The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows:

Additional data obtained from an examination of the accounts in the ledger for 20Y9 are as follows:

1. Equipment and land were acquired for cash.
2. There were no disposals of equipment during the year.
3. The investments were sold for $103,800 cash.
4. The common stock was issued for cash.
5. There was a $81,590 credit to Retained Earnings for net income.
6. There was a $46,330 debit to Retained Earnings for cash dividends declared.

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Doaktown Products manufactures fishing equipment for recreational uses. The Miramichi plant produces the company’s two versions of a special reel used for river fishing. The two models are the M-008, a basic reel, and the M-123, a new and improved version. Cost accountants at company headquarters have prepared costs for the two reels for the most recent period. The plant manager is concerned. The cost report does not coincide with her intuition about the relative costs of the two models. She has asked you to review the cost accounting and help her prepare a response to headquarters.

Manufacturing overhead is currently assigned to products based on their direct labor costs. For the most recent month, manufacturing overhead was $326,400. During that time, the company produced 14,400 units of the M-008 and 2,400 units of the M-123. The direct costs of production were as follows. M-008 M-123 Total Direct materials $ 115,200 $ 96,000 $ 211,200 Direct labor 115,200 48,000 163,200

Management determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year were as follows. Activity Level Cost Driver Costs M-008 M-123 Total Number of machine-hours $ 154,900 8,000 2,000 10,000 Number of production runs 80,000 20 20 40 Number of inspections 91,500 15 35 50 Total overhead $ 326,400

Required: a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? b. How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product?

Share your understanding of a tax preparer’s professional responsibilities. What penalties, if any, can accrue to a tax preparer who makes errors on a company’s tax return? Does intent (malicious vs. accidental) change those penalties?

A private not-for-profit entity is working to create a cure for a deadly disease. The charity starts the year with cash of $751,000. Of this amount, unrestricted net assets total $417,000, temporarily restricted net assets total $217,000, and permanently restricted net assets total $117,000. Within the temporarily restricted net assets, the entity must use 90 percent for equipment and the rest for salaries. No implied time restriction has been designated for the equipment when purchased. For the permanently restricted net assets, 80 percent of resulting income must be used to cover the purchase of advertising for fund-raising purposes and the rest is unrestricted.

During the current year, the organization has the following transactions:

• Received unrestricted cash gifts of $227,000.
• Paid salaries of $97,000 with $37,000 of that amount coming from restricted funds. Of the total salaries, 50 percent is for administrative personnel and the remainder is evenly divided among individuals working on research to cure the designated disease and individuals employed for fund-raising purposes.
• Bought equipment for $334,000 with a long-term note signed for $267,000 and restricted funds used for the remainder. Of this equipment, 90 percent is used in research, 5 percent is used in administration, and the remainder is used for fund-raising.
• Collected membership dues of $47,000. The members receive a reasonable amount of value in exchange for these dues including a monthly newsletter describing research activities.
• Received $27,000 from a donor that must be conveyed to another charity doing work on a related disease.
• Received investment income of $30,000 generated by the permanently restricted net assets. As mentioned above, the donor has stipulated that 80 percent of the income is to be used for advertising, and the remainder may be used at the entity’s discretion.
• Paid advertising of $3,700.
• Received an unrestricted pledge of $270,000 that will be collected in three years. The entity expects to collect the entire amount. The pledge has a present value of $95,000 and related interest (additional contributed support) of $4,700 in the year.
• Computed depreciation on the equipment acquired as $37,000.
• Spent $110,000 on research supplies that it utilized during the year.
• Owed salaries of $22,000 at the end of the year. Half of this amount is for individuals doing fund-raising and half for individuals doing research.
• Received a donated painting that qualifies as a museum piece. It has a value of $970,000. Officials do not want to record this gift if possible.

1. Prepare a statement of activities for this not-for-profit entity for this year.

2. Prepare a statement of financial position for this not-for-profit entity for this year.

Prepare a statement of activities for this not-for-profit entity for this year.

For the statement of activities below, I started to fill in what I understood, Can you complete the entire statement correctly. I will comment and like

* Required A

Prepare a statement of activities for this not-for-profit entity for this year.

• Required B

Prepare a statement of financial position for this not-for-profit entity for this year.

You are an eager and ambitious young graduate of the Reginal F. Lewis College of Business at Virginia State University with a new Accounting degree and a great life ahead of you. One of your closest friends is an inventor and an entrepreneur who wants to start a business selling a break-through new drywall screw that he has invented and that he believes works much better than the drywall screws currently on the market. He wants to start the business by opening a factory to produce the screws which can then be sold to either wholesalers or retailers who will then sell them to the general public. After searching all over creation for the right sized building in the perfect location to properly meet the needs of his target customers, he found that the ideal building in which to put up his factory was right here in Petersburg all along. To begin, he was able to purchase the building he needed outright for $525,000. Useful life of the building is 40 years and it is depreciated on a straight-line basis. Estimated salvage value is $25,000. Property taxes on the building each year are $3,500. There is a new machine that another fellow VSU grad has invented that takes the metal for the screws and molds them into their proper size and shape, and takes the plastic for the anchors and molds them into their proper size and shape; an assembly line is attached to the machine where workers put the screws and anchors into boxes. The finished product is a box of 32 drywall screws and their plastic anchors that work unlike any that have come before them. He purchased this machine outright for $175,000. The machine has a useful life of 25 years with no residual value and is depreciated on a straight-line basis. The machine can produce 23,000 boxes of screws and anchors per year. He is sure that he can sell every unit produced. It is determined that to produce the 32 screws in each box will require 112 ounces of metal which is the only material used to make the screws and to produce the 32 anchors in each box will take 48 ounces of plastic which is the only material used to make the anchors. The metal you need is produced by multiple suppliers and you've found one so far that will allow you to buy it at $1.50 per pound. The plastic used is also produced by multiple suppliers and you've found one so far that will allow you to buy it at $.15 per pound. It takes 15 minutes for the workers on the assembly line to box the screws and anchors because they are put in there in a way that prevents them from becoming disorderly. This is part of the quality aspect of the product. Assembly line workers are paid at a rate of $17.00 per hour. Your friend hired a Vice President (VP) who has a degree in Marketing from VSU. She did some market research and determined that in order to be competitive with your new product you are going to charge $20.75 per box of screws and anchors. The Vice President is paid $58,000 per year. He also hired a Chief Operating Officer who will be paid $58,000 per year. Your friend has also asked you to serve as a consultant to his company to make sure that the business gets off to a good start. Your fee has not yet been determined and is not part of this problem Please answer only these questions,

Prepare a variable costing format income statement assuming that the company makes and sells the maximum possible number of units. If the income is negative, what is the reason? What is the new break-even point after implementing your solution? What is the maximum income the company can make after implementing your solution? Is this enough profit to justify going into business?

Prepare both an absorption costing income statement and a variable costing income statement to reflect your solution. State your assumptions about the number of units produced and the number sold.

Kitchen Magician, Inc. has assembled the following data pertaining to its two most popular products.

Past experience has shown that the fixed manufacturing overhead component included in the cost per machine hour averages $34. Kitchen Magician’s management has a policy of filling all sales orders, even if it means purchasing units from outside suppliers.

Required:

1. If 58,000 machine hours are available, and management desires to follow an optimal strategy, how many units of each product should the firm manufacture? How many units of each product should be purchased?
2. With all other things constant, if management is able to reduce the direct material for an electric mixer to $22 per unit, how many units of each product should be manufactured? Purchased?

Why is it important for a company to maintain a good record-keeping systems?

As a tax planner your ethical responsibility is to advise a company about the business records they need to keep as it ensure a sound audit trail. List the business records that you would advise the company to keep.

Fast Turnstiles Co. is evaluating the extension of credit to a new group of customers. Although these customers will provide $216,000 in additional credit sales, 14 percent are likely to be uncollectible. The company will also incur $16,400 in additional collection expense. Production and marketing costs represent 72 percent of sales. The firm is in a 20 percent tax bracket and has a receivables turnover of five times. No other asset buildup will be required to service the new customers. The firm has a 8 percent desired return.  



b-2. Calculate the return on incremental investment if 17 percent of the new sales prove to be uncollectible. (Input your answer as a percent rounded to 2 decimal places.)
  

     

b-3. Should credit be extended if 17 percent of the new sales prove uncollectible?
  

  

c-1. Calculate the return on incremental investment if the receivables turnover drops to 1.6, and 14 percent of the accounts are uncollectible. (Input your answer as a percent rounded to 2 decimal places.)
  

   

c-2. Should credit be extended if the receivables turnover drops to 1.6, and 14 percent of the accounts are uncollectible?
  

Mears Production Company makes several products and sells them for an average price of $90. Mears' accountant is considering two different approaches to estimating the firm's total monthly cost function, 1) account analysis, and 2) high-low. In both cases, she used units of production as the independent variable. For the account analysis approach, she developed the cost function by analyzing each cost item in June, when production was 1,550 units. The following are the results of that analysis:

For the high-low method, she developed the cost function using the data from June above and data from August, when production was 2,350 units and total costs were $41,263.

After developing the two cost functions, the accountant used them to make predictions for the month of December, when production was expected to be 1,725 units.

REQUIRED [ROUND UNIT COSTS TO THE NEAREST CENT AND TOTAL COSTS TO THE NEAREST DOLLAR.]

Part A (5 tries; 5 points)
1. Using account analysis, what was the accountant's estimate of total fixed costs for December?   

2. Using account analysis, what was the accountant's estimate of total variable costs for December? (This is the main one I need help with)

Part B (5 tries; 5 points)
1. Using the high-low method, what was the accountant's estimate of total fixed costs for December?   

2. Using the high-low method, what was the accountant's estimate of variable costs per unit for December?   

Kaune Food Products Company manufactures canned mixed nuts with an average manufacturing cost of $50 per case (a case contains 24 cans of nuts). Kaune sold 158,000 cases last year to the following three classes of customer:

The supermarkets require special labeling on each can costing $0.03 per can. They order through electronic data interchange (EDI), which costs Kaune about $56,000 annually in operating expenses and depreciation. Kaune delivers the nuts to the stores and stocks them on the shelves. This distribution costs $41,000 per year.

The small grocers order in smaller lots that require special picking and packing in the factory; the special handling adds $20 to the cost of each case sold. Sales commissions to the independent jobbers who sell Kaune products to the grocers average 6 percent of sales. Bad debts expense amounts to 7 percent of sales.

Convenience stores also require special handling that costs $25 per case. In addition, Kaune is required to co-pay advertising costs with the convenience stores at a cost of $18,000 per year. Frequent stops are made to each convenience store by Kaune delivery trucks at a cost of $30,000 per year.

Required:

1. Calculate the total cost per case for each of the three customer classes. Round intermediate calculations and final answers to four decimal places. Use the rounded values for subsequent requirements.

2. Using the costs from Requirement 1, calculate the profit per case per customer class. Round intermediate computations to four decimal places and final answers to two decimal places.

Does the cost analysis support the charging of different prices?

3. What if Kaune charged the average price per case to all customer classes? How would that affect the profit percentages?

Which of the following is/are true about FUTA obligations? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

• FUTA is subject to a 5.4 percent reduction based on employer and state factors.unanswered
• FUTA applies to all companies.unanswered
• FUTA is subject to a $7,000 wage base per employee.unanswered
• FUTA is an employer-only tax.

Write a report for a university tutor describing the production process.

Advise the financial management strategies the business followed that assisted optimum tax position?

As an accountant what organisational policy and procedures you must follow in relation to the preparation of tax documents of a company ?

As a part of the document management process what would you do to ensure that your tax return satisfies the compliance requirements?

Based on your finding above what is the BAS lodgement due dates of a company ?