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
In: Accounting
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:
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:
|
In: Accounting
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)
In: Accounting
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]
In: Accounting
Indicate for each transaction below the account(s) and amount(s)
that should be debited and credited. Use abbreviated account
titles.
Item | Accounts | Amounts |
(a) Jan. 1, 2001 purchased land with a usable office building thereon for cash of $200,000. Tax assessment values: Land $20,000; building $60,000 | ||
(b) Jan. 1, 2001 purchased land for future building site for a cash cost of $40,000; an old building on this site, appraised at $2,000 at the date of purchase, is to be torn down immediately. | ||
(c) Net cash cost of demolishing the old building in (b) above amounted to $2,000. | ||
(d) Cash cost of excavation for basement of the new building (b above) was $6,000. | ||
(e) Lawyers' fees paid in connection with purchase of real estate in (b) $900. | ||
(f) Taxes paid on land purchased in (b) assessed before completion of building, $300. | ||
(g) Factory superintendent's salary for 2001 was $24,000. During 2001, the superintendent spent the first six months supervising construction of the new building; the next three months supervising installation of productive machinery in the new building, and the last three months supervising operations in the new building. | ||
(h) Cost of grading and paying parking space and walks behind new building, $9,500. |
In: Accounting
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
In: Accounting
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)
In: Accounting
Countywide Cable Services, Inc. is organized with three segments: Metro, Suburban, and Outlying. Data for these segments for the year just ended follow.
Metro |
Suburban |
Outlying |
|||||||
Service revenue |
$ |
1,030,000 |
$ |
830,000 |
$ |
430,000 |
|||
Variable expenses |
166,000 |
116,000 |
66,000 |
||||||
Controllable fixed expenses |
374,000 |
294,000 |
124,000 |
||||||
Fixed expenses controllable by others |
196,000 |
166,000 |
56,000 |
||||||
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:
|
In: Accounting
what is the rationale for recognising a deferred tax asset or deferred tax liability?
In: Accounting
Information pertaining to ABC Company's sales budget is as follows: | ||||||
October | November | December | ||||
Unit sales | 1,800 | 2,000 | 2,800 | |||
Unit sale price | $ 10.00 | |||||
Credit card sales | 60% | |||||
Cash sales | 40% | |||||
Fees paid to credit card companies | 3% | |||||
Cost of goods sold | 40% | of net sales | ||||
Note: Net sales is gross sales less fees paid to credit card companies. | ||||||
Required: | ||||||
Compute the budgeted sales revenue, cost of goods sold and | ||||||
gross margin for the month of November. | ||||||
In: Accounting
In: Accounting
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)
In: Accounting
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.
Selling price of standard pager | $96 | |
---|---|---|
Variable cost of standard pager | $54 | |
Additional variable cost of special pager | $38 |
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.)
Minimum transfer price |
Personal Communications Division should (accept/reject) the offer. |
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.)
Minimum transfer price |
Personal Communications Division should (accept/reject) the offer. |
c. The Personal Communications Division has offered to pay the CD Division $110 per pager. The CD Division has available capacity.
Minimum transfer price |
Personal Communications Division should (accept/reject) the offer. |
In: Accounting
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:
In: Accounting
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
In: Accounting