Questions
Pond Corporation holds 75 percent of the voting shares of Spring Services Company. During 20X7, Pond...

Pond Corporation holds 75 percent of the voting shares of Spring Services Company. During 20X7, Pond sold inventory costing $63,000 to Spring Services for $105,000, and Spring Services resold one-third of the inventory in 20X7. The remaining inventory was resold in 20X8. Also in 20X7, Spring Services sold land with a book value of $140,000 to Pond for $240,000. Pond continues to hold the land at the end of 20X8. The companies file separate tax returns and are subject to a 40 percent tax rate.

Required:
Prepare the consolidation entries relating to the intercorporate sale of inventories and land needed in the consolidation worksheet at the end of 20X8. Assume that Pond uses the equity method in accounting for its investment in Spring Services.

In: Accounting

Benjamin, Inc., operates an export/import business. The company has considerable dealings with companies in the country...

Benjamin, Inc., operates an export/import business. The company has considerable dealings with companies in the country of Camerrand. The denomination of all transactions with these companies is alaries (AL), the Camerrand currency. During 2017, Benjamin acquires 22,000 widgets at a price of 8 alaries per widget. It will pay for them when it sells them. Currency exchange rates for 1 AL are as follows:

September 1, 2017 $ 0.48
December 1, 2017 0.42
December 31, 2017 0.50
March 1, 2018 0.43
  1. Assume that Benjamin acquired the widgets on December 1, 2017, and made payment on March 1, 2018. What is the effect of the exchange rate fluctuations on reported income in 2017 and in 2018?
  2. Assume that Benjamin acquired the widgets on September 1, 2017, and made payment on December 1, 2017. What is the effect of the exchange rate fluctuations on reported income in 2017?
  3. Assume that Benjamin acquired the widgets on September 1, 2017, and made payment on March 1, 2018. What is the effect of the exchange rate fluctuations on reported income in 2017 and in 2018?

(Input all amounts as positive values.)

Effect of Exchange Rate Fluctuations

a.2017

2018

b.2017

c.2017

2018

In: Accounting

Dorman Products Company uses a job order cost system and applies overhead to production on the...

Dorman Products Company uses a job order cost system and applies overhead to production on the basis of direct labor cost. On January 1, 2018, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $30,000; direct labor $15,000; and manufacturing overhead $25,000. Job No. 49 had been completed at a cost of $100,000 and was part of finished goods inventory. There was a $35,000 balance in the Raw Materials inventory account.

         During the month of January, the company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $120,000 and $150,000, respectively. The following additional events occurred during the month.

1. Purchased additional raw materials of $270,000 on account.

2. Incurred factory labor costs of $61,000. Of this amount $11,000 is related to employer payroll taxes.

3. Incurred manufacturing overhead costs as follows: indirect materials $5,000; indirect labor $17,000; depreciation expense $22,000 and accounts payable $9,000 (for utilities and repairs).

4. Assigned direct materials and direct labor to jobs as follows.

                        Job No.                        Direct Materials                     Direct Labor

                        50                                $ 8,000                                   $    7,000

                        51                                29,000                                       16,000

                        52                                32,000                                       20,000

5. The company uses direct labor cost as the activity base to assign overhead.

Instructions

PLEASE ONLY DO E & F (Everything has already been solved in separate questions)

(a) Calculate the predetermined overhead rate for the year 2018, assuming Dorman Products Company Manufacturing estimates total manufacturing overhead costs of $863,600 and direct labor costs of $680,000.

(b) Complete the job cost sheets for Jobs 50, 51, and 52. (This can be done also when you get to parts d. and e.)

(c) Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January.

(d) Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). Post all costs to the job cost sheets as necessary.

(e) Prepare the journal entry to record the completion of Job 50 and Job 51 during the month.by using the total from the job cost sheets that were completed during the month.

(f) Prepare the journal entries to record the sale of Job 49 and Job 50 during the month.

(g) What is the balance in the Work in Process Inventory account at the end of the month? What does this balance consist of? (For example which Job and what specific costs.)

(h) What is the amount of over- or underapplied overhead for the month?

In: Accounting

Identify the three basic rules that apply to the REA model pattern.

Identify the three basic rules that apply to the REA model pattern.

In: Accounting

Perfect Pet Collar Company makes custom leather pet collars. The company expects each collar to require...

Perfect Pet Collar Company makes custom leather pet collars. The company expects each collar to require 1.70 feet of leather and predicts leather will cost $2.90 per foot. Suppose Perfect Pet made 65 collars during February. For these 65 collars, the company actually averaged 1.90 feet of leather per collar and paid $2.40 per foot.

Required:
1.
Calculate the standard direct materials cost per unit. (Round your answer to 2 decimal places.)



2. Without performing any calculations, determine whether the direct materials price variance will be favorable or unfavorable.



3. Without performing any calculations, determine whether the direct materials quantity variance will be favorable or unfavorable.



6. Calculate the direct materials price and quantity variances. (Round your intermediate calculations and final answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.)

In: Accounting

Prepare general journal entries for the following transactions. If an amount box does not require an...

Prepare general journal entries for the following transactions.

If an amount box does not require an entry, leave it blank. When required, enter amounts to the nearest cent. Assume 360 days in a year.

June 15 Purchased $6,000 worth of equipment from a supplier on account.
July 15 Issued a $6,000, 30-day, 7% note in payment of the account payable.
Aug. 14 Paid $300 cash plus interest to the supplier, extending the note for 30 days from August 14.
Sept. 13 Paid the note in full.
27 Issued a $5,400, 60-day, 6% note to a supplier for purchase of merchandise.

In: Accounting

An existing turning operation in an small parts manufacturing plant is currently generating 25% scrap. The...

An existing turning operation in an small parts manufacturing plant is currently generating 25% scrap. The value of the scrap including material, labor and overhead costs is $20.00/unit. The current rate of process is 2000 units / month of both good an bad product. The existing equipment was purchased 5 years ago for $500,000. Current operating costs are $20,000 per year. The equipment's market value currently is $150,000. It has 4 more years of life remaining.

A quality improvement team has determined that the scrap rate can be reduced to 7% if new tooling and major overhaul work could be performed and some of the major components be replaced. The improvements would also reduce the annual operating costs to $15,000 per year.

If the organization requires a 20% IRR what is the maximum that could be spent on the equipment to reduce the scrap rate?

In: Accounting

The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period....

The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used.

Year 1
Jan. 4 Purchased a used delivery truck for $28,000, paying cash.
Nov. 2 Paid garage $675 for miscellaneous repairs to the truck.
Dec. 31 Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $5,000 for the truck.
Year 2
Jan. 6 Purchased a new truck for $48,000, paying cash.
Apr. 1 Sold the used truck purchased on Jan. 4 of Year 1 for $15,000. (Record depreciation to date in Year 2 for the truck.)
June 11 Paid garage $450 for miscellaneous repairs to the truck.
Dec. 31 Record depreciation for the new truck. It has an estimated residual value of $9,000 and an estimated life of five years.
Year 3
July 1 Purchased a new truck for $54,000, paying cash.
Oct. 2 Sold the truck purchased January 6, Year 2, for $16,750. (Record depreciation to date for Year 3 for the truck.)
Dec. 31 Recorded depreciation on the remaining truck purchased on July 1. It has an estimated residual value of $12,000 and an estimated useful life of eight years.

Journalize the transactions and the adjusting entries. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS
Legacy Furniture Co.
General Ledger
ASSETS
110 Cash
111 Petty Cash
112 Accounts Receivable
114 Interest Receivable
115 Notes Receivable
116 Merchandise Inventory
117 Supplies
119 Prepaid Insurance
120 Land
123 Delivery Truck
124 Accumulated Depreciation-Delivery Truck
125 Equipment
126 Accumulated Depreciation-Equipment
130 Mineral Rights
131 Accumulated Depletion
132 Goodwill
133 Patents
LIABILITIES
210 Accounts Payable
211 Salaries Payable
213 Sales Tax Payable
214 Interest Payable
215 Notes Payable
EQUITY
310 Common Stock
311 Retained Earnings
312 Dividends
313 Income Summary
REVENUE
410 Sales
610 Interest Revenue
620 Gain on Sale of Delivery Truck
621 Gain on Sale of Equipment
EXPENSES
510 Cost of Merchandise Sold
520 Salaries Expense
521 Advertising Expense
522 Depreciation Expense-Delivery Truck
523 Delivery Expense
525 Truck Repair Expense
529 Selling Expenses
531 Rent Expense
532 Depreciation Expense-Equipment
533 Depletion Expense
534 Amortization Expense-Patents
535 Insurance Expense
536 Supplies Expense
539 Miscellaneous Expense
710 Interest Expense
720 Loss on Sale of Delivery Truck
721 Loss on Sale of Equipment

Journalize the transactions and the adjusting entries. Refer to the Chart of Accounts for exact wording of account titles. Scroll down to access pages 2 and 3 of the journal.

Journalize the Year 1 transactions and adjusting entries on Page 1.

PAGE 1

JOURNAL

ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1

2

3

4

5

Adjusting Entries

6

7

Journalize the Year 2 transactions and adjusting entries on Page 2.

PAGE 2

JOURNAL

ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1

2

3

4

5

6

7

8

9

10

11

Adjusting Entries

12

13

Journalize the Year 3 transactions and adjusting entries on Page 3.

PAGE 3

JOURNAL

ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1

2

3

4

5

6

7

8

9

Adjusting Entries

10

11

In: Accounting

Hillsong Inc. manufactures snowsuits. Hillsong is considering purchasing a new sewing machine at a cost of...

Hillsong Inc. manufactures snowsuits. Hillsong is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased five years ago at a price of $1.8 million; six months ago, Hillsong spent $55,000 to keep it operational. The existing sewing machine can be sold today for $240,845. The new sewing machine would require a one-time, $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7:

Year 1 $391,000
2 399,100
3 411,000
4 426,000
5 433,200
6 435,300
7 436,500


The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $379,800. This new equipment would require maintenance costs of $94,900 at the end of the fifth year. The cost of capital is 9%.



Use the net present value method to determine the following: (If net present value is negative then enter with negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round present value answer to 0 decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

Calculate the net present value

In: Accounting

20-03 20-16 Cost of Production Report The debits to Work in Process—Roasting Department for Morning Brew...

20-03 20-16

Cost of Production Report

The debits to Work in Process—Roasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:

Work in process, August 1, 700 pounds, 60% completed $3,220*
*Direct materials (700 X $3.7) $2,590
Conversion (700 X 60% X $1.5) $630
$3,220
Coffee beans added during August, 22,000 pounds 80,300
Conversion costs during August 34,768
Work in process, August 31, 1,100 pounds, 50% completed ?
Goods finished during August, 21,600 pounds ?

All direct materials are placed in process at the beginning of production.

a. Prepare a cost of production report, presenting the following computations:

  1. Direct materials and conversion equivalent units of production for August
  2. Direct materials and conversion costs per equivalent unit for August
  3. Cost of goods finished during August
  4. Cost of work in process at August 31

If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.

Morning Brew Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended August 31
Unit Information
Units charged to production:
Inventory in process, August 1
Received from materials storeroom
Total units accounted for by the Roasting Department
Units to be assigned costs:
Equivalent Units
Whole Units Direct Materials (1) Conversion (1)
Inventory in process, August 1
Started and completed in August
Transferred to finished goods in August
Inventory in process, August 31
Total units to be assigned costs
Cost Information
Costs per equivalent unit:
Direct Materials Conversion
Total costs for August in Roasting Department $ $
Total equivalent units
Cost per equivalent unit (2) $ $
Costs assigned to production:
Direct Materials Conversion Total
Inventory in process, August 1 $
Costs incurred in August
Total costs accounted for by the Roasting Department $
Costs allocated to completed and partially completed units:
Inventory in process, August 1 balance $
To complete inventory in process, August 1 $ $
Cost of completed August 1 work in process $
Started and completed in August
Transferred to finished goods in August (3) $
Inventory in process, August 31 (4)
Total costs assigned by the Roasting Department $

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July). If required, round your answers to the nearest cent.

Increase or Decrease Amount
Change in direct materials cost per equivalent unit $
Change in conversion cost per equivalent unit

In: Accounting

Multiple choice questions. No need to explain. Question 21 Sandstrom Corporation has an extraordinary loss of...

Multiple choice questions. No need to explain.

Question 21

Sandstrom Corporation has an extraordinary loss of $50,000, an unusual gain of $35,000, and a tax rate of 40%. At what amount should Sandstrom report each item?

Extraordinary loss

Unusual gain

$(50,000)

$35,000

(50,000)

21,000

(30,000)

35,000

(30,000)

21,000

Question 22

The approach most companies use to provide information related to the components of other comprehensive income is a

second separate income statement.
combined income statement of comprehensive income.
separate column in the statement of changes in stockholders' equity.
footnote disclosure.

Question 23

The following information applied to Howe, Inc. for 2010:

Merchandise purchased for resale

$300,000

Freight-in

8,000

Freight-out

5,000

Purchase returns

2,000


What is ending inventory?

$300,000.
$303,000.
$306,000.
$311,000.

Question 24

The following information was derived from the 2010 accounting records of Perez Co.:

Perez's Goods

Perez 's Central Warehouse

Held by Consigness

Beginning inventory

$130,000

$ 14,000

Purchases

575,000

70,000

Freight-in

10,000

Transportation to consignees

5,000

Freight-out

30,000

8,000

Ending inventory

145,000

20,000


What is the cost of sales for 2010?

$570,000.
$600,000.
$634,000.
$639,000.

Question 25

The role of the Securities and Exchange Commission in the formulation of accounting principles can be best described as

consistently primary.
consistently secondary.
sometimes primary and sometimes secondary.
non-existent.

Question 26

The use of a Discounts Lost account implies that the recorded cost of a purchased inventory item is its

invoice price.
invoice price plus the purchase discount lost.
invoice price less the purchase discount taken.
invoice price less the purchase discount allowable whether taken or not.

Question 27

Trade discounts are

not recorded in the accounts; rather they are a means of computing a price.
used to avoid frequent changes in catalogues.
used to quote different prices for different quantities purchased.
all of the above.

Question 28

Under the cash basis of accounting, revenues are recorded

when they are earned and realized.
when they are earned and realizable.
when they are earned.
when they are realized.

Question 29

Under which section of the balance sheet is "cash restricted for plant expansion" reported?

Current assets.
Non-current assets.
Current liabilities.
Stockholders' equity.

In: Accounting

A dynamometer test lab currently has 45 computers with 20 printers. The computers cost $3,500 each...

A dynamometer test lab currently has 45 computers with 20 printers. The computers cost $3,500 each and the printers were $350 each when purchased 2 years ago. The market value of the computers is estimated at $750 each today and the printers $75 each today. It is expected that the current equipment will last another 4 years and have no salvage value at that time. Operating expenses are $350 for each computer and $150 for each printer per year.

A new networked system is being considered that would have 45 terminal with a cost of $2.500 each; 7 printers would be purchased at $1000 each. The life of the new system is 6 years with a salvage value of $500 for the terminals and $400 for the printers at the end of that time. Operating expenses for the networked system are $6,000 per year.

A) What are the sunk costs at this point? (5 points)

B) If the firm desires a 15% IRR, determine the best alternative. (20 points)

Show ALL work.

In: Accounting

Estimating Share Value Using the ROPI Model The following are forecasts of Abercrombie & Fitch's sales,...

Estimating Share Value Using the ROPI Model The following are forecasts of Abercrombie & Fitch's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 29, 2011. Refer to the information in the table to answer the following requirements. Reported Horizon Period (In millions) 2011 2012 2013 2014 2015 Terminal Period Sales $ 3,469 $ 3,989 $ 4,587 $ 5,275 $ 6,066 $ 6,187 NOPAT 152 319 367 422 485 495 NOA 1,032 1,173 1,349 1,551 1,784 1,820 Answer the following requirements assuming a discount rate (WACC) of 10%, a terminal period growth rate of 2%, common shares outstanding of 87.2 million, and net nonoperating obligations (NNO) of $(858) million. (Negative NNO reflects net nonoperating assests such as investments rather than net obligations) (a) Estimate the value of a share of Abercrombie & Fitch common stock using the residual operating income (ROPI) model as of January 29, 2011. Rounding instructions: Round answers to the nearest whole number unless noted otherwise. Use your rounded answers for subsequent calculations. Do not use negative signs with any of your answers. Reported Horizon Period (In millions) 2011 2012 2013 2014 2015 Terminal Period ROPI (NOPAT - [NOABeg × rw]) Answer 216 Answer 250 Answer 287 Answer 330 Answer 317 Discount factor [1 / (1 + rw)t ] (round 5 decimal places) Answer 0.90909 Answer 0.82645 Answer 0.75131 Answer 0.68301 Present value of horizon ROPI Answer 196 Answer 206 Answer 216 Answer 225 Cum present value of horizon ROPI Answer 842 Present value of terminal ROPI Answer 2,703 NOA Answer 1,032 Total firm value Answer 4,577 NNO Answer 858 Firm equity value Answer 3,719 Shares outstanding (millions) Answer 872 (round one decimal place) Stock price per share Answer 42.65 (round two d

In: Accounting

Krandolph Metals, Inc., is a manufacturer of aluminum cans for the beverage industry. Krandolph purchases aluminum...

Krandolph Metals, Inc., is a manufacturer of aluminum cans for the beverage industry. Krandolph

purchases aluminum and other raw materials from several vendors. The purchasing process at

Krandolph occurs as follows:

When inventory of any raw material seems low, a purchasing agent examines the records to

determine the vendor who supplied the last purchase of that raw material. The purchasing agent

prepares a three

copy PO and mails the top copy to the vendor. One copy is filed in the purchasing

department, and one copy is forwarded to the inventory control department (inventory record

keeping). Inventory control personnel update the inventory subsidiary ledger and file the PO by

number in the inventory control files.

When the goods arrive at the receiving dock, a receiving report is prepared from information on

the packing slip. One copy of the receiving report is filed in the receiving department, and one

copy is forwarded to purchasing so that the purchasing department is informed of the receipt of

goods.

The vendor mails an invoice for the raw materials directly to the accounts payable department.

When the invoice is received, accounts payable personnel prepare a cash disbursement voucher to

approve payment. The voucher is forwarded to the cash disbursements department. The accounts

payable department also updates the accounts payable subsidiary ledger and files the invoice by

invoice number.

Upon receiving the cash disbursement voucher, an employee in the cash disbursements department

prepares a two

copy check. The top copy of the check is mailed to the vendor, and the second copy

is forwarded to the general ledger department. The cash disbursement voucher is stamped “paid”

and returned to the accounts payable department. The voucher is filed with the invoice in the

accounts payable department.

The general ledger department records the check in the general ledger and returns the check copy

to the cash disbursements department, where it is filed.

2. Draw two BPDs to reflect the business processes at Krandolph. One BPD should depict the

purchasing processes, and the second BPD should depict the cash disbursements processes.

In: Accounting

20-3 20-08 Costs per Equivalent Unit The following information concerns production in the Baking Department for...

20-3 20-08

Costs per Equivalent Unit

The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production.

ACCOUNT Work in Process—Baking Department ACCOUNT NO.
Date Item Debit Credit Balance
Debit Credit
Mar. 1 Bal., 4,200 units, 1/3 completed 8,050
31 Direct materials, 75,600 units 128,520 136,570
31 Direct labor 34,530 171,100
31 Factory overhead 19,426 190,526
31 Goods finished, 76,500 units 183,530 6,996
31 Bal. ? units, 3/5 completed 6,996

a. Based on the above data, determine each cost listed below. Round "cost per equivalent unit" answers to the nearest cent.

1. Direct materials cost per equivalent unit $
2. Conversion cost per equivalent unit $
3. Cost of the beginning work in process completed during March $
4. Cost of units started and completed during March $
5. Cost of the ending work in process $

b. Assuming that the direct materials cost is the same for February and March, did the conversion cost per equivalent unit increase, decrease, or remain the same in March?

In: Accounting