What’s the difference between default and bankruptcy?

Part 1:
Consider the following perpetual system merchandising transactions of Belton Company. Use a separate account for each receivable and payable; for example, record the sale on June 1 in Accounts Receivable—Avery & Wiest.

June 1 Sold merchandise to Avery & Wiest for $9,400; terms 2/5, n/15, FOB destination (cost of sales $6,550).
        2 Purchased $4,800 of merchandise from Angolac Suppliers; terms 1/10, n/20, FOB shipping point.
        4 Purchased merchandise inventory from Bastille Sales for $11,200; terms 1/15, n/45, FOB Bastille Sales.
        5 Sold merchandise to Gelgar for $10,800; terms 2/5, n/15, FOB destination (cost of sales $7,600).
        6 Collected the amount owing from Avery & Wiest regarding the June 1 sale.
     12 Paid Angolac Suppliers for the June 2 purchase.
      20 Collected the amount owing from Gelgar regarding the June 5 sale.
      30 Paid Bastille Sales for the June 4 purchase.

Prepare General Journal entries to record the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

example

Journal entry worksheet

• Record the sales; terms 2/5, n/15, FOB destination.

Note: Enter debits before credits.

Calculate net sales

calculate costs of goods

calculate gross profit from sales

What happens if a company sells bonds when the current market rate is: (a) equal to the company’s bond rate? (b) less than the company’s bond rate? (c) more than the company’s bond rate?

Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:

Please answer the question below and clearly explain..........Describe how IT performance reports are important in IT governance.

. On April 15, 2017, Melissa purchased $60,000 of Verbecke Co.'s 12%, 20-year bonds at face amount, with interest being paid on December 31 each year. Verbecke Co. has paid interest due on the bonds regularly. On April 15, 2021, market interest rates had risen to 14% and Melissa is considering selling the bonds.

Calculate the market value of Melissa’s bonds on April 14, 2021.

Please answer the question below and clearly explain..........There are four methods of system conversion: parallel, direct cutover, pilot, and phase‐in. Describe these four methods and how they differ.

1. Why is ROI an important number to know?

2. Looking at an organization, what do you think the most important items on the balanced score card would be and why.

QUESTION:

Expensing of employee stock options (ESOs) is now a requirement in financial reporting both under U.S. GAAP and IFRS. However, management, especially in the United States, successfully resisted expensing for many years before the expensing rules were finally adopted. Even now, accounting for ESOs remain a controversial topic.

Required

a) Discuss the effect of this asymmetric feature of ESOs on managers’ incentive to undertake risky projects. In other words, do these features lead to managers undertaking high-risk projects or low-risk projects?

DETAIL ANSWER. SHORT ANWERS WILL BE REJECTED

Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products. Forbes Division, which has $4.15 million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $5.07 million in automated equipment for test machine assembly. The division’s expected income statement at the beginning of the year was as follows:

A sales representative from LSI Machine Company approached Oscar in October. LSI has for $6.06 million a new assembly machine that offers significant improvements over the equipment Oscar bought at the beginning of the year. The new equipment would expand division output by 10 percent while reducing cash fixed costs by 5 percent. It would be depreciated for accounting purposes over a three-year life. Depreciation would be net of the $531,000 salvage value of the new machine. The new equipment meets Pitt's 12 percent cost of capital criterion. If Oscar purchases the new machine, it must be installed prior to the end of the year. For practical purposes, though, Oscar can ignore depreciation on the new machine because it will not go into operation until the start of the next year.

The old machine, which has no salvage value, must be disposed of to make room for the new machine.

Pitt has a performance evaluation and bonus plan based on residual income. Pitt uses a cost of capital of 12 percent in computing residual income. Income includes any losses on disposal of equipment. Investment is computed based on the end-of-year balance of assets, net book value. Ignore taxes.

Required:

a. What is Forbes Division’s residual income if Oscar does not acquire the new machine? (Negative amount should be indicated by a minus sign. Enter your answer in thousands of dollars. Round your final answers to nearest whole dollar.)

residual income

b. What is Forbes Division’s residual income this year if Oscar acquires the new machine? (Negative amount should be indicated by a minus sign. Enter your answer in thousands of dollars. Round your final answers to nearest whole dollar.)

residual income

c. If Oscar acquires the new machine and operates it according to specifications, what residual income is expected for next year? (Negative amount should be indicated by a minus sign. Enter your answer in thousands of dollars. Round your final answers to nearest whole dollar.)

residual income

Intangibles: Expense and Disclosure

Munn Inc. had the following intangible account balance at December 31, 2015:

Information relating to Munn's patent and transactions involving other intangible assets during 2016 includes the following:

1. The patent was purchased from Grey Company for $192,000 on January 1, 2014, at which time the remaining legal life was 16 years. On January 1, 2016, Munn determined that the useful life of the patent was only 8 years from the date of acquisition.
2. On January 2, 2016, in connection with the purchase of a trademark from Cody Corporation, the parties entered into a noncompete agreement and a consulting contract. Munn paid Cody $800,000, of which three-quarters was for the trademark and one-quarter was for Cody's agreement not to compete for a 5-year period in the line of business covered by the trademark. Munn considers the life of the trademark to be indefinite. Under the consulting contract, Munn agreed to pay Cody $50,000 annually on January 2 for 5 years. The first payment was made on January 2, 2016. The trademark is not impaired at the end of 2016.

Required

1. Prepare a schedule of the expenses for 2016 relating to Munn's intangible asset balances at December 31, 2015, and transactions during 2016. Enter all amounts as positive numbers.

2. Prepare the intangible assets section of Munn's balance sheet at December 31, 2016.

1. Bustillo Inc. is working on its cash budget for March. The budgeted ...

Bustillo Inc. is working on its cash budget for March. The budgeted beginning cash balance is $50,000. Budgeted cash receipts total $134,000 and budgeted cash disbursements total $129,000. The desired ending cash balance is $70,000. To attain its desired ending cash balance for March, the company needs to borrow:

Multiple Choice

• $125,000

• $70,000

• $15,000

• $0

2. Seventy percent of Pitkin ...

Seventy percent of Pitkin Corporation's sales are collected in the month of sale, 20% in the month following sale, and 10% in the second month following sale. The following are budgeted sales data for the company:

Total budgeted cash collections in April would be:

Multiple Choice

• $175,000

• $275,000

• $70,000

• $30,000

3. Budgeted sales in Acer Corporation ...

Budgeted sales in Acer Corporation over the next four months are given below:

Thirty percent of the company’s sales are for cash and 70% are on account. Collections for sales on account follow a stable pattern as follows: 50% of a month’s credit sales are collected in the month of sale, 30% are collected in the month following sale, and 20% are collected in the second month following sale. Given these data, cash collections for December should be:

Multiple Choice

• $141,800

• $100,500

• $118,700

• $161,400

4. Masde Corporation produces and sells Product ...

Masde Corporation produces and sells Product CharlieD. To guard against stockouts, the company requires that 25% of the next month's sales be on hand at the end of each month. Budgeted sales of Product CharlieD over the next four months are:

Budgeted production for August would be:

Multiple Choice

• 57,500 units

• 107,000 units

• 77,000 units

• 80,000 units

5.

The Charade Corporation is preparing its ...

The Charade Corporation is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable manufacturing overhead is $7 per direct labor-hour; the budgeted fixed manufacturing overhead is $87,000 per month, of which $16,200 is factory depreciation.

If the budgeted direct labor time for November is 8,200 hours, then the total budgeted manufacturing overhead for November is:

Multiple Choice

• $128,200

• $87,000

• $160,600

• $144,400

On January 1, 2018, Purellis Corporation issues 3-year $200,000 bonds at 97. The stated rate was 10% and the effective rate was 12%. Interest is payable semiannually on June 30 and December 31.

Prepare an amortization schedule for the first two interest payments using the straight-line method

. Prepare the entry for the first interest payment. You MUST show all calculations. Round to the nearest whole dollar. Do not forget journal entry descriptions.

Builder Products, Inc., uses the weighted-average method in its process costing system. It manufactures a caulking compound that goes through three processing stages prior to completion. Information on work in the first department, Cooking, is given below for May:

         
Production data:          
Pounds in process, May 1; materials 100% complete;
conversion 90% complete        75,000
Pounds started into production during May        400,000
Pounds completed and transferred out        ?
Pounds in process, May 31; materials 75% complete;
conversion 25% complete        35,000
Cost data:          
Work in process inventory, May 1:          
Materials cost    $    102,300
Conversion cost    $    45,600
Cost added during May:          
Materials cost    $    531,800
Conversion cost    $    250,575

Required:

1. Compute the equivalent units of production for materials and conversion for May.

2. Compute the cost per equivalent unit for materials and conversion for May.

3. Compute the cost of ending work in process inventory for materials, conversion, and in total for May.

4. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May.

5. Prepare a cost reconciliation report for May.

Old Country Links, Inc., produces sausages in three production departments—Mixing, Casing and Curing, and Packaging. In the Mixing Department, meats are prepared and ground and then mixed with spices. The spiced meat mixture is then transferred to the Casing and Curing Department, where the mixture is force-fed into casings and then hung and cured in climate-controlled smoking chambers. In the Packaging Department, the cured sausages are sorted, packed, and labeled. The company uses the weighted-average method in its process costing system. Data for September for the Casing and Curing Department follow:

       Percent Completed
   Units    Mixing    Materials    Conversion
Work in process inventory, September 1    10    100    %    60    %    50    %
Work in process inventory, September 30    10    100    %    20    %    10    %

Mixing    Materials    Conversion
Work in process inventory, September 1    $    27,200    $    90    $    4,880
Cost added during September $    409,700    $    35,550    $    225,350

Mixing cost represents the costs of the spiced meat mixture transferred in from the Mixing Department. The spiced meat mixture is processed in the Casing and Curing Department in batches; each unit in the above table is a batch and one batch of spiced meat mixture produces a set amount of sausages that are passed on to the Packaging Department. During September, 160 batches (i.e., units) were completed and transferred to the Packaging Department.

Required:

1. Determine the Casing and Curing Department's equivalent units of production for mixing, materials, and conversion for the month of September.

2. Compute the Casing and Curing Department's cost per equivalent unit for mixing, materials, and conversion for the month of September.

3. Compute the Casing and Curing Department's cost of ending work in process inventory for mixing, materials, conversion, and in total for September.

4. Compute the Casing and Curing Department's cost of units transferred out to the Packaging Department for mixing, materials, conversion, and in total for September.

5. Prepare a cost reconciliation report for the Casing and Curing Department for September.