CP7-1 (Perpetual Method) Jeter Co. uses a perpetual inventory system and both an accounts receivable
and an accounts payable subsidiary ledger. Balances related to both the general ledger and the
subsidiary ledgers for Jeter are indicated in the working papers presented below. Also following are a
series of transactions for Jeter Co. for the month of January. Credit sales terms are 2/10, n/30. The cost
of all merchandise sold was 60% of the sales price.
GENERAL LEDGER
Account January 1
Number Account Title Opening Balance
101 Cash $35,750
112 Accounts Receivable 13,000
115 Notes Receivable 39,000
120 Inventory 18,000
126 Supplies 1,000
130 Prepaid Insurance 2,000
157 Equipment 6,450
158 Accumulated Depreciation—Equip. 1,500
201 Accounts Payable 35,000
301 Owner’s Capital 78,700

Schedule of Accounts Receivable Schedule of Accounts Payable
(from accounts receivable subsidiary ledger) (from accounts payable subsidiary ledger)
January 1    January 1
Opening Balance Opening Balance

Customer    R. Beltre $1,500    Creditor S. Meek $ 9,000
   B. Santos 7,500 R. Moses 15,000
   S. Mahay 4,000    D. Saito 11,000

Jan. 3 Sell merchandise on account to B. Corpas $3,600, invoice no. 510, and to J. Revere $1,800,
invoice no. 511.
5 Purchase merchandise from S. Gamel $5,000 and D. Posey $2,200, terms n/30.
7 Receive checks from S. Mahay $4,000 and B. Santos $2,000 after discount period has lapsed.
8 Pay freight on merchandise purchased $235.
9 Send checks to S. Meek for $9,000 less 2% cash discount, and to D. Saito for $11,000 less
1% cash discount.
9 Issue credit of $300 to J. Revere for merchandise returned.
10 Daily cash sales from January 1 to January 10 total $15,500. Make one journal entry for these sales.
11 Sell merchandise on account to R. Beltre $1,600, invoice no. 512, and to S. Mahay $900,
invoice no. 513.
12 Pay rent of $1,000 for January.
13 Receive payment in full from B. Corpas and J. Revere less cash discounts.
15 Withdraw $800 cash by M. Jeter for personal use.
15 Post all entries to the subsidiary ledgers.
16 Purchase merchandise from D. Saito $15,000, terms 1/10, n/30; S. Meek $14,200, terms
2/10, n/30; and S. Gamel $1,500, terms n/30.
17 Pay $400 cash for offi ce supplies.
18 Return $200 of merchandise to S. Meek and receive credit.
20 Daily cash sales from January 11 to January 20 total $20,100. Make one journal entry for
these sales.
21 Issue $15,000 note, maturing in 90 days, to R. Moses in payment of balance due.
21 Receive payment in full from S. Mahay less cash discount.
22 Sell merchandise on account to B. Corpas $2,700, invoice no. 514, and to R. Beltre $2,300,
invoice no. 515.
22 Post all entries to the subsidiary ledgers.
23 Send checks to D. Saito and S. Meek for full payment less cash discounts.
25 Sell merchandise on account to B. Santos $3,500, invoice no. 516, and to J. Revere $6,100,
invoice no. 517.
27 Purchase merchandise from D. Saito $14,500, terms 1/10, n/30; D. Posey $3,200, terms
n/30; and S. Gamel $5,400, terms n/30.
27 Post all entries to the subsidiary ledgers.
28 Pay $200 cash for offi ce supplies.
31 Daily cash sales from January 21 to January 31 total $21,300. Make one journal entry for
these sales.
31 Pay sales salaries $4,300 and offi ce salaries $3,800.
Instructions

Prepare a multiple-step income statement and an owner’s equity statement for January and a
classifi ed balance sheet at the end of January.
(e) Prepare and post adjusting and closing entries.
(f) Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the
control accounts in the general ledger.

prepare a complete set of financial statements for Oh So Fake Company using the following adjusted trial balance. Make sure to use good formatting. Oh So Fake Company Adjusted Trial Balance December 31, 20XX Account Name Debit Credit Cash $ 400,300 Accounts receivable 370,100 Merchandise inventory 170,800 Office supplies 10,300 Prepaid rent 10,000 Furniture 63,000 Accumulated depreciation – Furniture $ 31,620 Equipment 197,500 Accumulated depreciation – Equipment 99,180 Goodwill 270,000 Accounts payable 60,300 Salaries payable 20,100 Interest payable 6,000 Unearned revenue 20,400 Notes payable, Long term * 144,000 LT Bond payable 180,000 Capital, Owner 220,200 Sales 2,470,000 Sales returns and allowances 100,000 Sales discounts 80,000 Cost of Goods Sold (COGS) 903,100 Interest revenue 20,100 Salaries expense 520,700 Rent expense 70,700 Utilities expense 50,800 Depreciation expense – Furniture 20,700 Supplies expense 20,200 Interest expense 20,900 Gain on sale of equipment 7,200 TOTALS: $ 3,279,100 $ 3,279,100 *$22,000 of the LT note will be paid within the following 12 months.

The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

Each unit requires 0.20 direct labor-hours and direct laborers are paid $16.00 per hour.

In addition, the variable manufacturing overhead rate is $1.75 per direct labor-hour. The fixed manufacturing overhead is $98,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $38,000 per quarter.

Required:

1. Calculate the company’s total estimated direct labor cost for each quarter of the upcoming fiscal year and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced.

2&3. Calculate the company’s total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole.

DQ #1 DQ #1 Complete the e-Activity. Next, imagine that you have been hired as the production manager of a manufacturing company and must determine the best inventory costing system to implement. Discuss the key factors that must be considered before making the determination. Provide specific details and a rationale for your decision.

DQ #2 As a production manager, one of your key tasks is to improve efficiencies by either increasing productivity or reducing cost. Determine whether the responsibility reports needed to track performance should be created by department, function, or manager, using a costing method of your choice. Based on the costing method you selected, determine the type of data needed to track and evaluate performance to control costs such as cost per unit, cost per hour, etc. Be specific with your examples.

DQ #3 Our text discusses job order, process and activity based costing. Can ABC be integrated into a job order and/or process costing division of a company?

DQ #4. Many companies in the manufacturing, financial services and health-care industries are currently using ABC. Some examples are UPS, USPS, FedEx, Ford Motors, General Motors and many Hospitals. What are some difficulties that must be overcome when implementing ABC in a service-based company?

Record the journal entries for the retirement of bonds under the following separate (unrelated) situations: A company previously issued $2,000,000, 10% bonds, receiving a $120,000 premium. On the current year's interest date, after the bond interest was paid; the bonds had a carrying value of $2,072,000. The company purchased the entire bond issue on the open market for $1,960,000 and retired it. A company issued $100,000 callable bonds that require a $5,000 premium to paid in addition to the par value. Currently, the bonds have a carrying value of 104,500 and are called in. The company pays the par value plus call premium for a total of $105,000 cash. BONUS: On January 1, $300,000 of par value bonds with a carrying value of $310,000 is converted to 50,000 shares of $5 par value common stock. Date Account Debit Credit

Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process.

Waterways likes to keep 10% of the next month’s unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2019, totaled $185,400.

Direct Materials

Direct materials cost 80 cents per pound. Two pounds of direct materials are required to produce each unit.

Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2019, totaled 11,380 pounds. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $104,585.

Other Information

The Cash balance on December 31, 2019, totaled $100,000, but management has decided it would like to maintain a cash balance of at least $700,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.70 per share for 5,180 shares outstanding. The company has an open line of

1) For the first quarter of 2017, prepare a sales budget.

2) For the first quarter of 2017, prepare a production budget.

3) For the first quarter of 2017, prepare a direct materials budget. (Round cost per pound to 2 decimal places, e.g. 0.25 and all other answers to 0 decimal places, e.g. 2,520.)

4) For the first quarter of 2017, prepare a direct labor budget. (Round time per unit to nearest hour, e.g. 30 minutes will be rounded to 0.5 hours)

5) For the first quarter of 2017, prepare a manufacturing overhead budget. (Round overhead rate to 2 decimal places, e.g. 5.25 and all other answers to 0 decimal places, e.g. 2,520. List Variable Costs first.)

6)  For the first quarter of 2017, prepare a selling and administrative budget. (Enter per unit expenses rounded to 2 decimal places. E.g. 1.25)

7) For the first quarter of 2017, prepare a schedule for expected cash collections from customers. (Do not leave any answer field blank. Enter 0 for amounts.)

8)For the first quarter of 2017, prepare a schedule for expected payments for materials purchases. (Round answers to 0 decimal places, e.g. 2,520. Do not leave any answer field blank. Enter 0 for amounts.)

9) For the first quarter of 2017, prepare a cash budget. (Round answers to 0 decimal places, e.g. 2,520. Do not leave any answer field blank. Enter 0 for amounts.)

credit with Romney’s Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 9% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $550,000 equipment purchase is planned for February.

Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters (cc) of solvent H300 are required to manufacture each unit of Supermix, one of the company’s products. The company now is planning raw materials needs for the third quarter, the quarter in which peak sales of Supermix occur. To keep production and sales moving smoothly, the company has the following inventory requirements:

The finished goods inventory on hand at the end of each month must equal 3,000 units of Supermix plus 25% of the next month’s sales. The finished goods inventory on June 30 is budgeted to be 19,250 units.

The raw materials inventory on hand at the end of each month must equal one-half of the following month’s production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 99,375 cc of solvent H300.

The company maintains no work in process inventories.

A monthly sales budget for Supermix for the third and fourth quarters of the year follows.

Required:

1. Prepare a production budget for Supermix for the months July, August, September, and October.

3. Prepare a direct materials budget showing the quantity of solvent H300 to be purchased for July, August, and September, and for the quarter in total.

Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 62 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 $ 1,419,250 $ 1,203,650 Net income 312,400 246,500 Total $1,731,650 $ 1,450,150 Dividends: On preferred stock $ 10,500 $ 10,500 On common stock 20,400 20,400 Total dividends $ 30,900 $ 30,900 Retained earnings, December 31 $ 1,700,750 $ 1,419,250 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $ 1,916,615 $ 1,765,870 Cost of goods sold 678,900 624,590 Gross profit $ 1,237,715 $ 1,141,280 Selling expenses $ 428,800 $ 516,710 Administrative expenses 365,265 303,470 Total operating expenses $794,065 $820,180 Income from operations $ 443,650 $ 321,100 Other revenue 23,350 20,500 $ 467,000 $ 341,600 Other expense (interest) 112,000 61,600 Income before income tax $ 355,000 $ 280,000 Income tax expense 42,600 33,500 Net income $ 312,400 $ 246,500 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets Cash $ 343,480 $ 296,990 Marketable securities 519,860 492,150 Accounts receivable (net) 335,800 313,900 Inventories 248,200 189,800 Prepaid expenses 64,980 59,400 Total current assets $ 1,512,320 $ 1,352,240 Long-term investments 881,030 307,914 Property, plant, and equipment (net) 1,820,000 1,638,000 Total assets $ 4,213,350 $ 3,298,154 Liabilities Current liabilities $ 472,600 $ 468,904 Long-term liabilities: Mortgage note payable, 8% $ 630,000 $ 0 Bonds payable, 8% 770,000 770,000 Total long-term liabilities $ 1,400,000 $ 770,000 Total liabilities $ 1,872,600 $ 1,238,904 Stockholders' Equity Preferred $0.70 stock, $20 par $ 300,000 $ 300,000 Common stock, $10 par 340,000 340,000 Retained earnings 1,700,750 1,419,250 Total stockholders' equity $ 2,340,750 $ 2,059,250 Total liabilities and stockholders' equity $ 4,213,350 $ 3,298,154 Required: Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year. 1. Working capital $ 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables days 6. Inventory turnover 7. Number of days' sales in inventory days 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders' equity 10. Times interest earned 11. Asset turnover 12. Return on total assets % 13. Return on stockholders’ equity % 14. Return on common stockholders’ equity % 15. Earnings per share on common stock $ 16. Price-earnings ratio 17. Dividends per share of common stock $ 18. Dividend yield %

Vinson Co. manufactures and sells one product.  Assume the selling price for each item is $200/per unit.  The following information pertains to the company’s first two years of operation:

Variable Costs Per Unit:

Manufacturing:

                  Direct Materials                                                                        $32/unit

                  Direct Labor                                                              $20/unit

                  Variable Manufacturing Overhead               $4/unit

Variable Selling and Administrative                              $3/unit

Fixed Costs:

Fixed Manufacturing Overhead                                       $660,000

Fixed Selling and Administrative                                    $120,000

Additionally, Vinson Company provides you with the following inventory flow information in terms of units for YEAR 1 & YEAR 2:

                                                                                                            YEAR 1                     YEAR 2                     

Beginning Inventory (units)                                               0                                 20,000                    

Units Produced                                                                         100,000                 75,000                    

Units Sold                                                                                     80,000                    90,000                    

Ending Inventory (units)                                                                        20,000                    5,000

-Prepare the Company’s YEAR 1 & 2 Traditional Income Statement---properly label and show all amounts

-Do the Contribution Margin and Traditional Income Statements provide differing Net Income amounts.  If so, what are they and explain in detail using NUMBERS FROM YOUR ANALYSIS ABOVE why they are different.

Devon Bishop, age 45, is single. He lives at 1507 Rose Lane, Albuquerque, NM 87131. His Social Security number is 111-11-1112. Devon does not want $3 to go to the Presidential Election Campaign Fund.

Devon's wife, Ariane, passed away in 2014. Devon's son, Tom, who is age 18, resides with Devon. Tom's Social Security number is 123-45-6788.

Devon owns a sole proprietorship for which he uses the accrual method of accounting and maintains no inventory. His revenues and expenses for 2018 are as follows:

*New office equipment ($21,000); Devon uses the immediate expense election.

** $18,000 for employees and $8,000 for Devon.

Other income received by Devon includes the following:

During the year, Devon and his sole proprietorship had the following property transactions:

1. Sold Blue, Inc. stock for $45,000 on March 12, 2018. He had purchased the stock on September 5, 2015, for $50,000.
2. Received an inheritance of $300,000 from his uncle, Henry. Devon used $200,000 to purchase Green, Inc. stock on May 15, 2018, and invested $100,000 in Gold, Inc. stock on May 30, 2018.
3. Received Orange, Inc. stock worth $9,500 as a gift from his aunt, Jane, on June 17, 2018. Her adjusted basis for the stock was $5,000. No gift taxes were paid on the transfer. Jane had purchased the stock on April 1, 2012. Devon sold the stock on July 1, 2018, for $22,000.
4. On July 15, 2018, Devon sold one-half of the Green, Inc. stock for $40,000.
5. Devon was notified on August 1, 2018, that Yellow, Inc. stock he purchased from a colleague on September 1, 2017, for $52,500 had become worthless. While he perceived that the investment was risky, he did not anticipate that the corporation would declare bankruptcy.
6. On August 15, 2018, Devon received a parcel of land in Phoenix worth $220,000 in exchange for a parcel of land he owned in Tucson. Because the Tucson parcel was worth $245,000, he also received $25,000 cash. Devon's adjusted basis for the Tucson parcel was $210,000. He originally purchased it on September 18, 2015.
7. On December 1, 2018, Devon sold the condominium in which he had been living for the past 20 years (1844 Lighthouse Lane, Albuquerque, NM 87131) and moved into a rented townhouse. The sales price was $480,000, selling expenses were $28,500, and repair expenses related to the sale were $9,400. Devon purchased the condominium for $180,000.

Devon's potential itemized deductions, exclusive of the aforementioned information, are as follows:

During the year, Devon makes estimated Federal income tax payments of $35,000.

Required:

Compute Devon's lowest net tax payable or refund due for 2018 by providing the information requested for Forms 1040, 4562, 8824, and 8949 as well as Schedules A, B, D, SE. Assume that he makes any available elections that will reduce the tax.

Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials—X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis):

Information relating to materials purchased and materials used in production during May follows:

The following additional information is available:

1. The company recognizes price variances when materials are purchased.

2. The standard labor rate is $20.00 per hour in Sintering and $18.50 per hour in Finishing.

3. During May, 1,300 direct labor-hours were worked in Sintering at a total labor cost of $29,640, and 2,880 direct labor-hours were worked in Finishing at a total labor cost of $59,040.

4. Production during May was 1,800 Alpha6s and 1,800 Zeta7s.

Required:

1. Complete the standard cost card for each product, showing the standard cost of direct materials and direct labor.

2. Compute the materials price and quantity variances for each material.

3. Compute the labor rate and efficiency variances for each operation.

Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify):

1) set up T accounts on the trial balance, prepare an income statement, a statement of retained earnings, and prepare a balance sheet

The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ended March 31:

Required:

1. Prepare a traditional income statement for the quarter ended March 31.

2. Prepare a contribution format income statement for the quarter ended March 31.

3. What was the contribution margin per unit?

Post General Jornal Tab, General Ledger Tab, Trial Balance Tab, Income Statement Tab, Statement of Retained Earnings Tab, Balance Sheet Tab.