Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2017 with three assets: cash of 23,600 dinars, accounts receivable of 81,100 dinars, and land that cost 211,000 dinars when acquired on April 1, 2016. On January 1, 2017, Zugar has a 161,000 dinar note payable, and no other liabilities. On May 1, 2017, Zugar renders services to a customer for 131,000 dinars, which was immediately paid in cash. On June 1, 2017, Zugar incurred a 111,000 dinar operating expense, which was immediately paid in cash. No other transactions occurred during the year. Currency exchange rates for 1 dinar follow:
April 1, 2016 | $0.44 | = | 1 dinar | |
January 1, 2017 | 0.47 | = | 1 | |
May 1, 2017 | 0.48 | = | 1 | |
June 1, 2017 | 0.50 | = | 1 | |
December 31, 2017 | 0.52 | = | 1 | |
Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume also that the dinar is the subsidiary’s functional currency. What is the translation adjustment for this subsidiary for the year 2017?
Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume also that the U.S. dollar is the subsidiary’s functional currency. What is the remeasurement gain or loss for 2017?
Assume that Zugar is a foreign subsidiary of a U.S. multinational company. On the December 31, 2017, balance sheet, what is the translated value of the Land account? On the December 31, 2017, balance sheet, what is the remeasured value of the Land account?
|
In: Accounting
A friend of yours is working toward a master of business administration (MBA) degree. He e-mails you the following note:
"Hey! How are things going? I need your help! We are studying income taxes in my Financial Accounting class and just finished talking about deferred taxes. I think the professor said something about adjusting the value of deferred taxes when it's an asset but not when it's a liability. When I looked at my homework problem, the balance sheet shows both a deferred tax asset and a deferred tax liability. Shouldn't it be one or the other? And why would one need the value adjusted for one, but not the other? Help!"
You want to help your friend, but you remember having some questions yourself:
In: Accounting
INSTRUCTIONS:
QUESTION
The Zambian economy has been facing significant macroeconomic challenges as reflected in low growth, high fiscal deficits; rising inflation and debt service obligations as well as low international reserves. The outbreak of Coronavirus (COVID-19) pandemic has compounded the situation, resulting in unprecedented global public health and economic crises. Although the full impact of the COVID-19 shock on public health and the economy cannot be determined at the moment, indications are that it will be unprecedented. The Bank of Zambia has introduced a number of measures to address the impact of the pandemic on the economy.
The Monetary Policy Committee (MPC), at its May 18 -20, 2020 meeting, decided to lower the policy rate by 225 basis points to 9.25%. The Bank has also introduced a K10 billion stimulus package to give the economy a boost.
Required: Critically analyse the performance of the downward revision of monetary policy in May 2020 and the Targeted Medium-term Refinancing Facility on the Zambian financial markets.
In: Accounting
1) Use the following information to prepare adjusting entries for Gilbert Holdings
2) Then make an adjusted trial balance, income statement & balance sheet for the information
a. On April 1, 2019, Gilbert Holdings signed a 4.30% bank loan due in 4 years. This is the only outstanding note payable.
b. Prepaid insurance represents a 4-month insurance policy purchased on December 1.
c. On Oct 1, 2019, Gilbert Holdings paid $11,880 for a 9-month lease for office space.
d. Unearned revenue represents a 12-month contract for consulting services. The payment was received on July 1, 2019.
e. Supplies on hand total $10,480.
f. Equipment is depreciated on a straight-line basis; residual value is estimated to be $15,000 with an estimated service life of 10 years. The assets were held the entire year.
g. On Nov 1, Gilbert Holdings issued Monroe Supplies an 3-month note receivable at a 8.2% annual interest rate.
h. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The aging schedule of accounts receivable must be completed to determine management's desired balance for 2019.
i. Accrued wages totaling $35,838 were unpaid and unrecorded at December 31, 2019.
j. Utility costs incurred but unrecorded for the month of December were estimated to be $2,561.
DR | CR | |
Cash | 67,188 | |
Accounts Receivable | 265,584 | |
Allowance for Doubtful Accounts | 11,194 | |
Interest Receivable | ||
Note Receivable | 113,180 | |
Merchandise Inventory | 194,172 | |
Prepaid Insurance | 7,128 | |
Prepaid Rent | 11,880 | |
Supplies | 30,096 | |
Equipment | 277,464 | |
Accumulated Depreciation - Equipment | 29,304 | |
Accounts Payable | 27,746 | |
Salaries & Wages Payable | ||
Unearned Revenue | 32,000 | |
Interest Payable | ||
Utilities Payable | ||
Note Payable (final payment due 2023) | 188,100 | |
Common Stock | 145,200 | |
Retained Earnings | 224,400 | |
Dividends | 64,680 | |
Sales | 2,773,980 | |
Consulting Revenue | ||
Sales Returns and Allowances | 15,840 | |
Sales Discounts | 34,056 | |
Cost of Goods Sold | 1,888,788 | |
Salaries & Wages Expense | 430,056 | |
Depreciation Expense - Equipment | ||
Bad Debt Expense | ||
Insurance Expense | ||
Rent Expense | ||
Supplies Expense | ||
Utilities Expense | 31,812 | |
Interest Revenue | ||
Interest Expense | ||
3,431,924 | 3,431,924 |
Age of Accounts | Balance December 31, 2019 | Estimated % Uncollectible | Estimated Amount Uncollectible |
Current | 159,350 | 2% | 3,187.01 |
1–30 days past due | 66,396 | 4% | 2,655.84 |
31–90 days past due | 31,870 | 20% | 6,374.02 |
Over 90 days past due | 7,968 | 37% | 2,947.98 |
Total Accounts Receivable | $ 265,584 | 15,165 |
In: Accounting
Problem 6-20 CVP Applications: Break-Even Analysis; Cost Structure; Target Sales [LO6-1, LO6-3, LO6-4, LO6-5, LO6-6, LO6-8]
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost.
Last year, the company sold 30,500 of these balls, with the following results:
Sales (30,500 balls) | $ | 775,000 |
Variable expenses | 465,000 | |
Contribution margin | 310,000 | |
Fixed expenses | 212,000 | |
Net operating income | $ | 98,000 |
Required:
1. Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level.
2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls?
3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $98,000, as last year?
4. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs?
5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls?
6. Refer to the data in (5) above.
a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $98,000, as last year?
b. Assume the new plant is built and that next year the company manufactures and sells 30,500 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage.
In: Accounting
Graham Potato Company has projected sales of $14,400 in
September, $17,000 in October, $24,400 in November, and $20,400 in
December. Of the company's sales, 25 percent are paid for by cash
and 75 percent are sold on credit. Experience shows that 40 percent
of accounts receivable are paid in the month after the sale, while
the remaining 60 percent are paid two months after. Determine
collections for November and December.
Also assume Graham’s cash payments for November and December are
$20,500 and $13,000, respectively. The beginning cash balance in
November is $5,000, which is the desired minimum balance.
a. Prepare a cash receipts schedule for November and December.
|
b. Prepare a cash budget with borrowing needed or repayments for November and December. (Negative amounts should be indicated by a minus sign. Assume the November beginning loan balance is $0.)
|
In: Accounting
Please Answer All of Them Please !
1. Presented below is the stockholders' equity section of
Coronado Industries at December 31, 2020:
Common stock, par value $20; authorized 75,000 shares; | ||
issued and outstanding 46000 shares |
$ 920000 |
|
Paid-in capital in excess of par value |
353000 |
|
Retained earnings |
508000 |
|
$1781000 |
During 2021, the following transactions occurred relating to
stockholders' equity:
2900 shares were reacquired at $28 per share.
3400 shares were reacquired at $35 per share.
1700 shares of treasury stock were sold at $31 per share.
For the year ended December 31, 2021, Coronado reported net income
of $449000. Assuming Coronado accounts for treasury stock under the
cost method, what should it report as total stockholders' equity on
its December 31, 2021, balance sheet?
a |
$2075100. |
b |
$1633500. |
c |
$2078800. |
d |
$2082500. |
2. Sheridan Company, has 4150000 shares of common stock
outstanding on December 31, 2020. An additional 809000 shares of
common stock were issued on April 1, 2021, and 410000 more on July
1, 2021. On October 1, 2021, Sheridan issued 19100, $1,000 face
value, 8% convertible bonds. Each bond is convertible into 20
shares of common stock. No bonds were converted into common stock
in 2021. What is the number of shares to be used in computing basic
earnings per share and diluted earnings per share,
respectively?
a |
5357250 and 6157250 |
b |
4961750 and 4961750 |
c |
4961750 and 5057250 |
d |
4961750 and 5357250 |
In: Accounting
Using the financial statements for the Snider Corporation,
calculate the 13 basic ratios found in the
chapter.
SNIDER CORPORATION Balance Sheet December 31, 20X1 |
|||
Assets | |||
Current assets: | |||
Cash | $ | 53,000 | |
Marketable securities | 26,400 | ||
Accounts receivable (net) | 235,000 | ||
Inventory | 257,000 | ||
Total current assets | $ | 571,400 | |
Investments | 65,100 | ||
Plant and equipment. | $699,000 | ||
Less: Accumulated depreciation | 222,000 | ||
Net plant and equipment | 477,000 | ||
Total assets | $ | 1,113,500 | |
Liabilities and Stockholders' Equity | |||
Current liabilities: | |||
Accounts payable | $ | 94,200 | |
Notes payable | 70,600 | ||
Accrued taxes | 14,000 | ||
Total current liabilities | $ | 178,800 | |
Long-term liabilities: | |||
Bonds payable | 158,800 | ||
Total liabilities | $ | 337,600 | |
Stockholders' equity | |||
Preferred stock, $50 par value | $ | 100,000 | |
Common stock, $1 par value | 80,000 | ||
Capital paid in excess of par | 190,000 | ||
Retained earnings | 405,900 | ||
Total stockholders' equity | $ | 775,900 | |
Total liabilities and stockholders' equity | $ | 1,113,500 | |
SNIDER CORPORATION Income Statement For the Year Ending December 31, 20X1 |
|||
Sales (on credit) | $ | 2,016,000 | |
Cost of goods sold | 1,319,000 | ||
Gross profit | $ | 697,000 | |
Selling and administrative expenses | 552,000 | * | |
Operating profit (EBIT) | $ | 145,000 | |
Interest expense | 30,300 | ||
Earnings before taxes (EBT) | $ | 114,700 | |
Taxes | 89,800 | ||
Earnings after taxes (EAT) | $ | 24,900 | |
*Includes $37,300 in lease payments.
Using the above financial statements for the Snider Corporation,
calculate the following ratios.
a. Profitability ratios. (Do not round
intermediate calculations. Input your answers as a percent rounded
to 2 decimal places.)
|
b. Assets utilization ratios. (Do not
round intermediate calculations. Round your answers to 2 decimal
places.)
|
c. Liquidity ratios. (Do not round
intermediate calculations. Round your answers to 2 decimal
places.)
|
d. Debt utilization ratios. (Do not
round intermediate calculations. Input your debt to total assets
answer as a percent rounded to 2 decimal places. Round your other
answers to 2 decimal places.)
|
In: Accounting
Problem 10A-10 Comprehensive Standard Cost Variances [LO10-1, LO10-2, LO10-3, LO10-4] "Wonderful! Not only did our salespeople do a good job in meeting the sales budget this year, but our production people did a good job in controlling costs as well,” said Kim Clark, president of Martell Company. “Our $20,825 overall manufacturing cost variance is only .5% of the $4,165,000 standard cost of products made during the year. That's well within the 3% parameter set by management for acceptable variances. It looks like everyone will be in line for a bonus this year." The company produces and sells a single product. The standard cost card for the product follows: Inputs (1) Standard Quantity or Hours (2) Standard Price or Rate Standard Cost (1) × (2) Direct materials 3.50 feet $ 4.30 per foot $ 15.05 Direct labor 2.2 hours $ 9 per hour 19.80 Variable overhead 2.2 hours $ 2.20 per hour 4.84 Fixed overhead 2.2 hours $ 4.50 per hour 9.90 Total standard cost per unit $ 49.59 The following additional information is available for the year just completed: The company manufactured 20,000 units of product during the year. A total of 69,000 feet of material was purchased during the year at a cost of $4.50 per foot. All of this material was used to manufacture the 20,000 units produced. There were no beginning or ending inventories for the year. The company worked 45,500 direct labor-hours during the year at a direct labor cost of $8.85 per hour. Overhead is applied to products on the basis of standard direct labor-hours. Data relating to manufacturing overhead costs follow: Denominator activity level (direct labor-hours) 40,000 Budgeted fixed overhead costs $ 180,000 Actual variable overhead costs incurred $ 113,750 Actual fixed overhead costs incurred $ 177,100 Required: 1. Compute the materials price and quantity variances for the year. 2. Compute the labor rate and efficiency variances for the year. 3. For manufacturing overhead compute: a. The variable overhead rate and efficiency variances for the year. b. The fixed overhead budget and volume variances for the year. (For all requirements, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
In: Accounting
Renew Energy Ltd. (REL) manufactures and sells directly to
customers a special long-lasting rechargeable battery for use in
digital electronic equipment. Each battery sold comes with a
guarantee that the company will replace free of charge any battery
that is found to be defective within six months from the end of the
month in which the battery was sold. On June 30, 2020, the Warranty
Liability account had a balance of $45,000, but by December 31,
2020, this amount had been reduced to $5,000 by charges for
batteries returned.
REL has been in business for many years and has consistently
experienced an 7% return rate. However, effective October 1, 2020,
because of a change in the manufacturing process, the rate
increased to a total of 9%. Each battery is stamped with a date at
the time of sale so that REL has developed information on the
likely pattern of returns during the six-month period, starting
with the month following the sale. (Assume no batteries are
returned in the month of sale.)
Month Following Sale |
% of Total Returns Expected in the Month |
|||
1st | 20% | |||
2nd | 30% | |||
3rd | 20% | |||
4th | 10% | |||
5th | 10% | |||
6th | 10% | |||
100% |
For example, for January sales, 20% of the returns are expected in
February, 30% in March, and so on. Sales of these batteries for the
second half of 2020 were:
Month | Sales Amount | ||
July | $1,700,000 | ||
August | 1,700,000 | ||
September | 2,200,000 | ||
October | 1,300,000 | ||
November | 1,000,000 | ||
December | 800,000 |
REL’s warranty also covers the payment of the freight cost on
defective batteries returned and on new batteries sent as
replacements. This freight cost is 10% of the sales price of the
batteries returned. The manufacturing cost of a battery is roughly
60% of its sales price, and the salvage value of the returned
batteries averages 14% of the sales price. Assume that REL follows
IFRS and that it uses the expense approach to account for
warranties.
Calculate the warranty expense that will be reported for the July 1 to December 31, 2020 period.
Warranty Expense | $Enter your answer in accordance to the question statement |
eTextbook and Media
Calculate the amount of the accrual that you would expect in the Warranty Liability account as at December 31, 2020, based on the above likely pattern of returns.
Provision in the Warranty Liability account | $Enter your answer in accordance to the question statement |
eTextbook and Media
Would your answer to any of the above situations change if REL
followed ASPE?
Choose the answer from the menu in accordance to the question
statement
YesNo
In: Accounting
For December 31, 20X1, the balance sheet of Baxter Corporation
was as follows:
Current Assets |
Liabilities |
||||
Cash |
$ |
30,000 |
Accounts payable |
$ |
32,000 |
Accounts receivable |
35,000 |
Notes payable |
40,000 |
||
Inventory |
45,000 |
Bonds payable |
70,000 |
||
Prepaid expenses |
14,000 |
||||
Fixed Assets |
Stockholders’ Equity | ||||
Gross plant and equipment |
$ |
270,000 |
Preferred stock |
$ |
40,000 |
Less: Accumulated depreciation | 54,000 | Common stock |
75,000 |
||
Paid in Capital |
45,000 |
||||
Net plant and equipment |
$ |
216,000 |
Retained earnings |
38,000 |
|
Total assets |
$ |
340,000 |
Total liabilities and stockholders’ equity |
$ |
340,000 |
Sales for 20X2 were $320,000, and the cost of goods sold was 50
percent of sales. Selling and administrative expense was $32,000.
Depreciation expense was 8 percent of plant and equipment (gross)
at the beginning of the year. Interest expense for the notes
payable was 10 percent, while the interest rate on the bonds
payable was 12 percent. This interest expense is based on December
31, 20X1 balances. The tax rate averaged 40 percent.
$4,000 in preferred stock dividends were paid, and $7,000 in
dividends were paid to common stockholders. There were 10,000
shares of common stock outstanding.
During 20X2, the cash balance and prepaid expenses balances were
unchanged. Accounts receivable and inventory increased by 10
percent. A new machine was purchased on December 31, 20X2, at a
cost of $55,000.
Accounts payable increased by 25 percent. Notes payable increased
by $8,000 and bonds payable decreased by $20,000, both at the end
of the year. The preferred stock, common stock, and capital paid in
excess of par accounts did not change.
a. Prepare an income statement for 20X2.
(Round EPS answer to 2 decimal places.)
b. Prepare a statement of retained earnings for
20X2.
c. Prepare a balance sheet as of December 31,
20X2. (Amounts to be deducted should be indicated with
parentheses or a minus sign.)
In: Accounting
Consider a 5-year project with an initial fixed asset investment of $324,000, straight-line depreciation to zero over the project's life, a zero salvage value, a selling price of $34, variable costs of $17, fixed costs of $189,700, a sales quantity of 94,000 units, and a tax rate of 21 percent. What is the sensitivity of OCF to changes in the sales price?
$59,470 per $1 of sales
$61,600 per $1 of sales
$78,700 per $1 of sales
$74,260 per $1 of sales
$68,850 per $1 of sales
In: Accounting
Required:
Prepare a complete statement of cash flows using a spreadsheet;
report its operating activities using the indirect method.
(Enter all amounts as positive values.)
Please use the indirect method
Required information
Use the following information for the Problems below.
[The following information applies to the questions displayed
below.]
Forten Company, a merchandiser, recently completed its
calendar-year 2017 operations. For the year, (1) all sales are
credit sales, (2) all credits to Accounts Receivable reflect cash
receipts from customers, (3) all purchases of inventory are on
credit, (4) all debits to Accounts Payable reflect cash payments
for inventory, and (5) Other Expenses are paid in advance and are
initially debited to Prepaid Expenses. The company’s income
statement and balance sheets follow.
FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 |
|||||||
2017 | 2016 | ||||||
Assets | |||||||
Cash | $ | 51,400 | $ | 74,500 | |||
Accounts receivable | 67,310 | 51,625 | |||||
Inventory | 277,156 | 252,800 | |||||
Prepaid expenses | 1,300 | 2,025 | |||||
Total current assets | 397,166 | 380,950 | |||||
Equipment | 156,500 | 109,000 | |||||
Accum. depreciation—Equipment | (37,125 | ) | (46,500 | ) | |||
Total assets | $ | 516,541 | $ | 443,450 | |||
Liabilities and Equity | |||||||
Accounts payable | $ | 54,141 | $ | 116,175 | |||
Short-term notes payable | 10,300 | 6,200 | |||||
Total current liabilities | 64,441 | 122,375 | |||||
Long-term notes payable | 64,500 | 49,750 | |||||
Total liabilities | 128,941 | 172,125 | |||||
Equity | |||||||
Common stock, $5 par value | 164,750 | 151,250 | |||||
Paid-in capital in excess of par, common stock | 38,500 | 0 | |||||
Retained earnings | 184,350 | 120,075 | |||||
Total liabilities and equity | $ | 516,541 | $ | 443,450 | |||
FORTEN COMPANY Income Statement For Year Ended December 31, 2017 |
||||||
Sales | $ | 587,500 | ||||
Cost of goods sold | 286,000 | |||||
Gross profit | 301,500 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 21,750 | ||||
Other expenses | 133,400 | 155,150 | ||||
Other gains (losses) | ||||||
Loss on sale of equipment | (6,125 | ) | ||||
Income before taxes | 140,225 | |||||
Income taxes expense | 25,650 | |||||
Net income | $ | 114,575 | ||||
Problem 12-4AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4
Additional Information on Year 2017 Transactions
|
In: Accounting
Required information Comprehensive Problem 8-85 (LO 8-1, LO 8-2, LO 8-3, LO 8-4, LO 8-5) [The following information applies to the questions displayed below.] John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2018, John worked as a computer technician at a local university earning a salary of $152,000, and Sandy worked part-time as a receptionist for a law firm earning a salary of $29,000. John also does some Web design work on the side and reported revenues of $4,000 and associated expenses of $750. The Fergusons received $800 in qualified dividends and a $200 refund of their state income taxes. The Fergusons always itemize their deductions and their itemized deductions were well over the standard deduction amount last year. The Fergusons had qualifying insurance for purposes of the Affordable Care Act (ACA). Use Exhibit 8-9, Tax Rate Schedule, Dividends and Capital Gains Tax Rates for reference. The Fergusons reported making the following payments during the year: State income taxes of $4,400. Federal tax withholding of $21,000. Alimony payments to John’s former wife of $10,000 (divorced in 2014). Child support payments for John’s child with his former wife of $4,100. $12,200 of real property taxes. Sandy was reimbursed $600 for employee business expenses she incurred. She was required to provide documentation for her expenses to her employer. $3,600 to Kid Care day care center for Samantha’s care while John and Sandy worked. $14,000 interest on their home mortgage ($400,000 acquisition debt). $3,000 interest on a $40,000 home-equity loan. They used the loan to pay for a family vacation and new car. $15,000 cash charitable contributions to qualified charities. Donation of used furniture to Goodwill. The furniture had a fair market value of $400 and cost $2,000. What is the Fergusons' 2018 federal income taxes payable or refund, including any self-employment tax and AMT, if applicable? (Round your intermediate computations to the nearest whole dollar amount.)
In: Accounting
Bellingham Company produces a product that requires 2 standard direct labor hours per unit at a standard hourly rate of $21.00 per hour. If 2,700 units used 5,600 hours at an hourly rate of $19.95 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
a. Direct labor rate variance $
b. Direct labor time variance $
c. Direct labor cost variance $
In: Accounting