You are the owner of a lawn service company (LawnCo) which provides grounds and maintenance services to a range of corporate customers. Customers are expected to pay on the first of each month, in advance of receiving services. One of your corporate customers is an eldercare facility whose grounds you have maintained for many years. The customer has not paid for the last three months of services (from Oct.–Dec. 2020); nevertheless, to maintain a positive relationship, your company continued to provide mowing and weed control services to the eldercare facility during that time. Your company ceased providing services in January 2021 and found out in that same month that the eldercare facility filed for bankruptcy in September. Your company now believes that collection of the missed payments is extremely unlikely.  Your company has already issued financial statements to lenders (for the period ending 12/31/20) which reflected revenue and a corresponding account receivable related to this customer of $10,000 per month for services provided to this customer. Those financial statements also reflected the company’s standard allowance (reserve) amount on receivables, of 4% of sales. In total, your company’s average monthly sales amount to $500,000.

Required:

Your paper should be structured in the format of an issues memo.

1. Evaluate whether receipt of this information indicates you have a change in accounting estimate or whether the customer’s bankruptcy should result in this event being considered an error in previously issued financial statements.

2. Next, describe the accounting treatment (as required by the Codification) for each alternative, then support your explanations with draft journal entries.

3. Finally, briefly state which treatment appears to be more appropriate given the circumstances. If you must make any assumptions in reaching this conclusion, state these.

An inexperienced accountant prepared this condensed income statement for Cullumber Company, a retail firm that has been in business for a number of years.

As an experienced, knowledgeable accountant, you review the statement and determine the following facts.

Prepare a correct detailed multiple-step income statement. Assume a 25% tax rate. (List other revenues before other expenses. Round answers to 0 decimal places, e.g. 5,125.)

1. Product Decisions Under Bottlenecked Operations

   Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass that it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a A condition that occurs when product demand exceeds production capacity.production bottleneck. Total fixed costs are $200,000 for the company as a whole. In addition, the following information is available about the three products:

   	Large		Medium		Small
   Unit selling price	$94		$281		$232
   Unit variable cost	74		230		204
   Unit contribution margin	$ 20		$ 51		$ 28
   Autoclave hours per unit	2		6		4
   Total process hours per unit	6		12		8
   Budgeted units of production	4,500		4,500		4,500

   a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production.

   	Large	Medium	Small	Total
   Units produced
   Revenues	$	$	$	$
   Variable costs
   Contribution margin	$	$	$	$
   Fixed costs
   Income from operations				$

   b. Prepare an analysis showing which product is the most profitable per bottleneck hour. Round the "Unit contribution margin per production bottleneck hour" amounts to the nearest cent.

   	Large	Medium	Small
   Contribution margin	$	$	$
   Autoclave hours per unit
   Unit contribution margin per production bottleneck hour	$	$	$

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Described below are three independent and unrelated situations involving accounting changes. Each change occurs during 2018 before any adjusting entries or closing entries are prepared.

1. On December 30, 2014, Rival Industries acquired its office building at a cost of $9,600,000. It has been depreciated on a straight-line basis assuming a useful life of 30 years and no residual value. Early in 2018, the estimate of useful life was revised to 18 years in total with no change in residual value.
2. At the beginning of 2014, the Hoffman Group purchased office equipment at a cost of $576,000. Its useful life was estimated to be 8 years with no residual value. The equipment has been depreciated by the sum-of-the-years’-digits method. On January 1, 2018, the company changed to the straight-line method.
3. At the beginning of 2018, Jantzen Specialties, which uses the sum-of-the-years’-digits method, changed to the straight-line method for newly acquired buildings and equipment. The change increased current year net income by $565,000.

Required:

1. Identify the type of change.
2. Prepare any journal entry necessary as a direct result of the change as well as any adjusting entry for 2018 related to the situation described. (Ignore income tax effects.)

Smithson Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company provided the following estimates at the beginning of the year:

During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobs—Job D-75 and Job C-100. It provided the following information related to those two jobs:

  
Smithson had no overapplied or underapplied manufacturing overhead during the year.

Assume Smithson uses departmental overhead rates based on machine-hours.

2-a. Compute the predetermined departmental overhead rates. (Round your answer to 2 decimal places.)

2-b. Compute the total manufacturing costs assigned to Job D-75 and Job C-100. (Round your intermediate calculations to 2 decimal places.)

2-c. If Smithson establishes bid prices that are 120% of total manufacturing costs, what bid price would it have established for Job D-75 and Job C-100? (Round your intermediate calculations to 2 decimal places.)

2-d. What is Smithson’s cost of goods sold for the year? (Round your intermediate calculations to 2 decimal places.)

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 $120,400 of manufacturing overhead for an estimated allocation base of $86,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:

Purchase of raw materials $ 139,000

Direct labor cost $ 82,000

Manufacturing overhead costs:

Indirect labor $ 129,200

Property taxes $ 9,000

Depreciation of equipment $ 16,000

Maintenance $ 12,000

Insurance $ 11,700

Rent, building $ 39,000

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 $8,400 of direct materials. Given this assumption, supply the information missing below:

Prepare an income statement using Absorption Cost and other using Variable costs.

D's company produce donuts.

The variable cost of making each box of donuts is $ 0.40.
The Fixed Production Costs are $ 65,000.
Administrative and variable sales expenses are $ 0.20 per box.
The administrative and sales Fixed Costs are $ 55,000.

During 2018 the company produces 500,000 and sells 450,000 boxes of donuts to $ 1. The company has the capacity to produce 600,000 boxes of donuts. The company uses a calendar year and this is its first year of operations.

1. Prepare the Income Statement for full costs (absorption cost) and for variable costs. There is no tax rate.

2. A school wishes to raise funds for the graduating class. They extend an offer to buy 5,000 boxes per month for 10 months at $ 0.60. If the company accepts, this sale will not affect normal sales. The company must incur all variable costs, but not fixed costs. Determine if you accept the offer or reject it. Present your computations.

Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $70. Wesley expects the following unit sales:

Wesley’s ending finished goods inventory policy is 35 percent of the next month’s sales.
      Suppose each handisaw takes approximately .45 hours to manufacture, and Wesley pays an average labor wage of $16.50 per hour.
      Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $7.00 each. The company has an ending raw materials inventory policy of 10 percent of the following month’s production requirements. Materials other than the housing unit total $4.00 per handisaw.
      Manufacturing overhead for this product includes $66,000 annual fixed overhead (based on production of 24,000 units) and $.80 per unit variable manufacturing overhead. Wesley’s selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $16,000 per month.

Required:
2. Compute the budgeted selling and administrative expenses.

3. Complete the budgeted income statement for the handisaw product for the first quarter. (Round direct material, direct labor and overhead costs per unit to 2 decimal places. Round final answers to the nearest dollar

amount.)

The following are several transactions of Ardery Company that occurred during the current year and were recorded in permanent (that is, balance sheet) accounts unless indicated otherwise:

The following information also is available:

Required:

Prepare journal entries to record whatever adjustments are necessary to bring the accounts up to date on December 31. Additional Instruction

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PAGE 1

GENERAL JOURNAL

Score: 178/226

You have an opportunity to buy either shares of common stock or shares of convertible preferred stock, for the same company. The Preferred stock is convertible to a set number of shares of common stock. All other things equal, would you consider buying the convertible preferred stock? What do you see as possible advantages to buying the convertible preferred stock?

Danner Company expects to have a cash balance of $53,100 on January 1, 2020. Relevant monthly budget data for the first 2 months of 2020 are as follows.

Sales of marketable securities in January are expected to realize $14,160 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $29,500. The company wants to maintain a minimum monthly cash balance of $23,600.

Prepare a cash budget for January and February.

Sales price $2.00 per unit Variable costs $0.80 per unit Fixed costs $400,000.00 per month 1. a. What number must Balance sell to break even? 2. b. What do the sales have to be to make an operating profit of $100,000.00? 3. c. Balance has just learned that the variable costs will increase to $1.05, but the fixed costs can be reduced to $380,000.00. What will the new selling price needed to be to maintain the target volume in sales dollars as recorded in b.? Assume that the company plans to sell 500,000 units per month. Consider requirements d., e. and f. independently of each other Assume that the company plans to sell 500,000 units per month. Consider requirements d., e. and f. independently of each other d. What will be the operating profit? e. Suppose that fixed costs are 10.00% lower than projected and variable costs per unit are 10.00% higher than projected. What impact will these cost changes have on operating profit?

Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.)

Required:

a. Assume that only one product is being sold in each of the four following case situations:

b. Assume that more than one product is being sold in each of the four following case situations:

(For all requirements, Loss amounts should be indicated by a minus sign.)

Assume that only one product is being sold in each of the four following case situations:

disscuss the factor that are likely to influence the desired level of cash a company