Texas Rex sells t-shirts. Expected sales for each quarter is 1000, 1200, 1500, and 2000 t-shirts at $10.00 each. They anticipate no price change.

The Direct Materials Budget tells management how much must be bought to support production and the cost of those purchases.

Plain t-shirts cost $3.00 each, and ink (for the screen printing) cost $0.20 per ounce. The factory needs one plain t-shirt and five ounces of ink for each logoed t-shirt that it produces. Texas Rex’s policy is to have 10% of the following quarter’s needs in ending inventory. The factory has 58 plain t-shirts and 390 ounces of ink on hand on January 1. At the end of the year, the desired ending inventory is 106 plain t-shirts and 530 ounces of ink.

Texas Rex, Inc.

Direct Materials Budget

For the year ending December 31, 2018

Plain t-shirts:                      Q1                          Q2                          Q3                          Q4                          Total

Units to be Produced

Direct Materials per unit_______            _______             ________           _______             ________

Production Needs          

Desired Ending Inv.         _______             _______             ________           _______             ________

Total Needs

Less Beginning Inv.          _______             _______             ________           _______             ________

Direct Materials

To be Purchased

Cost per t-shirt                  _______             _______             ________           _______             ________

Total T-shirt Purchase

Cost

Ink:                                        Q1                          Q2                          Q3                          Q4                          Total

Units to be Produced

Direct Materials per unit_______            _______             ________           _______             ________

Production Needs          

Desired Ending Inv.         _______             _______             ________           _______             ________

Total Needs

Less Beginning Inv.          _______             _______             ________           _______             ________

Direct Materials

To be Purchased

Cost per ounce                 _______             _______             ________           _______             ________

Total Ink Purchase Cost

Total Cost of

All Direct Materials

Paul’s Pool Service provides pool cleaning, chemical application, and pool repairs for residential customers. Clients are billed weekly for services provided and usually pay 50 percent of their fees in the month the service is provided. In the month following service, Paul collects 40 percent of service fees. The final 10 percent is collected in the second month following service. Paul purchases his supplies on credit, and pays 50 percent in the month of purchase and the remaining 50 percent in the month following purchase. Of the supplies Paul purchases, 80 percent is used in the month of purchase, and the remainder is used in the month following purchase.

The following information is available for the months of June, July, and August, which are Paul’s busiest months:

• June 1 cash balance $14,900.
• June 1 supplies on hand $3,900.
• June 1 accounts receivable $8,200.
• June 1 accounts payable $3,800.
• Estimated sales for June, July, and August are $24,600, $36,900, and $39,000, respectively.
• Sales during May were $22,600, and sales during April were $16,400.
• Estimated purchases for June, July, and August are $9,200, $17,400, and $12,300, respectively.
• Purchases in May were $5,100.

Required:
1. Compute budgeted cash receipts and budgeted cash payments for each month.

2. Compute the balances necessary to prepare a budgeted balance sheet for August 31 for each of the following accounts:

Julio and Maria are planning for their children to continue their education after
grade 12. They would like to know the types of tuition fees that are eligible for
the tuition fees tax credit and whether they can claim this credit if they pay for
their children's education.(In Canada)

COVID-19: The impact on Audits The Corona Virus (COVID-19) is already impacting South Africa in various ways and many businesses are faced with operational difficulties. However, entities must remember that the restrictions resulting from the virus, will also impact financial reporting requirements and increase the focus on certain areas during audits. Going concern Management of an entity are required to provide the auditor with their assessment of the entity’s ability to continue as a going concern. The assessment should take into account all available information about the future and cover at least 12 months from the end of the reporting period. It may be difficult to make a meaningful Base Case economic forecast, let alone a plausible downside economic scenario. In this highly uncertain environment, going concern assessments will be more difficult for entities to make, and more companies will need to report a material uncertainty related to going concern. The objectives of the auditor are: • to obtain sufficient appropriate audit evidence regarding, and conclude on, the appropriateness of management’s use of the going concern basis of accounting in the presentation of financial statements; and • to conclude on whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern. The conclusion reached by the auditor may have a significant impact on the audit opinion.

Required:
Discuss the potential impact of Covid-19 on the possible audit opinions that can be issued by external auditors.
[25 marks]

Indicate for each transaction below the account(s) and amount(s) that should be debited and credited. Use abbreviated account titles.

You have borrowed a loan of $20,000 from a bank to buy a car from Chase at the interest rate of

7.5% each year. You have promised the Chase to make mortgage style payments.

16. If you want to borrow this loan for three years, what is the total payment in each year?

            A) $6,191

             B) $1,500

             C) $ 7,691

             D) $ 7,154

             E) None of the above

17. If you want to borrow this loan for three years, what is the principal payment in year one?

            A) $6,191

             B) $1,500

             C) $ 7,691

             D) $ 7,154

             E) None of the above

18. If you want to borrow this loan for three years, what is the principal payment in year two?

            A) $6,191

             B) $1,500

             C) $ 7,691

             D) $ 7,154

             E) None of the above

19. If you want to borrow this loan for three years, what is the principal payment in year three?

            A) $6,191

             B) $1,500

             C) $ 7,691

             D) $ 7,154

             E) None of the above

20. If you want to borrow this loan for three years, what is the interest payment in year one?

            A) $6,191

             B) $1,500

             C) $ 7,691

             D) $ 7,154

             E) None of the above

21. If you want to borrow this loan for one year, what is the total payment?

            A) $21,500

             B) $20,000

             C) $1,500

             D) $7,691

             E) None of the above

22. If you want to borrow this loan for one year, what is the principal payment in this year?

            A) $21,500

             B) $20,000

             C) $1,500

             D) $7,691

             E) None of the above

23. If you want to borrow this loan for one year, what is the interest payment in this year?

            A) $21,500

             B) $20,000

             C) $1,500

             D) $7,691

             E) None of the above

24. If you want to borrow this loan for one year, what is the beginning balance in this year?

            A) $21,500

             B) $20,000

             C) $1,500

             D) $7,691

             E) None of the above

25. If you want to borrow this loan for one year, what is the ending balance in this year?

            A) $21,500

             B) $20,000

             C) $1,500

             D) $7,691

             E) None of the above

Lehman Pottery Company manufactures clay molded pottery on an assembly line. Its standard costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production.

Data for the Assembly Department for August 2019 are:

Work in process, beginning inventory: 0 units

Units started during August 450 units

Work in process, ending inventory: 300 units

Direct materials (100% complete)

Conversion costs (60% complete)

Costs for August: Costs for Assembly:

Direct materials $58,000

Conversion costs $45,000

Using the 5 step format in the Textbook and solutions manual, prepare the Production Cost Worksheet using the Weighted Average Method.

Round to 2 digits when calculating the Cost per Equivalent Unit (Example $28.58)

Countywide Cable Services, Inc. is organized with three segments: Metro, Suburban, and Outlying. Data for these segments for the year just ended follow.

In addition to the expenses listed above, the company has $85,000 of common fixed expenses. Income-tax expense for the year is $285,000.

Required:

1. Prepare a segmented income statement for Countywide Cable Services, Inc.

what is the rationale for recognising a deferred tax asset or deferred tax liability?

Conlon Chemicals manufactures paint thinner. Information on the work in process follows:

• Beginning inventory, 42,700 partially complete gallons.

• Transferred out, 210,000 gallons.

• Ending inventory (materials are 19 percent complete; conversion costs are 10 percent complete).

• Started this month, 244,100 gallons.

Required:

a. Compute the equivalent units for materials using the weighted-average method.

Equivalent units (Gallons)

b. Compute the equivalent units for conversion costs using the weighted-average method.

Equivalent units (Gallons)

Comm Devices (CD) is a division of Worldwide Communications, Inc. CD produces restaurant pagers and other personal communication devices. These devices are sold to other Worldwide divisions, as well as to other communication companies. CD was recently approached by the manager of the Personal Communications Division regarding a request to make a special emergency-response pager designed to receive signals from anywhere in the world. The Personal Communications Division has requested that CD produce 11,700 units of this special pager. The following facts are available regarding the Comm Devices Division.

For each of the following independent situations, calculate the minimum transfer price, and determine whether the Personal Communications Division should accept or reject the offer.

(a)

The Personal Communications Division has offered to pay the CD Division $115 per pager. The CD Division has no available capacity. The CD Division would have to forgo sales of 9,360 pagers to existing customers in order to meet the request of the Personal Communications Division. (Note: The number of special pagers to be produced does not equal the number of existing pagers that would be forgone.)

b. The Personal Communications Division has offered to pay the CD Division $150 per pager. The CD Division has no available capacity. The CD Division would have to forgo sales of 15,600 pagers to existing customers in order to meet the request of the Personal Communications Division. (Note: The number of special pagers to be produced does not equal the number of existing pagers that would be forgone.)

c. The Personal Communications Division has offered to pay the CD Division $110 per pager. The CD Division has available capacity.

Ekon owns a small tow-truck business that responds to state patrol requests to tow cars involved in wrecks, as well as to private business requests from customers at various auto repair shops and individuals with stalled autos. Ekon’s business is open 24/7 for 365 days a year. He is starting to see too many repairs on his three trucks, which either means that he loses business or must divert a truck from another area. He is now trying to consider whether it is best to continue use of the current trucks or whether he needs to invest some money in new trucks. Using the steps for the process of capital decision-making, create an outline with sub-steps that include questions Ekon can use to guide his investigation or considerations of buying new trucks.

To help reduce the risk involved in capital investment, a process is required to thoughtfully select the best opportunity for the company.

The process for capital decision-making involves several steps:

1. Determine capital needs for both new and existing projects.
2. Identify and establish resource limitations.
3. Establish baseline criteria for alternatives.
4. Evaluate alternatives using screening and preference decisions.
5. Make the decision.

Describe how the direct, step-down and reciprocal cost allocation methods differ in the way they recognise reciprocal services among support departments.

Type to copy and paste