Dunnes Stores has two service department, Advertising and Administration, and two operating departments, Hardware and Automotive. Sales, COGS, and direct expenses are given below. Complete the following table, including allocation of $220,000 of indirect costs. Indirect costs are allocated on the basis of square footage:Advertising Department:750 square feet, Administration Department:1,500 square feet, Hardware Department:3,000 square feet, Automotive Department:9,750 square feet

Use the table above to allocate the service department expenses to the operating departments. Advertising Costs are allocated on the basis of number of advertisements in each department. Hardware had 60 ads and Automotive had 90. Administrative costs are allocated on the basis of sales. Complete the following Departmental Income Statement

Complete the following Income Statement showing Departmental Contribution to Overhead

The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production department factory overhead rate method. The following factory overhead was budgeted for Firebolt:

Direct labor hours were estimated as follows:

In addition, the direct labor hours (dlh) used to produce a unit of each product in each department were determined from engineering records, as follows:

Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter:

1. As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances:

2. Actual sales for December and budgeted sales for the next four months are as follows:

3. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales.

4. The company’s gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.)

5. Monthly expenses are budgeted as follows: salaries and wages, $37,000 per month: advertising, $59,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $45,620 for the quarter.

6. Each month’s ending inventory should equal 25% of the following month’s cost of goods sold.

7. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid in the following month.

8. During February, the company will purchase a new copy machine for $3,200 cash. During March, other equipment will be purchased for cash at a cost of $81,000.

9. During January, the company will declare and pay $45,000 in cash dividends.

10. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

Required:

Using the data above, complete the following statements and schedules for the first quarter:

1. Schedule of expected cash collections:

2-a. Merchandise purchases budget:

2-b. Schedule of expected cash disbursements for merchandise purchases:

3. Cash budget:

4. Prepare an absorption costing income statement for the quarter ending March 31.

5. Prepare a balance sheet as of March 31.

blake closed his business on april 1 2018 he had no carrryovers losses and all assets were fully depreciated if blake elects to use the office in home simplified method what amount of his schedule c net profit or loss

Now assume that Temp Force's dividend is expected to experience nonconstant growth of 30% from year 0 to Year 1, 25% from Year 1 to Year 2, and 15% from Year 2 to Year 3. After Year 3, dividends will grow at a constant rate of 6%. What is the stocks intrinsic value under these conditions? What are the expected dividend yield and capital gains yield during the first year? What are the expected dividend yield and capital gains yield during the fourth year (from Year 3 to Year 4)?

Now why is it important from an accounting perspective to classify a lease into operating or capital lease? What is the criteria to classify the lease into operating and capital lease ? Do you think the lessee tends to prefer an operating lease or a capital lease? Why?

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.60 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below: Activity Cost Pool Activity Measure Activity for the Year Cleaning carpets Square feet cleaned (00s) 7,500 hundred square feet Travel to jobs Miles driven 394,000 miles Job support Number of jobs 1,800 jobs Other (organization-sustaining costs and idle capacity costs) None Not applicable The total cost of operating the company for the year is $363,000 which includes the following costs: Wages $ 138,000 Cleaning supplies 28,000 Cleaning equipment depreciation 15,000 Vehicle expenses 40,000 Office expenses 68,000 President’s compensation 74,000 Total cost $ 363,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Carpets Travel to Jobs Job Support Other Total Wages 77 % 11 % 0 % 12 % 100 % Cleaning supplies 100 % 0 % 0 % 0 % 100 % Cleaning equipment depreciation 75 % 0 % 0 % 25 % 100 % Vehicle expenses 0 % 84 % 0 % 16 % 100 % Office expenses 0 % 0 % 56 % 44 % 100 % President’s compensation 0 % 0 % 31 % 69 % 100 %

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 800 square foot carpet-cleaning job at the Flying N ranch—a 53-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N ranch was $188.80 (800 square feet @ $23.60 per hundred square feet). Calculate the customer margin earned on this job.

Sales revenue                                                               $5,625,000

Variable manufacturing expense                  1,875,000

Variable selling and admin expense                 625,000

Fixed manufacturing expense                      1,000,500

Fixed selling and administrative expense        562,000

Total Expenses                                                             (4,062,500)

Net operating income                                                    $ 1,562,500

Company produced and sold 625,000 units of products.

Requirements:

1. Compute Break-even point in unit and explain what that number means.
2. Compute Break-even point in dollar sales volume and explain what that number means.
3. If company want to have a pretax profit of $2,000,000, how much they should sell in dollar amount? Explain that number

CREATE A  Statement of Earnings, Statement of Retained Earnings, Statement of Financial Position, Journal Entries for January 2019:

Post-Closing Trial Balance

December 31, 2018

Business Activities for January, 2019

1. On January 4, 2019, Linda paid the outstanding accounts payable balance from December 31, 2018.
2. On January 6, 2019, Linda withdrew $2,000 in the form of a dividend.
3. Additional supplies were purchased, on account, on January 10 for $280. At January 31 there were $1,200 supplies left on hand.
4. A 12-month insurance policy was purchased on June 1, 2018, for $1,800. Linda recorded appropriate adjustments for 2018 year-end statements.
5. Linda paid 3 months rent, in advance, on December 1, 2018, to obtain a discount.  She appropriately recorded the use of the rent for December in her 2018 financial statements.
6. On January 12 Linda paid $190 for cell services in December which she had appropriately accrued on December 31, 2018.  Linda has not received the invoice for cell use in January, 2019, yet but she estimates it will be $175.  She will not pay it until later in February.  Linda uses a Utilities Expense account to record cell costs.
7. Linda charges $100 per person for each tour, which includes a full day tour, lunch, and admission to 2 museums.  If a group (greater than 10 people) books a tour they get a 10% discount and are given 30 days after the tour to pay.  
8. Two groups who had taken tours in December paid their outstanding accounts receivable balances, a total of $3,960, on January 18, 2019.
9. During January a total of 117 individuals paid cash for tours.  
10. Also, in January Linda ran tours for 2 groups. There were 25 people in each group. One group paid on January 29 and Linda expects the other group to pay their outstanding account in February. Both groups were given the 10% discount.   
11. Some groups request special tours that they pay for in advance.  Special tours do not receive any discounts.  Linda had received an advance payment of $1,900 in December, 2018.  On January 8 Linda ran the special tour.
12. In addition, on January 25, one company paid cash and booked a special tour for 28 of their employees, paying $130 per person. The tour will take place on February 12.
13. New office furniture was purchased on July 1, 2018, when Linda moved into her current office space.  The furniture is expected to last for 5 years and have a residual value of $500.  Linda uses the straight-line method to record depreciation.
14. Linda videos all the tours and emails a copy to customers so they can remember how much fun they had.  Linda purchased her video equipment on January 1, 2018, for $8,000 and depreciated it over 2 years using straight-line depreciation.  On January 1, 2019, Linda sold the old equipment for $3,000 cash.
15. Also, on January 1, 2019, Linda purchased new video equipment for $6,000 cash.  She started using the new equipment immediately.  It will be depreciated on a straight-line basis over 2 years and has an expected residual value of $1,200.
16. Linda uses special double-decker tour buses, which she rents, to conduct the tours.  She paid $7,700 cash for bus rentals on January 25 but she still owes the bus company $1,900 with regards to her January invoice.  She plans to pay that amount in February.
17. Linda tells you that the company records monthly adjusting entries and that her tax rate is 25%.   She will pay her income taxes on her January income in February 2019.

The Elberta Fruit Farm of Ontario always has hired transient workers to pick its annual cherry crop. Janessa Wright, the farm manager, just received information on a cherry picking machine that is being purchased by many fruit farms. The machine is a motorized device that shakes the cherry tree, causing the cherries to fall onto plastic tarps that funnel the cherries into bins. Ms. Wright has gathered the following information to decide whether a cherry picker would be a profitable investment for the Elberta Fruit Farm:

1. Currently, the farm is paying an average of $160,000 per year to transient workers to pick the cherries.
2. The cherry picker would cost $152,000. It would be depreciated using the straight-line method and it would have no salvage value at the end of its 10-year useful life.
3. Annual out-of-pocket costs associated with the cherry picker would be: cost of an operator and an assistant, $92,000; insurance, $4,000; fuel, $11,000; and a maintenance contract, $14,000.

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor using tables.

Required:

1. Determine the annual savings in cash operating costs that would be realized if the cherry picker were purchased.

2a. Compute the simple rate of return expected from the cherry picker.

2b. Would the cherry picker be purchased if Elberta Fruit Farm’s required rate of return is 21%?

3a. Compute the payback period on the cherry picker.

3b. The Elberta Fruit Farm will not purchase equipment unless it has a payback period of four years or less. Would the cherry picker be purchased?

4a. Compute the internal rate of return promised by the cherry picker.

4b. Based on this computation, does it appear that the simple rate of return is an accurate guide in investment decisions?

Income Statement For the Year ended December 31, 20X5 Income: Sales 682,000 Dividends 22,000 Interest 29,000 Gain on sale of PPE (Property Plant & Equipment) 19,000 Total income 752,000 Expenses: Cost of goods sold 360,000 Depreciation 43,000 Wages 134,000 Interest 38,000 Other expenses 41,000 Total expenses 616,000 Net income before income tax expense 136,000 Income tax expense 36,000 Net income after income tax expense 100,000 Additional information: PPE purchases during 20X5 were $735,000 Issuance of mortgage payable during 20X5 $226,000 All prepaid expenses at the beginning of the year expired during 20X5. $5,000 was accrued for operating expenses at year end. Bernie's Ltd. Balance sheet As at December 31, 20X5 20X4 Assets Cash 57,000 101,000 Accounts receivable 224,000 192,000 Inventory 323,000 330,000 Interest receivable 8,000 3,000 Prepaids 18,000 17,000 Long term receivable from Dennis's Ltd. 26,000 - Property, Plant and Equipment(PPE), net 1,087,000 525,000 Total 1,743,000 1,168,000 Liabilities Accounts payable 220,000 137,000 Accrued liabilities 5,000 7,000 Wages payable 6,000 12,000 Mortgage payable 384,000 185,000 Shareholder's Equity Common shares 861,000 619,000 Retained earnings 267,000 208,000 Total 1,743,000 1,168,000 What is the total cash outflow from investing activities as it appears on the cash flow statement when using the indirect method (Pick one of the 5 options)? The total for investing activities is actually a net cash inflow. ($735,000) ($586,000) ($612,000) ($149,000)

Question 2

“The customer is always right.” Do you agree or disagree with this statement? Support your answer with examples of how quality should be defined and how the Kano model links to customer expectations. This answer must be in your own words—significant cut and paste from the text or other sources is not acceptable.

Beginning work in process units 800 Units started during the month 16,000 Units finished during the month 15,000 Cost of beginning inventory Materials 1,296 conversions 2,416 cost of added inventory materials 47,076 conversion 497,213 Beginning units completed to materials 60% to conversion 10% Ending units completed to materials 60% to conversion 70% Determine the average cost using a) weighted average b) FIFO

Carter Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:

o Sales are budgeted at $380,000 for November, $390,000 for December, and $400,000 for January.
o Collections are expected to be 70% in the month of sale, 27% in the month following the sale, and 3% uncollectible.
o The cost of goods sold is 65% of sales.
o The company desires to have an ending merchandise inventory equal to 80% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
o Other monthly expenses to be paid in cash are $22,000.
o Monthly depreciation is $20,000.
o Ignore taxes.

The cash balance at the end of December would be:   

Mac’s Motel opened for business on May 1, 2017. Its trial balance before adjustment on May 31 is as follows. MAC’S MOTEL Trial Balance May 31, 2017 Account Number Debit Credit 101 Cash $ 3,500 126 Supplies 2,080 130 Prepaid Insurance 2,400 140 Land 12,000 141 Buildings 60,000 149 Equipment 15,000 201 Accounts Payable $ 4,800 208 Unearned Rent Revenue 3,300 275 Mortgage Payable 40,000 301 Owner’s Capital 41,380 429 Rent Revenue 10,300 610 Advertising Expense 600 726 Salaries and Wages Expense 3,300 732 Utilities Expense 900 $99,780 $99,780 In addition to those accounts listed on the trial balance, the chart of accounts for Mac’s Motel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation—Buildings, No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense. Other data: 1. Prepaid insurance is a 1-year policy starting May 1, 2017. 2. A count of supplies shows $750 of unused supplies on May 31. 3. Annual depreciation is $3,000 on the buildings and $1,500 on equipment. 4. The mortgage interest rate is 12%. (The mortgage was taken out on May 1.) 5. Two-thirds of the unearned rent revenue has been earned. 6. Salaries of $750 are accrued and unpaid at May 31. Instructions (a) Journalize the adjusting entries on May 31. (b) Prepare a ledger using the three-column form of account. Enter the trial balance amounts and post the adjusting entries. (Use J1 as the posting reference.) (c) Prepare an adjusted trial balance on May 31. (d) Prepare an income statement and an owner’s equity statement for the month of May and a balance sheet at May 31.

Instructions (a) Journalize the adjusting entries on May 31. (b) Prepare a ledger using the three-column form of account. Enter the trial balance amounts and post the adjusting entries. (Use J1 as the posting reference.) (c) Prepare an adjusted trial balance on May 31. (d) Prepare an income statement and an owner’s equity statement for the month of May and a balance sheet at May 31.