Compare and contrast the federal income tax treatment of a net capital loss and a net operating loss.

Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $127,400 of manufacturing overhead for an estimated allocation base of $91,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:

Required:

1. Compute the predetermined overhead rate for the year.

2. Compute the amount of underapplied or overapplied overhead for the year.

3. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.

4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer.

5. Assume that the $37,000 ending balance in Work in Process includes $8,000 of direct materials. Given this assumption, supply the information missing below:

Thanks!

On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $83,220 in assets in exchange for its common stock to launch the business. On October 31, the company’s records show the following items and amounts.  

Also assume the following:

1. The owner’s initial investment consists of $37,380 cash and $45,840 in land in exchange for its common stock..
2. The company’s $17,200 equipment purchase is paid in cash.
3. The accounts payable balance of $7,810 consists of the $2,530 office supplies purchase and $5,280 in employee salaries yet to be paid.
4. The company’s rent, telephone, and miscellaneous expenses are paid in cash.
5. No cash has been collected on the $12,000 consulting fees earned.

Using the above information prepare an October 31 statement of cash flows for Ernst Consulting. (Cash outflows should be indicated by a minus sign.)

1. Hockley Brewing has produced a new craft lager beer that will be branded Hockley Classic Lager. The market for craft beer is about $20 million retail per year and the average retail price across all craft beer producers is $2.50. The following information applies to Hockley’s new craft lager beer.

Factory production costs                                                $1.05 / can

Beer ingredients                                                            $0.35 / can

Packaging                                                                     $0.20 / can

Advertising and promotion                                            $60,000

Channel listing fees                                                       $30,000

Hockley’s wholesale price to retailers                             $2.40 / can

(Hockley’s) manufacturer’s suggested retail price           $2.55 / can

a. What is Hockley’s unit contribution (measured in $ per can) and contribution margin (measured in percentage)?

b. What is the break-even point in cans? in dollars?

c. What is the necessary sales volume in cans to achieve a $150,000 (target) profit?

d. What will Hockley’s net profit be if 100,000 cans of the new lager are sold?

e. What will Hockley’s market share of craft beer be if they sell 100,000 cans? [Hint: to calculate the total number of cans sold in the market, use the total retail value of the market and industry average retail price given above.]

f. Their largest competitor is Mill Street Brewery whose Original Organic Lager has 2.5% market share of the craft beer market. Given Hockley’s market share calculated in part (e), what will Hockley’s relative market share (RMS) be for their Classic Lager?

g. The craft beer market is growing at 10% annually, higher than any other type of beer. With the RMS for Hockley Classic Lager calculated in part (f), at the end of their first year, where in Hockley’s portfolio will Classic Lager be positioned and what recommendation would follow?

h. Calculate the price elasticity of demand if they raise the MSRP from $2.55 to $2.75 and demand falls from 100,000 cans to 95,000 cans. Is demand for this product price elastic or inelastic?

Based on the following:

• The estimated purchase price for the equipment required to move the operation in-house would be $500,000. Additional net working capital to support production (in the form of cash used in Inventory, AR net of AP) would be needed in the amount of $25,000 per year starting in year 0 and through all 5 years of the project to support production.

• The current spending on this component (i.e. annual spend pool) is $875,000. The estimated cash flow savings of bringing the process in-house is 20% or annual savings of $175,000. This includes the additional labor and overhead costs required.

• Your company has access to a credit line and could borrow the funds at a rate of 6%.

• Finally, the equipment required is anticipated to have a somewhat short useful life, as a new wave of technology is on the horizon. Therefore, it is anticipated that the equipment will be sold after five years for $25,000. (i.e. the terminal value).

Your colleague from Sales is convinced that this capability would allow new revenue stream that could significantly offset operating expenses. He recommends savings that grow each year: 5-year project life, 10% discount rate, and a 10% compounded annual savings growth in years 2 through 5. In other words, instead of assuming savings stay flat, assume that they will grow by 10% in year 2, and then grow another 10% over year 2 in year 3, and so on.

Using the data presented above (and ignoring the extraneous information), for this profit and supply chain improvement project, calculate each of the following (where applicable): Show Calculations

o  Nominal Payback

o  Discounted Payback

o  Net Present Value

o  Internal Rate of Return

Mello Manufacturing Company is a diversified manufacturer that manufactures three products (Alpha, Beta, and Omega) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows:

The activity bases identified for each activity are as follows:

The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows:

Each product requires 40 minutes per unit of machine time.

Caldwell Home Appliances Inc. is estimating the activity cost associated with producing ovens and refrigerators. The indirect labor can be traced into four separate activity pools, based on time records provided by the employees. The budgeted activity cost and activity-base information are provided as follows:

The estimated activity-base usage and unit information for two product lines was determined as follows:

Orange County Chrome Company manufactures three chrome-plated products—automobile bumpers, valve covers, and wheels. These products are manufactured in two production departments (Stamping and Plating). The factory overhead for Orange County Chrome is $233,300.

The three products consume both machine hours and direct labor hours in the two production departments as follows:

Discuss the similarities and differences between the corporate and individual tax formulas.

Exercise 19-7 Income reporting under absorption costing and variable costing LO P2

[The following information applies to the questions displayed below.]

Oak Mart, a producer of solid oak tables, reports the following data from its second year of business.

1. Prepare the current-year income statement for the company using variable costing.

select one of the following types of businesses:

• Custom home builder
• Auto repair shop
• Accounting firm
• Lawn service company
• Television show production

Describe how your chosen business might use Managerial Accounting to support internal AND external Stakeholders.

The total equity of the business is P500, 000. Owner’s equity is P400, 000. Plant and Equipment is 45% of total Assets, the total current assets is

Select one:

a. P225, 000

b. P220, 000

c. P275, 000

d. P100,000

Mr. A has the following revenue transactions during April of the current year: Rendered services: Cash, P5, 000 & on credit, P3, 500; received P5000 advance payment for services to be rendered in May. The amount of income to be recognized in April is

Select one:

a. P5,000

b. P13,500

c. P10,000

d. P8,500

Odd-man out: Select the word that does not belong to the group.

Select one:

a. Balance Sheet

b. Statement of Cash Flow

c. Worksheet

d. Income Statement

The company's performance for a given accounting period is measured and evaluated through the income statement.

Select one:

True

False

Odd-man out: Select the word that does not belong to the group.

Select one:

a. Factory Insurance

b. Depreciation of Delivery Equipment

c. Salaries of factory supervisor

d. Factory Supplies

QuickBooks Project

Prepare a Trial Balance for a Company for Jan. given the following information

Here is a list of the accounts the company uses:

How does one determine whether a warranty constitutes a separate performance obligation within a contract?

Please be as thorough and as descriptive as possible.

Outsourcing business function is a vital part, though outsourcing social media

marketing\ digital marketing, is a very easy task to learn. The companies outsource it

without thinking how to grasp the knowledge themselves. What measures can be taken

to make it more cost-effective in this regard?

in simple words: why outsourcing social media marketing/digital marketing is bad for businesses?? and why should businesses need to treat social media marketing as a core business process?