Tidewater Company uses the product cost concept of applying the cost-plus approach to product pricing. The cost and expenses of producing and selling 50,000 units of Product K are as follows:

Tidewater desires a profit equal to a 10% rate of return on invested assets of $1,285,000.

a. Determine the amount of desired profit from the production and sale of Product K.
$ 128,500

b. Determine the total manufacturing costs and the cost amount per unit for the production and sale of 50,000 units of Product K.

c. Determine the markup percentage for Product K.
%

d. Determine the selling price of Product K. Round your answer to two decimal places.
$21.25

I'm having trouble with C.

On January 1, 2015 $20,000,000 of 20 year bonds were issued with a coupon rate of 6.5% when the market rate was 6%. Interest is paid every six months on June 30th and December 31st. Prepare the following journal entries and show your calculations as to how you arrived at the numbers.

1)Issuance of bonds on January 1, 2015

2) Payment of interest on June 30th and December 31st of both 2015 and 2016.

3) What is the carrying value of the bonds that would be presented on the balance sheet at December 31st 2016.

Sonic Inc. manufactures two models of speakers, Rumble and Thunder. Based on the following production and sales data for June, prepare (a) a sales budget and (b) a production budget:

a. Prepare a sales budget.

b. Prepare a production budget. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.

Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1.

Required:

1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)

1. 2-a. Of the four methods, which will result in the highest gross profit?

• Last-in, first-out

• Weighted average cost

• First-in, first-out

• Specific identification

1. 2-b. Of the four methods, which will result in the lowest income taxes?

• Last-in, first-out

• Weighted average cost

• First-in, first-out

• Specific identification

Cash Budget

The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budgetinformation:

The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $7,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.

Current assets as of September 1 include cash of $55,000, marketable securities of $79,000, and accounts receivable of $163,100 ($128,000 from July sales and $35,100 from August sales). Sales on account for July and August were $117,000 and $128,000, respectively. Current liabilities as of September 1 include $7,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $22,000 will be made in October. Bridgeport’s regular quarterly dividend of $7,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $54,000.

Required:

1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign. Assume 360 days per year for interest calculations.

1. Ludell Corp. shows the following data-

Projected benefit obligation 1/1/17-             $560,000

Plan Assets 1/1/17-                                        $546,200

On 1/2017, Ludell amends the plan and grants prior service cost benefits of $120,000

Settlement rate - 9%              Service Cost - $58,000            Contribution - $65,000

Actual/expected returns-$52,280      Benefits paid-$40,000

PSC amortization-$17,000.

A. Prepare the pension worksheet showing the journal entry for pension expense.

B. Show Y/E balances in the pension accounts (Memo record and OCI accounts included) C. Indicate amounts to be reported on Balance sheet and Income statements.

Allocation: Fixed and Variable Costs, Budgeted Fixed and Variable Costs

Biotechtron, Inc., has two research laboratories in the Southwest, one in Yuma, Arizona, and the other in Bernalillo, New Mexico. The owner of Biotechtron centralized the legal services function in the Yuma office and had both laboratories send any legal questions or issues to the Yuma office. The legal services support center has budgeted fixed costs of $175,000 per year and a budgeted variable rate of $66 per hour of professional time. The normal usage of the legal services center is 2,925 hours per year for the Yuma office and 1,575 hours per year for the Bernalillo office. This corresponds to the expected usage for the coming year.

Required:

1. Determine the amount of legal services support center costs that should be assigned to each office. In your computations, carry ratio values out to two decimal places. Round your final answers to the nearest dollar if rounding is required.

2. Since the offices produce services, not tangible products, what purpose is served by allocating the budgeted costs?

3. Now, assume that during the year, the legal services center incurred actual fixed costs of $178,300 and actual variable costs of $254,740. It delivered 3,840 hours of professional time—2,270 hours to Yuma and 1,570 hours to Bernalillo.

Determine the amount of the legal services center's costs that should be allocated to each office.

Fill in the missing amounts in the following schedules.

• Fill in the missing amounts in the following schedules.

  	Accounts receivable, 12/31/x0 ¥1,740,000 ‡ Sales on account during 20x1 4,548,000 Collections of accounts receivable during 20x1 (3,932,000) Accounts receivable, 12/31/x1

• 	Retained earnings, 12/31/x0 $1,540,300 Net income for 20x1 301,200 Dividends paid in 20x1 0 Retained earnings, 12/31/x1

• *Half of each month’s sales are on account. March sales amounted to $186,000.

  †60% of credit sales is collected in the month of sale; 40% is collected in the following month.

  ‡Yen is the Japanese national currency.

McKinsey Machines Ltd manufactures a single product A.   It has two cost centers namely molding department and painting department.

McKinsey Ltd executes job no. 410.   The cost and output details of Job No.410 are given below:

Overheads allocation to Job No. 410 will be as follows:

(a) Molding department overheads will be allocated based on machine hours

(b) Painting Department overheads will be allocated using direct labour costs (as a percentage).

Required

(4) Explain why the costs reported under traditional costing and activity-based costing differ from one another?         

Admire is a retail company that sells specialized gardening products. The company is considering opening a new store on October 1, Year1. As budget coordinator, you have been asked to prepare a master budget for the first 3 months of the company’s operation. You have gathered the following information:

October sales are estimated to be $300000 of which 45 percent will be cash and the remainder will be on credit. The company expects all sales to increase at the rate of 20 percent per month for November and December. Sales in January Year 2 are expected to be $250000.

The company expects to collect 100 percent of the accounts receivable generated by credit sales in the month following the sale.

Prepare a sales budget and a schedule of cash receipts using these facts and your excel template. Check your answers here before moving to the next part, by completing the cells requested in the chart below.

The cost of goods sold is 60 percent of sales. The company desires to maintain a minimum ending inventory equal to 10 percent of the next month’s cost of goods sold. (Ending inventory for December is based on budgeted January Year2 sales.)

Assume that all inventory purchases are made on account (on credit). The company pays 80 percent of accounts payable in the month of purchase and the remaining amount in the following month.

In excel, prepare an inventory purchases budget and a cash payments budget for inventory purchases. Use the check figures below before you continue.

Budgeted selling and administrative expenses per month follow.

• Salary expense (fixed): $ 28200
• Sales commissions:  5 percent of Sales
• Supplies expense:   2 percent of Sales
• Utilities (fixed): $2600              
• Depreciation on store equipment (fixed)*:   You compute    
• Rent (fixed) $ 11000          
• Miscellaneous (fixed): $ 3500      

*The capital expenditures budget indicates that the company will spend $182400 on October 1 for store fixtures, which are expected to have a $24000 residual value and a 36 month useful life.

Utilities and sales commissions are paid the month after they are incurred; all other expenses are paid in the month in which they are incurred.

In excel, prepare the selling and administrative expenses budget and the cash payments budget for selling and administrative expenses. Check the key figures below.

Admire issued common stock for $50000 on October 5.

A dividend of $28000 was paid on December 15.

The company borrows and repays funds in increments of $1,000 on the last day of the month. The company also pays its vendors on the last day of the month. It pays interest of 1 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $16000 cash cushion.   

Prepare a cash budget on your excel template. Check key figure below.

Income statement

Input expenses as negatives. Use a minus sign in front of the number.

Balance Sheet

Enter any contra-assets as negative numbers. Use a minus sign.

Required information

[The following information applies to the questions displayed below.]

The City of Lynnwood was recently incorporated and had the following transactions for the fiscal year ended December 31.

1. The city council adopted a General Fund budget for the fiscal year. Revenues were estimated at $2,100,000 and appropriations were $2,000,000.
2. Property taxes in the amount of $2,040,000 were levied. It is estimated that $14,000 of the taxes levied will be uncollectible.
3. A General Fund transfer of $30,000 in cash and $310,000 in equipment (with accumulated depreciation of $75,000) was made to establish a central duplicating internal service fund.
4. A citizen of Lynnwood donated marketable securities with a fair value of $900,000. The donated resources are to be maintained in perpetuity with the city using the revenue generated by the donation to finance an after school program for children, which is sponsored by the culture and recreation function. Revenue earned and received as of December 31 was $50,000.
5. The city’s utility fund billed the city’s General Fund $135,000 for water and sewage services. As of December 31, the General Fund had paid $134,000 of the amount billed.
6. The central duplicating fund purchased $9,500 in supplies.
7. Cash collections recorded by the general government function during the year were as follows:

8. During the year the internal service fund billed the city’s general government function $20,700 for duplicating services and it billed the city’s utility fund $13,100 for services.
9. The city council decided to build a city hall at an estimated cost of $5,100,000. To finance the construction, 5 percent bonds were sold at the face value of $5,100,000. A contract for $4,600,000 has been signed for the project; however no expenditures have been incurred as of December 31.
10. The general government function issued a purchase order for $37,000 for computer equipment. When the equipment was received, a voucher for $32,900 was approved for payment and payment was made.

a. For each transaction number identify all of the fund and/or government-wide activity journals in which journal entries must be made. (Select all that apply.)

Mary Tappin, an assistant Vice President at Galaxy Toys, was disturbed to find on her desk a memo from her boss, Gary Resnick, to the controller of the company. The memo appears below:

GALAXY TOYS INTERNAL MEMO

Sept 15

To: Harry Wilson, Controller

Fm: Gary Resnick, Executive Vice President

As you know, we won't start recording many sales until October when stores start accepting shipments from us for the Christmas season. Meanwhile, we are producing flat-out and are building up our finished goods inventories so that we will be ready to ship next month.

Unfortunately, we are in a bind right now since it looks like the net income for the quarter ending on Sept 30 is going to be pretty awful. This may get us in trouble with the bank since they always review the quarterly financial reports and may call in our loan if they don't like what they see. Is there any possibility that we could change the classification of some of our period costs to product costs--such as the rent on the finished goods warehouse?

Please let me know as soon as possible. The President is pushing for results.

Mary didn't know what to do about the memo. It wasn't intended for her, but its contents were alarming.

Required:

a. Why has Gary Resnick suggested reclassifying some period costs as product costs?

b. Why do you think Mary was alarmed about the memo?