A. Seahawks, Inc. had the following consignment transactions during December:

No. sales of consigned goods were made through December 31. Seahawks' December 31 balance sheet should include consigned inventory at

Select one:

a. P12,500

b. P18,900

c. P18,000

d. P12,000

B. Ricoa Company has been forced into bankruptcy and liquidity. Unsecured claims will be paid at the rate of P0.75 on the peso. Coco Company holds a noninterest-bearing not receivable from Ricoa in the amount of P80,000, collateralized by machinery with a liquidation value of P20,000.
The total amount to be realized by Coco on this note receivable is

Select one:

a. P65,000

b. P45,000

c. P60,000

d. P80,000

C.

Maggy Corporation filed a voluntary bankruptcy petition on August 1, 20x7, and the statement of affairs reflects the following information:

The amount that will be paid to creditors with priority is

Select one:

a. P14,000

b. P20,000

c. P15,000

d. P16,000

The following information is available for Robstown Corporation for 20Y8: Inventories January 1 December 31 Materials $347,000 $435,000 Work in process 627,000 590,600 Finished goods 608,200 571,000 December 31 Advertising expense $ 295,200 Depreciation expense-office equipment 44,400 Depreciation expense-factory equipment 55,000 Direct labor 669,600 Heat, light, and power-factory 22,480 Indirect labor 76,750 Materials purchased 658,600 Office salaries expense 185,300 Property taxes-factory 18,200 Property taxes-office building 32,400 Rent expense-factory 32,500 Sales 3,016,000 Sales salaries expense 419,000 Supplies-factory 15,900 Miscellaneous costs-factory 9,600 Required:

a. Prepare the 20Y8 statement of cost of goods manufactured. For those boxes in which you must enter subtracted or negative numbers use a minus sign.*

b. Prepare the 20Y8 income statement. *Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

Colt Company reports pretax financial “income” of $143,000 in 2016. In addition to pretax income from continuing operations (of which revenues are $295,000), the following items are included in this pretax “income:” Problems Colt's taxable income totals $93,000 in 2016. The difference between the pretax financial income and the taxable income is due to the excess of tax depreciation over financial depreciation on assets used in continuing operations. At the beginning of 2016, Colt had a retained earnings balance of $310,000 and a deferred tax liability of $8,100. During 2016, Colt declared and paid dividends of $48,000. It is subject to tax rates of 15% on the first $50,000 of income and 30% on income in excess of $50,000. Based on proper interperiod tax allocation procedures, Colt has determined that its 2016 ending deferred tax liability is $14,100.

Required: Prepare a schedule for Colt to allocate the total 2016 income tax expense to the various components of pretax income.
Prepare Colt's income tax journal entry at the end of 2016. Prepare Colt's 2016 income statement.
Prepare Colt's 2016 statement of retained earnings. Show the related income tax disclosures on Colt's December 31, 2016, balance sheet.

The valuation of plant and equipment to allow for fair market value will be reference to IFRS IAS 16. Does the standard differ from GAAP valuation? Do you see this debate getting settled soon? Please take a side and defend your position.

Regency Corp. uses a standard cost system to account for the costs of its one product. Fixed overhead is applied to production at a rate of $27.10 per unit, based on budgeted production is 2,445 per month. During November, Regency produced 2,295 units. Fixed overhead incurred totaled $70,420.

a. Calculate the fixed overhead spending variance.

b. Calculate the fixed overhead volume variance.

Wisner Corporation's financial statements for 2019 showed the following:

This company has debt of $120,000 and contributed capital of $200,000. A consultant recommended that a better capital structure would be $220,000 debt and contributed capital of $100,000. Assume the company pays no dividends, the interest on the debt would be paid in cash annually at 6%, and income taxes are paid in cash annually.

1. Prepare the adjusted income statement for 2018 as if Wisner was under the alternative capital structure.

2. Complete the following table for 2018: For ratios use year end balances.

3. What do you think of the consultant's recommendation?

Ferris Corporation makes a single product—a fire-resistant commercial filing cabinet—that it sells to office

furniture distributors. The company has a simple ABC system that it uses for internal decision making. The

company has two overhead departments whose costs are listed on the following page:

Manufacturing overhead .................................. $500,000

Selling and administrative overhead ................ 300,000

Total overhead costs ........................................ $800,000

The company’s ABC system has the following activity cost pools and activity measures:

Activity Cost Pool Activity Measure

Assembling units ..................... Number of units

Processing orders .................... Number of orders

Supporting customers ............. Number of customers

Other ........................................ Not applicable

Costs assigned to the “Other” activity cost pool have no activity measure; they consist of the costs of

unused capacity and organization-sustaining costs—neither of which are assigned to orders, customers, or

the product.

Ferris Corporation distributes the costs of manufacturing overhead and of selling and administrative

overhead to the activity cost pools based on employee interviews, the results of which are reported below:

Required:

1- Perform the first-stage allocation of overhead costs to the activity cost pools and find manufacturing overhead for Assembling units.

2-Compute activity rates for the activity cost pools and find the activity rate for processing orders

3-Compute activity rates for the activity cost pools and find the activity rate for supporting customers

4-Office Mart is one of Ferris Corporation’s customers. Last year, Office Mart ordered filing cabinets four different times. Office Mart ordered a total of 80 filing cabinets during the year. What is the ABC cost for Assembeling unit?

5-Office Mart is one of Ferris Corporation’s customers. Last year, Office Mart ordered filing cabinets four different times. Office Mart ordered a total of 80 filing cabinets during the year. What is the ABC cost for Processing orders?

Question 2
Heinrich Bauer Stahl Ltd is a company that manufactures steel products. The following trial
balance was extracted from the records of Heinrich Bauer Stahl on 31 December 2018.
Additional information:
 Heating, lights and power for manufacturing as well as rent are to be apportioned: 4/5
Factory, 1/5 office.
N$ N$
Balances
Inventory at 1 January 2018:
· Raw materials 6,800.00
· Finished goods 12,200.00
· Work in progress -
Transactions
Capital 30,000.00
Drawings 4,000.00
Sales 180,000.00
Purchases of raw materials 36,000.00
Carriage inwards 1,600.00
Factory wages 37,000.00
Office salaries 33,800.00
Heinrich Bauer: salary and expenses 20,800.00
Heating, lights and power for manufacturing 5,000.00
Rent 7,500.00
Factory insurance 1,900.00
Advertising 2,800.00
Bank 7,200.00
Cash 650.00
General expenses:
· Factory 2,400.00
· Office 1,500.00
Bad debts 1,300.00
Discount received 3,200.00
Carriage outwards 750.00
Plant and machinery, at cost less depreciation 18,200.00
Car, at cost less depreciation 8,400.00
Trade receivables and payables 15,400.00 12,000.00
225,200.00 225,200.00
Balances
Inventory at 31 December 2018:
· Raw materials 5,800.00
· Finished goods 16,400.00
· Work in progress -
Page 16 of 18
 Factory insurance is to be apportioned: ¾ Factory , ¼ office
 Heinrich Bauers’ expenses and salary are to be regarded as selling expense and has sole
use of the entity’s vehicle.
 Depreciation for the year should be charged as follows:
o Vehicle N$ 1,000.00
o Plant and Machinery N$ 3,000.00
 Factory insurance paid in advance at 31 December 2017 was N$ 300.00 and office
general expenses unpaid were N$ 150.
You are required to:
Prepare the following accounts in the general ledger of Heinrich Bauer Stahl Ltd:
1. Raw material inventory ( 3 Marks)
2. Factory overhead expenses ( 4 Marks)
3. Finished goods and
4. Prepare a statement of profit or loss and other comprehensive income for the year
ending 31 December 2018. ( 11 Marks)

he following selecred rransaccions occurred during 2016 and 2017 for Mediterranean Importers. The company ends irs accouncin. g year on April 30. 2016 Learning Objective 4 Receivables 5I7 Recorded credit card sales of $96,000, net of processor fee of 1 %. Ignore Cost of Goods Sold. Loaned $23,000 to Jess Prich.et!, an executive with the company; on a one- year, 12% note. Accrued interest revenue on the Prichett note. Collected the maturity value of the Prichett note. Learning Objective 4 Feb. 1, 2017 Cash DR $21,200 Feb. Apr. 6 Apr. 30 ? 2017 Feb. 1 loaned $20,000 cash to Candace Smith on a one-year. 6% note. Sold goods to Green Masters. receiving a 90-day, 9% note for $10,000. Ignore Cost of Goods Sold. Made a single entry to accrue interest revenue on both notes. Collected the maturity value of the Green Masters note. Collected the maturity value of the Smith note. Journalize all required entries. Make sure co determine che missing maturity dare.

Munoz, Inc., produces a special line of plastic toy racing cars.​ Munoz, Inc., produces the cars in batches. To manufacture a batch of the​ cars, Munoz,​ Inc., must set up the machines and molds. Setup costs are​ batch-level costs because they are associated with batches rather than individual units of products. A separate Setup Department is responsible for setting up machines and molds for different styles of car.

Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of​ setup-hours. The following information pertains to June​ 2015:

Calculate the efficiency variance for variable overhead setup costs.

A.

$ 623$623

favorable

B.

$ 4 comma 377$4,377

favorable

C.

$ 4 comma 377$4,377

unfavorable

D.

$ 623$623

unfavorable

Click to select your answer.

Ignacio, Inc., had after-tax operating income last year of $1,198,500. Three sources of financing were used by the company: $2 million of mortgage bonds paying 4 percent interest, $4 million of unsecured bonds paying 6 percent interest, and $10 million in common stock, which was considered to be relatively risky (with a risk premium of 8 percent). The rate on long-term treasuries is 3 percent. Ignacio, Inc., pays a marginal tax rate of 30 percent.

Required:

1. Calculate the after-tax cost of each method of financing. Enter your answers as decimal values rounded to three places. For example, 4.36% would be entered as ".044".

2. Calculate the weighted average cost of capital for Ignacio, Inc. Round intermediate calculations to four decimal places. Round your final answer to four decimal places before converting to a percentage. For example, .06349 would be rounded to .0635 and entered as "6.35" percent.

%

Calculate the total dollar amount of capital employed for Ignacio, Inc.

$

3. Calculate economic value added (EVA) for Ignacio, Inc., for last year. If the EVA is negative, enter your answer as a negative amount.

$

Is the company creating or destroying wealth?

Destroying

4. What if Ignacio, Inc., had common stock which was less risky than other stocks and commanded a risk premium of 5 percent? How would that affect the weighted average cost of capital?

What is the new EVA? In your calculations, round weighted average percentage cost of capital to four decimal places. If the EVA is negative, enter your answer as a negative amount.

$

Rochelle is a general partner in Megawatt Partnership. For 2018, her schedule K-1 from the partnership reported her share of income and distributed cash as follows

Calculate the Self-employment tax that should be paid by Rochelle.

HolmesWatson (HW) is considering what the effect would be of reporting its liabilities under IFRS rather than U.S. GAAP. The following facts apply:

1. HW is defending against a lawsuit and believes it is virtually certain to lose in court. If it loses the lawsuit, management estimates it will need to pay a range of damages that falls between $6,900,000 and $11,900,000, with each amount in that range equally likely.
2. HW is defending against another lawsuit that is identical to item (a), but the relevant losses will only occur far into the future. The present values of the endpoints of the range are $4,900,000 and $9,900,000, with the timing of cash flow somewhat uncertain. HW considers these effects of the time value of money to be material.
3. HW is defending against another lawsuit for which management believes HW has a slightly worse than 50/50 chance of losing in court. If it loses the lawsuit, management estimates HW will need to pay a range of damages that falls between $4,900,000 and $10,900,000, with each amount in that range equally likely.
4. HW has $11,900,000 of short-term debt that it intends to refinance on a long-term basis. Soon after the balance sheet date, but before issuance of the financial statements, HW obtained the financing necessary to refinance the debt.

   
Required:
1. For each item, indicate how treatment of the amount would differ between U.S. GAAP and IFRS.
2. Consider the total effect of items a–d. If HW’s goal is to show the lowest total liabilities, which set of standards, U.S. GAAP or IFRS, best helps it meet that goal?
  

During January 2018, the first month of operations, a consulting firm had following transactions:

1. Issued common stock to owners in exchange for $22,000 cash.

2. Purchased $5,500 of equipment, paying $1,650 cash and signing a promissory note for $3,850.

3. Received $9,900 in cash for consulting services performed in January.

4. Purchased $1,650 of supplies on account; all of the supplies were used in January.

5. Provided consulting services on account in the amount of $17,600.

6. Paid $825 on account.

7. Paid $3,300 to employees for work performed during January.

8. Received a bill for utilities for January of $3,750; the bill remains unpaid.

What is the amount to be reported as total liabilities on the balance sheet at the end of January?

Explain the difference between a cost standard and an efficiency standard.  Give an example of each.