the following information:
A July sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit.
To calculate the budgeted sales, we simply need to multiply the number of units sold for the selling price:
Budgeted sales July= 6,000*10.5= $63,000
Health and Wealth Company is financed entirely by common stock that is priced to offer a 12 percent expected return. If the company repurchases 20 percent of the common stock and substitutes an equal value of debt yielding 8 percent, what is the expected return on the common stock after refinancing
Answer: 13%
Explanation:
By substituting 20% of debt for debt yielding 8%, the company now has 20% financing from debt and 80% from equity.
The expected return on common stock after refinancing can be calculated by;
Return after refinancing = Return before refinancing + [tex]\frac{Debt}{Equity}[/tex](return before refinancing - Debt yield)
= 12% + [tex]\frac{0.2}{0.8} (0.12 - 0.08)[/tex]
= 13%
At Emmerson Company, one bookkeeper prepares the cash deposits while the other bookkeeper enters the collections in the journal and ledger. Which of the following is the best explanation of this type of internal control principle over cash reciepts?
a. mechanical controls
b. physical controls
c. documentation procedures
d. segregation of duties
Answer:
d. segregation of duties
Explanation:
Segregation of duties defines that when a different number of people doing their duties for the same purpose. For example a person receives an envelope of cheque and another person records in accounting system.
According to the given situation, one person who is bookkeeper prepared cash deposit and another person records the collection of journal and ledger. So, this indicates the segregation of duties
Like a good economist, you calculated the opportunity cost of getting your college degree. Suppose that at your university, you will pay $10,000 each year for tuition, $2,500 each year for textbooks, and $12,000 per year for room and board. Before you left for college, your boss at your high-school job offered you a job paying $20,000 per year.
Assume that if you decided not to go to college, your parents would not let you live at home.
What is your opportunity cost for four years of college? $_______
Answer:
$130,000
Explanation:
Calculation for the opportunity cost for four years of college
The first step is to calculate for the cost of education per year
Using this formula
Cost of education per year =Tuition+Text book +Room and board
Let plug in the formula
Cost of education per year =$10,000+$2,500+$12,000
=$24,500
Second step is to calculate the return in a situation were we decided not to go to college
$20,000-$12,000=$8,000
The last step is to calculate for the opportunity cost for 4 years of college:
Using this formula
Opportunity cost =Cost of education per year+ Return * Numbers of year
Where,
Cost of education per year=$24,500
Return =$8,000
Numbers of years =4
Let plug in the Formula
Opportunity cost =($24,500+$8,000)*4
Opportunity cost =$32,500*4
Opportunity cost =$130,000
Therefore the opportunity cost for four years of college will be $130,000
ent "Flounder" Dorfman is a full-time student at Faber College. He is a senior and a member of Delta Tau Chai fraternity. The Deltas awarded Kent a $35,000 scholarship called "The Dean Wormer Double Secret Probation Memorial Scholarship". Kent pays the following amounts, out of his scholarship, to attend Faber College: Tuition - $26,000; Required lab fees - $300; Required books and supplies - $1,000; Room and board - $7,500. Part 1 of 6: Does the $26,000 of the scholarship that was paid for tuition have to be included in Flounder's taxable income for federal income tax purposes?
Answer:
Kent "Flounder" Dorfman
Scholarship from Delta Tau Chair Fraternity
The $26,000 will not be included in Flounder's taxable income for federal income tax purposes. It is a qualified scholarship expense. It is only the portion of $7,500 used for Room and board that is not a qualified scholarship expense.
Though it is required that the $35,000 be disclosed in form 1040. Qualified expenses like tuition, required lab fee, required books and supplies are tax-exempt, while Room and board and other non-required expenses are not qualified and therefore taxable.
Explanation:
S117(b)(2) of the IRS Code states the expenses that are qualified and tax-exempt if they are tuition-related.
When a qualified student, usually above 18 years and enrolled in post-secondary educational institution, receives a scholarship, the amount she uses to pay for tuition and other required expenses, which are generally payable by other students, are regarded as qualified expenses. Since they are qualified, they are also tax-exempt, meaning that taxes will not be paid on them, instead they will be deducted for tax purposes from the student's income. In the case of Kent, the tuition fee is not included in her taxable income for federal income tax purposes.
Mr. Jones has a salary of $75,000 and $5,000 in dividends, for a total adjusted gross income of $80,000. He also has two real estate investments that he acquired this year: (a) a limited partnership with losses of $4,000, and (b) a real estate project in which he actively participates and owns 15%, with his share of losses equal to $15,000. How much of his losses can he deduct from the income on a joint return
Answer:
$15,000
Explanation:
Based on the information given we were told that Mr. Jones have gross income of the amount of $80,000 and he had a real estate project in which he owns 15%, which makes Mr. Jones share of losses to be the amount of $15,000. Based on this we can vividly say that Mr. Jones losses will be the amount of $15,000 which is the amount of money Mr. Jones can deduct from the income on a joint return .
Arthur White Sunglasses sell for about $ 151 per pair. Suppose the company incurs the following average costs per pair: LOADING...(Click the icon to view the cost information.) Arthur White has enough idle capacity to accept a one-time-only special order from Nevada Glasses for 22 comma 000 pairs of sunglasses at $ 62 per pair. Arthur White will not incur any variable marketing expenses for the order. Read the requirements
Requirement
How would accepting the order affect Arthur White's operating income?
In addition to the special order's effect onprofits, what other (longer-term qualitative) factors should Arthur White's managers consider in deciding whether to accept theorder?
Prepare an incremental analysis to determine the specialorder's effect on operating income. (Enter a "0" for any zero balances.
Use parentheses or a minus sign to indicate a decrease in operating income from the special order.) Total Order Incremental Analysis of Special Sales Order Decision Per Unit (22,000 units) Revenue from special order Less variable expense associated with the order: Variable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order
Answer:
How would accepting the order affect Arthur White's operating income?
operating income will increase by $88,000In addition to the special order's effect onprofits, what other (longer-term qualitative) factors should Arthur White's managers consider in deciding whether to accept theorder?
The most important qualitative factors which cannot be measured in $ are:
Morale Customers Investors Community ProductsIn this case, the only two factors that could be affected are the investors which will be happy to earn more money and customers which might consider making special orders only. In this case, the special order is feasible because the company has a lot of spare capacity, but what would happen in the future if there is no spare capacity and more customers want to place special orders?
Prepare an incremental analysis to determine the special order's effect on operating income.
without special with special differential
order order amount
revenue $0 $1,364,000 $1,364,000
variable costs $0 ($1,276,000) ($1,276,000)
contribution $0 $88,000 $88,000
margin
fixed costs $0 $0 $0
total effect on $0 $88,000 $88,000
operating income
Explanation:
production costs per unit:
direct labor $11direct materials $39variable manufacturing overhead $8fixed manufacturing overhead $16variable marketing expenses $4total $78sales price $151
special order 22,000 pairs at $62:
since the company has idle capacity, no fixed manufacturing costs nor any variable marketing expenses
total cost per unit = $78 - $16 - $4 = $58
special order's contribution margin = $62 - $58 = $4 x 22,000 = $88,000
What is capital budgeting? a. The process of managing cash flow. b. The analysis of real asset investment opportunities. c. The process of managing current assets. d. None of the above.
Answer:
b. The analysis of real asset investment opportunities.
Explanation:
Capital Budgeting is the Process of appraising various alternatives of investments.
It uses techniques such as the Net Present Value methods, Internal Rate of Return and Payback Period methods to analyze the best alternatives of investments.
Pendleton Company, a merchandising company, is developing its master budget for 2015. The income statement for 2014 is as follows:
Gross sales $2,000,000
Less: Estimated uncollectible accounts (40,000)
Net sales 1,960,000
Cost of goods sold (1,100,000)
Gross profit 860,000
Operating expenses (including $25,000 depreciation) (500,000)
Net income $360,000
The following are management’s goals and forecasts for 2015:
a. Selling prices will increase by 6 percent, and sales volume will increase by 4 percent.
b. The cost of merchandise will increase by 3 percent.
c. All operating expenses are fixed and are paid in the month incurred. Price increases for operating expenses will be 10 percent. The company uses straight-line depreciation.
d. The estimated uncollectibles are 2 percent of budgeted sales.
Required
Prepare a budgeted functional income statement for 2015.
Answer:
Budgeted functional income statement for 2015
Gross sales ($2,000,000 × 1.04 × 1.06) $2,204,800
Less: Estimated uncollectible accounts ($2,204,800 × 2 %) ($44,096)
Net sales $2,160,704
Cost of goods sold (1,100,000 × 1.03) ($1,133,000)
Gross profit $1,027,704
Operating expenses (475,000 × 1.10) ($522,500)
Depreciation ($25,000)
Net income $480,204
Explanation:
Make the adjustments stated on the 2014 Income Statement.
For Operating Expenses, it is wise to first remove the depreciation expense and apply the increment of 10% to reflect Operating Costs for 2015.
Treat Depreciation Expense separately and at the same amount as for 2014, since depreciation is calculated on straight line method.
The Bank of Bramblewood would like to increase its loans to customers, but it is currently mandated by a high reserve rate. As a Federal Reserve member bank, it will borrow additional funds from the Fed and charge its customers an interest rate that is higher than the ________________.
Answer: discount rate
Explanation:
It should be noted that the discount rate is the rate that is charged by the Federal Reserve when any of its member banks borrow money from it.
Therefore, Federal Reserve member bank, the Bank of Bramblewood will borrow additional funds from the Fed and charge its customers an interest rate that is higher than the discount rate.
A favorable direct materials price variance might lead to an unfavorable direct materials quantity variance because the company purchased inferior materials. true or false
A favorable direct materials price variance might lead to an unfavorable direct materials quantity variance because the company purchased inferior materials. This statement was correct. Thus, option (a) is correct.
What is direct materials?The term direct materials refers to the manufactured product components such as integrated circuits, screen, camera modules and the other components. It was the used in the cost accounting. The material are they directly manufacture the goods and the services.
The concepts are the actual costs related to materials as result on the more standards outcomes is called the unfavorable direct materials. The favorable outcome of the fewer standards outcomes. The concept is the direct material price is fewer than the standard direct material price.
As a result, the significance of the direct materials are the aforementioned. Therefore, option (a) is correct.
Learn more about on direct materials, here:
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Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows. Product Quantity Unit Cost Unit Replacement Cost Unit Selling Price A 1,000 $ 26 $ 28 $ 32 B 500 31 27 34 C 900 19 18 24 D 900 23 20 22 E 800 30 28 29 The cost to sell for each product consists of a 10 percent sales commission. The normal profit for each product is 35 percent of the selling price. Required: 1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Determine the carrying value of inventory at December 31, 2021, assuming the LCM rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Forester, record any necessary year-end adjusting entry based on the amount calculated in requirement 2.
Answer:
A)
A 1,000 x $26.00 = $ 26,000
B 500 x $30.60 = $ 15,300
C 900 x $ 19.00 = $ 17,100
D 900 x $ 19.80 = $ 17,820
E 800 x $26.10 = $ 20,880
Total $ 97,100
B)
102,240
C)
Write-down at NRV 1,060 debit
Inventory 1,060 credit
Explanation:
We have to calculate the net realizable value(NRV) for each item and compare with the historic cost:
Units// Cost /// NRV
A 1,000 $ 26 $ 32(1 - 0.1) = 28.8
B 500 $ 31 $ 34(1-0.1) = 30.60
C 900 $ 19 $ 24(1-0.1) = 21.60
D 900 $ 23 $ 22(1-0.1) = 19.80
E 800 $ 30 $ 29(1-0.1) = 26.10
We will always pick the lowest to valuate the goods:
A 1,000 x $26.00 = $ 26,000
B 500 x $30.60 = $ 15,300
C 900 x $ 19.00 = $ 17,100
D 900 x $ 19.80 = $ 17,820
E 800 x $26.10 = $ 20,880
Total $ 97,100
Total Cost:
1,000 x 26
+ 500 x 31
+ 900 x 19
+ 900 x 23
+ 800 x 30
103,300
Total NRV
1,000 x 28.80
+ 500 x 30.60
+ 900 x 21.60
+ 900 x 19.80
+ 800 x 26.10
102,240
Comparing at the entire inventory level we get the following adjustment
103,300 - 102,240 = 1,060
The profit leverage effect (ratio) is calculated by A. dividing 1.0 by the profit margin. B. dividing pretax earnings by the cost of goods sold. C. dividing sales by the cost of goods sold. D. none of the above
Answer:
D. none of the above
Explanation:
The profit leverage effect shows that in order to increase net profits, it is better and more efficient to reduce operating expenses rather than increasing total net sales revenue. I.e. a $1 decrease in costs increases operating profits by $1, which is much more than the increase resulting from increasing sales by $1.
Standard Direct Materials Cost per Unit Crazy Delicious Inc. produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (2,857 bars) are as follows: Ingredient Quantity Price Cocoa 630 lbs. $0.40 per lb. Sugar 180 lbs. $0.60 per lb. Milk 150 gal. $1.60 per gal. Determine the standard direct materials cost per bar of chocolate. If required, round to the nearest cent. $ per bar
Answer:
Standard direct material cost per unit= $0.21
Explanation:
Giving the following information:
The standard costs for a batch of chocolate (2,857 bars) are as follows:
Cocoa 630 lbs. $0.40 per lb.
Sugar 180 lbs. $0.60 per lb.
Milk 150 gal. $1.60 per gal
First, we need to calculate the total cost for 2,857 bars:
Total cost= 630*0.4 + 180*0.6 + 150*1.6
Total cost= $600
Now, the unitary standard cost:
Standard direct material cost per unit= 600/2,857
Standard direct material cost per unit= $0.21
Students arrive at the Administrative Services Office at an average of one every 15 minutes, and their requests take on average 10 minutes to be processed. The service counter is staffed by only one clerk, Judy Gumshoes, who works eight hours per day. Assume Poisson arrivals and exponential service times.
Required:
a. What percentage of time is Judy idle?
b. How much time, on average, does a student spend waiting in line?
c. How long is the (waiting) line on average?
d. What is the probability that an arriving student (just before entering the Administrative Services Office) will find at least one other student waiting in line?
Mason Automotive is an automotive parts company that sells car parts and provides car service to customers. This is Mason's first year of operations and they have hired you as their CPA to prepare the income statement and balance sheet for their company. As such, January 1st , 2018 was the first day that Mason was in business. For the month of January, record all the necessary journal entries for transactions that occurred during the month. In addition, please prepare all necessary adjusting journal entries as of the end of the month.
From the information below, please fill out the "journal entries tab" for all the necessary journal entries. Furthermore, please complete the "T-Accounts" tab for the individual accounts so that the trial balance tab can be updated (automatically). I prepared the first journal entry for you in the journal entries tab and T-Accounts tab. Ensure you label the entries similar to how I have shown in Entry #1.
Once all entries are recored and the T-Accounts tab is updated, please prepare the financial statements (income statement and balance sheet) for the month of January.
Journal Entry #1
Mason Automotive sells 10,000,000 shares at $5 par for $30 on January 1st, 2018.
Journal Entry #2
Ed Mason, the CEO, hires 3,000 employees, whom will receive a combined salary of $12 Million on a monthly basis. The employees started on January 1st and will be paid for the month of January on February 5th. Employee's withholdings are as follows: 10% for federal income taxes 5% for state income taxes and 7% for FICA. Record the necessary entry as of January 1st, 2018.
Journal Entry #3
Mason Automotive issues a bond payable on January 1st, 2018 with a face value of $200 Million at 102. The bond will have a useful life of 5 years and interest is paid out monthly based on a rate of 5% APR. Record the necessary journal entry as of January 1st 2018.
(Note: Assume straight line amortization for the bond discount/premium).
Journal Entry #4
Mason Automotive purchased $80 Million dollars worth of inventory on account on January 2nd, 2018. Mason notes that it will use a perpetual inventory system to track inventory.
Journal Entry #5
Mason Automotive purchases fixed assets of $120 Million that will have a useful life of 10 years and no salvage value on January 2, 2018. $20 million was paid with cash with the remaining balance on account. These assets are depreciated using the straight-line method.
Journal Entry #6
On January 2nd, Mason Automotive shipped an order to Corby Panther Company. The shipping terms were FOB shipping point and the value of the order was $50 Million and the inventory cost was $20 Million. Assume that this sale was made on account.
Journal Entry #7
On January 3rd, Mason Automotive receives $75 Million advance payment from a customer, Michael Scott Paper Company, to manufacture 7,500 cars.
Journal Entry #8
Mason Automotive buys a patent from Apple for $24 Million on January 3rd, 2018. The patent has a legal life of 20 years, but a useful life of 10 years. Record the necessary entry as of January 3rd, 2018. Assume the patent was purchased using cash.
Journal Entry #9
Mason Automotive purchased $2 Million dollars worth of supplies January 4th, 2018. $1.5 Million was paid with cash with the remaining balance on account.
Journal Entry #10
Mason Automotive pre-pays for Rent Expense for the next year of $12 Million and Insurance Expense of $2.4 Million on January 4th, 2018
Journal Entry #11
On January 20th, Mason Automotive decides to purchase 2,000,000 shares of Treasury stock at $25 per share.
Month End Adjusting Entries
There are 10 applicable adjusting entries that need to be made as of the end of the month based on the information provided above. When recording these adjusting entries consider the following facts:
1) Interest expense will be recorded as a operating expense items on the income statement.
2) Record the necessary adjusting entries related to pre-paid expense as separate journal entries.
3) When reviewing the supply room as of the end of the month, Mason Automation noted that it had $1.5 Million worth of supplies still on hand.
4) As of the end of the month, 4,000 cars were completed for Michael Scott Paper Company and the performance obligation had been met on those 4,000 cars. As such, revenue was determined to be earned on those 4,000 vehicles and it was noted that each vehicle costed $8,000 to manufacture.
5) Mason Automation uses the balance sheet approach in estimating the allowance for doubtful accounts as of the end of the period. Based on industry average, Mason noted that it will use 5% of receivables as an estimation.
6) When preparing the balance sheet, close out net income to retained earnings.
Answer:
1) Mason Automotive sells 10,000,000 shares at $5 par for $30 on January 1st, 2018.
Dr Cash 300,000,000
Cr Common stock 50,000,000
Cr Additional paid in capital 250,000,000
2) Ed Mason, the CEO, hires 3,000 employees, whom will receive a combined salary of $12 Million on a monthly basis. The employees started on January 1st and will be paid for the month of January on February 5th. Employee's withholdings are as follows: 10% for federal income taxes 5% for state income taxes and 7% for FICA. Record the necessary entry as of January 1st, 2019.
No journal entry required
Adjusting entry:
January 31, 2018, wages expense
Dr Wages expense 12,000,000
Dr FICA taxes expense 840,000
Cr Federal income taxes withheld payable 1,200,000
Cr State income taxes withheld payable 600,000
Cr FICA taxes withheld payable 840,000
Cr FICA taxes payable 840,000
Cr Wages payable 9,360,000
3) Mason Automotive issues a bond payable on January 1st, 2018 with a face value of $200 Million at 102. The bond will have a useful life of 5 years with an interest payment of 5% (Annual Percentage Rate) due at the end of the month. Record the necessary journal entry as of January 1st, 2018.
Dr Cash 204,000,000
Cr Premium on bonds payable 4,000,000
Cr Bonds payable 200,000,000
(Note: When considering the amortization of the discount or premium, assume the straight line method is used).
Adjusting entry
January 31, 2018, interest expense
Dr interest expense 766,666.66
Dr Premium on bonds payable 66,666.67
Cr Interest payable 833,333.33
4) Mason Automotive purchased $80 Million dollars worth of inventory on January 2nd, 2018. $80 Million was paid with cash with the remaining balance on account. Mason notes that it will use a perpetual inventory system to track inventory.
Dr Inventory 80,000,000
Cr Accounts payable 80,000,000
5) Mason Automotive purchases fixed assets of $120 Million that will have a useful life of 10 years and no salvage value on January 2, 2018. $20 million was paid with cash with the remaining balance on account. These assets are depreciated using the straight-line method.
Dr Fixed assets 120,000,000
Cr Cash 20,000,000
Cr Accounts payable 100,000,000
Adjusting entry:
January 31, 2019, depreciation expense
Dr Depreciation expense 1,000,000
Cr Accumulated depreciation - fixed assets 1,000,000
6) On January 2nd, Mason Automotive shipped an order to Corby Panther Company. The shipping terms were FOB shipping point and the value of the order was $50 Million and the inventory cost was $20 Million. Assume that this sale was made on account.
Dr Accounts receivable 50,000,000
Cr Sales revenue 50,000,000
Dr Cost of goods sold 20,000,000
Cr Inventory 20,000,000
Adjusting entry:
January 31, 2018, allowance for doubtful accounts (5%)
Dr Bad debt expense 2,500,000
Cr Allowance for doubtful accounts 2,500,000
7) On January 3, Mason Automotive receives $75 Million advance payment from a customer, Michael Scott Paper Company, to manufacture 7,500 cars.
Dr Cash 75,000,000
Cr Deferred revenue 75,000,000
Adjusting entry:
January 31, 2019, 4,000 cars were finished and delivered
Dr Deferred revenue 40,000,000
Cr Sales revenue 40,000,000
Dr Cost of goods sold 32,000,000
Cr Inventory: finished cars 32,000,000
8) Mason Automotive buys a patent from Apple for $24 Million on January 3rd, 2018. The patent has a legal life of 20 years, but a the useful life of 10. Record the necessary entry as of January 3rd, 2018. Assume the patent was purchased using cash.
Dr Patent 24,000,000
Cr Cash 24,000,000
Adjusting entry:
January 31, 2018, patent amortization expense
Dr Patent amortization expense 200,000
Cr Patent 200,000
9) Mason Automotive purchased $2 Million dollars worth of supplies on account on January 4, 2018.
Dr Supplies 2,000,000
Cr Cash 1,500,000
Cr Accounts payable 500,000
Adjusting entry
January 31, 2018, supplies expense
Dr Supplies expense 500,000
Cr Supplies 500,000
10) Mason Automotive pre-pays for Rent Expense for the next year of $12 Million and Insurance Expense of $2.4 Million on January 4, 2018.
Dr Prepaid rent 12,000,000
Dr Prepaid insurance 2,400,000
Cr Cash 14,400,000
Adjusting entries:
January 31, 2019, rent expense
Dr Rent expense 1,000,000
Cr Prepaid rent 1,000,000
January 31, 2019, insurance expense
Dr Insurance expense 200,000
Cr Prepaid insurance 200,000
11) On January 20th, Mason Automotive decides to purchase 2,000,000 shares of Treasury stock at $25 per share.
Dr Treasury stock 50,000,000
Cr Cash 50,000,000
Closing journal entries:Dr Sales revenue 90,000,000
Cr Income summary 90,000,000
Dr Income summary 71,006,66.66
Cr Wages expense 12,000,000
Cr FICA taxes expense 840,000
Cr interest expense 766,666.66
Cr Depreciation expense 1,000,000
Cr Cost of goods sold 52,000,000
Cr Bad debt expense 2,500,000
Cr Patent amortization expense 200,000
Cr Supplies expense 500,000
Cr Rent expense 1,000,000
Cr Insurance expense 200,000
Dr Income summary 18,993,333.34
Cr Retained earnings 18,993,333.34
Answer:
i think this is correct
Explanation:
explain the procedure of inducting a new technology on a given business
The correct answer to this open question is the following.
Although the question does not provide a specific reference, we can say the following.
A general procedure of inducting a new technology on a given business would be like this.
First, really search for the technological necessities in your company. Take people's opinions. Once you have identified your priority, proceed informing every single one of the employees the reason and purpose of this new piece of technology or software. Remember that the benefit of it must be for all the areas in some way. Then give the specifics reasons for how this new technology will help employees' work. This novelty should be seen as an advantage, not an excuse for delaying work under the argument that "it is complicated."
Provide the proper training so everybody can get familiar with the technology.
Give the proper time so everybody is on the same page.
Allowance for Doubtful Accounts has a debit balance of $441 at the end of the year (before adjustment), and Bad Debt Expense is estimated at 3% of sales. If net credit sales are $903,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts is a.$26,649 b.$27,531 c.$27,090 d.$441
Answer: $27,090
Explanation:
From the question, we are informed that the allowance for doubtful accounts has a debit balance of $441 at the end of the year (before adjustment), and bad debt expense is estimated at 3% of sales and that the net credit sales are $903,000.
The amount of the adjusting entry to record the estimate of the uncollectible accounts will be 3% of $903,000. This will be:
= 3% × $903,000
= 3/100 × $903,000
= 0.03 × $903,000
= $27,090
One reason for not requiring a balanced federal budget at all times is that with a balanced-budget rule:_________.
a. the distorting features of the tax system are minimized.
b. it is possible to shift the burden of a war from current to future generations.
c. expenditures are not limited because, if the government wants to raise expenditures, it just raises taxes.
d. in a recession the automatic stabilizing powers of our system of taxes and transfers could not work.
Answer:
d. in a recession the automatic stabilizing powers of our system of taxes and transfers could not work.
Explanation:
A balanced government expenditure is when government spending equals government revenue.
most times, the government doesn't have a balanced budget. it either has a surplus or a deficit.
When there is a recession, automatic stabilisers - progressive tax and transfer payment - may not be adequate to lift the economy out of recession. So, the government would have to spend more than it receives from taxes to revive the economy. in this case there would be a deficit
intext:"The adjusting entry at the end of an accounting period to record the unpaid salaries of employees for work provided is"
Answer:
A debit to Salaries Expense and a credit to the Salaries Payable Account.
Explanation:
This adjusting entry brings the salary expense account to its accrued balance in line with the accrual concept and matching principle of generally accepted accounting principles. These state that expenses and revenues should not reflect only the cash basis but the accrual basis, whereby unpaid or prepaid expenses, deferred or unpaid revenues that relate to the accounting period are brought into consideration.
Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, an auction house sold a sculpture at auction for a price of $10,371,500. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12,497,500.
What was his annual rate of return on this sculpture? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Annual rate of return %
Answer:
-4.25%
Explanation:
purchase price in 1999 = $12,497,500
purchase price in 2003 = $10,371,500
annual rate of return = {[($10,371,500 - $12,497,500) / $12,497,500] / (2003 - 1999)} x 100 = (-0.170114 / 4) x 100 = -4.25%
the annual rate of return refers to how much money you win or loss with an investment during a year. In this case, the investor lost $2,126,000 in 4 years, which resulted in a total loss of 17.01% for the whole period.
Consider the following information for Dave Company for the month of May: Direct materials (DM) purchased and used 86,000 gallons Total quantity of DM budgeted to be used in May production 81,400 gallons Actual cost of DM purchased and used in May $230,200 Unfavorable DM quantity variance $12,880 What is the DM price variance in May
Answer:
Direct material price variance = $ 10,600 favourable
Explanation:
The Direct material quantity variance($) = Direct material qty variance × standard price
Standard price = Direct material quantity variance ($)/Direct material quantity variance in units
Direct material quantity variance in units= 86,000 - 81,400 = 4,600
Standard price = $12,880/4,600 units = $2.8
Direct material price variance occurs when the actual quantity of materials are purchased at an actual price per unit higher or lower than the standard price.
Direct material price variance $
86,000 gallons should have cost (86,000× $2.8) = 240,800
But did cost 230,200
Direct material price variance 10,600 favourable
Direct material price variance = $ 10,600 favourable
Proposal preparation is completed by Select one: a. a large team for a simple project. b. a single person when proposing a multimillion-dollar project. c. a proposal manager regardless of the project size. d. one or more people depending upon the requirements of the proposal.
Answer:
d. one or more people depending upon the requirements of the proposal.
Explanation:
A proposal can be defined as a plan or suggestion which are formally written to present an idea to an individual or organization for consideration.
Proposal preparation is completed by one or more people depending upon the requirements of the proposal.
In order to prepare a good proposal, it is very important to make it as formal as possible. The content of the proposal is strictly based on what the initiators wants to do or achieve, as well as how they wish to achieve.
Hence, a proposal is only prepared with regard to the requirements of the proposal and the number of people involved. Proposals are usually used by project managers or contractors seeking for a contract.
The company estimates future uncollectible accounts. The company determines $14,000 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.) Record bad debts at the end of January.
Answer:
Bad debt expense = $4,690
Explanation:
Entry DEBIT CREDIT
Bad debt Expense $4,690
Allowance for doubtful debt $4,690
In Order to record bad debt expense, we need to go through some minor workings.
Workings
Receivables on January 31 past due = $14,000 x 30% = $4,200
Receivable not past due = ($14,000 x 70%) x5% = $490
Bad debt expense = Receivables on January 31 past due + Receivable not past due
Bad debt expense = $4,200 + $490
Bad debt expense = $4,690