Given Information:
Lincoln Corporation had no noncash investing and financing
transactions for 2018. During the year, Lincoln sold equipment for
$15,100, which had originally cost $12,700, with a book value of
$10,700. Lincoln did not issue any notes payable during the year,
but did issue common stock for $30,000. Note that the corporation's
board of directors authorized the payment of dividends for the
year.
Lincoln Corporation
Income Statement
For the Period Ending December 31, 2018
Sales revenue $347,000
Cost of goods sold 78,000
Gross profit $269,000
Operating expenses:
Salaries expense $26,500
Depreciation expense 4,900
Other operating expenses 12,500
43,900
Operating Income $225,100
Other incomes and expenses:
Gain on Sale of equipment $4,400
Interest expense 9,900 5,500
Income before taxes $219,600
Income tax expense (36,600)
Net Income $183,000
Lincoln Corporation
Balance Sheets
Year ended December 31,
Assets 2018 2017
Current Assets:
Cash and cash equivalents $50,000
$23,500
Accounts receivable 32,100
29,100
Inventory 86,000 93,300
Prepaid insurance 3,300 2,800
Total current assets: $171,400
$148,700
Property, plant & equipment 153,000
136,000
Less: Accumulated depreciation(30,000)
(27,100)
Investments 113,000 -
Total Assets $407,400
$257,600
Liabilities
Current Liabilities:
Accounts payable (Inventory purchases) $33,200
$36,500
Salaries payable 2,900 7,400
Interest payable 2,400 -
Taxes payable 5,300 -
Other accrued operating expenses 18,800
22,100
Total current liabilities 62,600
66,000
Bonds Payable 78,000 113,000
Total Liabilities 140,600
179,000
Stockholders' Equity
Common stock 107,000 77,000
Retained earnings 159,800
1,600
Total stockholders' equity 266,800
78,600
Total liabilites and equity $407,400
$257,600
Instructions: Prepare a statement of cash flows using the indirect
method.
In: Accounting
What are the correct journal entries and adjusting entries for the below transaction? I'm having trouble identifying the journal and adjusting entries in 'bank situations'. The textbook doesn't come with answers.
01-January-2016 |
Open business bank account with transfer of personal funds |
$210,000 |
||
02-January-2016 |
EFT for rental of office space. Immediate occupancy. 60 months at $3500 per month. |
$210,000 |
||
11-January-2016 |
Office equipment purchased for cash to get discount from the retail price of $56,000. |
$50,000 |
||
11-January-2016 |
The office equipment will be replaced in 5 years at an expected cost of $67,000. |
$67,000 |
||
13-January-2016 |
Bank loan approved and credited to account. Payable in 2021 |
$310,000 |
||
28-June-2016 |
Credit sales. EFT payment to be received in 90 days. |
$65,500 |
||
04-July-2016 |
Employee timesheets submitted for work performed. Payment (EFT) to be made in 7 days. |
$5,200 |
||
29-July-2016 |
Cash sales. |
$33,500 |
||
12-December-2016 |
Credit sales. EFT payment to be received in 90 days. |
$42,500 |
||
28-December-2016 |
Employee timesheets submitted for work performed. Payment (EFT) to be made in 7 days. |
$5,720 |
||
Assume that credit sales "to be received in 90 days" are received in exactly 90 days and that EFT wage payments are made in exactly 7 days. |
||||
In: Accounting
3. Using the regular Treasury note of Problem 2:
a. What is its price if investors’ required rate of return is 6.0 percent on similar bonds? Treasury notes pay interest semiannually.
b. Erron Corporation wants to issue five-year notes but investors require a credit risk spread of 3 percentage points. What is the anticipated coupon rate on the Erron notes?
the treasuring note of problem 2
2. Judy Johnson is choosing between investing in two Treasury securities that mature in five years and have par values of $1,000. One is a Treasury note paying an annual coupon of 5.06 percent. The other is a TIPS that pays 3 percent interest annually.
a. If inflation remains constant at 2 percent annually over the next five years, what will be Judy’s annual interest income from the TIPS bond? From the Treasury note?
b. How much interest will Judy receive over the five years from the Treasury note? From the TIPS?
c. When each bond matures, what par value will Judy receive from the Treasury note? From the TIPS?
d. After five years, what is Judy’s total income (interest + par) from each bond? Should she use this total as a way of deciding which bond to purchase?
In: Accounting
Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin. After considerable research, a winter products line has been developed. However, Silven’s president has decided to introduce only one of the new products for this coming winter. If the product is a success, further expansion in future years will be initiated. The product selected (called Chap-Off) is a lip balm that will be sold in a lipstick-type tube. The product will be sold to wholesalers in boxes of 24 tubes for $10 per box. Because of excess capacity, no additional fixed manufacturing overhead costs will be incurred to produce the product. However, a $115,500 charge for fixed manufacturing overhead will be absorbed by the product under the company’s absorption costing system. Using the estimated sales and production of 165,000 boxes of Chap-Off, the Accounting Department has developed the following manufacturing cost per box: Direct material $ 4.70 Direct labor 3.00 Manufacturing overhead 2.10 Total cost $ 9.80 The costs above relate to making both the lip balm and the tube that contains it. As an alternative to making the tubes for Chap-Off, Silven has approached a supplier to discuss the possibility of buying the tubes. The purchase price of the supplier's empty tubes would be $2.00 per box of 24 tubes. If Silven Industries stops making the tubes and buys them from the outside supplier, its direct labor and variable manufacturing overhead costs per box of Chap-Off would be reduced by 10% and its direct materials costs would be reduced by 30%. Required: 1. If Silven buys its tubes from the outside supplier, how much of its own Chap-Off manufacturing costs per box will it be able to avoid? (Hint: You need to separate the manufacturing overhead of $2.10 per box that is shown above into its variable and fixed components to derive the correct answer.) 2. What is the financial advantage (disadvantage) per box of Chap-Off if Silven buys its tubes from the outside supplier? 3. What is the financial advantage (disadvantage) in total (not per box) if Silven buys 165,000 boxes of tubes from the outside supplier? 4. Should Silven Industries make or buy the tubes? 5. What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes? 6. Instead of sales of 165,000 boxes of tubes, revised estimates show a sales volume of 203,000 boxes of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $70,000 per year to make the additional 38,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less than 203,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 203,000 boxes of tubes from the outside supplier? Given this new information, should Silven Industries make or buy the tubes? 7. Refer to the data in (6) above. Assume that the outside supplier will accept an order of any size for the tubes at a price of $2.00 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier?
In: Accounting
what documentation should you access prior to making a
collection call?
how can you negotiate with customers so that both they and the
organisation you represent are happy with the outcome?
hat sort of procedures might be in place to deal with accounts that
are outside of agreed terms?
In: Accounting
what non financial (qualitative) information might be useful for management team of Singapore Airlines company? provide two examples and explain why. (250 words)
In: Accounting
Characteristics of Production Process, Cost Measurement
Vince Melders, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year:
Number of direct labor hours | 6,720 |
Direct labor cost | $67,200 |
Overhead cost | $50,400 |
During the year, the following actual amounts were experienced:
Number of direct labor hours | 6,045 |
Direct labor incurred | $66,495 |
Overhead incurred | $50,500 |
Vince Melders, owner of EcoScape, noticed that the watering systems for many houses in a local subdivision had the same layout and required virtually identical amounts of prime cost. Vince met with the subdivision builders and offered to install a basic watering system in each house. The idea was accepted enthusiastically, so Vince created a new company, Irrigation Specialties, to handle the subdivision business. In its first three months in business, Irrigation Specialties experienced the following:
June | July | August | |
Number of systems installed | 48 | 68 | 88 |
Direct materials used | $14,976 | $21,216 | $27,456 |
Direct labor incurred | $9,984 | $14,144 | $18,304 |
Overhead | $8,985.60 | $9,900.80 | $10,982.40 |
Required:
1. Should Irrigation Specialties use process costing or job-order costing?
2. If Irrigation Specialties uses an actual costing system, what is the cost of a single system installed in June? In July? In August? Round your answers to the nearest dollar.
June | $ per system |
July | $ per system |
August | $ per system |
3. Now assume that Irrigation Specialties uses a normal costing system. Estimated overhead for the year is $64,600, and estimated production is 680 watering systems. What is the predetermined overhead rate per system?
$ per system installed
What is the cost of a single system installed in June? In July? In August?
June | $ per system |
July | $ per system |
August | $ per system |
In: Accounting
In 2022, Draper Company discovered errors made in 2019-2021, its first three years of operation.
2021 |
2020 |
2019 |
|
Items not recognized: |
|||
Prepaid expenses |
$1,300 |
$900 |
$550 |
Unearned Revenues |
950 |
700 |
800 |
Other information: |
|||
Reported net income |
$23,000 |
$25,000 |
$20,000 |
Dividends declared and paid |
4,100 |
2,600 |
5,000 |
Common stock and additional paid in capital at 12/31 |
22,000 |
17,000 |
15,000 |
Indicate the error in 12/31/21 Retained Earnings:
Select one:
a. $400 overstated
b. $350 overstated
c. $400 understated
d. $350 understated
e. $550 understated
Question 29
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Question text
In 2022, Draper Company discovered errors made in 2019-2021, its first three years of operation.
2021 |
2020 |
2019 |
|
Items not recognized: |
|||
Prepaid expenses |
$1,300 |
$900 |
$550 |
Accrued expenses |
950 |
700 |
800 |
Other information: |
|||
Reported net income |
$23,000 |
$25,000 |
$20,000 |
Dividends declared and paid |
4,100 |
2,600 |
5,000 |
Common stock and additional paid in capital at 12/31 |
22,000 |
17,000 |
15,000 |
Corrected 12/31/21 Total Equity will be:
Select one:
a. $78,450
b. $110,300
c. $77,950
d. $110,650
e. $78,650
In: Accounting
Scoresby Inc. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, 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.
Transactions | Units | Unit Cost | ||||||||||||||||||||||||||||||||||||||||||||
a. Inventory, Beginning | 1,500 | $ | 26 | |||||||||||||||||||||||||||||||||||||||||||
For the year: | ||||||||||||||||||||||||||||||||||||||||||||||
b. Purchase, March 5 | 7,500 | 27 | ||||||||||||||||||||||||||||||||||||||||||||
c. Purchase, September 19 | 3,500 | 29 | ||||||||||||||||||||||||||||||||||||||||||||
d. Sale, April 15 (sold for $71 per unit) | 2,300 | |||||||||||||||||||||||||||||||||||||||||||||
e. Sale, October 31 (sold for $74 per unit) | 6,500 | |||||||||||||||||||||||||||||||||||||||||||||
f. Operating expenses (excluding income tax expense), $402,000 Prepare an income statement that shows the FIFO method, LIFO method and weighted average method.
|
In: Accounting
Bob Sample opened the Campus Laundromat on September 1, 2017. During the first month of operations, the following transactions occurred. Sep. 1 Bob invested $20,000 cash in the business. Sep. 2 The company paid $1,000 cash for store rent for September. Sep. 3 Purchased washers and dryers for $25,000, paying $10,000 in cash and signing a $15,000, 6-month, 12% note payable Sep. 4 Paid $1,200 for a one-year accident insurance policy. Sep. 10 Received a bill from the Daily News for online advertising of the opening of the laundromat $200. Sep. 20 Bob withdrew $700 cash for personal use. Sep. 30 The company determined that cash receipts for laundry services for the month were $6,200. Question1 Journalize the September transactions. (Use J1 for the journal page number.) (in General journal table) Question2. Open ledger accounts and post the September transactions Question3. Prepare a trial balance at September 30, 2017
In: Accounting
Please answer ALL of the questions!
At the end of the year, a company offered to buy 4,100 units of
a product from X Company for a special price of $12.00 each instead
of the company's regular price of $18.00 each. The following
information relates to the 68,400 units of the product that X
Company made and sold to its regular customers during the
year:
Per-Unit | Total | ||
Cost of goods sold | $9.43 | $645,012 | |
Period costs | 2.60 | 177,840 | |
Total | $12.03 | $822,852 |
Fixed cost of goods sold for the year were $151,848, and fixed
period costs were $78,660. Variable period costs include selling
commissions equal to 4% of revenue.
6. Profit on the special order is
Tries 0/3 |
7. Assume the following two changes for the special order: 1)
variable cost of goods sold will decrease by $0.87 per unit, and 2)
there will be no selling commissions. What would be the effect of
these two changes on the special order profit?
Tries 0/3 |
8. There is concern that regular customers will find out about the
special order, and X Company's regular sales will fall by 700
units. As a result of these lost sales, X Company's profits would
fall by
Tries 0/3 |
In: Accounting
X Company currently makes a part and is considering buying it from a company that has offered to supply it for $19.45 per unit. This year, per-unit production costs to produce 54,000 units were:
Direct materials | $8.50 |
Direct labor | 6.50 |
Overhead | 4.10 |
Total | $19.10 |
$167,400 of the total overhead costs were variable; $39,960 of the
fixed overhead costs cannot be avoided even if X Company buys the
part. If the company buys the part, the resources that are used to
make it cannot be used for anything else. Production next year is
expected to increase to 57,400 units.
If X Company continues to make the part instead of buying it, it
will save _______
In: Accounting
The Perez Company has the opportunity to invest in one of two mutually exclusive machines that will produce a product it will need for the foreseeable future. Machine A costs $11 million but realizes after-tax inflows of $5 million per year for 4 years. After 4 years, the machine must be replaced. Machine B costs $13 million and realizes after-tax inflows of $3.5 million per year for 8 years, after which it must be replaced. Assume that machine prices are not expected to rise because inflation will be offset by cheaper components used in the machines. The cost of capital is 14%.
What is the equivalent annual annuity for each machine? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answers to two decimal places.
Machine A | $ ________ million |
Machine B | $ ________ million |
In: Accounting
Blackwelder Factory produces two similar products-small lamps and desk lamps. The total plant overhead budget is $529,000 with 540,000 estimated direct labor hours. It is further estimated that small lamp production will require 264,000 direct labor hours and desk lamp production will need 276,000 direct labor hours.
Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Blackwelder Factory allocate to small lamp production if actual direct hours for the period is 191,000?
a.$187,180
b.$731,183
c.$366,083
d.$506,000
2)
Blackwelder Factory produces two similar products-small lamps and desk lamps. The total plant overhead budget is $582,000 with 471,000 estimated direct labor hours. It is further estimated that small lamp production will require 267,000 direct labor hours and desk lamp production will need 204,000 direct labor hours.
Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Blackwelder Factory allocate to desk lamp production if actual direct hours for the period is 178,000.
a.$220,720
b.$507,824
c.$873,000
d.$361,280
3)
Challenger Factory produces two similar products - regular widgets and deluxe widgets. The total plant overhead budget is $563,000 with 350,200 estimated direct labor hours. It is further estimated that deluxe widget production will need 5 direct labor hours for each unit and regular widget production will require 6 direct labor hours for each unit.
Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Challenger Factory allocate to regular widget production if budgeted production for the period is 75,000 units and actual production for the period is 104,800 units?
a.$1,012,368
b.$842,410
c.$93,833
d.$168,482
In: Accounting
Many mortgage companies have included in their mortgage contracts the right to non-judicial foreclosure, meaning that if a mortgagee becomes delinquent under the terms of the note, the mortgage company can foreclose on the property without having to sue the mortgagee and obtain a judgment for judicial foreclosure. Do you think this nonjudicial foreclosure provision is fair? Is it good for the economy/business? Should it be allowed? Why or why not? Please remember to comment upon at least two other students' posts in addition to posting your own comment.
In: Accounting