web> X Company is a merchandiser and prepares monthly financial statements. The following is its balance sheet at the beginning of July: Balance Sheet July 1 Assets Equities Cash $50,676 Accounts Payable $65,758 Accounts Receivable 33,728 Notes Payable 31,613 Inventory 80,609 Prepaid Rent 6,118 Paid-In Capital 252,133 Equipment 241,894 Retained Earnings 63,521 Total Assets $413,025 Total Equities $413,025 The following summary transactions occurred during July: Sold stock to investors for $45,000. Borrowed $21,000 from a bank and paid off a $14,000 bank loan. Bought $8,729 of merchandise from suppliers, paying $3,219 and promising to pay the rest in August. Bought equipment for $36,100 from a manufacturer, paying $4,100 and promising to pay the rest in September. Paid $4,402 to suppliers that it bought merchandise from in June. Sold merchandise, receiving $16,551 cash and promises from customers to pay $4,839; the merchandise that was sold cost $10,695 and was purchased earlier in July. Paid $562 for rent in advance. Received $3,762 from customers who purchased merchandise last month. Paid wages and other miscellaneous expenses totaling $5,610. Note: Ignore adjusting entries. 4. What was the cash balance on July 31? A: $33,588 B: $44,672 C: $59,413 D: $79,020 E: $105,096 F: $139,778 G: $185,904 H: $247,253 Tries 0/3 5. What were total equities on July 31? A: $503,218 B: $669,280 C: $890,142 D: $1,183,889 E: $1,574,573 F: $2,094,182 G: $2,785,262 H: $3,704,398 Tries 0/3 6. What was Net Income in July? A: $3,823 B: $5,085 C: $6,763 D: $8,995 E: $11,963 F: $15,911 G: $21,162 H: $28,145

Cost of Goods Manufactured for a Manufacturing Company Two items are omitted from each of the following three lists of cost of goods manufactured statement data. Determine the amounts of the missing items, identifying them by letter. Work in process inventory, August 1 $2,300 $18,600 (e) Total manufacturing costs incurred during August 15,200 (c) 108,800 Total manufacturing costs (a) $217,600 $118,100 Work in process inventory, August 31 3,300 45,700 (f) Cost of goods manufactured (b) (d) $99,200

Production and Direct Labor Cost Budgets

Two-Leg Company manufactures slacks and jeans under a variety of brand names, such as Dockers^® and 501 Jeans^®. Slacks and jeans are assembled by a variety of different sewing operations. Assume that the sales budget for Dockers and 501 Jeans shows estimated sales of 21,610 and 38,720 pairs, respectively, for May. The finished goods inventory is assumed as follows:

Assume the following direct labor data per 10 pairs of Dockers and 501 Jeans for four different sewing operations:

a. Prepare a production budget for May. Prepare the budget in two columns: Dockers^® and 501 Jeans^®. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

b. Prepare the May direct labor cost budget for the four sewing operations, assuming a $12 wage per hour for the inseam and outerseam sewing operations and a $18 wage per hour for the pocket and zipper sewing operations. Prepare the direct labor cost budget in four columns: inseam, outerseam, pockets, and zipper.

Finch Boot Co. sells men’s, women’s, and children’s boots. For each type of boot sold, it operates a separate department that has its own manager. The manager of the men’s department has a sales staff of nine employees, the manager of the women’s department has six employees, and the manager of the children’s department has three employees. All departments are housed in a single store. In recent years, the children’s department has operated at a net loss and is expected to continue to do so. Last year’s income statements follow:

Required

1. a. Calculate the contribution margin. Determine whether to eliminate the children’s department.

2. b-1. Calculate the net income for the company as a whole with the children's department.

3. b-2. Confirm the conclusion you reached in Requirement a by preparing income statements for the company without the children’s department.

4. c. Eliminating the children’s department would increase space available to display men’s and women’s boots. Suppose management estimates that a wider selection of adult boots would increase the store’s net earnings by $38,000. Would this information affect the decision that you made in Requirement a?

Depletion

A coal mine was acquired at a cost of $1,500,000 and estimated to contain 6,000,000 tons of ore. During the year, 100,000 tons were mined and sold. Prepare the journal entry for the year's depletion expense. If an amount box does not require an entry, leave it blank.

A silver mine was acquired at a cost of $3,000,000 and estimated to contain 750,000 tons of ore. During the year, 125,000 tons were mined and sold. Prepare the journal entry for the year's depletion expense. If an amount box does not require an entry, leave it blank.

Prepare the entries using a general journal.

there are 2 entries per journal

On January 1, 2018, Sans Serif Publishers leased printing equipment from First Lease Corp. First LeaseCorp purchased the equipment from Compudec Corporation at a cost of $479,079.

The lease agreement specifies six annual payments of $92,931 beginning 1/1/18, the beginning of the lease, and at December 31 from 2018 through 2022. On December 31, 2023, at the end of the 6 year lease, and at the end of the six-year lease term, the equipment is expected to be worth $75,000, and San Serif has the option to purchase it for $60,000 on that date. The residual value after 7 years is zero. First LeaseCorp routinely acquires electronic equipment for lease to other firms. The interest rate in these financing arrangements is 10%.  

Exercise of Purchase Option (12/31/23)

Sans Serif Publishers (Lessee) Dr. Interest Expense (10% * $54,542) $5,458

Dr. Lease Payable (difference) $54,542  

Cr. Cash $60,000

CompuDec Corporation (Lessor)

Dr. Cash (exercise price) $60,000

Cr. Lease Receivable (account balance) $54,542

Cr. Interest revenue (10% * outstanding balance) $5,458

($54,542 is the balance of lease payable after all periodic lease payments have been made)

Since the lessee takes the BPO at the end of the lease, from the lessor's point of view, how come the journal doesn't have a debit entry saying "cash $60,000" and the lessor having a credit journal entry saying "equipment $60,000). This question comes from page 859 and 860 illustrations 15-14 and 15-14A in the Intermediate Accounting 9th edition by the authors Spiceland, Nelson, and Thomas.

. Complete the following table with the information provided 

Gross income

Medical care contribution

(1.45%)

Contribution on income

Other deductions

Net income

Determine:

• Contribution to Social Security (FICA)

• Medical care contribution (Medicare - FICA)

• Contribution on income

• Net income

Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided manufacturing system. The annual net cash benefits and savings associated with the system are described as follows:

The system will cost $9,000,000 and last 10 years. The company’s cost of capital is 12 percent.

The present value tables provided in Exhibit 19B.1 and Exhibit 19B.2 must be used to solve the following problems.

Required:

1. Calculate the payback period for the system.
years

Assume that the company has a policy of only accepting projects with a payback of five years or less. Would the system be acquired?
No

2. Calculate the NPV and IRR for the project. Round your IRR answers to the nearest whole percentage value (for example, 15.6% rounds to 16% and should be entered as "16" in the answer box). If the NPV is negative, enter your answer as a negative value.

Should the system be purchased—even if it does not meet the payback criterion?
Yes

3. The project manager reviewed the projected cash flows and pointed out that two items had been missed. First, the system would have a salvage value, net of any tax effects, of $1,000,000 at the end of 10 years. Second, the increased quality and delivery performance would allow the company to increase its market share by 20 percent. This would produce an additional annual net benefit of $300,000. Recalculate the payback period, NPV, and IRR given this new information. (For the IRR computation, initially ignore salvage value.) Round your IRR answers to the nearest whole percentage value (for example, 15.6% rounds to 16% and should be entered as "16" in the answer box). If the NPV is negative, enter your answer as a negative value.

Does the decision change?
Yes

Suppose that the salvage value is only half what is projected. Does this make a difference in the outcome? Does the salvage value have any real bearing on the company's decision?
No - in this case the decrease in salvage value is not enough to change the decision

The following problem is an example of typical transactions that a not-for-profit college or university might have.  Use the information in the FASB Accounting Standards Codification to help you answer the requirements of the problem.

Beatty College, a not-for-profit college, engaged in the following transactions during its fiscal year ending June 30, 2015.         

Requirements:  Prepare appropriate journal entries, indicating the types of funds (by restrictiveness) in which they would be recorded.

Transactions:

               1. In May 2015 Beatty College collected $100,000,000 in student tuition.  Of this amount              $10,000,000 was applicable to the summer semester, which ran from June1 to August 30, 2015,              and $1,000,000 was applicable to the fall semester that began September, 2015.

               2. Beatty College received a contribution of $1,000,000 in stocks and bonds to establish an       endowed chair in accounting.  Income from the chair endowment must be used to supplement        the salary of a professor accounting.

               3. During 2015, the accounting chair endowment earned interest and dividends of $50,000 all of    which was used to supplement the salary of the chair of the accounting department.  (Note:        a. record the investment earnings and b. record cash paid for the chair’s salary.)  Use the same      $50,000 for both entries.

               4. The fair value of the investment of the accounting chair endowment declined by $80,000.

               5. Using funds restricted for this purpose, the college purchased $150,000 of equipment for the          college athletics department.

               6. Beatty College recorded depreciation of $30,000.

               7. The annual alumni campaign yielded $1,800,000 in pledges.  The college estimated that 2% would be uncollectible.  During the year, Beatty college collected $1,500,000 on the pledges.

wite a paper on the cost of quality in a medical device company.

Net Present Value Method, Present Value Index, and Analysis

United Bankshores, Inc. wishes to evaluate three capital investment proposals by using the net present value method. Relevant data related to the proposals are summarized as follows:

Required:

1. Assuming that the desired rate of return is 6%, prepare a net present value analysis for each proposal. Use the present value of $1 table above. If required, use the minus sign to indicate a negative net present value. If required, round to the nearest dollar.

2. Determine a present value index for each proposal. If required, round your answers to two decimal places.

Average Rate of Return Method, Net Present Value Method, and Analysis

The capital investment committee of Cross Continent Trucking Inc. is considering two capital investments. The estimated income from operations and net cash flows from each investment are as follows:

Each project requires an investment of $400,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value analysis.

Required:

1a. Compute the average rate of return for each investment. If required, round your answer to one decimal place.

1b. Compute the net present value for each investment. Use the present value of $1 table above. If required, use the minus sign to indicate a negative net present value.

Develop and use accounting information for daily recording of business financial transactions in a manufacturing environment, and construct and use operational budgets for a manufacturing company

Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $120 per unit. Variable expenses are $60.00 per unit, and fixed expenses total $200,000 per year. Its operating results for last year were as follows:

Sales $ 3,360,000

Variable expenses 1,680,000

Contribution margin 1,680,000

Fixed expenses 200,000

Net operating income $ 1,480,000

Required: Answer each question independently based on the original data:

1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in dollar sales. 3. If this year's sales increase by $51,000 and fixed expenses do not change, how much will net operating income increase? 4-a. What is the degree of operating leverage based on last year's sales? 4-b. Assume the president expects this year's sales to increase by 15%. Using the degree of operating leverage from last year, what percentage increase in net operating income will the company realize this year? 5. The sales manager is convinced that a 11% reduction in the selling price, combined with a $60,000 increase in advertising, would increase this year's unit sales by 25%. a. If the sales manager is right, what would be this year's net operating income if his ideas are implemented? b. If the sales manager's ideas are implemented, how much will net operating income increase or decrease over last year? 6. The president does not want to change the selling price. Instead, he wants to increase the sales commission by $1.70 per unit. He thinks that this move, combined with some increase in advertising, would increase this year's sales by 25%. How much could the president increase this year's advertising expense and still earn the same $1,480,000 net operating income as last year?

Below are several transactions for Meyers Corporation for 2021.

1. Issue common stock for cash, $49,000.
2. Purchase building and land with cash, $34,000.
3. Provide services to customers on account, $6,900.
4. Pay utilities on building, $950.
5. Collect $4,900 on account from customers.
6. Pay employee salaries, $8,900.
7. Pay dividends to stockholders, $3,900.

Required:

1. For each transaction, determine the amount of cash flows. If cash is involved in the transaction, indicate whether Meyers should classify it as operating, investing, or financing in a statement of cash flows. (Enter N/A if the question is not applicable to the statement. List cash outflows as negative amounts.)

2. Calculate net cash flows for the year. (List cash outflows as negative amounts.)

3. Assuming the balance of cash on January 1, 2021, equals $4,300, calculate the balance of cash on December 31, 2021.