Part A Instructions: Use the information provided below for Plant A of Big Noizz Corporation to prepare the Statement of Cost of Goods Manufactured, Cost of Goods Sold and Income Statement for 2017.

Sales $20,000

Raw Materials Used $5,000

Direct Labor Costs $2,000

Selling and Administrative Expenses $5,000

Beginning Raw Material Inventory $600

Ending Raw Material Inventory $2,000

Net Income $400

Beginning Work-in-Process Inventory zero

Ending Work-in-Process Inventory $600

Beginning Finished Goods Inventory $1,400

Ending Finished Goods Inventory $800

Betty DeRose, Inc. operates two departments, the handling department and
the packaging department. During April, the handling department reported
the following information:

                                           % complete      % complete
                                units         DM           conversion 
work in process, April 1        17,000        46%             77%
units completed during April    46,000
work in process, April 30       23,000        29%             14%

The cost of beginning work in process and the costs added during April
were as follows:

                                 DM         Conversion       Total cost
work in process, April 1      $121,279       $203,056         $324,335
costs added during April       363,285        227,619          590,904
total costs                    484,564        430,675          915,239

Calculate the total cost of the handling department's work in process
inventory at April 30 using the FIFO process costing method.

Please provide a one page summary of your key learnings chapter 1 Ethical Reasoning: Implications for Accounting

Dealer Financing On 1/1/X1, Tractor Co. sold a new combine to Jim’s U-Pick farm. The purchase agreement establishes a base price of $100,000, plus a contractual interest rate of 5%, payable in 48 monthly installments of $2,302.93. Control of the combine transferred to Jim when Jim signed the contract and had the combine delivered that same day. If Jim had obtained separate financing (say, a bank loan) for the purchase, his interest rate would have been 6%.

What amount of revenue should Tractor Co. record at the date of sale? What guidance should Tractor Co. apply to the subsequent measurement of its receivable?

Consider the measurement attribute used to record Tractor Co.’s revenues. How does this approach achieve the objective of this measurement attribute?

Hint: You might find it useful to use Microsoft Excel’s formula options: PMT and PV for this example. Excel walks you through how to input numbers into each formula.

Instructions

• Journalize the transactions for the month of January 2018, beginning on page GJ1. Be sure and list the Debit Account(s) first; Credit Account(s) next. Write a brief explanation for each transaction, and skip a line in-between transactions.
• Post the journal entries to the general ledger accounts. Be sure and use the Post Reference #s for each posting. (Hint: the balance of the cash account after all journal entries have been posted should be $9,915).
• Prepare the Trial Balance section of the worksheet.
• Prepare the Adjustments section of the worksheet.
  • Compute and record the adjustment for supplies used during the month. An inventory showed supplies on hand of $250.
  • One month insurance has been used up.
  • Record the adjustment for depreciation of Office Equipment of $85 for the month.
  • Record the adjustment for depreciation of Tools of $125 for the month.
• Complete the worksheet.
• Prepare an Income Statement, Statement of Owner’s Equity, and Balance Sheet for the month. Be sure to add the date to each financial statement.
• Journalize and post the Adjusting entries.
• Journalize and post the Closing entries.
• Prepare a Post-closing Trial Balance.

CHART OF ACCOUNTS

Assets                                                                      Revenue

111     Cash                                                             411     Income from Services

112     Accounts Receivable                               

114     Supplies                                                       Expenses

116     Prepaid Insurance                                     511     Advertising Expense

121     Office Equipment                                       512     Supplies Expense

122     Accum. Depr., Office Equipment           513     Insurance Expense

123     Tools                                                             514     Utilities Expense

124     Accum. Depr., Tools                                 515     Salaries Expense

125     Truck                                                             516     Truck Expense

521     Depreciation Expense - Office Equipment

Liabilities                                                                  522     Depreciation Expense - Tools

211     Accounts Payable   

Owner’s Equity                                                                  

311     Mike Hammer, Capital                              

312     Mike Hammer, Drawing

330     Income Summary

Transactions for the month:

You made the following transactions for Mike’s Quality Repair Services during the month of January:

Jan.    1          Invested $15,000 cash, and a truck with a fair market value of $8,500 into the business.      

3          Paid $1800 to Liberty Mutual for a 1-year insurance policy. The policy is effective immediately. Ck# 1001

4          Bought tools from Sears on account, $7500, Inv. #X-1357

5          Bought computer system from Ben’s Computer Center, $5000, putting $2500 down and putting the balance on account, Ck. #1002, Inv. #Y-4152.

6          Bought supplies-Office Mart, $850, Ck. #1003.

7          Performed services for cash, $1,650.

10        Performed services on account, $1275.

12        Received and paid telephone bill, $420, ck#1004.

13        Bought supplies on account from Office Mart, $900, Inv. AB1477.

15        Received and paid the utility bill, $600, Ck. #1005.

15        Paid salary for office clerk, 1/1-1/15-$1000, Ck# 1006.

20        Received The Times Review bill for advertising for the month, $410, Inv. #TR198.

            (Note that you did not PAY the bill – you only received it).

21        Performed services $7,250, received $2,250 cash, with the balance due in 30 days.

27        Received from clients $1,275, for work completed on January 10.

28        Paid for oil change on truck, $90, ck#1007.

29        Withdrew cash for personal use, $1500, Ck. #1008.

30        Paid salary for office clerk, 1/16-1/30, $1000, ck#1009.

30        Made partial payment of $500 to Office Mart for supplies purchased on January 13th, Ck#1010.

Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions

Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, units sold consist of 600 units from beginning inventory, 380 from the February 10 purchase, 120 from the March 13 purchase, 130 from the August 21 purchase, and 205 from the September 5 purchase. (Round your average cost per unit to 2 decimal places.)

Compute gross profit earned by the company for each of the four costing methods

EZ-Seat, Inc., manufactures two types of reclining chairs, Standard and Ergo. Ergo provides support for the body through a complex set of sensors and requires great care in manufacturing to avoid damage to the material and frame. Standard is a conventional recliner, uses standard materials, and is simpler to manufacture. EZ-Seat’s results for the last fiscal year are shown in the statement below.

EZ-Seat currently uses labor costs to allocate all overhead, but management is considering implementing an activity-based costing system. After interviewing the sales and production staff, management decides to allocate administrative costs on the basis of direct labor costs but to use the following bases to allocate the remaining costs:

Required:

a. Complete the income statement using the preceding activity bases. (Do not round intermediate calculations.)

c. Restate the income statement for EZ-Seat using direct labor costs as the only overhead allocation base. (Do not round intermediate calculations.)

Thanks for your help!

Cheese Ahead Frankie’s Homemade Cheese Shop (“Frankie’s”) signed an advertising agreement with Simmons Boards (“Owner”) for billboard advertising rights along Route 33 in the town of Hampton. Frankie’s has the right to select and display advertising copy on billboard panels numbered 10 and 12 (panel numbers correspond to designated billboard locations) for a 3-year period from Jan. 1, 20X1, to Dec. 31, 20X3. In consideration for these rights, Frankie’s agrees to pay $10,000 in year 1, $12,000 in year 2, and $13,000 in year 3. Assume that Frankie’s is required to pay the annual fee on Jan. 1 of each contract year. Assuming Frankie’s incremental borrowing rate is 5%, what are the entries Frankie should record at inception of the contract, then at the end of years 1, 2, and 3?

Mervin March and George Gamble are equal partners. On January 1, 2018, each had an adjusted basis in the partnership of $10,000. During 2018, the partnership borrowed $15,000, for which the partners are liable, and had an operating loss for the year of $20,000. What is the basis of each partner's interest at the end of 2018?

Campaign Printing has two service departments, S1 and S2, and two production departments, P1 and P2.

The data for May were as follows:

Required:

Allocate service departments costs (S1 & S2) to the production departments (P1 & P2) using reciprocal method

1. Set up linear equations to solve for the total costs incurred in S1 and S2. (Note: if you use repeated iteration, you won’t get any points!!!)
2. Determine total costs for each department by first solving the equations from part i. and then performing the necessary allocation. (note: round to the nearest integer)

8) What type of investments can be classified as “Hold to Maturity” and how are they reported/valued on the balance sheet.

9) What type of investments can be classified as “Trading” or “Available for Sale”? How are they reported/valued on the balance sheet?

10) How/where are unrealized gains/losses reported for a) Trading securities, b)Available for sale securities?

11) How/where are realized gains/losses reported for a) Trading securities, b)Available for sale securities?

12) Explain the difference between Level 1, Level 2 and Level 3 fair value measurements.

Apply the Concepts

A pediatric ward in a metropolitan hospital has the following information:

• Monitors are used only for the monitoring activity
• The one computer is used 1,200 hours for supervisory work and 800 hours for monitoring work
• The nursing resources (supplies, uniforms, and labor) are assigned to activities using nursing hours. The nursing supervisor spends 100 percent of her time on supervision.

Required:

You have conducted several interviews with department supervisors who oversee the acquisition/payment process. The following is a summary of your discussions. Use this narrative to prepare a system flowchart to depict Plume’s acquisition/payment system.

checks are issued by the cash disbursements department. When the payment
authorization is received from accounts payable, the information is entered and used to
update the accounts payable and cash disbursements master files. A check is then
generated (with 1 copy). A copy of the check is filed with the payment authorization by
date. The check is then forwarded to the Treasurer. Additionally, a weekly cash
disbursements report is generated and is forwarded to the controller department.
The Treasurer verifies the check information by looking up the authorization
information in the accounts payable system. If the check information is correct, the
treasurer signs the check and sends it to the vendor. If there are any discrepancies, the
check is forwarded to the Controller.