3) The December 31, 2019, trial balances for Paul Corporation and its subsidiary Stuart are listed below.
Paul Corporation Stuart Company
Debit Credit Debit Credit
Cash $ 30,000 $ 8,000
Receivables (net) 13,000 12,000
Inventory, 1/1 12,000 10,000
Investment in S 150,000
Plant and equipment (net) 250,000 195,000
Land 100,000 80,000
Accounts payable $ 30,000 $ 10,000
Other liabilities 85,000 100,000
Common stock ($10 par) 250,000 100,000
Retained earnings, 1/1 168,000 84,000
Dividends declared 15,000 20,000
Sales 132,000 91,000
Dividend income 15,000
Purchases 60,000 30,000
Other expenses 50,000 _______ 30,000 _______
$680,000 $680,000 $385,000 $385,000
Inventory, 12/31 $15,000 $12,000
A. Prepare the journal entries found on Paul’s books for 2019
|
To record P’s share of S’s dividends |
||
B. Prepare the workpaper entries for 2019
|
To establish reciprocity (convert to equity) |
||
|
To eliminate P’s share of S’s equity |
||
|
To allocate the difference between implied and book value |
||
|
To eliminate P’s share of S’s dividends |
||
In: Accounting
Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment is as follows
Initial investment (2 limos) $960,000
Useful life 10 years
Salvage value $120,000
Annual net income generated $82,560
LLT's cost of capital 13%
Assume straight line depreciation method is used. Required Help LLT evaluate this project by calculating each of the following:
1. Accounting rate of return. (Round your percentage answer to 1 decimal place.)
2. Payback period. (Round your answer to 2 decimal places.)
3.Net present value.
I require answer for all the 3 questions. Thank you
In: Accounting
Pureform, Inc., uses the weighted-average method in its process costing system. It manufactures a product that passes through two departments. Data for a recent month for the first department follow:
| Units | Materials | Labor | Overhead | ||||
| Work in process inventory, beginning | 79,000 | $ | 99,000 | $ | 34,200 | $ | 46,700 |
| Units started in process | 749,000 | ||||||
| Units transferred out | 770,000 | ||||||
| Work in process inventory, ending | 58,000 | ||||||
| Cost added during the month | $ | 1,309,400 | $ | 421,230 | $ | 576,520 | |
The beginning work in process inventory was 80% complete with respect to materials and 65% complete with respect to labor and overhead. The ending work in process inventory was 60% complete with respect to materials and 50% complete with respect to labor and overhead.
Required:
1. Compute the first department's equivalent units of production for materials, labor, and overhead for the month.
2. Determine the first department's cost per equivalent unit for materials, labor, and overhead for the month. (
In: Accounting
List the steps of the Accounting Cycle. Identify the effects of various business transactions. Compare internal accounting methods.
Please answer the following questions with supporting examples and full explanations. For each of the learning objectives, provide an analysis of how the course supported each objective. Explain how the material learned in this course, based upon the objectives, will be applicable to the professional application.
In: Accounting
roblem 5-3A Record transactions related to accounts receivable (LO5-3, 5-5) [The following information applies to the questions displayed below.] The following events occur for The Underwood Corporation during 2018 and 2019, its first two years of operations. June 12, 2018 Provide services to customers on account for $41,000. September 17, 2018 Receive $25,000 from customers on account. December 31, 2018 Estimate that 45% of accounts receivable at the end of the year will not be received. March 4, 2019 Provide services to customers on account for $56,000. May 20, 2019 Receive $10,000 from customers for services provided in 2018. July 2, 2019 Write off the remaining amounts owed from services provided in 2018. October 19, 2019 Receive $45,000 from customers for services provided in 2019. December 31, 2019 Estimate that 45% of accounts receivable at the end of the year will not be received. References Section BreakProblem 5-3A Record transactions related to accounts receivable (LO5-3, 5-5) 11.value: 0.27 pointsRequired information Problem 5-3A Part 1 Required: 1. Record transactions for each date
In: Accounting
Gear Company records $2,000 of depr
eciation under the sum-of-ye
ars’-digits method in
2019, the company’s first year
of operations. In 2020, the comp
any decides to change to the
straight-line method f
or accounting purposes. If the straight-l
ine method were used in 2019,
depreciation would have b
een $1,500. Depreciation in 2020 under
the straight-line method is
$1,800 (depreciated based on the
book value on January 1, 2020)
. The tax rate is 25%.
Income from continuing operati
ons before tax and before deducti
ng depreciation in 2020 is
$12,000.
REQUIRED:
Provide the 2020 entry to record t
his change and calculate 2020
net income.
In: Accounting
Larry company is considering the purchase of an investment that has a positive net present value based on a discount rate of 12%. The internal rate of return would be: a. zero b. 12% c. greater than 12% d. Less than 12%?
In: Accounting
Suppose you can afford $11,700 per year to invest into a savings annuity. Write this value down, as you'll be using it throughout this entire problem. We are going to explore various options and how these options will impact the interest you are making.
Payment Frequency
Monthly
If you deposit your available money on a monthly basis, how much are you depositing per month? $
If you are earning 6.4% annual interest, what is the total value of the annuity at the end of 30 years? $
How much interest is earned at the end of 30 years? $
Weekly
If you deposit your available money on a weekly basis, how much are you depositing per week (52 weeks per year)? $
If you are earning 6.4% annual interest, what is the total value of the annuity at the end of 30 years? $
How much interest is earned at the end of 30 years? $
Rate
r = 6.4%
If you are making monthly deposits from your available funds, what is the total value in your annuity at the end of 30 years, given the rate is 6.4%? $
How much interest did you earn? $
r = 6.9%
If you are making monthly deposits from your available funds, what is the total value in your annuity at the end of 30 years, given the rate is 6.9%? $
How much interest did you earn? $
r = 7.4%
If you are making monthly deposits from your available funds, what is the total value in your annuity at the end of 30 years, given the rate is 7.4%? $
How much interest did you earn? $
Time
25 years
If you make monthly deposits at an annual rate of 6.4%, what is the total value in the account after 25 years? $
How much interest did you earn? $
30 years
If you make monthly deposits at an annual rate of 6.4%, what is the total value in the account after 30 years? $
How much interest did you earn? $
35 years
If you make monthly deposits at an annual rate of 6.4%, what is the total value in the account after 35 years? $
How much interest did you earn? $
40 years
If you make monthly deposits at an annual rate of 6.4%, what is the total value in the account after 40 years? $
How much interest did you earn? $
Conclusion
Which factor had the greatest impact on the amount of interest that you earned? Select an answer Payment Frequency? Rate? Time?
In: Accounting
Midlands Inc. had a bad year in 2019. For the first time in its
history, it operated at a loss. The company’s income statement
showed the following results from selling 80,000 units of product:
net sales $1,600,000; total costs and expenses $1,824,800; and net
loss $224,800. Costs and expenses consisted of the
following.
|
Total |
Variable |
Fixed |
||||
|---|---|---|---|---|---|---|
| Cost of goods sold | $1,160,000 | $652,000 | $508,000 | |||
| Selling expenses | 515,800 | 91,000 | 424,800 | |||
| Administrative expenses | 149,000 | 57,000 | 92,000 | |||
| $1,824,800 | $800,000 | $1,024,800 |
Management is considering the following independent alternatives
for 2020.
| 1. | Increase unit selling price 25% with no change in costs and expenses. | |
| 2. | Change the compensation of salespersons from fixed annual salaries totaling $195,000 to total salaries of $41,985 plus a 5% commission on net sales. | |
| 3. | Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50. |
(a) Compute the break-even point in dollars for
2019. (Round contribution margin ratio to 4 decimal
places e.g. 0.2512 and final answer to 0 decimal places, e.g.
2,510.)
| Break-even point |
$Enter the break-even point in dollars rounded to 0 decimal places |
(b) Compute the break-even point in dollars under
each of the alternative courses of action for 2020.
(Round contribution margin ratio to 3 decimal places
e.g. 0.251 and final answers to 0 decimal places, e.g.
2,510.)
|
Break-even point |
||||
|---|---|---|---|---|
| 1. | Increase selling price |
$Enter a dollar amount |
||
| 2. | Change compensation |
$Enter a dollar amount |
||
| 3. | Purchase machinery |
$Enter a dollar amount |
In: Accounting
Catherine is a U.S. citizen who is employed by DSC, Inc., a global company. Beginning on August 1, 2018, Catherine began working in Augsburg, Germany. She worked for 153 days of 2018. She worked there until March 31, 2019, when she transferred to Kamnik, Slovenia. She worked in Kamnik for the remainder of 2019. Her salary for the first seven months of 2018 was $225,000, and it was earned in the United States. Her salary for the remainder of 2018 was $165,000, and it was earned in Augsburg. Catherine's 2019 salary from DSC was $425,000, with part being earned in Augsburg and part being earned in Kamnik.
Assume the 2019 indexed statutory amount is the same as the 2018 indexed amount. Assume a 365-day year.
When required, round any fractions out to four decimal places. Round final answers to the nearest dollar.
a. Is Catherine eligible for the foreign income exclusion for 2018? Yes
b. Catherine may exclude $ ? from her gross income for 2018.
c. Is Catherine eligible for the foreign income exclusion for 2019? Yes
d. Catherine may exclude $ 103,900 from her gross income for 2019.
In: Accounting
Pareto Chart and Cost of Quality Report for a Manufacturing Company The president of Mission Inc. has been concerned about the growth in costs over the last several years. The president asked the controller to perform an activity analysis to gain a better insight into these costs. The result of the activity analysis is summarized as follows: Required: 1. Classify the activities into prevention, appraisal, internal failure, external failure, and not costs of quality (producing product). Classify the activities into value-added and non-value added activities. Activity Activity Cost Cost of Quality Classification VA/NVA Correcting invoice errors $22,600 External failure Non-value-added Disposing of incoming materials with poor quality 18,080 Internal failure Non-value-added Disposing of scrap 54,240 Internal failure Non-value-added Expediting late production 45,200 Internal failure Non-value-added Final inspection 40,680 Appraisal Value-added Inspecting incoming materials 9,040 Appraisal Value-added Inspecting work in process 40,680 Appraisal Value-added Preventive machine maintenance 31,640 Prevention Value-added Producing product 162,720 Not a quality cost Value-added Responding to customer quality complaints 27,120 External failure Non-value-added Total $452,000 2. On paper or in a spreadsheet program, prepare a Pareto chart for each of the activities listed above. Answer the following: What type of chart is a Pareto chart? Bar chart Which activity appears first, in order from left to right? Producing product 3. Use the activity cost information to determine the percentages of total department costs that are prevention, appraisal, internal failure, external failure, and not costs of quality. If required, round percentages to one decimal place. Quality Cost Classification Activity Cost Percent of Total Department Cost Prevention $ % Appraisal % Internal failure % External failure % Not a cost of quality % Total $ % 4. Determine the percentages of total department costs that are value-added and non-value-added. If required, round percentages to one decimal place. Activity Cost Percent of Total Department Cost Value-added $ % Non-value-added % Total $ % 5. The department has 37% of its total costs as non-value-added . Internal failure costs represent 26% of the total costs. This means there is significant opportunity for cost savings. External failure costs represent 11% of the total department costs.
In: Accounting
Two items are omitted from each of the following summaries of
balance sheet and income statement data for two corporations for
the year 2019, Blue Spruce Corp. and Ayayai Enterprises.
Determine the missing amounts.
|
Blue Spruce Corp. |
Ayayai Enterprises |
|||||
| Beginning of year: | ||||||
| Total assets | $137,740 | $183,180 | ||||
| Total liabilities | 120,700 | (c) | ||||
| Total stockholders’ equity | (a) | 106,500 | ||||
| End of year: | ||||||
| Total assets | 227,200 | 255,600 | ||||
| Total liabilities | 170,400 | 71,000 | ||||
| Total stockholders’ equity | 56,800 | 184,600 | ||||
| Changes during year in stockholders’ equity: | ||||||
| Additional investment | (b) | 35,500 | ||||
| Dividends | 34,080 | (d) | ||||
| Total revenues | 305,300 | 142,000 | ||||
| Total expenses | 248,500 | 78,100 | ||||
In: Accounting
Many companies make annual reports available on their corporate website, often under an Investors tab. Annual reports also can be accessed through the SEC's EDGAR system at www.sec.gov (under Filings, click Company Filings Search, type in Company Name, and under Filing Type, search for 10-K).
Access the most recent annual report for the following U.S.-based multinational corporations to complete the requirements:
International Business Machines Corporation
Intel Corporation
Required:
a. Identify the location(s) in the annual report that provides disclosures related to foreign currency translation and foreign currency hedging.
b. Determine whether the company's foreign operations have a predominant functional currency.
c. Determine the amount of translation adjustment, if any, reported in other comprehensive income in each of the three most recent years. Explain the sign (positive or negative) of the translation adjustment in each of the three most recent years. Compare the relative magnitude of these translations adjustments for the two companies.
d. Determine whether each company hedges net investments in foreign operations. If so, determine the type(s) of hedging instruments used.
In: Accounting
EMD Corporation manufactures two products, Product S and Product W. Product W is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product W. Product W is the more complex of the two products, requiring 3 hours of direct labor time per unit to manufacture compared to 2 hour of direct labor time for Product S. Product W is produced on an automated production line.
Overhead is currently assigned to the products on the basis of direct-labor-hours. The company estimated it would incur $912,811 in manufacturing overhead costs and produce 19,000 units of Product W and 76,000 units of Product S during the current year. Unit cost for materials and direct labor are:
| Product S | Product W | ||||||
| Direct material | $ | 15 | $ | 25 | |||
| Direct labor | 10 | 12 | |||||
Required:
a-1. Compute the predetermined overhead rate under the current method of allocation.
a-2. Determine the unit product cost of each product for the current year.
b. The company's overhead costs can be attributed to four major activities. These activities and the amount of overhead cost attributable to each for the current year are given below:
| Total Activity | |||||
| Activity Cost Pool | Total Cost | Product S | Product W | Total | |
| Machine setups required | $ | 405,000 | 1,620 | 1,620 | 3,240 |
| Purchase orders issued | 60,680 | 553 | 187 | 740 | |
| Machine-hours required | 273,450 | 7,460 | 10,770 | 18,230 | |
| Maintenance requests issued | 173,681 | 673 | 864 | 1,537 | |
| $ | 912,811 | ||||
Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year.
Complete this question by entering your answers in the tabs below.
Compute the predetermined overhead rate under the current method of allocation. (Round your answer to 2 decimal places.)
Req A1
|
Determine the unit product cost of each product for the current year. (Round your answers to 2 decimal places.)
Req A2
|
Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year. (Round your answer to 2 decimal places.)
Req B
|
In: Accounting
A meteorite landed in Lindsay’s back yard. She sold it to a science museum for $10,000. Which of the following investments has the higher effective rate, assuming that Lindsay is investing the money for one year: a certificate of deposit (CD) with a 3.00% stated interest rate compounded monthly, or a money market fund that pays 3.25% simple interest?
|
The CD has a higher effective interest rate and will earn $3,932.61 more than the money market fund. |
||
|
The money market fund has a higher effective annual interest rate and will earn $20.84 more than the CD. |
||
|
The money market fund has a higher effective annual interest rate and will earn $300.00 more than the CD. |
||
|
The money market fund has a higher effective annual interest rate and will earn $25.00 more than the CD. |
In: Accounting