Use the following information to answer the next six questions:

All balances are as of 12/31/2019 unless specified otherwise.

5. Determine the Working Capital as of December 31, 2019.

1. 137,000
2. 5.9305
3. 187,500
4. 149,500
5. cannot be determined since the balance of Common Stock is not given

6. Determine Retained Earnings and Cash as of 12/31/2019.

7. Determine Total Liabilities as of 12/31/2019.

1. $48,500
2. $76,500
3. $153,000
4. $168,500
5. $181,000

8. Determine Income from Operations for 2019.

1. $200,500
2. $243,500
3. $117,000
4. $151,750
5. $165,750

9. Determine the Total Assets as of 12/31/2019.

1. $719,000
2. $769,000
3. $679,000
4. $669,000
5. $696,500

10. Determine the Profit Margin for the year ended December 31, 2019.              

1. 26%
2. 37%
3. 54%
4. 382%
5. $243,500

Denton Company manufactures and sells a single product. Cost data for the product are given:

The product sells for $48 per unit. Production and sales data for July and August, the first two months of operations, follow:

The company’s Accounting Department has prepared the following absorption costing income statements for July and August:

Required:

1. Determine the unit product cost under:

a. Absorption costing.

b. Variable costing.

2. Prepare contribution format variable costing income statements for July and August.

3. Reconcile the variable costing and absorption costing net operating incomes.

Alamar Petroleum Company offers its employees the option of contributing retirement funds up to 5% of their wages or salaries, with the contribution being matched by Alamar. The company also pays 85% of medical and life insurance premiums. Deductions relating to these plans and other payroll information for the first biweekly payroll period of February are listed as follows:
   

   
Required:
Prepare the appropriate journal entries to record salaries and wages expense and payroll tax expense for the biweekly pay period. Assume that no employee’s cumulative wages exceed the relevant wage bases for Social Security, and that all employees’ cumulative wages do exceed the relevant unemployment wage bases. Salaries are not yet paid. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
  

Explain the tax implications of compensation in the form of salary and wages from the perspectives of the employee and employer.

During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows:

* $3 per unit variable; $250,000 fixed each year.

The company’s $29 unit product cost is computed as follows:

Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings.

Production and cost data for the first two years of operations are:

Required:

1. Using variable costing, what is the unit product cost for both years?

2. What is the variable costing net operating income in Year 1 and in Year 2?

3. Reconcile the absorption costing and the variable costing net operating income figures for each year.

record the transactions or events that should be recorded in the general journal

On August 2, Paid $2200 cash for August salon rent. On August 4, Incurred $400 of advertising costs due in 20 days On August 5, Purchased salon equipment for $120 On August 7, Paid for supplies (shampoos, creams, and gels) $350 On August 8, received $300 for selling gels On August 12, paid $200 water bill On August 12, paid $150 for electricity bill On August 14, incurred $1100 for the business’s bank loan due in 14 days On August 16, purchased a new chair set up for $450 On August 17, paid the amount due for the influencer $400 for advertising On August 19, paid $90 for my internet bill On August 21, received for $200 selling of shampoos On August 23, paid $110 for insurance On August 24, cleaner $110 On August 27, paid $1100 for the business’s bank loan On August 28, gas bills $35 On August 30, extra salary cost to a new trainee $400 On August 30, purchased a new tv screen $600 On August 30, paid $6000 in salaries for the month of August. On August 30, received $14000 from haircuts services during the month of August. And $500 of selling gels, creams, and shampoos

Zimmerman Inc. manufactures a single product, CXW. Zimmerman uses budgets
and standards in its planning and control functions. Zimmerman makes use of its
standards in order to derive their budgeted cost per unit. For example, Exhibit A
provides information on the budgeted variable costs per unit. When determining
direct material costs for the planning budget income statement, the $12 budgeted
material cost per unit of CXW would be used in the calculation.

Exhibit A

Budgeted
(Standard)
Variable Costs Per
Unit of CXW
Raw material: 3 pounds at $4 per pound $12
Direct labor: 0.75 direct labor hours at $20 per hour 15
Variable overhead: 0.75 direct labor hours at $12 per hour 9
Total variable budgeted (standard) cost per CXW $36
__________________________________________________________________
The standards for fixed manufacturing overhead costs are: 0.75 direct labor hours
at $8 per hour. The standard fixed manufacturing overhead cost per hour is
calculated based on a denominator level of activity of 30,000 direct labor hours.
The planning budget income statement is based on the expectation of selling
40,000 units of CXW. The budgeted sales price is $65 per unit, and total budgeted
fixed selling and administrative costs are $500,000. There are no variable selling
and administrative costs in this firm.
The company actually produced and sold 36,000 units this year. The company
never has a beginning or ending raw materials inventory, because it uses all raw
materials purchased. Also, the company never has a beginning or ending finished
goods inventory. Everything produced in the year is sold in that same year.

3

The actual income statement for the year is provided in Exhibit B.
Exhibit B
_______________________________________________________________

Zimmerman Inc.
Actual Income Statement

Sales:
36,000 units produced and sold at $68 $2,448,000
Less Variable Costs:
Direct materials (100,000 pounds at $4.25 per pound) 425,000
Direct labor (32,000 direct labor hours at $18/hr.) 576,000
Variable manufacturing overhead 400,000
Contribution margin 1,047,000
Less Fixed Costs:
Fixed manufacturing overhead costs 280,000
Fixed selling and administrative costs 485,000
Net operating income $ 282,000
Required:
2) Prepare a detailed income statement variance analysis using the contribution
approach income statement (i.e., variable costing basis) for the year (i.e.,
compare the actual income statement with the flexible budget income
statement and compare the flexible budget income statement with the
planning budget income statement). Show all the revenue, spending, and
activity variances appearing in the income statement analysis. A template
for answering this question is given below. All variances should be marked
with either an “F” for favorable or “U” for unfavorable. (35 points)

Acquisition Cost of Long-Lived Assets

The following items represent expenditures (or receipts) related to the construction of a new home office for Lowrey Company.

Required

From the given data, calculate the proper balances for the Land, Building, and Land Improvements accounts of Lowrey Company.

Camden Biotechnology began operations in September 2018. The following selected transactions relate to liabilities of the company for September 2018 through March 2019. Camden’s fiscal year ends on December 31. Its financial statements are issued in April.

2018

1. On September 5, opened checking accounts at Second Commercial Bank and negotiated a short-term line of credit of up to $25,000,000 at the bank’s prime rate (9.5% at the time). The company will pay no commitment fees.
2. On October 1, borrowed $22 million cash from Second Commercial Bank under the line of credit and issued a five-month promissory note. Interest at the prime rate of 9% was payable at maturity. Management planned to issue 10-year bonds in February to repay the note.
3. Received $4,200 of refundable deposits in December for reusable containers used to transport and store chemical-based products.
4. For the September–December period, sales on account totaled $4,630,000. The state sales tax rate is 3% and the local sales tax rate is 3%. (This is a summary journal entry for the many individual sales transactions for the period.)
5. Recorded the adjusting entry for accrued interest.

2019

6. In February, issued $20 million of 10-year bonds at face value and paid the bank loan on the March 1 due date.
7. Half of the storage containers covered by refundable deposits were returned in March. The remaining containers are expected to be returned during the next six months.

Required:
1. Prepare the appropriate journal entries for 2018 and 2019 transactions.
2. Prepare the current and long-term liability sections of the December 31, 2018, balance sheet. Trade accounts payable on that date were $302,000.

Winkin, Blinkin, and Nod are equal shareholders in SleepEZ, an S corporation. In the conditions listed below, how much income should each report from SleepEZ for 2017 under both the daily allocation and the specific identification allocation method? Refer to the following table for the timing of SleepEZ’s income. Period Income January 1 through March 17 (76 days) $ 215,000 March 18 through December 31 (289 days) 431,000 January 1 through December 31, 2017 (365 days) $ 646,000 (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

a. There are no sales of SleepEZ stock during the year.

b. On March 17, 2017, Blinkin sells his shares to Nod.

c. On March 17, 2017, Winkin and Nod each sell their shares to Blinkin.

Ps. this is one question

X Company currently makes a part and is considering buying it next year from a company that has offered to supply it for $17.29 per unit. This year, total costs to produce 58,000 units were: Direct materials $371,200 Direct labor 336,400 Variable overhead 179,800 Fixed overhead 104,400 If X Company buys the part, it can avoid $34,452 of the fixed overhead. The resources that will become idle if they choose to buy the part can be used to increase production of another product, resulting in additional total contribution margin of $65,000. The marketing manager is uncertain what demand will be next year. What level of demand will make the company indifferent between making the part and buying it?

Bessrawl Corporation is a U.S.-based company that prepares its consolidated financial statements in accordance with U.S. GAAP. The company reported income in 2014 of $1,000,000 and stockholders’ equity at December 31, 2014, of $8,000,000. The CFO of Bessrawl has learned that the U.S. Securities and Exchange Commission is considering requiring U.S. companies to use IFRS in preparing consolidated financial statements. The company wishes to determine the impact that a switch to IFRS would have on its financial statements and has engaged you to prepare a reconciliation of income and stockholders’ equity from U.S. GAAP to IFRS. You have identified the following four areas in which Bessrawl’s accounting principles based on U.S. GAAP differ from IFRS.

1)Inventory

2)Property, plant, and equipment

3)Intangible assets

4)Research and development costs.

Bessrawl provides the following information with respect to each of these accounting differences.

Inventory

At year-end 2014, inventory had a historical cost of $250,000, a replacement cost of $180,000, a net realizable value of $190,000, and a normal profit margin of 20 percent.

Property, Plant, and Equipment

The company acquired a building at the beginning of 2013 at a cost of $2,750,000. The building has an estimated useful life of 25 years, an estimated residual value of $250,000, and is being depreciated on a straight-line basis. At the beginning of 2014, the building was appraised and determined to have a fair value of $3,250,000. There is no change in estimated useful life or residual value. In a switch to IFRS, the company would use the revaluation model in IAS 16 to determine the carrying value of property, plant, and equipment subsequent to acquisition.

Intangible Assets

As part of a business combination in 2011, the company acquired a brand with a fair value of $40,000. The brand is classified as an intangible asset with an in- definite life. At year-end 2014, the brand is determined to have a selling price of $35,000 with zero cost to sell. Expected future cash flows from continued use of the brand are $42,000, and the present value of the expected future cash flows is $34,000.

Research and Development Costs

The company incurred research and development costs of $200,000 in 2014. Of this amount, 40 percent related to development activities subsequent to the point at which criteria had been met indicating that an intangible asset existed. As of the end of the 2014, development of the new product had not been completed.

Required

Prepare a reconciliation schedule to convert 2014 income and December 31, 2014, stockholders’ equity from a U.S. GAAP basis to IFRS. Ignore income taxes.

Prepare a note to explain each adjustment made in the reconciliation schedule.

Thunder Creek Company is preparing budgets for the first quarter of 2018.

#1 Create a sales budget.

Thunder Creek Company expects sales of 18,000 units in January 2018, 24,000 units in February, 30,000 units in March, 34,000 in April, and 36,000 in May. The sales price is $48 per unit.

#2 Create a production budget.

Thunder Creek wants to finish each month with 20% of next month's sales in units.

#3 Create a Direct Materials Budget

Thunder Creek Company uses 2 pounds of direct materials for each unit it produces, at a cost of $4.00 per pound. The company begins the year with 9,500 pounds of material in Raw Materials Inventory. Management desires an ending inventory of 25% of next month's materials requirements

#4 Create a Direct Labor Budget

Thunder Creek Company's workers require 30 minutes of labor to produce each unit of product. The labor cost is $20 per hour

Budget #5: Create a Manufacturing Overhead Budget

1. Thunder Creek Company prepares its Manufacturing Overhead Budget. For each direct labor hour, the variable overhead costs are:
Indirect Materials = $1.00 per DLH; Indirect Labor Cost = $1.30 per DLH; Maintenance = $1.20 per DLH

2. The Fixed Overhead Costs per month are: Salaries of $40,000, Depreciation =$20,000 and Maintenance = $10,000.

3. ROUND the predetermined overhead allocation rate to two decimal places. Manufacturing overhead is allocated using direct labor hours.

Budget #6: Create a Cost of Goods Sold Budget. Thunder Creek Company uses the first-in, first-out (FIFO) inventory costing method.

The Beginning Finished Goods Inventory is $86,400 consisting of 3,600 units.

Budget #7: Selling and Administrative Expense Budget

Thunder Creek Company's variable supplies expense per month is $3.00 per unit. The fixed selling and administrative expenses per month consist of Salaries: $245,000; Advertising: $30,000; and Depreciation: $28,000

Potz and Pans, a small gift shop, has current assets of $45,000 (including inventory valued at $30,000) and $9,000 in current liabilities. Wannabees, a specialty clothing store has current assets of $150,000 (including inventory valued at $125,000) and $85,000 in current liabilities. Both business have applied for loans. Click the calculators box on the toolbar at bankrate.com then click on Small Business to answer the following questions.

1) Calculate and present the current ratio for each company. Which company is more likely to get the loan? Why?

2) The acid test ratio subtracts the value of the firm's inventory from its total current assets. Because inventory is often difficult to sell, this ratio is considered an even more reliable measure of a business's ability to repay loans than the current ration. Calculate and present the acid test ratio for each business and decide whether you would give either the loan. Why or why not for each?

A delivery truck was acquired on January 1, 2017, at a cost of $65,000. The delivery truck was originally estimated to have a residual value of $5,000 and an estimated life of five years. The truck is expected to be driven a total of 200,000 kilometers during its life, distributed as:

Using the straight-line, units-of-production, and double-diminishing balance methods, answer the following questions.

1. The 2017 depreciation expense using the units-of-production method is:

2. The 2018 depreciation expense using the straight-line method is:

3. The 2018 depreciation expense using the double-diminishing balance method is:

4. The 2019 depreciation expense using the units-of-production method is:

5. The book value on December 31, 2018, using the straight-line method is:

6. The book value on December 31, 2018, using the double-diminishing balance method is:

7. Which method results in the lowest depreciation expense in the first two years?

8. Prepare the adjusting entry to record the 2020 depreciation expense based on the units-of- production method.