What are the two most common measures of cash?
A. Cash position and accounts payable
B. Cash (and cash equivalents) and cash flow from operations
C. Accounts receivable and working capital
D. Earnings per share and dividends per share
In: Accounting
No handwriting and photo (managerial accounting)
a-To makes income taxable, income must be realized and recognized. Explain in your own words the difference between income realization and income recognition, then provide a short numerical example to indicate the difference
b-Illustrate the concept of ROI with a suitable numerical example. How ROI is different from Residual Income? Explain in your own words
In: Accounting
What does cash on hand measure?
A. The value at which an asset is carried on the company’s financial “books” and shown on the Balance Sheet.
B. The cash generated by a company’s core operations.
C. Highly liquid assets, such as money market funds or government bonds, that are easily converted into cash within 90 days without risk of a change in value.
D. Cash on hand measures the amount of available cash and low-risk, liquid cash-like assets you can convert to cash in 90 days or less.
In: Accounting
No handwriting or photo (tax accounting)
To make income taxable, income must be realized and recognized. Explain in your own words the difference between income realization and income recognition, then provide a short numerical example to indicate the difference
In: Accounting
On February 1, 2018, Arrow Construction Company entered into a
three-year construction contract to build a bridge for a price of
$8,075,000. During 2018, costs of $2,030,000 were incurred, with
estimated costs of $4,030,000 yet to be incurred. Billings of
$2,536,000 were sent, and cash collected was $2,280,000.
In 2019, costs incurred were $2,536,000 with remaining costs
estimated to be $3,645,000. 2019 billings were $2,786,000, and
$2,505,000 cash was collected. The project was completed in 2020
after additional costs of $3,830,000 were incurred. The company’s
fiscal year-end is December 31. This project does not qualify for
revenue recognition over time.
Required:
1. Calculate the amount of revenue and gross
profit or loss to be recognized in each of the three years.
2a. Prepare journal entries for 2018 to record the
transactions described (credit "various accounts" for construction
costs incurred).
2b. Prepare journal entries for 2019 to record the
transactions described (credit "various accounts" for construction
costs incurred).
3a. Prepare a partial balance sheet to show the
presentation of the project as of December 31, 2018.
3b. Prepare a partial balance sheet to show the
presentation of the project as of December 31, 2019.
In: Accounting
Timmins Company of Emporia, Kansas, spreads herbicides and
applies liquid fertilizer for local farmers. On May 31, 2020, the
company’s Cash account per its general ledger showed a balance of
$6,100.50.
The bank statement from Emporia State Bank on that date showed the
following balance.
| Emporia State Bank | |||||||
| Checks and Debits | Deposits and Credits | Daily Balance | |||||
| XXX | XXX | 5-31 | 7,209.60 | ||||
A comparison of the details on the bank statement with the details
in the Cash account revealed the following facts.
| 1. | The statement included a debit memo of $50 for the printing of additional company checks. | ||
| 2. | Cash sales of $983.36 on May 12 were deposited in the bank. The cash receipts entry and the deposit slip were incorrectly made for $1,043.36. The bank credited Timmins Company for the correct amount. | ||
| 3. | Outstanding checks at May 31 totaled $53.55, and deposits in transit were $1,830.45. | ||
| 4. | On May 18, the company issued check No. 1181 for $671 to H. Moses, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Timmins Company for $617. | ||
| 5. | $3,900 was collected by the bank for Timmins Company on May 31 through electronic funds transfer. | ||
| 6. | Included with the canceled checks was a check issued by Tomins Company to C. Pernod for $480 that was incorrectly charged to Timmins Company by the bank. | ||
| 7. |
On May 31, the bank statement showed an NSF charge of $370 for a check issued by Sara Ballard, a customer, to Timmins Company on account. Prepare the bank reconciliation at May 31, 2020. (List items that increase cash balance first.) |
In: Accounting
| 2018 | 2017 | 2016 | 2015 | 2014 | Average | ||
| Sales | A | 4.22% | 2.22% | 2.40% | 6.99% | 3.96% | |
| B | 6.53% | 6.30% | 4.23% | 11.91% | 7.25% | ||
| C | -0.56% | -0.34% | 3.58% | 9.17% | 2.96% | ||
| Gross Profit | A | 4.01% | 3.26% | 3.84% | 5.77% | 4.22% | |
| B | 5.88% | 8.71% | 3.13% | 11.18% | 7.23% | ||
| C | 0.96% | 0.97% | 1.14% | 8.75% | 2.96% | ||
| Net Income | A | -26.02% | 45.85% | 56.18% | 1.17% | 19.30% | |
| B | -23.31% | 78.39% | 4.34% | 9.36% | 17.20% | ||
| C | -8.99% | 0.76% | -2.70% | 5.69% | -1.31% | ||
| Total Assets | A | 2.67% | 9.17% | 1.48% | 6.16% | 4.87% | |
| B | 2.89% | 19.85% | 11.54% | 10.86% | 11.29% | ||
| C | 3.81% | 1.32% | 7.57% | 13.79% | 6.62% | ||
| Total Liabilities/Debt | A | 78.09% | 76.92% | 79.15% | 79.12% | 76.39% | 77.93% |
| B | 76.10% | 77.34% | 80.09% | 77.10% | 76.74% | 77.47% | |
| C | 74.89% | 77.26% | 77.53% | 75.42% | 75.33% | 76.09% | |
| Total Equity | A | 21.91% | 23.08% | 20.85% | 20.88% | 23.61% | 22.07% |
| B | 23.67% | 22.36% | 19.59% | 22.34% | 22.87% | 22.17% | |
| C | 25.11% | 22.74% | 22.74% | 24.58% | 24.67% | 23.97% | |
Make a conclusion about A's performance in comparison to B's and C's
In: Accounting
Consider the following information regarding the performance of a money manager in a recent month. The table presents the actual return of each sector of the manager’s portfolio in column (1), the fraction of the portfolio allocated to each sector in column (2), the benchmark or neutral sector allocations in column (3), and the returns of sector indexes in column (4). (1) Actual Return (2) Actual Weight (3) Benchmark Weight (4) Index Return Equity 2.8% 0.40 0.30 2.9% (S&P 500) Bonds 1.1 0.40 0.50 1.8 (Aggregate Bond Index) Cash 0.9 0.20 0.20 0.9 a-1. What was the manager’s return in the month? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Manager’s return 0.36 % a-2. What was her over or underperformance? (Input the value as positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.) % b. What was the contribution of security selection to relative performance? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) Contribution of security selection % c. What was the contribution of asset allocation to relative performance? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Contribution of asset allocation %
In: Accounting
Dollar-Value LIFO Retail
Johns Company adopts the dollar-value LIFO retail inventory method on January 1, 2016. The following information for 2016 is obtained from Johns' records:
| Cost | Retail | |
|---|---|---|
| Inventory, January 1, 2016 | $20,000 | $29,000 |
| Purchases | 60,000 | 92,000 |
| Net additional markups | — | 1,000 |
| Net markdowns | — | 3,000 |
| Sales | — | 75,000 |
The price index on January 1, 2016, was 100, and on December 31, 2016, it was 110.
Required:
Compute the cost of the inventory on December 31, 2016. Round the cost-to-retail ratio to three decimal places.
| JOHNS COMPANY | ||
| Calculation of cost of inventory using Dollar-Value LIFO | ||
| December 31, 2016 | ||
| Cost | Retail | |
| Beginning inventory | $20,000 | $29,000 |
| Purchases | 60,000 | $92,000 |
| Add: Markups (net) | 1,000 | |
| Less: Markdowns (net) | (3000) | |
| $90,000 | ||
| Goods available for sale | $80,000 | $119,000 |
| Less: Sales | 75,000 | |
| Ending inventory at retail | $44,000 | |
| Ending inventory at cost | $ ? | |
In: Accounting
Kitchen Magician, Inc. has assembled the following data pertaining to its two most popular products.
| Blender | Electric Mixer | ||||||
| Direct material | $ | 22 | $ | 32 | |||
| Direct labor | 15 | 43 | |||||
| Manufacturing overhead @ $54 per machine hour | 54 | 108 | |||||
| Cost if purchased from an outside supplier | 75 | 146 | |||||
| Annual demand (units) | 38,000 | 45,000 | |||||
Past experience has shown that the fixed manufacturing overhead component included in the cost per machine hour averages $27. Kitchen Magician’s management has a policy of filling all sales orders, even if it means purchasing units from outside suppliers.
Required:
If 80,000 machine hours are available, and management desires to follow an optimal strategy, how many units of each product should the firm manufacture? How many units of each product should be purchased?
|
With all other things constant, if management is able to reduce the direct material for an electric mixer to $22 per unit, how many units of each product should be manufactured? Purchased?
|
||||||||||||||
|
In: Accounting
On January 1, 2018, A Co. purchased a machine at a cost of $84,000. The machine is expected to last 5 years and has a residual value of $14,000.
Required:
1. Compute depreciation for the five year periods ending December 31 using the straight-line, sum-of-the-years digits and DDB method.
2. The machine is sold on January 1,2020 for $40,000. Compute the gain or loss for each method.
In: Accounting
In: Accounting
Flexible Overhead Budget
Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 9,000 hours of productive capacity in the department:
| Variable overhead cost: | ||
| Indirect factory labor | $81,900 | |
| Power and light | 3,870 | |
| Indirect materials | 25,200 | |
| Total variable overhead cost | $110,970 | |
| Fixed overhead cost: | ||
| Supervisory salaries | $38,840 | |
| Depreciation of plant and equipment | 24,410 | |
| Insurance and property taxes | 15,540 | |
| Total fixed overhead cost | 78,790 | |
| Total factory overhead cost | $189,760 |
Assuming that the estimated costs for November are the same as for October, prepare a flexible factory overhead cost budget for the Press Department for November for 7,000, 9,000, and 11,000 hours of production. Round your interim computations to the nearest cent, if required. Enter all amounts as positive numbers.
| Leno Manufacturing Company | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Factory Overhead Cost Budget-Press Department | ||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Month Ended November 30 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Direct labor hours | 7,000 | 9,000 | 11,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Variable overhead cost:
Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 9,000 hours of productive capacity in the department:
Assuming that the estimated costs for November are the same as for October, prepare a flexible factory overhead cost budget for the Press Department for November for 7,000, 9,000, and 11,000 hours of production. Round your interim computations to the nearest cent, if required. Enter all amounts as positive numbers.
|
||||||||||||||||||||||||||||||||||||||||||||||||||
In: Accounting
Dillon, Jones, and Kline, Ltd. is studying the acquisition of two electrical component insertion systems for producing its sole product, the universal gismo. Data relevant to the systems follow. Model A: Variable costs, $17.00 per unit Annual fixed costs, $986,400 Model B: Variable costs, $11.80 per unit Annual fixed costs, $1,114,000 The selling price is $68 per unit for the universal gismo, which is subject to a 5 percent sales commission. (In the following requirements, ignore income taxes.)
|
How many units must the company sell to break even if Model A is selected? Calculate the net income of the two systems if sales and production are expected to average 42,000 units per year and which of the two systems would be more profitable? Assume Model B requires the purchase of additional equipment that is not reflected in the preceding figures. The equipment will cost $450,000 and will be depreciated over a five-year life by the straight-line method. How many units must the company sell to earn $973,000 of income if Model B is selected? As in requirement (2), sales and production are expected to average 42,000 units per year. Ignoring the information presented in part (3), at what volume level will the annual total cost of each system be equal? |
In: Accounting