Assume that you work for Greeble's Department Store, and your manager wants to discuss the pros and cons of discontinuing its hardware department. That department appears to be generating losses, and your manager believes that discontinuing it will increase overall store profits.

Question:

What factors should Greeble's management consider when trying to decide whether to discontinue its hardware department?

The following costs result from the production and sale of 4,600 drum sets manufactured by Tight Drums Company for the year ended December 31, 2017. The drum sets sell for $310 each. The company has a 25% income tax rate.

Required:

1. Prepare a contribution margin income statement for the company.
2. Compute its contribution margin per unit and its contribution margin ratio.

Schmidt Company issued $ 260,000​, 8​%, 10​-year bonds payable at 92 on January​ 1, 2018.

Journalize the issuance of the bonds payable on January​ 1, 2018.

7. Journalize the payment of semiannual interest and amortization of the bond discount or premium​ (using the​ straight-line amortization​ method) on July​ 1, 2018.

8. Assume the bonds payable was instead issued at 106. Journalize the issuance of the bonds payable and the payment of the first semiannual interest and amortization of the bond discount or premium.

thanks

A company had inventory on November 1 of 5 units at a cost of $16 each. On November 2, they purchased 13 units at $18 each. On November 6 they purchased 9 units at $21 each. On November 8, 11 units were sold for $51 each. Using the LIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale?

• $278

• $272

• $283

• $315

• $294

Search online for a recent announcement related to a strategic business decision (new product launch, opening or closing of a business, hiring or layoff of workers, launch of a sustainability program, etc.). Briefly describe the decision and explain the role you think management accounting might have played in the decision.

When the Essex Company formed three divisions a year ago, the president told the division managers an annual bonus would be given to the most profitable division. The bonus would be based on either the return on investment or residual income of the division. Investment is to be measured using gross book value or net book value. The following data are available:

            All the assets are long-lived assets that were purchased 15 years ago and have 15 years of useful life remaining. A zero terminal disposal price is predicted. Essex's minimum return on investment used for computing residual income is 10%.

            Required:

            Which method for computing profitability would each manager choose? Show supporting calculations. Where applicable, assume straight line depreciation.

Basic Facts: DEF is an equal general partnership engaged in medical practice. On January 1, 2007, D died, triggering the partnership’s buy/sell agreement. Just prior to his death, D’s outside basis was $130. According to the agreement, the partnership must pay D’s sole beneficiary, B, $500 in liquidation of her interest in the partnership. Neither the partnership agreement nor the buy/sell agreement mentions goodwill. There is no §754 election in place. On the date of death, DEF’s balance sheet (with FMVs) was as follows:

            Assets                                                                         Liabilities & Capital

                                    AB/Book         FMV                                        Liabilities        $150               

Cash                            $120                $120

Acc’ts Rec.                  0                      150

Installment Oblig.       150                  270

Equipment                  90                    300

Land                            30                    510

Goodwill                     0                      300

                                    $390                $1650

                                                                                                Capital Accounts

                                                                                                Tax/Bk                        FMV   

                                                                                    D          $80                  $500

                                                                                    E          80                    500

                                                                                    F          80                    500

                                                                                                $240                $1500

Assume that the equipment was purchased by the partnership for $400, and that the land is used in the partnership’s business.

Questions:

1. Before the distribution to B in liquidation of her interest in the partnership, what is her outside basis?
2. If there were a §754 election in place what would be the amount of the §743(b) adjustment, and among which assets (and in what amount) would it be allocated?
3. What are the income tax consequences to B of the $500 distribution?
4. What difference would it have made if the agreement explicitly allocated $100 to goodwill?
5. What difference would it have made if there were no buy/sell agreement and B (who is also a doctor) becomes a partner in D’s place?

Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated’s investment activities during the last quarter of 2018 and the first month of 2019. The only securities held by Amalgamated at October 1 were $40 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1 at face value and held in Amalgamated’s trading portfolio. The company’s fiscal year ends on December 31.

Required:
Prepare the appropriate journal entry for each transaction or event. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).)

Case Study 2 Master Budgeting and Pro-Forma Financial Statements

You have just been assigned to a new manager who believes you have exceptional budgeting skills. Since you began your job last summer, you have been showing management your latest spreadsheets and how you use your new-found knowledge of Managerial Accounting to make sound business decisions. Your new manager is responsible for the nationwide distribution of designer handkerchief sets (HCS) and, through multiple franchise agreements, sales have grown very rapidly, and the timing is right for you to join her team and to show your skills. You have just been given responsibility for all planning and budgeting of the entire HCS division. Your first assignment is to prepare a master budget for the next three months, starting April 1, 2019. You accept this responsibility with enthusiasm and you are anxious to impress your new manager and the president of the company, who has a very high regard for you. To commence your new role, you have assembled the following pertinent information:

Note: The company desires a minimum ending cash balance each month on $10,000. The HCS’s are sold to retailers for $8 each and they are flying off the shelves. Recent forecasted sales in units are provided below:

The increased sales volume before and during June is due to Father’s Day with HCS being a favorite. Ending inventories are supposed to be equal to 90% of the next month’s sales in units. The cost of each HCS is $5.00.

Purchases are paid for in the following manner: 50% in the month of the purchase and the remaining 50% paid in the month following the purchase. All sales to the distributors are made on credit terms with no discount (for now), and payable within 15 days. The HCS division has determined that only 25% of a month’s sales are collected by the end of the month in which the sale occurred. An additional 50% is collected in the month following the sale, and the remaining 25% is collected in the second month following the sale. Bad debts have been negligible, supporting the credit terms as favorable.

Below is a display of the HCS division monthly selling and administrative expenses:

Selling and administrative expenses are all paid during the month, in cash, with the exception of depreciation (of course) and insurance is pre-paid for the duration of the policy. HCS will make a purchase of a parcel of land during the month of May for $25,000 cash. HCS contributes to the corporate dividend at a rate of $12,000 each quarter, payable in the first month of the following quarter. HCS’s balance sheet at the end of the first quarter is shown below:

An agreement with Bank of the West allows HCS to borrow in increments of $1,000 at the beginning of each month, up to a total loan amount of $150,000. The interest rate on these loans is 1% per month (pretty high but convenient nonetheless) but the interest is not compounded, meaning this is simple interest only. At quarter end, HCS would pay Bank of the West all of the accumulated interest on the loan and as much of the balance of the loan as possible (in $1,000 increments) while retaining the minimum $10,000 cash balance.

Required:

Prepare a master budget for the three- months ending June 30, 2019. Include the following budget schedules and financial statements:

5) Cash Budget. Show the cash budget by month and in total.

Answers to previous questions to help with answering question # 5

Part 2 –Schedule of expected cash collections from sales, by month and total.

Part 3 – Merchandise purchases budget in units and in dollars. Show the budget by month and total

Part 4 - Schedule of expected cash disbursements for merchandise purchases, by month and total

How are debt and stock investments reported in financial statements

Pam Inc. produces joint products O, P, and Q from a joint process. Information concerning a batch produced in May at a joint cost of $90,000 was as follows

Required:

            (1) Allocate the joint costs to the joint products using the physical measures method.

            (2) Allocate the joint costs to the joint products using the net realizable method.

Choose an area of the Accounting Profession (i.e. Public Accounting, Taxation, Managerial Accounting, Payroll, Controller (General Ledger/payables), Government Accountant, Bookkeeper, or any other area of Accounting) and write a two page paper to me describing the following:

-Description of the area

-any certifications available or required

-typical duties and responsibilities

-career prospects

-educational requirements

-why you chose the area

The paper will be graded on content, spelling, grammar, and originality

Problem 11-15 Return on Investment (ROI) and Residual Income [LO11-1, LO11-2]

Financial data for Joel de Paris, Inc., for last year follow:

The company paid dividends of $266,940 last year. The “Investment in Buisson, S.A.,” on the balance sheet represents an investment in the stock of another company. The company's minimum required rate of return of 15%.

Required:

1. Compute the company's average operating assets for last year.

2. Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.)

3. What was the company’s residual income last year?

Nexto Inc. uses the weighted average method of process costing. The company has the following information for the period:

Beginning Work in Process: 2000 units 100% complete for materials, 75% complete for conversion costs

Units started during the period: 10,000

Ending work in process: 4,000 units 75% complete for materials, 50% complete for conversion costs

Costs for the period:

Beginning work in process: Materials: $1,100 Conversion Costs: $2,000

Costs added during the period: Materials: $14,300 Conversion Costs: $13,000

A) What are the total units to account for?  

B) How many units were completed during the month?  

C) What are the equivalent units for materials?  

D) What are the equivalent units for conversion?  

E) What is the cost per equivalent unit for materials? $

F) What is the cost per equivalent unit for conversion? $

G) What is the cost assigned to units completed and transferred out? $

H) What is the cost assigned to units in ending work in process? $

I) What are the total costs to account for? $