Questions
QUESTION TWO Use ONE MAIN accounting concept from the framework of accounting to provide acceptable solutions...

QUESTION TWO

  1. Use ONE MAIN accounting concept from the framework of accounting to provide acceptable solutions to the following accounting problems
  1. The accountant is not sure as to whether to include cash received from a transaction in the income statement or the cash book
  1. The managers wish to assess the effectiveness of its standard costing system
  1. The directors are doubting the professional acumen of the staff in the valuation department of the firm
  1. It is not clear whether to include some assets in the income statement or the statement of financial position
  1. The accountant of a cash-based business wishes to save on cost by relying solely on the cash book and ignoring other ledger accounts                                                               [10 Marks]
  1. Accounting is increasingly becoming irrelevant in modern business practice and business schools should shift focus to other more useful areas of management processes. Do you agree with this sentiment? Elaborate [4 Marks]

c) Evaluate the accounting standard setting process used by the International Accounting Standards Board                                                                                                                                   [6 Marks]

In: Accounting

Ranking Investment Proposals: Payback Period, Accounting Rate of Return, and Net Present Value Presented is information...

Ranking Investment Proposals: Payback Period, Accounting Rate of Return, and Net Present Value
Presented is information pertaining to the cash flows of three mutually exclusive investment proposals:

Proposal X Proposal Y Proposal Z
Initial investment $98,000 $98,000 $98,000
Cash flow from operations
Year 1 90,000 49,000 98,000
Year 2 8,000 49,000
Year 3 49,000 49,000
Disinvestment 0 0 0
Life (years) 3 years 3 years 1 year

(a) Select the best investment proposal using the payback period, the accounting rate of return on initial investment, and the net present value criteria. Assume that the organization's cost of capital is 10 percent.

  • Round accounting rate of return four decimal places.

  • Round net present value to the nearest whole number.

  • Use negative signs with your answers, when appropriate.

Proposal X Proposal Y Proposal Z Best proposal
Payback period (years) Answer Answer Answer AnswerXYZX,YX,ZY,Z
Accounting rate of return Answer Answer Answer AnswerXYZX,YX,ZY,Z
Net present value Answer Answer Answer AnswerXYZX,YX,ZY,Z

(b) Factors explaining the differences in rankings include all of the following except:

Net present value considers the timing of cash flows while payback considers only total cash flows.

The net present value method considers the cost of capital while the payback method does not discount future cash flows.

The accounting rate of return considers profitability while payback only considers the time required to recover the investment.

While the accounting rate of return explicitly considers the cost of the asset as part of annual depreciation the net present value method considers the cost of the asset as part of the initial investment.

** JUST NEED THE ACCOUNTING RATE OF RETURN - IT IS NOT 50%

In: Accounting

Cloud Productivity Inc. uses flexible budgets that are based on the following data: Sales commissions 15%...

Cloud Productivity Inc. uses flexible budgets that are based on the following data:

Sales commissions 15% of sales
Advertising expense 18% of sales
Miscellaneous administrative expense $5,500 per month plus 12% of sales
Office salaries expense $30,000 per month
Customer support expenses $13,000 per month plus 20% of sales
Research and development expense $30,000 per month

Prepare a flexible selling and administrative expenses budget for March for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.)

Cloud Productivity Inc.
Flexible Selling and Administrative Expenses Budget
For the Month Ending March 31
Total sales $400000 $500000 $600000
Variable cost:
$ $ $
Total variable cost $ $ $
Fixed cost:
$ $ $
Total fixed cost $ $ $
Total selling and administrative expenses $ $ $

Please show work for each step.

In: Accounting

Schedule of Cash Receipts Rosita Flores owns Rosita's Mexican Restaurant in Tempe, Arizona. Rosita's is an...

Schedule of Cash Receipts

Rosita Flores owns Rosita's Mexican Restaurant in Tempe, Arizona. Rosita's is an affordable restaurant near campus and several hotels. Rosita accepts cash and checks. Checks are deposited immediately. The bank charges $0.60 per check; the amount per check averages $75. “Bad” checks that Rosita cannot collect make up 4 percent of check revenue.

During a typical month, Rosita's has sales of $49,000. About 80 percent are cash sales. Estimated sales for the next three months are as follows:

April $32,000
May 49,000
June 59,000

Required:

Prepare a schedule of cash receipts for May and June. Round your intermediate computations and final answers to the nearest whole dollar.

Rosita's Mexican Restaurant
Schedule of Cash Receipts
For the Months of May and June
May June
Cash sales: $ $
Checks
Total $ $

In: Accounting

A and B are equal partners in a personal services partnership. Each partner acquired her partnership...

A and B are equal partners in a personal services partnership. Each partner acquired her partnership interest for cash several years ago. None of the partnership’s assets is Section 704(c) property. The partnership has the following balance sheet:

Assets                                                                         Liabilities and Partners’ Capital

                        A.B.                 F.M.V.                                                 A.B.*               F.M.V.

Cash                $13,000           $12,000                       Liabilities:                               $2,000

Capital Assets:                                                                        Capital:

Collectibles     1,000               3,000                           A                      $10,000           15,000

Other               6,000               2,000                           B                      10,000             15,000

Subtotal          7,000               5,000                                                                                      

Receivables     0                      14,000                                                                                    

Total                $20,000           $32,000                                               $20,000           $32,000

Consider the tax consequences to B on her sale in each of the following alternative situations:

  1. B sells her interest for $15,000 cash
  2. B sells her interest for $16,000 cash and under the partnership agreement all gain from the sale of the collectibles is allocated to B
  3. Same as (a), above, except that the collectibles have a basis of $3,000 and a fair market value of $1,000, and the other capital asset has a basis of $4,000 and a fair market value of $4,000.

In: Accounting

Question: After graduation, you head out to Reno and take a job with a casino as...

Question:

After graduation, you head out to Reno and take a job with a casino as an accountant because you’re totes swol. You expected the accounting to be easy, but you come to find out that there are a

great deal of specifics that you had never expected to encounter. What do you do with customer comps, casino chips, slot machines which are leased to the casino by outside parties, and the major jackpots that may get awarded? You’re totally lost and need to make a short report describing the details of casino accounting.


This is a question for the minicase in my Intermediate Accounting class. Please help me answer this.

In: Accounting

Statement of cost of goods manufactured for a manufacturing company Cost data for Johnstone Manufacturing Company...

Statement of cost of goods manufactured for a manufacturing company Cost data for Johnstone Manufacturing Company for the month ended March 31 are as follows: Inventories March 1 March 31 Materials $236,400 $217,370 Work in process 490,700 574,550 Finished goods 659,900 693,310 Direct labor $3,940,000 Materials purchased during March 3,001,370 Factory overhead incurred during March: Indirect labor 360,220 Machinery depreciation 236,400 Heat, light, and power 197,000 Supplies 39,280 Property taxes 33,770 Miscellaneous costs 51,450 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Prepare a cost of goods manufactured statement for March. Round your answers to the nearest dollar. Johnstone Manufacturing Company Statement of Cost of Goods Manufactured For the Month Ended March 31 $ Direct materials: $ $ $ Factory overhead: $ Total factory overhead Total manufacturing costs incurred during March Total manufacturing costs $ Cost of goods manufactured $ Determine the cost of goods sold for March. Round your answer to the nearest dollar.

In: Accounting

At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for...

At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

Cash balance, September 1 (from a summer job) $8,260
Purchase season football tickets in September 110
Additional entertainment for each month 290
Pay fall semester tuition in September 4,500
Pay rent at the beginning of each month 400
Pay for food each month 220
Pay apartment deposit on September 2 (to be returned December 15) 600
Part-time job earnings each month (net of taxes) 1,020

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign.

Priscilla Wescott
Cash Budget
For the Four Months Ending December 31
September October November December
Estimated cash receipts from:
$ $ $ $
Total cash receipts $ $ $ $
Less estimated cash payments for:
$
$ $ $
Total cash payments $ $ $ $
Cash increase (decrease) $ $ $ $
Cash balance at end of month $ $ $ $

b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?

c. What are the budget implications for Priscilla Wescott?

Priscilla can see that her present plan (will provide/will not provide?) sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $________? (over/short?) at the end of December, with no time left to adjust.

In: Accounting

Please prepare the following A. An entry for the following transactions of Elirene Mosquera Automobile Shop...

Please prepare the following

A. An entry for the following transactions of Elirene Mosquera Automobile Shop for the month of October, 2020:

B. Prepare trial balance, income statement and balance sheet.

October 1 Elirene Mosquera invested P420,000 in the business.

4 Purchased shop supplies for cash, P3,000.

6 Purchased additional supplies, P3,000, and shop equipment, P2,500 on credit from Rio Feliciano Trading.

10 Repaired the cargo truck of Jet payapag, P5,600 and collected P3,200.

11 Paid Rio Feliciano Trading, P1,200 as partial settlement of the account due to it.

14 Repaired the stare car of Maileen Flores on credit, P12,000.

19 Paid 1/2 of the amount still due to Rio Feliciano Trading.

20 Bought additional supplies from Mahilom Trading, P10,000 in cash.

25 Rendered service to Erika Bernasol on credit amounting to P1,300.

27 Paid water bill for the month, P2,100.

29 Collected P500 from Erika Bernasol as partial settlement of the account.

30 Paid the remaining balance owed to Rio Feliciano.

31 Paid telephone bill for the month amounting to P3,000.

In: Accounting

Project L costs $35,000, its expected cash inflows are $13,000 per year for 11 years, and...

Project L costs $35,000, its expected cash inflows are $13,000 per year for 11 years, and its WACC is 14%. What is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.

Project L costs $65,631.23, its expected cash inflows are $13,000 per year for 11 years, and its WACC is 10%. What is the project's IRR? Round your answer to two decimal places.

Project L costs $75,000, its expected cash inflows are $9,000 per year for 8 years, and its WACC is 13%. What is the project's MIRR? Round your answer to two decimal places. Do not round your intermediate calculations.

Project L costs $60,000, its expected cash inflows are $15,000 per year for 9 years, and its WACC is 11%. What is the project's payback? Round your answer to two decimal places.

Project L costs $30,000, its expected cash inflows are $8,000 per year for 8 years, and its WACC is 10%. What is the project's discounted payback? Round your answer to two decimal places.

In: Accounting

Dividends on Preferred and Common Stock Pecan Theatre Inc. owns and operates movie theaters throughout Florida...

  1. Dividends on Preferred and Common Stock

    Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $48,000; Year 2, $96,000; Year 3, $216,000; Year 4, $264,000; Year 5, $348,000; and Year 6, $432,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 30,000 shares of cumulative preferred 4% stock, $100 par, and 100,000 shares of common stock, $5 par.

    Required:

    1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".

    Preferred Dividends Common Dividends

    Year
    Total
    Dividends

    Total

    Per Share

    Total

    Per Share
    Year 1 $   48,000 $ $ $ $
    Year 2 96,000
    Year 3 216,000
    Year 4 264,000
    Year 5 348,000
    Year 6 432,000
    $ $

    2. Determine the average annual dividend per share for each class of stock for the six-year period. If required, round your answers to two decimal places.

    Average annual dividend for preferred $ per share
    Average annual dividend for common $ per share

    3. Assuming a market price per share of $204 for the preferred stock and $9 for the common stock, determine the average annual percentage return on initial shareholders' investment, based on the average annual dividend per share for preferred stock and for common stock.

    Round your answers to two decimal places.

    Preferred stock %
    Common stock %

Check My Work

In: Accounting

Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common....

Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2018, 300 shares of preferred stock and 4,000 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2018:

March 1 Issue 1,100 shares of common stock for $42 per share.
May 15 Purchase 400 shares of treasury stock for $35 per share.
July 10 Reissue 200 shares of treasury stock purchased on May 15 for $40 per share.
October 15 Issue 200 shares of preferred stock for $45 per share.
December 1 Declare a cash dividend on both common and preferred stock of $0.50 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.)
December 31 Pay the cash dividends declared on December 1.

Donnie Hilfiger has the following beginning balances in its stockholders’ equity accounts on January 1, 2018: Preferred Stock, $300; Common Stock, $40; Additional Paid-in Capital, $76,000; and Retained Earnings, $30,500. Net income for the year ended December 31, 2018, is $10,800.

Required:

1. Record each of these transactions.

(I need the most help on the Dividends and Dividends payable amounts from december 1st and december 30th)

In: Accounting

6a: Midgley Corporation makes a product whose direct labor standards are 1.9 hours per unit and...

6a:

Midgley Corporation makes a product whose direct labor standards are 1.9 hours per unit and $20.00 per hour. In April, the company produced 6,000 units using 10,930 direct labor-hours. The actual direct labor cost was $209,310.

The labor efficiency variance for April is:

$9,400 U

$9,400 F

$9,319 F

$9,428 U

6b:

Midgley Corporation makes a product whose direct labor standards are 0.9 hours per unit and $10.00 per hour. In April, the company produced 5,000 units using 4,260 direct labor-hours. The actual direct labor cost was $41,110.

The labor rate variance for April is:

$1,625 U

$1,490 F

$1,625 F

$1,490 U

6c:

Blaster, Inc., manufactures portable radios. Each radio requires 3 units of Part XBEZ52, which has a standard cost of $1.20 per unit. During May, the company purchased 12,400 units of the part for a total of $15,500. Also during May, the company manufactured 3,000 radios, using 9,900 units of part XBEZ52. The direct materials purchases variance is computed when the materials are purchased.

During May, the materials price variance for part XBEZ52 was:

$470 U

$470 F

$620 F

$620 U

In: Accounting

Charles Maxwell is starting a cheesecake bakery, Able Baker Charlie Company, to produce and sell different...

Charles Maxwell is starting a cheesecake bakery, Able Baker Charlie Company, to produce and sell different flavored cheesecakes to restaurants and the general public. He has just begun his study of accounting, and is a bit confused about the many types of reports he has read about and how they will help him run his business. He asks you to help him clarify what the differences between managerial accounting and financial accounting are. He’s also wondering how to set up his inventory, how to classify the costs of his business, and how to fill in some missing information.

Managerial vs. Financial

Select whether the following characteristics are most often associated with managerial accounting or financial accounting.

Primarily used for internal decision making Managerial Accounting
Generally Accepted Accounting Principles (GAAP) must be used Financial Accounting
Prepared statements usually pertain to the company as a whole rather than individual departments or products Financial Accounting
Information provided will often be subjective, such as estimated future results Managerial Accounting
Often prepared on an as-needed basis rather than at fixed intervals Managerial Accounting

Charles has provided some of the costs he expects to incur as follows. Decide on the classifications that could be applied to each of these costs using the table provided. The cost object in each case is the cheesecake.

(Select "Yes" or "No" from the below dropdowns.)

Cost Product Period Direct Direct Factory Selling Administrative Direct Indirect Prime Conversion
Cost Cost Materials Labor Overhead Expense Expense Cost Cost Cost Cost
Eggs used to make cheesecakes
Baker’s wages
Delivery driver wages
Depreciation of office computers
Power to run the cheesecake ovens
President’s salary
Sales commissions
Factory supervisor salary

harles found some sample income statements and balance sheets on the Internet, and asked which of them might be most appropriate for a manufacturing business like his. Review income statements A and B, and balance sheets C and D. Determine which income statement and balance sheet would be most appropriate for a manufacturing business like Able Baker Charlie Company.

Income Statement A

Sample Company A
Income Statement
For the Year Ended December 31, 20Y8
Sales $42,000
  Finished goods inventory, January 1, 20Y8 $5,250
  Cost of goods manufactured 6,400
  Cost of finished goods available for sale $11,650
  Finished goods inventory, December 31, 20Y8 (400)
  Cost of goods sold (11,250)
Gross profit $30,750
Operating expenses:
  Selling expenses $6,400
  Administrative expenses 5,250
    Total operating expenses (11,650)
Net income $19,100

Income Statement B

Sample Company B
Income Statement
For the Year Ended December 31, 20Y8
Sales $42,000
  Beginning inventory $5,250
  Net purchases 6,400
  Inventory available for sale $11,650
  Ending inventory (400)
  Cost of goods sold (11,250)
Gross profit $30,750
Operating expenses:
  Selling expenses $6,400
  Administrative expenses 5,250
    Total operating expenses (11,650)
Net income $19,100

Balance Sheet C

Sample Company C
Balance Sheet
December 31, 20Y8
Assets
Cash $20,800
Accounts receivable (net) 10,000
Inventory 6,000
Supplies 2,100
Land 17,000
Total assets $55,900
Liabilities
Accounts payable $17,800
Stockholders’ Equity
Common stock $19,000
Retained earnings 19,100
Total stockholders’ equity 38,100
Total liabilities and stockholders’ equity $55,900

Balance Sheet D

Sample Company D
Balance Sheet
December 31, 20Y8
Assets
Cash $20,800
Accounts receivable (net) 10,000
Inventory:
  Direct materials $2,500
  Work in process 1,500
  Finished goods 2,000
  Total inventory 6,000
Supplies 2,100
Land 17,000
Total assets $55,900
Liabilities
Accounts payable $17,800
Stockholders’ Equity
Common stock $19,000
Retained earnings 19,100
Total stockholders’ equity 38,100
Total liabilities and stockholders’ equity $55,900

Which income statement is most appropriate for a manufacturing business?

Income statement A

Which balance sheet is most appropriate for a manufacturing business?

Balance sheet D

At the end of February, after the second month of operations of Able Baker Charlie Company, Charles shows you the data he’s collected, but he was unable to figure out some of the amounts. Review the following data and fill in the missing amounts on the chart for Able Baker Charlie Company. Note: It may be helpful to use T accounts to map the flow of the amounts through the manufacturing accounts and solve for the missing dollar values. It may also be helpful to review the steps for determining the cost of materials used, total manufacturing cost incurred, and cost of goods manufactured.

Data for February
Decrease in materials inventory $3,600
Materials inventory on Feb. 28 50% of materials inventory on Jan. 31
Direct materials purchased $12,000
Direct materials used 3 times the direct labor incurred
Total manufacturing costs incurred in period $27,300
Total manufacturing costs incurred in period 70% of Cost of Goods Manufactured
Total manufacturing costs incurred in period $7,000 less than Cost of Goods Sold
Account Balances
Account Jan. 31 Feb. 28 Costs Incurred
Materials Inventory $ $ Direct Materials Used $
Work in Process Inventory 21,000 Direct Labor Incurred
Finished Goods Inventory 16,000 Factory Overhead Incurred
Cost of Goods Sold

In: Accounting

Cash Budget The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget...

  1. Cash Budget

    The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following An accounting device used to plan and control resources of operational departments and divisions.budget information:

    May June July
    Sales $86,000 $90,000 $95,000
    Manufacturing costs 34,000 39,000 44,000
    Selling and administrative expenses 15,000 16,000 22,000
    Capital expenditures _ _ 80,000

    The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $3,500 of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.

    Current assets as of May 1 include cash of $33,000, marketable securities of $40,000, and accounts receivable of $90,000 ($72,000 from April sales and $18,000 from March sales). Sales on account for March and April were $60,000 and $72,000, respectively. Current liabilities as of May 1 include $6,000 of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $14,000 will be made in June. Sonoma’s regular quarterly dividend of $5,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $30,000.

    Required:

    1. Prepare a monthly cash budget and supporting schedules for May, June, and July 2016. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign.

    Sonoma Housewares Inc.
    Cash Budget
    For the Three Months Ending July 31
    May June July
    Estimated cash receipts from:
    Cash sales $ $ $
    Collection of accounts receivable
    Total cash receipts $ $ $
    Estimated cash payments for:
    Manufacturing costs $ $ $
    Selling and administrative expenses
    Capital expenditures
    Other purposes:
    Income tax
    Dividends
    Total cash payments $ $ $
    Cash increase or (decrease) $ $ $
    Cash balance at beginning of month
    Cash balance at end of month $ $ $
    Minimum cash balance
    Excess or (deficiency) $ $ $

In: Accounting