Answer:
Gundy Company
Flexible Budget Report for the month of March, 2020:
Flexible Budget Actual Budget Variance
Direct materials $400,000 $425,000 $25,000 U
Direct labor $700,000 $695,000 $5,000 F
Overhead $1,000,000 $1,005,000 $5,000 U
Fixed Cost $632,000 $632,000 $0 None
Explanation:
a) Data and Calculations:
Expected production units for 2020 = 1,243,200
Monthly production range = 79,000 to 121,000
Budgeted variable manufacturing costs per unit are:
Direct materials $4
Direct labor $7
Overhead $10
Total variable cost $21
Budgeted fixed manufacturing costs per unit:
Depreciation $5
Supervision $3 $8
Total costs $29
Total fixed cost = 79,000 * $8 = $632,000
Actual costs incurred in March 2020:
Production units = 100,000
Direct materials = $425,000 ($4.25 per unit)
Direct labor = $695,000 ($6.95 per unit)
Variable overhead = $1,005,000 ($10.05 per unit)
Actual fixed costs = $632,000
Flexible Budget:
Direct materials $400,000 ($4 * 100,000)
Direct labor $700,000 ($7 * 100,000)
Overhead $1,000,000 ($10 * 100,000)
Fixed Cost $632,000
Additionally, as the price level rises, the impact on the domestic interest rate will cause the real value of the dollar torise in foreign exchange markets. The number of domestic products purchased by foreigners (exports) will thereforefall , and the number of foreign products purchased by domestic consumers and firms (imports) willrise . Net exports will thereforefall , causing the quantity of domestic output demanded tofall . This phenomenon is known as theexchange rate effect
Answer:
rise, fall, rise, fall, fall, exchange rate
Explanation:
When there is a change in the level of price it will cause the real value to change as well. This is due to the fact that real value is basically relative price i.e., nominal value adjusted by inflation.
This rise in price effects the demand for exports, which in return falls due to higher goods rates. And the effect is opposite for imports which would now rise. The combination effect of imports and exports results in the change in the net exports which would also fall due to rise in imports and fall in the exports. Overall, this effect is known as the exchange rate effect.
Dream House Builders, Inc. applies overhead by linking it to direct labor. At the start of the current period, management predicts total direct labor costs of $100,000 and total overhead costs of $20,000. On January 31, the direct labor for this job equals $2,700.
Required:
Write the journal entry.
Answer:
Explanation:
To solve this question, we need to calculate the predetermined overhead rate first and this will be:
= Estimated overhead / Direct labor cost
= $20,000 / $100,000
= 20% of cost of direct labor
Then we calculate the factory overhead which will be:
= Direct Labor × Predetermined overhead rate
= $2700 × 20%
= $540
Then, the journal entry will be:
31 Dec:
Debit Work in Process $540
Credit: Factory overhead $540
(To record overhead applied).
On January 1, 2020, Blue Inc. had cash and common stock of $62,340. At that date, the company had no other asset, liability, or equity balances. On January 2, 2020, it purchased for cash $22,990 of debt securities that it classified as available-for-sale. It received interest of $4,480 during the year on these securities. In addition, it has an unrealized holding gain on these securities of $5,100 net of tax. Determine the following amounts for 2020: (a) net income, (b) comprehensive income, (c) other comprehensive income, and (d) accumulated other comprehensive income (end of 2020).
Answer:
(a) Net income = $3,000
(b) Comprehensive income = $7,000
(c) Other comprehensive income = $4,000
(d) Accumulated other comprehensive income = $4,000
Explanation:
This question is based on multi-step income statement. Therefore, some of the elements of the multi-step income statement are employed in answering this question.
(a) net income
This can be calculated as follows:
Net income = Operating income + Total other income and expense – Tax expense ………… (1)
Where, based on information in the question, we have:
Operating income = Not available = 0
Total other income and expense = Interest income = $3,000
Tax expense = Not available = 0
Substituting the values into equation (1), we have:
Net income = 0 + $3,000 – 0 = $3,000
(b) comprehensive income
This can be calculated as follows:
Comprehensive income = Net income + Other comprehensive income …... (2)
Where:
Net income = $3,000
Other comprehensive income = Unrealized holding gain on securities = $4,000
Substituting the values into equation (2), we have:
Comprehensive income = $3,000 + $4,000 = $7,000
(c) other comprehensive income
As already stated in part (b) above, we have:
Other comprehensive income = Unrealized holding gain on securities = $4,000
(d) accumulated other comprehensive income (end of 2020).
As there is no other income from the question, this implies that:
Accumulated other comprehensive income = Unrealized holding gain on securities = $4,000
Ann Company borrowed $240,000 to buy an equipment on January 1, 2019, and signed a 7% instalment note requiring annual equal payments, including principal and interest at the end of every year for 15 years. Rounded to the nearest dollar, determine the balance in the Instalment Note Payable account after making the first annual payment.
Answer:
$2,000
Explanation:
Payment include repayment of Capital Amount and Payment of Interest expense
Therefore the balance in the Instalment Note Payable account after making the first annual payment is
During Year 1, Ashkar Company ordered a machine on January 1 at an invoice price of $28,000. On the date of delivery, January 2, the company paid $6,000 on the machine, with the balance on credit at 10 percent interest due in six months. On January 3, it paid $1,400 for freight on the machine. On January 5, Ashkar paid installation costs relating to the machine amounting to $2,300. On July 1, the company paid the balance due on the machine plus the interest. On December 31 (the end of the accounting period), Ashkar recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $4,000.
Required:
Indicate the effects (accounts, amounts, and or- of each transaction (on January 1, 2, 3, and 5 and July 1) on the accounting equation.
Explanation:
Date Assets = Liabilities + Stockholder's Equity
January 1 No effect No effect No effect
January 2 Cash $28,000 Note payable $22,000
Equipment -$6,000
January 3 Cash $1,400
Equipment -$1,400
January 5 Cash $2,300
Equipment -$2,300
July 1 Cash $23,100 Note payable -$22,000 Interest expense $1,100
( July 1 cash = balance due + interest
= $22,000 + ($22,000*10%*6/12)
= $23,100 )
Jack Hammer invests in a stock that will pay dividends of $2.00 at the end of the first year; $2.20 at the end of the second year; and $2.40 at the end of the third year. Also, he believes that at the end of the third year he will be able to sell the stock for $33. What is the present value of all future benefits if a discount rate of 11 percent is applied
Answer:
$29.47
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
To find the PV using a financial calculator:
Cash flow in year 1 = 2
Cash flow in year 2 = 2.2
Cash flow in year 3 = 2.4 + 33
I = 11
PV = 29.47
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
William is preparing to file his tax return. Which two items are necessary to complete his tax return?
W-2 form from an employer
driver's license
receipts for expenses taken as deductions or credits
copy of a birth certificate
voter registration card
employment verification
Answer:
W-2 form from an employer, Receipts for expenses taken as deductions or credits
Explanation:
Got it right on Plato
DJH Enterprises has 3 departments. Operating results for 2019 are as follows:
Department 1 Department 2 Department 3
Sales $670,000 $322,000 $856,000
Variable costs 445,000 287,000 602,000
Contribution margin $225,000 $35,000 $254,000
Direct fixed expenses $120,000 $27,000 $163,000
Common fixed expenses 75,000 30,000 94,000
Total fixed expenses $195,000 $57,000 $257,000
Operating income (loss) $30,000 ($22,000) ($3,000)
DJH is considering eliminating the departments that show losses. Assume that the direct fixed expenses could be avoided if the department is eliminated. What effect would elimination of Department 2 have on DJ H's total operating income?
Answer:
DJH Enterprises
The effect of eliminating Department 2 will increase the total operating income to $27,000 from $5,000.
Explanation:
a) Data and Calculations:
Operating Results for 2019 for the three departments:
Department 1 Department 2 Department 3 Total
('000)
Sales $670,000 $322,000 $856,000 $1,848
Variable costs 445,000 287,000 602,000 1,334
Contribution margin $225,000 $35,000 $254,000 $514
Direct fixed expenses $120,000 $27,000 $163,000 $310
Common fixed expenses 75,000 30,000 94,000 199
Total fixed expenses $195,000 $57,000 $257,000 509
Operating income (loss) $30,000 ($22,000) ($3,000) $5
Loss-making departments eliminated:
Department 1 Department 3 Total
Sales $670,000 $856,000 $1,526,000
Variable costs 445,000 602,000 1,047,000
Contribution margin $225,000 $254,000 $479,000
Direct fixed expenses $120,000 $163,000 $283,000
Common fixed expenses 75,000 94,000 169,000
Total fixed expenses $195,000 $257,000 $452,000
Operating income (loss $30,000 ($3,000) 27,000
The following information was obtained from the records of Appleton Corporation during 2018.
Manufacturing Overhead was applied at a rate of 100 percent of direct labor dollars.
Beginning value of inventory follows:
Beginning Work in Process Inventory, $9,000.
Beginning Finished Goods Inventory, $12,000.
During the period, Work in Process Inventory decreased by 20 percent, and Finished Goods Inventory increased by 25 percent.
Actual manufacturing overhead costs were $88,000.
Sales were $418,000
Adjusted Cost of Goods Sold was $302,000.
Required:
Use the preceding information to find the missing values in the following table:
Item Amount
Direct Materials Used
Direct labor
Manufacturing Overhead Applied 85,000
Total Current Manufactoring Costs
Plus: Begining work in process inventory 9,000
Less: Ending Work in process inventory
Cost of goods manufactured
Plus: Beginning finished goos inventory 12,000
Less: Ending Finished goods inventory
Unadjusted cost of goods sold
Overhead Adjustment
Adjusted Cost of Goods Sold $319,000
Answer:
See below
Explanation:
Items
Direct materials used
($300,200 - $85,000 - $85,000)
$130,200
Direct labor ($85,000/100%)
$85,000
Manufacturing overhead applied $85,000
Total current manufacturing costs
($302,000 + $7,200 - $9,000)
$300,200
Plus: Beginning work in process inventory
$9,000
Less: Ending work in process inventory
($9,000 × 80%)
$7,200
Cost of goods manufactured
($299,000 + $15,000 - $12,000)
$302,000
Plus: Beginning finished goods inventory
$12,000
Less: Ending finished goods inventory
($12,000 × 125%)
$15,000
Unadjusted cost of goods sold ($302,000 - $3,000)
$299,000
Add: Overhead adjustment ($88,000 - $85,000)
$3,000
Adjusted cost of goods sold
$302,000
Using the preceding information to find the missing values in the following table, titled Production Cost Schedule, is as below.
What is a Production Cost Schedule?A production cost schedule is a cost schedule or table that shows the total costs of production at different levels of input and output.
For example, the missing values in the Production Cost Schedule are as follows:
Direct Materials Used $152,000
Direct labor 85,000
Manufacturing Overhead Applied 85,000
Total Current Manufacturing Costs 322,000
Plus: Begining work in process inventory 9,000
Less: Ending Work in process inventory 12,000
Cost of goods manufactured 319,000
Plus: Beginning finished goods inventory 12,000
Less: Ending Finished goods inventory 15,000
Unadjusted cost of goods sold 316,000
Overhead Adjustment 3,000
Adjusted Cost of Goods Sold $319,000
Data and Calculations:Actual manufacturing overhead costs = $88,000
Adjusted cost of goods sold = $302,000
Work in ProcessBeginning Balance $9,000
Ending balance = $10,800 ($9,000 x 1.20)
Finished GoodsBeginning Balance $12,000
Ending balance = $15,000 ($12,000 x 1.25)
Missing Values TableDirect Materials Used 152,000 ($322,000 - $85,000 - $85,000)
Direct labor 85,000 ($85,000/100%)
Manufacturing Overhead Applied 85,000
Total Current Manufactoring Costs 322,000 ($319,000 + $12,000 - 9,000)
Plus: Begining work in process inventory 9,000
Less: Ending Work in process inventory 12,000
Cost of goods manufactured 319,000 ($316,000 +$15,000 - $12,000)
Plus: Beginning finished goods inventory 12,000
Less: Ending Finished goods inventory 15,000
Unadjusted cost of goods sold 316,000 ($319,000 - $3,000)
Overhead Adjustment 3,000 ($88,000 - $85,000)
Adjusted Cost of Goods Sold $319,000
Learn more production schedules at https://brainly.com/question/14930678
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At the beginning of his current tax year, Eric bought a corporate bond with a maturity value of $25,000 from the secondary market for $17,800. The bond has a stated annual interest rate of 8 percent payable on June 30 and December 31, and it matures in five years on December 31. Absent any special tax elections, how much interest income will Eric report from the bond this year and in the year the bond matures
Answer: See explanation
Explanation:
Based on the information given in the question, the interest income reported this year will be:
= ($25000 × 8%/2) × 2
= $25000 × 0.04 × 2
= $2000
The interest income that will be reported in the year the bond matures will be:
= $2000 + ($25000 - $17800)
= $2000 + $7200
= $9200
g The effect on revenue due to a marginal increase in the input is called the marginal revenue product. Match the statements below with the appropriate type of market structure a firm operates in. The marginal revenue product of the input x is lower than the value of the marginal product of that input (price times marginal product). This statement is true for a
Answer:
Statement true for Imperfect Competition Markets
Explanation:
Marginal Revenue Product is additional revenue due to hiring of additional input, it is product of marginal product & marginal revenue = MP x MR
Value Marginal Product is money value of additional production with additional input, product of marginal product (MP) & price (AR), = MP x AR
Input demand curves are derived demand curves, derived from demand of final goods. In perfect competition, demand is perfectly inelastic & horizontal, AR = MR, so MRP = VMP in this case. In imperfect competition market (oligopoly, monopoly etc) - MR < AR, so MRP < VMP in this case.
Your credit card statement had your interest rate at 16.5%. When you open your statement the rate went up to 18.2%. Can the credit card company do that without notifying you?
Answer:
Definitely not
Explanation:
I mean, it's YOUR account; they can't just do that, to my inderstanding.
Q 9.20: City Mission is a not-for-profit organization that provides hot meals, living quarters, and showers for homeless people. Based on their yearly budget, they expect to spend $450,000 on food expenses, $350,000 on housing expenses, $280,000 on staff salaries, $90,000 on utilities, and $118,000 on other expenses. How much will City Mission need to raise in donations
Answer:
at least $1,288,000 in donation
Explanation:
With regards to the above information, we would add up all the expenses to arrive at how much donation that need City Mission needs to raise.
= Expenses on food + Housing expenses + Staff salaries + Utilities + Other expenses
= $450,000 + $350,000 + $280,000 + $90,000 + $118,000
= $1,288,000
The above is a large sum of money to raise only from donations, and by right a level or various levels of government should help pay for these expenses as no one go homeless either that or provide low cost homes for the homeless.
Brief Exercise 18-5 a1-a2 Ivanhoe Corp. has collected the following data concerning its maintenance costs for the past 6 months. Units Produced Total Cost July 18,700 $39,712 August 33,344 50,016 September 37,512 57,310 October 22,924 40,126 November 41,680 77,629 December 39,596 64,604 (a1) Compute the variable cost per unit using the high-low method.
Answer:
a, the variable cost per unit using the high-low method is $1.65
Explanation:
a. The computation of the variable cost per unit using the high low method is shown below:
= (HIgh cost - low cost) ÷ (high units - low units)
= ($77,629 - $39,712) ÷ (41,680 units - 18,700 units)
= ($37,917) ÷ (22,980 units)
= $1.65
Hence, the variable cost per unit using the high-low method is $1.65
The same would be considered by applying the above formula so that the correct value could come
Nicholas is the production manager for a manufacturing firm. He has two supervisors who are experiencing conflict with each other based upon personality differences. Nicholas should have held a meeting last week to discuss next year's budget, but cancelled it because the two supervisors had a verbal confrontation on the shop floor the previous day. What conflict handling style is Nicholas demonstrating
Answer:
Avoidance
Explanation:
Conflict or disagreement usually occurs when individuals or members of a group engage in an expressed struggle that hinders a task accomplishment. This occurs mainly due to the real and perceived differences that exist among individuals or members of a group.
Communication
Simply deals with how individuals coordinate actions and achieve goals. It is usually refered to as the process by which information is exchanged between individuals via a common system such as symbols, signs, or behavior. People communicate differently and when you don't understand each other ways, attitude or method of communication, conflict is bound to occur.
Avoiding conflict-handling style
This is a type of conflict handling style that is generally of little/low concern for meeting the needs of both yourself and your group members. It is the act of deliberately ignoring or withdrawing yourself and hopingthe problem will go away and letting others to handle it. It is only useful when facing trivial/temporary issues, no chance to get what you want, when others can, when people need to cool down/get more information etc. But it usually makes other people perceive you as uncaring and a conflict simmers.
Trinkle Co., Inc. made several purchases of long-term assets in Year 1. The details of each purchase are presented here.
New Office Equipment
1. List price: $41,900; terms: 2/10 n/30; paid within discount period.
2. Transportation-in: $860. Installation: $510.
3. Cost to repair damage during unloading: $431.
5. Routine maintenance cost after six months: $110.
Basket Purchase of Copier, Computer, and Scanner for $51,000 with Fair Market Values
1. Copier $22,755.
2. Computer $6,765.
3. Scanner $31,980.
Land for New Warehouse with an Old Building Torn Down
1. Purchase price, $82,400.
2. Demolition of building, $4,750.
3. Lumber sold from old building, $1,800.
4. Grading in preparation for new building, $7,700.
5. Construction of new building, $217,000.
Required:
In each of these cases, determine the amount of cost to be capitalized in the asset accounts.
Answer:
New Office Equipment $42,863
Basket Purchase Of Copier, Computer, Scanner $61,500
Land For New Warehouse $310,050
Explanation:
Calculation to determine the amount of cost to be capitalized in the asset accounts
NEW OFFICE EQUIPMENT
Amount of cost to be capitalised in the asset accounts = $41,900*0.98+$860+$510+$431
Amount of cost to be capitalised in the asset accounts =$41,062+$860+$510+$431
Amount of cost to be capitalised in the asset accounts =$42,863
BASKET PURCHASE OF COPIER, COMPUTER AND SCANNER
Amount of cost to be capitalised in the asset accounts = $22,755 + $6,765 + $31,980
Amount of cost to be capitalised in the asset accounts= $61,500
LAND FOR NEW WAREHOUSE with an old building torn down
Amount of cost to be capitalised in the asset accounts = $82,400 + $4,750 - $1,800 + $7,700 + $217,000
Amount of cost to be capitalised in the asset accounts = $310,050
Therefore The Amount of cost to be capitalised in the asset accounts are:
New Office Equipment $42,863
Basket Purchase Of Copier, Computer, Scanner $61,500
Land For New Warehouse $310,050
Dawson Toys, Ltd., produces a toy called the Maze. The company has recently created a standard cost system to help control costs and has established the following standards for the Maze toy:
Direct materials: 6 microns per toy at $1.50 per micron
Direct labor: 1.3 hours per toy at $21 per hour
During July, the company produced 3,000 Maze toys. The toy's production data for the month are as follows: Direct materials: 25,000 microns were purchased at a cost of $1.48 per micron. 5,000 of these microns were still in inventory at the end of the month. Direct labor: 4,000 direct labor-hours were worked at a cost of $88,000.
Required:
Compute the variances for July.
Answer and Explanation:
The computation of the variance is shown below;
a) Material price variance is
= (Standard price - actual price) × actual quantity
= ($1.5 - $1.48) × 25000
= $500 F
b. Material quantity variance is
= (Standard quantity - actual quantity) × Standard price
= (3000 × 6 - 20,000) × 1.5
= $3,000 U
c) Labor rate variance is
= (Standard rate - actual rate) × actual hours
= ($21 × 4000 - $88,000)
= $4,000 U
d. Labor efficiency variance is
= (Standard hour - actual hour) × Standard rate
= (3000 × 1.3 - 4000) × 21
= $2,100 U
Logistics Solutions provides order fulfillment services for dot merchants. The company maintains warehouses that stock items carried by its dot clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours.
In the most recent month, 185,000 items were shipped to customers using 8,000 direct labor-hours. The company incurred a total of $27600 in variable overhead costs. According to the company's standards, 0.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.50 per direct labor-hour.
Required:
a. What is the standard labor-hours allowed (SH) to ship 185,000 items to customers?
b. What is the standard variable overhead cost allowed (SH SR) to ship 185,000 items to customers?
c. What is the variable overhead spending variance?
d. What is the variable overhead rate variance and the variable overhead efficiency variance?
Answer:
Standard labor-hours allowed= 7,400 direct labor Hours.
The standard variable overhead cost= $ 25,900
Variable overhead spending variance =$400
Variable overhead rate variance =$400
Variable overhead efficiency variance=$2,100
Explanation
a.) The standard labor-hours allowed (SH) to ship 185,000 items to customers
= 0.04 direct labor-hours x 185,000= 7,400 direct labor Hours.
b). The standard variable overhead cost allowed to ship 185,000 items to customers=
standard labor-hours SH × Standard Rate SR
7400 X $3.50= $ 25,900
c). Variable overhead spending variance is calculated as
Actual Overhead Costs - Actual hours x Standard Rate
= $27600 - 8,000 x 3.50 = $27600 -28,000
=$400
d1). Variable overhead rate variance =
Actual hours x Actual Variable Overhead Rate per Hour - Actual hours Standard Variable Overhead Rate per Hour
Variable overhead rate variance =8000 x (27600/8000) - 8000 x 3.50
8000 x 3.45 - 8000 x 3.50
27,600-28,000=$400
d2) Variable overhead efficiency variance= Actual Hours x Standard Rate - Standard Hours x Standard Rate
8000 x 3.50 -7400 x 3.50
28,000 -25,900
=$2,100
You send out 20,000 emails. Of those, 6% are opened. Of those, 9% click on a link to register for something. Of those who clicked the link, 30% complete the registration. How many people completed the registration?
Which employees work directly with customers, helping them make deposits and withdrawals?
Bank Teller
Insurance Agent
Financial Manager
Mortgage Broker
Answer:
A. bank teller
Explanation:
bank teller is a person who manages deposits and withdrawls
QS 7-5 (Algo) Allowance method for bad debts LO P2 Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off an $2,800 account of a customer, C. Green. On March 9, it receives a $2,300 payment from Green. 1. Prepare the journal entry for January 31. 2. Prepare the journal entries for March 9; assume no additional money is expected from Green.
Answer:
1. Jan 31
Dr Allowance for doubtful accounts $2,800
Cr Accounts receivable—C. Green $2,800
2. Mar 09
Dr Accounts receivable—C. Green $2,300
Cr Allowance for doubtful accounts $2,300
3. Mar 09
Dr Cash $2,300
Cr Accounts receivable—C. Green $2,300
Explanation:
1. Preparation of the journal entry for January 31.
Jan 31
Dr Allowance for doubtful accounts $2,800
Cr Accounts receivable—C. Green $2,800
2. Preparation of the journal entry for March 9
Mar 09
Dr Accounts receivable—C. Green $2,300
Cr Allowance for doubtful accounts $2,300
3. Mar 09
Dr Cash $2,300
Cr Accounts receivable—C. Green $2,300
The cost of materials transferred into the Rolling Department of Keystone Steel Company is $510,000 from the Casting Department. The conversion cost for the period in the Rolling Department is $81,200 ($54,700 factory overhead applied and $26,500 direct labor). The total cost transferred to Finished Goods for the period was $553,200. The Rolling Department had a beginning inventory of $25,000.
Required:
a. Journalize the cost of transferred-in materials.
b. Journalize the conversion costs.
c. Journalize the costs transferred out to Finished Goods.
d. Journalize the costs transferred out to Finished Goods.
e. Determine the balance of Work in Process—Rolling at the end of the period.
Answer:
Part a
Debit : Work in Process - Rolling Department $510,000
Credit : Work in Process - Casting Department $510,000
Part b
Debit : Work in Process - Overheads $54,700
Debit : Work in Process - Direct labor $26,500
Credit : Accounts Payable $81,200
Part c
Debit : Finished Goods Inventory $553,200
Credit : Work in Process - Rolling Department $553,200
Part d
Debit : Finished Goods Inventory $553,200
Credit : Work in Process - Rolling Department $553,200
Part e
$18200 credit
Explanation:
Ending Balance = Opening Balance + Additions - Transfers out
therefore,
Rolling Department balance = $25,000 + $510,000 - $553,200
= ($18200)
Also see journal prepared above.
The D. Dorner Farms Corporation is considering purchasing one of two fertilizer-herbicides for the upcoming year. The more expensive of the two is better and will produce a higher yield. Assume these projects are mutually exclusive and that the required rate of return is 10 percent. Given the following free cash flows:
Product A Product B
Initial outlay -$5000 -$5000
Inflow year 1 700 6,000
Required:
a. Calculate the NPV of each project.
b. Calculate the PI of each project.
c. Calculate the IRR of each project.
d. If there is no capital-rationing constraint, which project should be selected? If there is a capital-rationing constraint, how should the decision be made?
Question Correction:
The question stated that there is a more expensive fertilizer-herbicide. Therefore, their initial outlays cannot be equal as stated. Instead, the correct cash flows, including initial outlays are:
Product A Product B
Initial outlay -$500 -$5000
Inflow year 1 700 6,000
Answer:
The D. Dorner Farms Corporation
Product A Product B
a. NPV = $136 $454
b. PI = 1.272 1.091
c. IRR = 27.2% 9.08%
d. If there is no capital-rationing constraint, Project B should be chosen despite its poor PI and IRR performances, but for returning a larger NPV.
e. If there is a capital-rationing constraint, Project A should be chosen because of its more impressive PI and IRR performances.
Explanation:
a) Data and Calculations:
Required rate of return for the projects = 10%
Present factor of 10% for 1 year = 0.909
Free cash flows:
Product A Product B
Initial outlay -$500 -$5000
Inflow year 1 700 6,000
Present values:
Product A Product B
Initial outlay -$500 -$5000
Inflow year 1 636 5,454
NPV = $136 $454
b) PI (Profitability Index) is a useful tool in capital budgeting which measures the profit potential of a project in order to ease decisions. It is computed by dividing the present value of cash inflows by the initial investment cost. Another formula is: 1 + (NPV/Initial outlay).
Therefore, the PI for each project is calculated as follows:
PI = 1+ (NPV/Initial outlay)
Product A Product B
PI = 1 + ($136/$500) 1 + ($454/$5,000)
= 1.272 1.091
IRR (Internal Rate of Return) = NPV/Initial Outlay
Product A Product B
IRR = $136/$500 * 100 $454/$5,000 * 100
= 27.2% 9.08%
The units of an item available for sale during the year were as follows: Jan 1 Inventory 22 units at 127 April 15 Purchase 138 units at 117 September 9 Purchase 27 units at 125 There are 42 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using the last-in, first-out (LIFO)
Answer:
$5,134
Explanation:
LIFO assumes that the units to arrive last are sold first Therefore inventory value is based on earlier (old) prices.
Step 1 : Calculate units sold
Units sold = Units Available for sale - units in inventory
= 145 unit
Step 2 : Determine Inventory Value
Inventory value = 22 units x $127 + 20 units x $117
= $5,134
Conclusion
the inventory cost using the last-in, first-out (LIFO) is $5,134
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $770,000; Allowance for Doubtful Accounts has a credit balance of $7,000; and sales for the year total $3,470,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $32,200. a. Determine the amount of the adjusting entry for uncollectible accounts. $fill in the blank 1 b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $fill in the blank 2 Allowance for Doubtful Accounts $fill in the blank 3 Bad Debt Expense $fill in the blank 4 c. Determine the net realizable value of accounts receivable.
Answer:
A. $25,200
B. Accounts Receivable $770,000
Allowance for Doubtful Accounts $32,200
Bad Debt Expense $25,200
C. $744,800
Explanation:
a. Calculation to Determine the amount of the adjusting entry for uncollectible accounts using this formula
Uncollectible accounts Adjusting entry= Allowance for Doubtful Accounts - Credit balance on Allowance for doubtful accounts
Let plug in the formula
Uncollectible accounts Adjusting entry=$32,200 - $7,000
Uncollectible accounts Adjusting entry= $25,200
Therefore the amount of the adjusting entry for uncollectible accounts is $25,200
B. Based on the information given the adjusted balances of Accounts Receivable will be $770,000
Based on the information given the adjusted balances of Allowance for Doubtful Accounts will be $32,200
Bad Debt Expense = $32,200 - $7,000
Bad Debt Expense= $25,200
c. Calculation to Determine the net realizable value of accounts receivable
Using this formula
Net realizable value of accounts receivable = Accounts receivables - Bad debt
Let plug in the formula
Net realizable value of accounts receivable= $770,000 - $25,200
Net realizable value of accounts receivable=$744,800
Therefore Net realizable value of accounts receivable is $744,800
Gallerani Corporation has received a request for a special order of 4,300 units of product A90 for $26.90 each. Product A90's unit product cost is $26.40, determined as follows: Direct materials$2.55 Direct labor 7.85 Variable manufacturing overhead 6.95 Fixed manufacturing overhead 9.05 Unit product cost$26.40 Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product A90 that would increase the variable costs by $3.30 per unit and that would require an investment of $22,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be:
Answer:
Effect on income= $4,875 increase
Explanation:
Giving the following formula:
Production costs:
Direct materials$2.55
Direct labor 7.85
Variable manufacturing overhead 6.95
Total= $17.35
Special offer:
Selling price= $26.9
Number of units= 4,300
Increase in variable cost= $3.3
Increase in fixed costs= $22,000
Because it is a special offer and there is unused capacity, we will take into account only the incremental fixed costs.
To calculate the effect on income, we need to use the following formula:
Effect on income= incremental contribution margin - incremental fixed costs
Effect on income= 4,300*(26.9 - 17.35 - 3.3) - 22,000
Effect on income= $4,875 increase
Beachfront property owners of the Town of Eden Beach requesteda financed through a note payable, which was to be repaid from taxes raised through a special assessment on their properties. The Town guarantees the debt and accounts for the special assessment through a debt service fund. Assume the special assessments were levied in 2016, recording a special assessment receivable an assessment is to be collected each year and used to pay the interest and principal on the note d deferred inflow in the amount of $480,000. One-third of the
Record the following transactions that occurred in 2017
1 June 30. S160000 of the assessments became due and currently receivable (Hint The special assessment tax is recorded as revenue in the debt service fund when it becomes due)
2. July 31, the $160.000 was collected
3 September 30, interest of $24.000 and principal of $136.000 were paid
4 December 31, the books were closed
If no entry is required for e transaction/event, select "No Journal Entry Required" in the first account field.)
Answer: See explanation
Explanation:
The journal entries for the transaction goes thus:
June30:
Debit Deferred revenue 160,000
Credit Special assessment revenue 160,000
July 31:
Debit Cash 160,000
Credit special assesement tax receivable 160,000
September 30:
Debit interest expenditure 24,000
Debit principal expenditure 136,000
Credit cash 160,000
December 31:
Debit Special assesement revenue 160,000.00
Credit interest expenditure 24,000
Credit Principal expenditure 136,000
To be effective, an item used as money should serve several functions. Select the statement that best describes money's function as a standard of deferred payment.
a. That a currency can be used to express the value goods and services that are both relatively expensive and goods and services that are relatively cheap.
b. That the purchasing power of a currency is relatively stable over time.
c. That people are willing to accept a currency in the future as compensation for debts accrued earlier.
d. That a currency is widely accepted in exchange for goods and services and therefore makes economic transactions easier.
Answer:
c. That people are willing to accept a currency in the future as compensation for debts accrued earlier.
Explanation:
Money defines the legal tender i.e. offically issued and that involved the notes, currencies, coins that are circulated via medium of exchange that govern by the government.
So here the people would to accept the currency in the future that become compensation for the debt that accrued earlier
Hence, the option c is correct
A manufacturing company accumulates the following data on variable overhead: Actual cost incurred: $61,000; Actual allocation base times the standard variable rate: $64,000; Applied variable overhead: $60,000. The variable overhead efficiency variance is:
Answer: $4000U
Explanation:
From the information given in the question, the variable overhead efficiency variance is the difference between the actual allocation base times the standard variable rate and the applied variable overhead. This will be:
= $64000 - $60000
= $4000U
Therefore, the variable overhead efficiency variance is $4000U
in your own opinion, what is the advantages and disadvantages of having a business website.
Answer:
There are several advantages and disadvantages to having a website for your business or limited company. In the modern age, more and more businesses are getting online. As I mentioned in a previous post, there were around 227,225,642 websites online in September 2010. If you don’t take your business onto the World Wide Web, you could miss out on potential customers, sales and profits. According to data collected by the Office for National Statistics – internet sales were up to £473million (a week) in August 2010 (Retail Sales Statistical Bulletin – August 2010). So having a website designed for your small business or limited company is just one important step towards getting a slice of the internet pie.