Factory rent 3140
Company advertising 1070
Wages paid to assembly workers 31000
Depreciation for salespersons' vehicles 2180
Screws 580
Utilities for factory 870
Assembly supervisor's salary 3520
Sandpaper President's salary 135
Plastic tubing 5040
Paint 4170
Sales commissions 225
Factory insurance 1210
Depreciation on cutting machines 1100
Wages paid to painters 2130
Determine the total cost for each of the following:
a. Direct Materials
b. Direct Labor
c. Manufacturing Overhead
d. Prime Cost
e. Conversion Cost
f. Total Product Cost
Answers
Answer and Explanation:
The computation is shown below:
a. The direct material cost is
Screws $580
Sandpaper $135
Plastic Tubing $4170
Paint $225
Cost of Direct Material $5,110
b. The direct labor cost is
Wages paid to Assembly workers $31,000
Assembly Supervisors Salary $3,520
Wages paid to painters $8,200
Cost of Direct Labor $42,720
d. The Prime Cost is
= Direct Labor + direct material
= $42,720 + $5,110
= $47,830
c. The Manufacturing Overheads is
Factory Rent $3,140
Utilities for factory $870
Factory Insurance $1,100
Depreciation on cutting Machines $2,130
Manufacturing overhead cost $7,240
e. The conversion cost is
= Prime cost + manufacturing overhead
= $47,830 + $7,240
= $55,070
f. The total product cost is
= Conversion cost + Production cost + selling overhead
= $55,070 + $5,040 $1,070 + $2,180 + $1,210
= $64,570
Related Questions
Owl Sporting Goods reported the following data at July 31, 2018, with amounts in thousands:
Pigeon Sporting Goods Company
Balance Sheet July 31, 2018
Thousands
Assets
Current assets
Cash $26,200
Accounts receivable 28,000
Inventories 40,000
Other current assets 4,700
Total current assets 98,900
Property and equipment, net 19,000
Other assets 24,100
Total assets $142,000
Liabilities Total current liabilities $52,600
Long-term liabilities 6,800
Total liabilities 59,400
Stockholders' Equity Common
stock 23,500
Retained earnings 59,100
Total stockholders' equity 82,600
Total liabilities and stockholders'
equity $142,000
1. Calculate Owl's net working capital. Net working capital.
2. Calculate Owl's current ratio.
3. Calculate Owl's debt ratio.
Answers
Answer:
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Mutual funds that invest in mortgage-backed pass-through securities are exposed to which of the following risks and costs?
a. Credit risk
b. Liquidity risk
c. Interest rate risk
d. Capital adequacy requirements
e. Prepayment risk
Answers
Answer:
e. Prepayment risk
Explanation:
Prepayment risk is the likelihood of the firm where Special Purpose Vehicle that manages the mortgage-backed pass-through securities to repay the principal sum invested or part of it earlier than expected which then denies the investor of interest payments throughout the investment period.
When principals are repaid much earlier, the interest that could be earned on the principal is lost since the principal upon which the interest is to be computed has been repaid, hence, no more basis for the interest thereafter
) It can be supposed that an increase in the importance of fitness and wellness in people's lives prompted Apple to include features like the built-in compass and always-on workout apps. That increased importance in fitness is part of the __________________ societal force. a not selected option a economic b not selected option b natural c selected option c cultural d not selected option d demographic e not selected option e political
Answers
Answer:
C. Cultural.
Explanation:
Culture can be defined as the general way of life of a group of people living together in a particular location or society.
Basically, culture comprises of beliefs, values, behaviors, language, dressing, cuisine, music, symbols, arts, social habits, knowledge, customs, laws pertaining to a particular group of people living together in a society.
This ultimately implies that, culture are acquired and passed from one generation to another.
A cultural trait can be defined as the smallest characteristics of human activity (actions) that is mainly acquired socially and transmitted from one generation to another through various modes of communication. Thus, these unique behavioral informations or characteristics and beliefs acquired by people socially are transmitted from one individual or group of people to another.
Basically, cultural traits play a significant role in the way of life of a group of people in that it is a unique collection of various cultural elements that are closely related such as behaviors and beliefs.
Hence, it can be supposed that an increase in the importance of fitness and wellness in people's lives prompted Apple to include features like the built-in compass and always-on workout apps. Thus, that increased importance in fitness is part of the cultural societal force because it is a unique assortment of behaviors that distinguish the people.
Lantz Company has provided the following information:
Cash sales totaled $280,000.
Credit sales totaled $488,000.
Cash collections from customers for services yet to be provided totaled $88,000.
A $24,000 loss from the sale of property and equipment occurred.
Interest income was $8,600.
Interest expense was $18,800.
Supplies expense was $350,000.
Rent expense for the store was $38,000.
Wages expense was $48,000.
Other operating expenses totaled $78,000.
Unearned revenue was $3,300.
Required:
How much was Lantz's income before income taxes?
Answers
Answer:
The answer is "$272,000"
Explanation:
[tex]\text{Operating revenues}[/tex] [tex]= \$ 280,000 + \$ 488,000 = \$ 786,000[/tex]
[tex]\text{Operating expenses}[/tex] [tex]= \$ 350,000 + \$ 38,000 + \$ 48,000 + \$ 78,000 = \$ 514,000[/tex]
[tex]\text{Operating income = Operating revenues- Operating expenses}[/tex]
[tex]= \$ 786,000 - \$ 514,000\\\\ = \$ 272,000[/tex]
A consumer purchases a lawn mower from a retail store. It contains a tag that says the purchaser should read the instruction book that is included. He reads the book, which contains a warning not to use the mower over gravel or stones or grassy areas mixed with rock or stone. The consumer remembers the warning but when he sees how smoothly the mower operates and how effortlessly it goes over a few small stones mixed in the grass, he decides to continue using the mower in areas filled with loose stones and rocks. One day a rock flies up and shatters the consumers face, causing him to lose an eye and suffer a broken nose and jawbone. He sues the manufacturer for putting out a defective product unreasonably dangerous to the consumer. What defense may give the manufacturer the best chance of having the case dis-missed?
A. Lack of privity.
B. Contributory negligence.
C. Assumption of the risk.
D. Waiver of warranty.
Answers
Answer:
B. Contributory negligence
Explanation:
Contributory negligence may be defined as a defense to the tort claim that is based on the negligence of the plaintiff in some law jurisdiction. And if contributory negligence is available defense completely bars the person who files the suit from any recovery if the plaintiff contributes to their own injury and harm from any negligence.
In the context, a person buys a lawn mover form a store. The lawn mover contains a instruction book where it was written that the lawn mover should not be moved over any stones or gravels or areas mixed with grass and stones.
The consumer though remembers the warning but he moves the lawn mover over land filled with loose stones and rocks. Unfortunately, a rock flies and hits him on his face resulting in serious damage of his face. And so the consumer sues the manufacturer for selling a defective lawn mover.
But the court will dis-miss the case as it was a case of contributory negligence of the consumer as the manufacturer warned the consumer with a written instruction not to use the product over areas covered with stones and rocks. Thus the defense that will give the manufacturer the best chance of having dismissing the case by the court is the Contributory negligence of the consumer.
The specification for the pull strength of a wire that connects an integrated circuit to its frame is 10 g or more. Units made with aluminum wire have a defect rate of 10%. A redesigned manufacturing process involving the use of gold wire is being investigated. The goal is to reduce the rate of defects to 5% or less. Out of the first 100 units manufactured with gold wire, only 4 are defective. True or false: Since only 4% of the 100 units were defective, we can conclude that the goal has been reached.
Answers
Answer: False
Explanation:
For the goal to be concluded as reached, the research must follow rules that will enable the proper testing of the data.
One of those is that the sample chosen must be random and the other is that the sample size must be sufficient.
The sample here is not random as it is the first 100 units and it also has an insufficient size because a sample of more than 100 will be needed to adequately test this method.
We are therefore unable to conclude that the goal has been reached, yet.
When developing baseline standards, it is vital to use industry best practices. Industry best practices standards enable one to justify choices being made to regulators. Furthermore, there is increased efficiency to be gained by modifying an existing standard as opposed to creating one from the ground up.
A. True
B. False
Answers
Answer:
A. True
Explanation:
A baseline may be defined as the minimum amount of security that a network, a device or a system must adhere to. They are generally mapped to the industry standards. It is applied to the several layers of the IT infrastructure of an organization.
When developing them, it is very important to make use of the industry best practices. It enables to justify the choices that are being made to the regulators.
Hence the answer is true.
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $165,591 in overhead. The company has identified the following information about its overhead activity cost pools and the two product lines:
Activity Cost Cost Driver Cost Assigned Quantity/ Quantity
Pools to Pool Amount /Amount
Consumed Consumed
by Basic by Luxury
Materials
handling Number of moves $3,666 18 moves 60 moves
Quality Number of
inspections $37,125 200 100
inspections inspections
Machine
maintenance Number of
machine hours $124,800 6,000 3,600
machine hours machine hours
Required:
1. Suppose Hazelnut used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line.
2. Calculate the activity rates for each cost pool in Hazelnut’s ABC system.
3. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system.
4. Determine the amount of overhead Hazelnut will assign to the luxury line if it uses an ABC system.
Answers
Answer:
Hazelnut Corp.
1. The amount of overhead assigned to each product line:
Basic = $103,500 (6,000 * $17,25)
Luxury = $62,100 (3,600 * $17.25)
2. Activity Rate based on ABC System:
Overhead Rates :
Materials handling $3,666/78 moves = $47 per move
Quality $37,125/300 inspections = $123.75 per inspection
Machine maintenance $124,800/9,600 m.hours = $13 per machine hour
3. The amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system is:
= $103,596
4. The amount of overhead that Hazelnut will assign to the luxury line if it uses an ABC system is:
= $61,995
Explanation:
a) Data and Calculations:
Total overhead = $165,591
Activity Cost Cost Driver Cost Assigned Quantity/ Quantity
Pools to Pool Amount /Amount
Consumed Consumed
by Basic by Luxury
Materials
handling Number of moves $3,666 18 moves 60 moves
Quality Number of
inspections $37,125 200 100 inspections
Machine
maintenance No. of machine
hours $124,800 6,000 3,600 m.hours
Total overhead costs $165,591
Traditional costing system with machine hours as the cost driver:
Overhead assigned to each product line:
Basic Luxury Total
Machine hours 6,000 3,600 9,600
Overhead rate = $165,591/9,600 = $17.25
Overhead assigned $103,500 $62,100
Overate rate:
Materials handling $3,666 78 moves = $47 per move
Quality $37,125 300 inspections = $123.75 per inspection
Machine maintenance $124,800 9,600 m.hours = $13 per machine hour
Assignment of costs:
Basic Luxury
Materials handling $47 * 18 = $846 $47 * 60 = $2,820
Quality $123.75 * 200 = 24,750 $123.75 * 100 = 12,375
Machine maintenance $13 * 6,000 = 78,000 $13 * 3,600 = 46,800
Total overhead assigned $103,596 $61,995
Suppose the cost of flying a 200-seat plane for an airline is $100,000 and there are 10 empty seats on a flight. If the marginal cost of flying a passenger is $200 and a standby passenger is willing to pay $300, the airline should a. sell the ticket because the marginal benefit exceeds the average cost. b. not sell the ticket because the marginal benefit is less than the average cost. c. not sell the ticket because the marginal benefit is less than the marginal cost. d. sell the ticket because the marginal benefit exceeds the marginal cost.
Answers
Answer: d. sell the ticket because the marginal benefit exceeds the marginal cost.
Explanation:
The marginal benefits exceed the marginal costs in this scenario as the marginal benefit if $300 and the marginal cost is $200.
The company should therefore sell the ticket as they would be making a net marginal benefit of $100. Were it the other way around and the marginal cost was larger, the company should not sell because they would be making a marginal loss.
a. Performed $29,400 of services on account.
b. Collected $17,500 cash on accounts receivable.
c. Paid $4,400 cash in advance for an insurance policy.
d. Paid $570 on accounts payable.
e. Recorded the adjusting entry to recognize $3,700 of insurance expense.
f. Recorded the adjusting entry to recognize $300 accrued interest revenue.
g. Received $9,500 cash for services to be performed at a later date.
h. Purchased land for $1,560 cash.
i. Purchased supplies for $1,800 cash.
Required:
Record each of the above transactions in general journal form and then show the effect of the transaction in a horizontal statements model. The first transaction is shown as an example. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Transaction Account Titles Debit Credit
a Accounts receivable 29,400
Service revenue 29,400
Show the effect of the transaction in a horizontal statements model. The first transaction is shown as an example. (In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. Enter any decreases to account balances with a minus sign.)
Answers
Answer:
S/n Account Titles Debit$ Credit$
a. Accounts receivable 29400
Service revenue 29400
b. Cash 17500
Accounts receivable 17500
c. Prepaid insurance 4400
Cash 4400
d. Accounts payable 570
Cash 570
e. Insurance expense 3700
Prepaid insurance 3700
f. Interest receivable 300
Interest revenue 300
g. Cash 9500
Unearned service revenue 9500
h. Land 1560
Cash 1560
i. Supplies 1800
Cash 1800
Asset Liabilities Equity Revenue Expense Net income S.Cash Flow
a. 29400 29400 29400 29400 NA
b. 17500 OA
-17500
c. 4400 OA
-4400
d. -570 -570 OA
e. -3700 -3700 3700 -3700 NA
f. 300 300 300 300 NA
g. 9500 9500 OA
h. 1560 IA
-1560
i. 1800 OA
-1800
Earnings per share: Group of answer choices will increase if net income increases and the number of shares outstanding decreases. will increase if net income decreases and the number of shares outstanding increases. is defined as the addition to retained earnings divided by the number of shares outstanding. is the total amount of dividends paid per year on a per share basis. must increase at the same rate as the net income.
Answers
Answer:
will increase if net income increases and the number of shares outstanding decreases
Explanation:
Earning per share is the part of the profit of an organization that would be distributed for every share of the common stock
It would be increase when the net income would rise and the number of outstanding shares would reduced
Therefore the first option is correct
Klingon Cruisers, Inc., purchased new cloaking machinery three years ago for $12 million. The machinery can be sold to the Romulans today for $10.8 million. Klingon's current balance sheet shows net fixed assets of $10 million, current liabilities of $830,000, long-term debt of $5 million and net working capital of $248,000. If all the current accounts were liquidated today, the company would receive $1.15 million cash. What is the book value of Klingon's equity?
a. $5,248,000.00.
b. $11,078,000.00.
c. $5,000,000.00.
d. $22,800,000.00.
e. $12,000,000.00.
Answers
Answer:
a. $5,248,000.00.
Explanation:
Calculation for the book value of Klingon's equity
Book value = $248,000 + $5,000,000
Book value = $5,248,0000
Therefore the book value of Klingon's equity will be $5,248,0000
Beyond-the-Sea Corporation and Homeport Company make a deal for Homeport's products, via e-records. Under the UETA, an e-record is considered sent when it:a.is signed and encrypted, and will be sent without changes.b.is stored in the sender's back-up system.c.is composed on the sender's computer.d.leaves the sender's control.
Answers
Answer: d. leaves the sender's control.
Explanation:
Under the Uniform Electronic Transaction Act(UETA), there are three conditions that must be met for an e-record to be considered sent and the relevant one here is that the e-record leaves the control of the sender.
It does this by entering into an information processing system that the sender does not control of.
The other requirements demand that the e-record be properly addressed to a system specified by the recipient and this system must be able to process said e-record.
Select the correct answer.
Prontas Inc. has bought back 2,000 of its stock from its shareholders at par value of $5. How will this transaction be recorded in the journal of Prontas Inc.?
A.
Treasury Stock Account (Debit) $10,000 Common Stock Account (Credit) $10,000
B.
Cash Account (Debit) $10,000 Common Stock Account (Credit) $10,000
C.
Cash Account (Debit) $10,000 Treasury Stock Account (Credit) $10,000
D.
Treasury Stock Account (Debit) $10,000 Cash Account (Credit) $10,000
Answers
If Prontas Inc. has bought back 2,000 of its stock from its shareholders at par value of $5. This transaction will be recorded in the journal of Prontas Inc. as: D. Treasury Stock Account (Debit) $10,000 Cash Account (Credit) $10,000.
What is journal entry?Journal entry is used by companies to post their business transaction. The appropriate journal entry to record this transaction is Treasury Stock Account (Debit) $10,000 Cash Account (Credit) $10,000 which is calculated as :
Prontas Inc. entry
Debit: Treasury Stock $10,000
(2,000 x $5)
Credit: Cash $10,000
(2,000 x $5)
Therefore the correct option is D.
Learn more about journal entry here:https://brainly.com/question/28390337
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Worthy Ships initially issued 320,000 shares of $1 par stock for $1,600,000 in 2021. In 2023, the company repurchased 32,000 shares for $320,000. In 2024, 16,000 of the repurchased shares were resold for $256,000. In its balance sheet dated December 31, 2024, C. Worthy's treasury stock account shows a balance of: Multiple Choice $0 $320,000 $64,000 $160,000
Answers
Answer:
$160,000
Explanation:
The calculation of the treasury stock is seen below
Treasury stock account balance on December 31, 2024 balance sheet
= Number of shares in treasury stock × Cost per share
= (32,000 - 16,000) × ($320,000 ÷ 32,000)
= 16,000 × $10
= $160,000
Therefore, for computing the treasury account stock balance, we simply make use of the above.
You have researched your dream around-the-world vacation and determined that the total cost of the vacation will be $33,000. You feel you can earn an APR of 10.8 percent compounded monthly and plan to save $395 per month until you reach your goal. How many years will it be until you reach your goal and enjoy your well-deserved vacation
Answers
Answer:
Explanation:
What 22
heres a freebe to get more points. whats ur fav disney movie and whos ur fav disney princess. why?
Answers
Answer:
fav Disney movie: coco fav Disney princess: Tiana
Explanation:
i dont know why I just like them and they dont have a lot of black princesses so yeah
Answer:
belle and beauty and the beast
Explanation:
because shes not judgmental and can be her own person
The distance between defects in an automated weaving process at Craft Mills, Inc. is exponentially distributed. On average there are 0.025 defects per foot. Use the random number 0.749 to simulate the distance between two defects. Give your answer to 3 decimal places. (Note: For this problem, the average (represented by tau) would be the average distance (in feet) between defects.)
Answers
Answer:
55.292 feets
Explanation:
Given that :
Average defect per foot, λ = 0.025
Random number generated = 0.791
Distance between two defects :
b(x) = 1 - e^-λx = random number
1 - e^-λx = 0.749
e^-λx = 0.749 - 1
λ = 0.025
e^-0.025x = - 0.251
Take the In of both sides ;
-0.025x = - ln(0.251)
0.025x = In(0.251)
x = In(0.251) / 0.025
x = 1.382302 / 0.025
x = 55.29209
x = 55.292 feets
Hence, distance between two defects is 55.292 feets
Tamar Co. manufactures a single product in two departments. All direct materials are added at the beginning of the Forming process. Conversion costs are added evenly throughout the process. During May, the Forming department started 21,600 units, and transferred 22,200 units of product to the Assembly department. Its 3,000 units of beginning work in process consisted of $19,800 of direct materials and $221,940 of conversion costs. It has 2,400 units (100% complete with respect to direct materials and 80% complete with respect to conversion) in process at month-end. During the month, $496,800 of direct material costs and $2,165,940 of conversion costs were charged to production.
Required:
Prepare the company's process cost summary for May using the weighted-average method.
Answers
Answer:
Tamar Co.
Process Cost Summary for May, using the weighted-average method:
Process Cost Summary for May:
Materials Conversion Total
Units transferred $466,200 $2,197,800 $2,664,000
Ending WIP 50,400 190,080 240,480
Total cost $516,600 $2,387,880 $2,904,480
Explanation:
a) Data and Calculations:
Units started = 21,600
Units transferred = 22,200
Beginning work in process = 3,000 units
Cost of beginning work in process:
Direct materials $19,800
Conversion costs = $221,940
Ending work in process = 2,400 units
Degree of completion:
Materials = 100%
Conversion = 80%
Actual costs incurred:
Direct materials = $496,800
Conversion = $2,165,940
Calculation of Equivalent Units:
Materials Conversion
Units transferred out 22,200 (100%) 22,200 (100%)
Ending WIP 2,400 (100%) 1,920 (80%)
Total equivalent unit 24,600 24,120
Cost of production:
Materials Conversion Total
Beginning WIP $19,800 $221,940 $241,740
Current period 496,800 2,165,940 2,662,740
Total production cost $516,600 $2,387,880 $2,904,480
Cost per equivalent unit:
Materials Conversion Total
Total production cost $516,600 $2,387,880 $2,904,480
Total equivalent unit 24,600 24,120
Cost per equivalent unit $21 $99
Process Cost Summary for May:
Materials Conversion Total
Units transferred $466,200 $2,197,800 $2,664,000
($21 *22,200) ($99 * 22,200)
Ending WIP 50,400 190,080 240,480
($21 *2,400) ($99 * 1,920)
Total cost $516,600 $2,387,880 $2,904,480
Jaworskiâs Ski Store is completing the accounting process for its first year ended December 31, 2018. The transactions during 2018 have been journalized and posted. The following data are available to determine adjusting journal entries:
a. The unadjusted balance in Supplies was $840 at December 31, 2018. The unadjusted balance in Supplies Expense was $0 at December 31, 2018. A year-end count showed $110 of supplies on hand.
b. Wages earned by employees during December 2010, unpaid and unrecorded at December 31, 2010, amounted to $3,700. The last paychecks were issued December 28; the next payments will be made on January 6, 2011. The unadjusted balance in Wages Expense was $40,000 at December 31, 2010.
c. A portion of the store's basement is now being rented for $1100 per month to K. Frey. On November 1, 2010, the store collected six months' rent in advance from Frey in the amount of $6,600. It was credited in full to Unearned Rent Revenue
when collected. The unadjusted balance in Rent Revenue was $0 at December 31, 2010.
d. The store purchased delivery equipment at the beginning of the year. The estimated depreciation for 2010 is $3,000, although none has been recorded yet.
e. On December 31, 2010, the unadjusted balance in Prepaid Insurance was $4,800. This was the amount paid in the middle of the year for a two-year insurance policy with coverage beginning on July 1, 2010. The unadjusted balance in Insurance Expense was S800, which was the cost of insurance from January 1 to June 30, 2010.
f. Jaworski's store did some ski repair work for Frey. At the end of December 31, 2010, Frey had not paid for work completed amounting to S750. This amount has not yet been recorded as Repair Shop Revenue. Collection is expected
during January 2011.
Required:
Earlier in 2010, Jaworski's store had already provided, recorded, and collected cash for $5,000 of repair services for other customers.
a. For each of the items listed above, indicate the account names and adjusted balances that should be reported on
b. For each situation, prepare the adjusting journal entry that should be recorded for Jaworski's at December 31, 2010.
Answers
Answer:
Jaworski's Ski Store
1. Indication of the account names and the adjusted balances that should be reported on:
a. Supplies Expense $730 and Supplies $110
b. Wages Expenses $43,700 and Wages Payable $3,700
c. Unearned Rent Revenue $4,400 and Rent Revenue $2,200
d. Depreciation expense $3,000 and Accumulated Depreciation - Equipment $3,000
e. Prepaid Insurance $3,600 and Insurance Expense $2,000
f. Accounts Receivable $750 and Repair Shop Revenue $5, 750
2. Adjusting Journal Entries at December 31, 2010:
a. Debit Supplies Expense $730
Credit Supplies $730
To record supplies expense for the year.
b. Debit Wages Expenses $3,700
Credit Wages Payable $3,700
To record accrued wages expense.
c. Debit Unearned Rent Revenue $2,200
Credit Rent Revenue $2,200
To record rent revenue earned.
d. Debit Depreciation expense $3,000
Credit Accumulated Depreciation - Equipment $3,000
To record depreciation expense for the year.
e. Debit Insurance Expense $1,200
Credit Prepaid Insurance $1,200
To record insurance expense from July 1 to December 31, 2010.
f. Debit Accounts Receivable $750
Credit Repair Shop Revenue $750
To record shope repairs on account.
Explanation:
Journal entries are also used to adjust accounts to reflect the accrual concept and matching principle of accounting. They ensure that transactions are recorded in the period in which they occur instead of when cash is exchanged. Transactions recorded with adjusting journal entries include prepaid expenses, accrued expenses, unearned revenue, accrued revenue, and adjustments for depreciation expenses.
The following information is available for the adjusting entries. Accrued interest on the notes payable at year-end amounted to $4,000 and will be paid January 1, 2022. Accrued salaries at year-end amounted to $3,000 and will be paid on January 5, 2022. Supplies remaining on hand at the end of the year equal $3,800. Problem 3-9B Part 9 9. Record closing entries.
Answers
Question Completion:
Assume that Supplies were purchased during the year worth $13,000.
Record the adjusting entries.
Answer:
Adjusting Journal Entries on December 31, 2021:
Debit Interest Expense $4,000
Credit Interest payable $4,000
To record the accrued interest on the notes payable.
Debit Salaries Expense $3,000
Credit Salaries payable $3,000
To record the accrued salaries at year end.
Debit Supplies Expense $9,200
Credit Supplies $9,200
To record supplies expense for the year.
Explanation:
a) Data and Calculations:
Supplies purchased = $13,000
Supplies at year-end = 3,800
Supplies consumed = $9,200 ($13,000 - $3,800)
b) Adjusting entries are journal entries done at the end of a financial period to ensure that expenses and revenues are matched to the period they occur instead of when cash is exchanged. This accords with the accrual concept and the matching principle of accounting.
Merv Grazinski, driving his Winnebago, put it on cruise control to go make coffee. The Winnebago went off the road, turned over several times, and left Grazinski paralyzed from the waist down. He brings a product liability lawsuit against Winnebago. Which of the following is the best possible defense for Winnebago to use at trial?
a. Res ipsa loquitur
b. Contributory negligence
c. Assumption of risk
d. Proximate cause
Answers
Answer:
B). Contributory negligence
Explanation:
From the question we are informed about Merv Grazinski, who is driving his Winnebago, put it on cruise control to go make coffee. The Winnebago went off the road, turned over several times, and left Grazinski paralyzed from the waist down. He brings a product liability lawsuit against Winnebago. In this case, the best possible defense for Winnebago to use at trial Contributory negligence. Contributory negligence can be regarded as failure of plaintiff to have a tangible care for their own safety. Plantiff compensation could be reduced by Contributory negligence if confirmed that the occurrence of incident is likely as a result of their actions
Delicious Catering completed the following selected transactions during May 2016: May 1: Prepaid rent for three months, $1,500 May 5: Received and paid electricity bill, $190 May 9: Received cash for meals served to customers, $2,400 May 14: Paid cash for kitchen equipment, $2,500 May 23: Served a banquet on account, $2,000 May 31: Made the adjusting entry for rent (from May 1). May 31: Accrued salary expense, $1,700 May 31: Recorded depreciation for May on kitchen equipment, $340
Answers
Question Completion:
If Delicious Catering had recorded transactions using the Accrual method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign.
Answer:
Delicious Catering
Using the Accrual method, Delicious Catering would have recorded for the month a net income of $1,670.
Explanation:
Data and Calculations:
Prepaid Rent for 3 months = $1,500
Rent expense for the month = $500 ($1,500/3)
Utilities expense = $190
Service Revenue:
Cash for meals = $2,400
Credit 2,000
Total $4,400
Salary Expense = !,700
Depreciation expense = $340
Kitchen Equipment = $2,500
Income Statement for the month of May:
Service Revenue $4,400
Expenses:
Rent $500
Utilities expense 190
Salary expense 1,700
Depreciation expense 340
Total expenses $2,730
Net Income $1,670
Below are Company Y's financial statements:
Income Statement
Balance Sheet
Sales $7,900
Current assets $3,900
Current liabilities $2,100
Costs 5,500
Fixed assets 8,600
Long-term debt 3,700
Taxable income $2,400
Equity 6,700
Taxes (25%) 600
Total $12,500
Total $12,500
Net income $1,800
We assume that Company Y's current liabilities, assets, and costs are proportional to its sales. However, long-term debt and equity are not proportional to sales. We assume that the company's dividend payout ratio is 40 percentage and remains constant. The company's sales are projected to increase by exactly 15% in the next year. What is the external financing needed?
Answers
Answer:
Company Y
The external financial needed is:
= $1,290.
Explanation:
a) Data and Calculations:
Company Y's financial statements:
Income Statement
Sales $7,900
Costs 5,500
Taxable income $2,400
Taxes (25%) 600
Net income $1,800
Balance Sheet
Current assets $3,900
Fixed assets 8,600
Total assets $12,500
Current liabilities $2,100
Long-term debt 3,700
Equity 6,700
Total liab. & equity $12,500
Projected Income Statement:
Sales $9,085 ($7,900 * 1.15)
Costs 6,325 ($5,500 * 1.15)
Taxable income $2,760
Taxes (25%) 690
Net income $2,070
Dividends = 40% $828
Retained earnings $1,242
Projected Balance Sheet
Current assets $4,485 ($3,900 * 1.15)
Fixed assets 9,890 ($8,600 * 1.15)
Total assets $14,375
Current liabilities $2,415 ($2,100 * 1.15)
Long-term debt 4,018 ($14,375 - 2,415 - 7,942)
Equity 7,942 ($6,700 + $1,242)
Total liab. & equity $14,375
Working capital = $2,070 ($4,485 - $2,415)
Capital expenditure = $1,290 ($9,890 - 8,600)
External financing needed = Net income minus (working capital plus capital expenditure)
= $2,070 - ($2,070 + 1,290)
= $1,290
Direct materials $ 37 per unit Fixed manufacturing overhead costs $ 225,000 Sales price $ 195 per unit Variable manufacturing overhead $ 22 per unit Direct labor $ 26 per unit Fixed marketing and administrative costs $ 190,000 Units produced and sold $ 5,500 Variable marketing and administrative costs $ 8 per unit Required: a. Prepare a gross margin income statement. b. Prepare a contribution margin income statement.
Answers
Answer:
A.Gross Margin $385,550
B. Contribution margin $566,500
Explanation:
a. Preparation of a gross margin income statement
Gross margin income statement
Sales 1,072,500
(5500*$ 195 per unit)
Less Variable expenses:
Direct Material 198,000
(5500*36)
Direct Labour 143,000
(5500*26)
Variable manufacturing overhead 121,000
(5500*22)
Fixed Manufacturing overhead 224,950
(5500*40.90)
(225,000/5500=40.90)
Gross Margin $385,550
Therefore Gross Margin will be $385,550
b. Preparation of a contribution margin income statement.
Contribution margin income statement
Sales 1,072,500
(5500*$ 195 per unit)
Less cost of goods sold:
Direct Material 198,000
(5500*36)
Direct Labour 143,000
(5500*26)
Variable manufacturing overhead 121,000
(5500*22)
Variable Marketing and administrative cost 44,000
(5500*8)
Contribution margin $566,500
Therefore Contribution margin will be $566,500
Bill and Ted are deciding what musical instruments they want to learn to play for their band. They can pick between the guitar, keyboard, and the drums.They both want to have a good band, but also each has a preference over what toplay. Both like the drums over all else. However, Bill likes the keyboard more thanthe guitar and Ted likes the guitar more than the keyboard. What is crucial is that each chooses a different instrument, otherwise the band is pretty terrible. The actual combination does not affect the quality of the band. One night, Bill and Ted simultaneously reveal to each other what instrument they have bought decided to learn. Since they bought the instrument they are committedto learning it! Given the information above,
1. Does either Bill or Ted have a dominant/dominated strategy? Explain.
2. If Bill picks the keyboard, is it a best response for Ted to pick the drums? Explain.
3. If Ted picks the guitar, is it a best response for Bill to pick the keyboard? Explain.
4. Can there exista Nash equilibrium in which Bill picks the drums and Ted picks the keyboard? Explain.
5. Can there exist a Nash Equlibrium in which Bill picks the guitar and Ted picks the drums? Explain.
Answers
Answer:
1. Does either Bill or Ted have a dominant/dominated strategy? Explain.
No, since both like playing the drums. But if both choose the drums, then there is no band.
2. If Bill picks the keyboard, is it a best response for Ted to pick the drums? Explain.
yes, since Ted likes the drums more than the guitar.
3. If Ted picks the guitar, is it a best response for Bill to pick the keyboard? Explain.
No, Bill should pick the drums since he likes them more.
4. Can there exist a Nash equilibrium in which Bill picks the drums and Ted picks the keyboard? Explain.
No, because they both prefer the drums, but Ted doesn't like the keyboard.
5. Can there exist a Nash Equilibrium in which Bill picks the guitar and Ted picks the drums? Explain.
No, because they both prefer the drums, but Bill doesn't like the guitar.
Mallory Industries has the following cost information for the year just ended:
Direct materials $6.00 per unit
Direct labor $2.00 per unit
Variable manufacturing overhead $1.50 per unit
Fixed manufacturing overhead $40,000
Variable selling and administrative cost $3.00 per unit
Fixed selling and administrative cost $50,000
During the year, Mallory produced 10,000 units, out of which 9,100 were sold for $50 each. What is net income under absorption costing?
Answers
Answer:
Results are below.
Explanation:
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
First, we need to calculate the unitary cost value:
Unitary cost= (6 + 2 + 1.5) + 40,000/10,000
Unitary cost= $13.5
Now, the income statement:
Sales= 9,100*50= 455,000
COGS= (13.5*9,100)= (122,850)
Gross profit= 332,150
Total administrative costs= (3*9,100) + 50,000= (77,300)
Net operating income= 254,850
School Days Centers specialize in helping students with difficulties. With locations around the country, each center consists of a manager and several tutors and counselors. The counselors and tutors have a great deal of flexibility to design programs specifically for individual students. In fact, these first-line employees are considered to be the key people in the organization, and the manager's main function is to assist these employees in matters such as scheduling and securing necessary materials. This type of arrangement suggests that School Days is an inverted organization.
a. True
b. False
Answers
Answer:
This type of arrangement suggests that School Days is an inverted organization.
a. True
Explanation:
An inverted organization gives the customer-facing employees more flexibility and power to lead the organization, with the center line managers playing a supporting role. This type of organization inverts or reverses the traditional and classical pyramid of hierarchical organizations where leadership is from the top. This implies that the counselors and tutors play more leadership roles, especially in designing suitable programs for their students instead of the organization handling the design of programs and making the front-line employees to comply.
Fairhaven Composite Poles manufactures fishing poles that have a price of $125.00. It has costs of $90. A competitor is introducing a new fishing pole that will sell for $115.00. Management believes it must lower the price to $115.00 to compete in the highly cost-conscious fishing pole market. Marketing department believes that the new price will allow Fairhaven to maintain the current sales level of 200,000 poles per year.
Required:
A. What is the target cost for the new price if target operating income is 25% of sales?
B. What is the change in operating income for the year if only the selling price is changed and costs remain the same?
C. What is the target cost per unit if the selling price is reduced to $110.00 and the company wants to maintain its same income level?
Answers
Solution :
a). Statements showing computations
Particulars Amount
Target selling price 115
Target operating income at rate 25% 28.75
Target cost = 115 - 28.75 86.25
b). Statement showing computations
Particulars Existing Proposed Difference
Sales at rate 125 and 115 25000000 22000000 3000000
Cost at 90 18000000 18000000
Target operating income 7000000 4000000 3000000
c).
The current income level 7000000
No. of units 2000000
Income per unit 35
Cost per unit (115-35) 80
Selected balance sheet and income statement information from Abbott Laboratories for 2018 follows ($ millions).
Net income $2,368
Net income attributable to Company shareholders 2,368
Net operating profit after tax (NOPAT) 2,940
Net nonoperating expense (NNE) 572
Average net operating assets (NOA) 48,222
Average net nonoperating obligations (NNO) 17,312
Average total equity 30,910
Average equity attributable to Company shareholders 30,711
Compute the following measures a through h.
a. Return on equity = (Net income attributable to Company shareholders/Average equity attributable to Company shareholders)
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer
%
b. RNOA = NOPAT/Average NOA
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
c. Nonoperating return = ROE − RNOA
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
d. NNEP = NNE/Average NNO
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
e. Spread = RNOA − NNEP
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
f. FLEV = Average NNO/Average total equity
Note: Round amount to two decimal places (for example, enter 6.78 for 6.77555).
Answer
g. NCI ratio = (Net income attributable to Company shareholders/Net income)/(Average equity attributable to Company shareholders/Average total equity)
Note: Round amount to two decimal places (for example, enter 6.78 for 6.77555).
Answer
h. ROE = (RNOA + (Spread × FLEV)) × NCI ratio
Note: Round percentage to one decimal place (for example, enter 6.7% for 6.6555%).
Answer%
Answers
Answer:
a. Return on equity = 7.7%
b. RNOA = 6.1%
c. Nonoperating return = 1.6%
d. NNEP = 3.3%
e. Spread = 2.8%
f. FLEV = 56.01%
g. NCI ratio = 1.01
h. ROE = 7.7%
Explanation:
a. Return on equity = (Net income attributable to Company shareholders/Average equity attributable to Company shareholders)
Return on equity = $2,368 / $30,711 = 0.0771059229592003
To convert to percentage, we multiply by 100 as follows:
Return on equity = 0.0771059229592003 * 100 = 7.71059229592003%
Rounding percentage to one decimal place, we have:
Return on equity = 7.7%
b. RNOA = NOPAT/Average NOA
RNOA = Return on net operating assets = $2,940 / $48,222 = 0.0609680228941147
To convert to percentage, we multiply by 100 as follows:
RNOA = 0.0609680228941147 * 100 = 6.09680228941147%
Rounding percentage to one decimal place, we have:
RNOA = 6.1%
c. Nonoperating return = ROE − RNOA
Nonoperating return = Return on equity (ROE) - RNOA = 7.7% - 6.1% = 1.6%
d. NNEP = NNE/Average NNO
NNEP = Net non-operating expense percent = $572 / $17,312 = 0.0330406654343808
To convert to percentage, we multiply by 100 as follows:
NNEP = 0.0330406654343808 * 100 = 3.30406654343808%
Rounding percentage to one decimal place, we have:
NNEP = 3.3%
e. Spread = RNOA − NNEP
Spread = 6.1% - 3.3% = 2.8%
f. FLEV = Average NNO/Average total equity
FLEV = Financial leverage = $17,312 / $30,910 = 0.560077644775154
To convert to percentage, we multiply by 100 as follows:
FLEV = 0.560077644775154 * 100 = 56.0077644775154%
Rounding percentage to two decimal place, we have:
FLEV = 56.01%
g. NCI ratio = (Net income attributable to Company shareholders/Net income)/(Average equity attributable to Company shareholders/Average total equity)
NCI ratio = ($2,368 / $2,368) / ($30,711 / $30,910) = 1 / 0.993561954060175 = 1.00647976295139
Rounding the amount to two decimal places, we have:
NCI ratio = 1.01
h. ROE = (RNOA + (Spread × FLEV)) × NCI ratio
ROE = (6.1% + (2.8% * 56.01%)) * 1.01 = 0.077449628
To convert to percentage, we multiply by 100 as follows:
ROE = 0.077449628 * 100 = 7.7449628%
Rounding percentage to one decimal place, we have:
ROE = 7.7%