Use the following information for the Exercises below.

[The following information applies to the questions displayed below.]
  
Hemming Co. reported the following current-year purchases and sales for its only product.
    

Exercise 5-9A Perpetual: Inventory costing system LO P3

Required:
Hemming uses a perpetual inventory system.
  
1. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.
2. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO.
3. Compute the gross margin for FIFO method and LIFO method.

Custom Designs

Please use the following data to determine the value of cost of goods sold that should be included within Custom Design’s income statement.

Inventories Beginning Ending

Work in Process $120,000 $97,000

Finished Goods $118,000 $140,000

Additional Information

Direct Materials $310,000

Direct Labor $270,000

Labor Hours Worked 6,800 DLH

Estimated Labor Hours Worked 7,000 DLH

Manufacturing Overhead Incurred $254,000

Estimated Manufacturing Overhead $224,000

Mr. Massey, who is in the 32 percent marginal tax bracket and itemizes deductions, recently inherited $30,000. He is considering three alternative uses for this windfall: He could buy shares in a mutual bond fund paying 6 percent interest a year. He could pay off a $30,000 personal debt to a local bank on which he pays $2,350 interest each year. He could pay off $30,000 of the mortgage incurred to buy his home. This principal repayment would decrease his annual home mortgage interest expense by $2,900. Compute the annual increase in Mr. Massey's after-tax cash flow for each of these three alternatives. Which alternative would you recommend and why? Can you show the break down of all 3 parts?

Goods purchased were shipped Dec. 31, 2018, and received as of 12/31/2018. The invoice was not received until January 10, 2019. FOB shipping. The company’s practice is not to record liability until the receipt of the invoice. Is this an unrecorded liability as of 12/31/18? Was 2018 net income misstated?

Acme, LLC produces three models of paint sprayers. A limitation of only 2,000 machine hours available per year for the equipment required to make components for the pump unit and components for the motor and gasoline engines used on all of the sprayers prevents Acme from meeting the sales demand for its paint sprayers. The three models are Residential, Commercial Electric and Commercial gas.

Give the following Data:

Residential Commercial Electric Commercial Gas

Unit Selling price: $400 $900 $1,200

Unit Variable Price: $200 $650 $850

Machine Hours per Unit: .8 1.25 1.5

Maximum annual Demand: 1000 units 1,500 units 300 units

1.) What is the recommended product mix to maximize profit in the short run?

2.) What is the total contribution margin at the recommended product mix?

Venus Cellular Limited (“Venus”) is the leading, worldwide provider of a wide variety of telecommunications equipment and services. Its telecommunications equipment and services enable its customers to send or receive virtually any type of voice or data transmission. Its customers include fixed line and wireless telecommunication operators, Internet service providers, governments, and businesses. Venus prepares its financial statements in accordance with International Financial Reporting Standards (IFRSs).

• Question — Discuss any additional issues you have identified or other observations.

• Question 1 — Identify whether the analysis of expenses in profit or loss is presented by nature or function.

Transactions

On June 1 of the current year, Chad Wilson established a business to manage rental property. He completed the following transactions during June:

1. Opened a business bank account with a deposit of $28,000 from personal funds.
2. Purchased office supplies on account, $3,450.
3. Received cash from fees earned for managing rental property, $9,680.
4. Paid rent on office and equipment for the month, $4,230.
5. Paid creditors on account, $1,570.
6. Billed customers for fees earned for managing rental property, $7,840.
7. Paid automobile expenses (including rental charges) for the month, $940, and miscellaneous expenses, $470.
8. Paid office salaries, $2,980.
9. Determined that the cost of supplies on hand was $2,040; therefore, the cost of supplies used was $1,410.
10. Withdrew cash for personal use, $2,820.

Required:

1. Indicate the effect of each transaction and the balances after each transaction:
For those boxes in which no entry is required, leave the box blank.
For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300)

2. Owner's equity is the right of owners to the assets of the business. These rights are   by owner's investments and revenues and   by owner's withdrawals and expenses.

3. Determine the net income for June.
$

4. June's transactions (a-j) increased or decreased Chad Wilson's capital to?

Financial Statements

Jose Loder established Bronco Consulting on August 1, 2019. The effect of each transaction and the balances after each transaction for August follow:

Required:

1. Prepare an income statement for the month ended August 31, 2019.

2. Prepare a statement of owner's equity for the month ended August 31, 2019. If an answer is zero, enter "0".

3. Prepare a balance sheet as of August 31, 2019. When entering assets, enter them in order of liquidity.

4. Prepare a statement of cash flows for the month ending August 31, 2019. For those boxes in which no entry is required, enter "0". Use the minus sign to indicate cash outflows, cash payments, and decreases in cash.

A company is considering the purchase of a new piece of equipment for $91,600. Predicted annual cash inflows from this investment are $37,000 (year 1), $29,500 (year 2), $18,500 (year 3), $12,500 (year 4) and $7,000 (year 5). The payback period is:

multiple choice:

3.00 years.

• 4.47 years.

• 2.53 years.

• 4.22 years.

• 3.53 years

"The Statement of Cash Flow is more important than the Income Statement and the Balance Sheet."  Do you agree or disagree? Please state your opinion and explain your position by giving specific examples.

Nautical Accessories, Inc., manufactures women's boating hats. Manufacturing overhead is assigned to production on a machine-hour basis. For 2016, it was estimated that manufacturing overhead would total $357,180 and that 25,010 machine hours would be used.

Required:

a. Calculate the predetermined overhead application rate that will be used for absorption costing purposes during 2016. (Round your answer to 2 decimal places.)

b. During April, 3,300 hats were made. Raw materials costing $6,930 were used, and direct labor costs totaled $9,110. A total of 780 machine hours were worked during the month of April. Calculate the cost per hat made during April. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c. At the end of April, 1,280 hats were in ending inventory. Calculate the cost of the ending inventory and the cost of the hats sold during April. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Ratio Analysis of Comparative Financial Statements

Amounts from the comparative income statement and balance sheet of Miller Electronics Corporation for the last two years are as follows:

Required:

Calculate the following ratios and amounts for 20-1 and 20-2. Round all calculations to two decimal places. Use 365 days when computing the accounts receivable and merchandise inventory turnover.

Background Information  

Recently, there has been talk amongst the partners regarding the expansion of the business  into the home construction business.  Charles, Bob and Jane support the idea but Mary is totally  opposed.      Charles, Bob and Jane decide to buy out Mary for $25,000.  Charles and Jane are each  contributing $10,000 to the buyout and Bob is contributing $5,000.  They intend to implement  their expansion plans by purchasing a tract of land and building a small subdivision. A financial  analysis has indicated that although such a project is risky and will require another $500,000 in  capital, it has the potential of generating substantial profits because of the improving real  estate market.      Before proceeding, however, their accountant has recommended that they form a corporation  and sell the partnership assets now worth $200,000 to the new corporation.  They have all  agreed to this suggestion but have made it clear that they all wish to have a say in corporate  decision‐making and to take an active role in the day to day operations of the corporation.   They also insist that their shareholdings in the new corporation must reflect each of their  present financial interests in the partnership.      

Assignment Question: (2 marks each)  

1. Why would incorporating the business be better than continuing as a general  partnership?      

2. Why would issuing Common Shares to each partner be the best way to distribute  ownership upon incorporation?    

3. After the corporation was formed, Bob was delegated the task of finding a suitable piece  of property for the development.  Within a few days, he learned of a farmer who was  considering selling his farm.  On investigation, it turned out to be such a good deal that Bob  decided not to tell the others about the property and to purchase it for himself as an  investment.  Several weeks later, he recommended to his fellow directors a property owned
by his recently deceased uncle that was being sold to settle the estate in which Bob was a  beneficiary.  Bob did not tell the others about his connection to the property.  Did Bob act  properly? (Explain your answer)

4. Disappointed by Bob’s conduct, Jane and Charles have decided that they want Bob out of  the business. What legal right does Bob have if Jane and Charles gang up on him?   (Explain your answer)

5. What should Jane, Charles and Bob have done when they formed the corporation to avoid  the problems they are experiencing? (Explain your answer)   

Required information

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

The following information pertains to Trenton Glass Works for the year just ended.

Budgeted direct-labor cost: 70,000 hours (practical capacity) at $16 per hour

Actual direct-labor cost: 80,000 hours at $17.50 per hour

Budgeted manufacturing overhead: $997,500

Actual selling and administrative expenses: 434,000

3. Prepare a journal entry to close out the Manufacturing Overhead account into Cost of Goods Sold. (Round intermediate calculations to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Required information

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

The following information pertains to Trenton Glass Works for the year just ended.

Budgeted direct-labor cost: 70,000 hours (practical capacity) at $16 per hour

Actual direct-labor cost: 80,000 hours at $17.50 per hour

Budgeted manufacturing overhead: $997,500

Actual selling and administrative expenses: 434,000

2. Calculate the overapplied or underapplied overhead for the year. (Round your intermediate calculations to 2 decimal places.)

this is the first part of the question