Question 8 Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 135,000 units per year. The total budgeted overhead at normal capacity is $742,500 comprised of $270,000 of variable costs and $472,500 of fixed costs. Byrd applies overhead on the basis of direct labor hours. During the current year, Byrd produced 85,200 putters, worked 94,000 direct labor hours, and incurred variable overhead costs of $140,580 and fixed overhead costs of $416,600. Compute the predetermined variable overhead rate and the predetermined fixed overhead rate. (Round answers to 2 decimal places, e.g. 2.75.) Variable Fixed Predetermined Overhead Rate $ $ LINK TO TEXT Compute the applied overhead for Byrd for the year. Overhead Applied $ LINK TO TEXT Compute the total overhead variance. Total Overhead Variance $ Click if you would like to Show Work for this question: Open Show Work

1. In Chapter 2 of your book, it describes the accounting cycle. Phase 4 of the accounting cycle is to prepare the adjusting entries. Describe two types of adjusting entries. If those entries were not made, what would the impact be on the financial statements.

2. How does double entry book-keeping and the system of debits and credits ensure accuracy in financial reporting? Can you relate the concept of double entry bookkeeping or the accounting equation to other aspects of life or learning?

Merrill Corp. has the following information available about a potential capital investment:   

Assume straight line depreciation method is used.  


Required:
1. Calculate the project’s net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round the final answer to nearest whole dollar.)

         

2. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 10 percent.

    

   

3. Calculate the net present value using a 13 percent discount rate. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round the final answer to nearest whole dollar.)

       

4. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 13 percent.

    

you are evaluating an investment that requires $2,000 upfront and pays $500 at the end of each of the first 2 years and an additional lump sum of $1000 at the end of year 2. What would happen to the IRR if the annual payment at the end of the first year go down from $500 to $300 and the annual payment at the end of the second year stays at $500?

Prepare the journal entries for the following transactions.

1. Paris Cosmetics issues €2,500 shares of €200 par value preference stock at €317 cash per share on 1/1/2017. The shares are 5% and cumulative.
2. Paris Cosmetics issues 120,000 shares of €2 par value share of ordinary stock at €27 cash per share on 1/1/2017.
3. On March 1, Paris Cosmetics repurchases 6,200 shares of the previously issued ordinary shares at €43 cash per share.
4. The company declares and pays cash dividends amounting to €10,000. (the company is new, so no arrearage exists at this point).
5. How much is paid per share to the preference shares? To the ordinary shares?
6. The company repurchases 5,000 shares of the previously issued ordinary shares at €25 per share.
7. The company declares and pays cash dividends amounting to €41,000.
8. How much is paid per share to the preference shares? To the ordinary shares?
9. The company sells all of the treasury stock for €30 cash per share.
10. The Company declares and pays a cash dividend of €55,000.
11. How much is paid per share to the preference shares? To the ordinary shares?

Show all your work.

Marwick’s Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,493 per unit and then sells them to retail customers for an average price of $3,100 each. The company’s selling and administrative costs for a typical month are presented below:

During August, Marwick’s Pianos, Inc., sold and delivered 61 pianos.

Required:

1. Prepare a traditional format income statement for August.
2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down through contribution margin.

A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are

Bell’s creditors have filed a $23,000 claim against the partnership’s assets. The partnership currently holds assets of $320,000 and liabilities of $110,000. If the assets can be sold for $200,000, what is the minimum amount that Bell’s creditors would receive?

What are the production stages and labor requirements for each stage of production for a hairbrush?

British Columbia Lumber has a raw lumber division and a finished lumber division. The variable costs are as follows:

Raw lumber division: R100 per 100 m² of raw lumber
Finished lumber division: R125 per 100 m² of finished lumber

Assume that there is no m² loss in processing raw lumber into finished lumber. Raw lumber can be sold at R200 per 100 m². Finished lumber can be sold at R275 per 100 m².

Required:

2.1 Should British Columbia Lumber process raw lumber into its finished form? Show your calculations.

2.2 Assume that internal transfers are made at 110% of variable costs. Will each division maximise its division contribution by adopting the action that is in the best interest of British Columbia Lumber as a whole? Explain.

2.3 Assume that the internal transfers are made at market prices. Will each division maximise its division contribution by adopting the action that is in the best interest of British Columbia Lumber as a whole? Explain.

1. ABC company prepared the following contribution format income statement based on a sales volume of 1,000 unites:

a. Calculate contribution margin per unit, contribution margin ratio, and variable expense ratio. (5 points)

b. What would be the percentage increase in net operating income if sales volume increases by 50%? (5 points)

c. If the selling price increases by 10% and sales volume decreases by 10%, what would be the net operating income? (5 points)

d. What would be the break even point in unit sales if variable expenses per unit increases by 8% and fixed expenses increase by 10%? (5 points)

e. What is the margin of safety percentage? At what “percentage of sale volume decrease” the company would experience zero net operating income? (5 points)

This Comprehensive Problem is to acquaint you with the content of the 2015 financial statements of Home Depot, Inc., and related disclosures, excerpts of which are reproduced in Appendix A of this textbook. (The 2015 financial statements are for the fiscal year ended January 31, 2016.) The problem contains three major parts, which are independent of one another: Part I is designed to familiarize you with the general contents of a company’s financial statements; Part II involves analysis of the company’s liquidity; and Part III analyzes the trend in its profitability. If you work this problem as a group assignment, each group member should be prepared to discuss the group’s findings and conclusions in class. A good starting point for understanding the financial statements of a company such as Home Depot, Inc. , is to understand the accounting policies used in preparing those statements. The first note accompanying the financial statements provides a brief description of the major accounting policies the company used. Most of the areas discussed in this note have been covered in this text. Part I Annual reports include not only comparative financial statements but also other sources of information, such as: - A multiyear summary of financial highlights, a summary of key statistics for the past 5 or 10 years. - Several pages of Notes that accompany the financial statements. - Reports by management and by the independent auditors in which they express their respective responsibilities for the financial statements. Instructions: Answer each of the following questions and explain where in the statements, notes, or other sections of the annual report you located the information used in your answer. a. How many years are covered in each of the primary comparative financial statements? Were all of these statements audited? Name the auditors. What were the auditors' conclusions concerning these statements? b. Home Depot, Inc., combines its statement of retained earnings with another financial statement. Where are the details about changes in the amount of retained earnings found? c. Over the three years presented, have the company's annual net cash flows been positive or negative from (1) operating activities, (2) investing activities, and (3) financing activities? Has the company's cash balance increased or decreased during each of these three years? Part II Assume that you are the credit manager of a medium-size supplier of building materials and related products. Home Depot wants to make credit purchases from your company, with payment due in 60 days. Instructions: a. As general background read the first note to the financial statements, "Summary of Significant Accounting Policies." Next, compute the following for the fiscal years ending January 31, 2016 and February 1, 2015 (round percentages to the nearest tenth of 1 percent, and other computations to one decimal place): 1. Current ratio. 2. Quick ratio. 3. Amount of working capital 4. Percentage change in working capital from prior year. 5. Percentage change in cash and cash equivalents from the prior year. b. On the basis, of your analysis of your analysis in part a, does the company's liquidity appear to have increased or decreased during the most recent fiscal year? Explain. c. Other than the ability of Home Depot to pay for its purchases, do you see any major considerations that should enter into your company's decision? Explain? d. Your company assigns each customer one of the four credit ratings listed below. Assign a credit rating to Home Depot, Inc., and write a memorandum explaining your decision. (In your opinion memorandum, you may refer to any of your computations or observations in parts a through c, and to any information contained in the annual report.) POSSIBLE CREDIT RATINGS: A. Outstanding. Little or no risk of inability to pay. For customers in this category, we fill any reasonable order without imposing a credit limit. The customer's credit is reevaluated annually. B. Good. Customer has good debt-paying ability but is assigned a credit limit that is reviewed every 90 days. Orders above the credit limit are accepted only on a cash basis. C. Marginal. Customer appears sound, but credit should be extended only on a 30-day basis and with a relatively low credit limit. Creditworthiness and credit limit are reevaluated every 90 days. D. Unacceptable. Customer does not qualify for credit.

Windsor Company began operations on January 2, 2016. It employs 8 individuals who work 8-hour days and are paid hourly. Each employee earns 9 paid vacation days and 7 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows.

Windsor Company has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when earned and to accrue sick pay when earned.

Prepare journal entries to record transactions related to compensated absences during 2016 and 2017. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

List of Accounts

Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2016 and 2017.

Cumberland County Senior Services is a non-profit organization devoted to providing essential services to seniors who live in their own homes within the Cumberland County area. Three services are provided for seniors—home nursing, Meals on Wheels, and housekeeping. In the home nursing program, nurses visit seniors on a regular basis to check on their general health and to perform tests ordered by their physicians. The Meals on Wheels program delivers a hot meal once a day to each senior enrolled in the program. The housekeeping service provides weekly housecleaning and maintenance services. Data on revenue and expenses for the past year follow:

*Allocated on the basis of program revenues.

     The head administrator of Cumberland County Senior Services, Judith Ewa, is concerned about the organization’s finances and considers the operating income of $6,400 last year to be razor-thin. (Last year’s results were very similar to the results for previous years and are representative of what would be expected in the future.) She feels that the organization should be building its financial reserves at a more rapid rate in order to prepare for the next inevitable recession. After seeing the above report, Ewa asked for more information about the financial advisability of discontinuing the
housekeeping program.

     The depreciation in the housekeeping category is for a small van that is used to carry the housekeepers and their equipment from job to job. If the program were discontinued, the van would be donated to a charitable organization. Depreciation charges assume zero salvage value. None of the general administrative overhead would be avoided if the housekeeping program were dropped, but the liability insurance and the salary of the program administrator would be avoided.

Required:

1-a. Compute the change in net operating income for the company as a whole if housekeeping program be discontinued.

1-b. Should the housekeeping program be discontinued?

• Yes

• No

2. Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services?

• Yes

• No

HELP NEEDED URGENT

The following are the information for Chun Equipment Co. for 2018. (Hint: Some of the items will not appear on either statement, and ending retained earnings must be calculated.)

Required

Prepare a multistep income statement and balance sheet for Chun Equipment Co. for 2018.

Prepare a multistep income statement for Chun Equipment Co. for 2018.

Prepare the balance sheet for Chun Equipment Co. for 2018. (Be sure to list the assets in the order of their liquidity.)