LaBBC Company has provided the following information from their records:

                                                                         Purchases                                         Sales               

                                                                 Units             Unit Cost              Units     Selling Price/Unit

Mar       1         Beginning inventory          100                  $50

             3         Purchase                             60                  $60

             4         Sales                                                                                   70                   $100

           10         Purchase                           200                  $70

           16         Sales                                                                                   80                   $110

           19         Sales                                                                                   80                   $110

           25         Sales                                                                                   50                   $110

           30         Purchase                             40                  $75

Using the inventory and sales data above, to complete the below inventory schedule under average cost method and prepare the journal entries to record the sales on March 4. All sales are made on credit.

ABC Company has provided the following information from their records:

                                                                         Purchases                                         Sales               

                                                                 Units             Unit Cost              Units     Selling Price/Unit

Mar       1         Beginning inventory          100                  $50

             3         Purchase                             60                  $60

             4         Sales                                                                                   70                   $100

           10         Purchase                           200                  $70

           16         Sales                                                                                   80                   $110

           19         Sales                                                                                   80                   $110

           25         Sales                                                                                   50                   $110

           30         Purchase                             40                  $75

Using the inventory and sales data above, to complete the below inventory schedule under FIFO method and prepare the journal entries to record the sales on March 4. All sales are made on credit.

The administrative offices and manufacturing plant of Billings Tool & Die share the same building. The following information (in $000s) appears in the accounting records for last year.

Required:

1. Prepare a cost of goods sold statement.

2. Prepare an income statement.

Prepare a cost of goods sold statement. (Enter your answers in thousands of dollars (i.e., 234,000 should be entered as 234).)

Prepare an income statement. (Enter your answers in thousands of dollars (i.e., 234,000 should be entered as 234).)

Determining Cost Relationships

Midstate Containers Inc. manufactures cans for the canned food industry. The operations manager of a can manufacturing operation wants to conduct a cost study investigating the relationship of tin content in the material (can stock) to the energy cost for enameling the cans. The enameling was necessary to prepare the cans for labeling. A higher percentage of tin content in the stock increases the cost of material. The operations manager believed that a higher tin content in the can stock would reduce the amount of energy used in enameling. During the analysis period, the amount of tin content in the stell can stock was increased for every month, from April to September. The following operating reports were available from the controller:

Differences in materials unit costs were entirely related to the amount of tin content. In addition, inventory changes are negligible and are ignored in the analysis.

A) Calculate the Total cost per unit for each month. Round your answers to the nearest cent

B) Interpret your results

The calculations reveal that the tin content and energy costs are _________ related. That is, as the materials cost increased due to higher tin content, the energy costs ________ by more. Thus, the recommendation should be to __________ raw can stock with the tin content at the $0.33-per-unit level (September level). This is the material that __________ the total production cost for this set of data. Additional data could be used to determine the optimal tin content or the point where energy cost savings fail to overcome additional material costs.

What assets are not in the Quick Ratio that are in the Current Ratio? What makes these assets different? Please explain

Compare planning budgets vs flexible budgets.

Be thorough in describing what each is, and the differences between them. Conclude with what the best use is for each.

1) Briefly explain what are the advantages and disadvantages of shared leadership?

1. The local police department is considering two types of sidearms for its officers. The Glock 40 costs $400 apiece and has a life of 4 years. The other option is a Sauer 45 that costs $800 and has a 12-year life. The Sauer pistol has a residual value of $200 at the end of its 12-year service life. Determine the better choice using the PW method and a study period of 8 years. The department uses a MARR of 5%.
2. Three different methods can be used for recovering by-product heavy metals from a manufacturing site’s liquid waste. The investment costs and incomes associated with each method are shown below. Assuming all methods have a 10-year life and the company’s MARR is 10% per year, determine which method should be selected using Annual Worth Analysis.

3. 	Method 1	Method 2	Method 3
   First Cost, $	20,000	18,000	25,000
   Salvage Value, $	1,000	3,000	1,500
   Annual Income, $	5,000	5,000	7,000

1. Over what period should the following be included as an expense in the income statement?

(a) The interest paid on a five-year corporate bond.

(b) The cost of a truck with an estimated fifteen-year economic life.

(c) The annual bonus earned by chief executive officers and paid in the following year.

(d) The one-time premium paid on a 10-year insurance policy.

(e) What basic accounting concepts do your answers reflect?

Houston-based Advanced Electronics manufactures audio speakers for desktop computers. The following data relate to the period just ended when the company produced and sold 40,000 speaker sets:

Management is considering relocating its manufacturing facilities to northern Mexico to reduce costs. Variable costs are expected to average $18.00 per set; annual fixed costs are anticipated to be $1,986,000. (In the following requirements, ignore income taxes.)

Required:

1. Calculate the company’s current income and determine the level of dollar sales needed to double that figure, assuming that manufacturing operations remain in the United States.
2. Determine the break-even point in speaker sets if operations are shifted to Mexico.
3. Assume that management desires to achieve the Mexican break-even point; however, operations will remain in the United States.

1. If variable costs remain constant, by how much must fixed costs change?
2. If fixed costs remain constant, by how much must unit variable cost change?

4. Determine the impact (increase, decrease, or no effect) of the following operating changes.

Calculate the company’s current income and determine the level of dollar sales needed to double that figure, assuming that manufacturing operations remain in the United States. (Do not round intermediate calculations and round your final answers to nearest whole dollar.)

Calculate the company’s current income and determine the level of dollar sales needed to double that figure, assuming that manufacturing operations remain in the United States. (Do not round intermediate calculations and round your final answers to nearest whole dollar.)

Determine the break-even point in speaker sets if operations are shifted to Mexico. (Do not round intermediate calculationsand round your final answer up to nearest whole number.)

• Assume that management desires to achieve the Mexican break-even point; however, operations will remain in the United States.

  a. If variable costs remain constant, by how much must fixed costs change? (Round your intermediate unit calculations to the nearest whole number and round your final answers to the nearest whole dollar.)

  b. If fixed costs remain constant, by how much must unit variable cost change? (Round your intermediate unit calculations to the nearest whole number and round your final answer to 2 decimal places.)

  Show less

  	a. Fixed costs not attempted by not attempted b. Variable costs not attempted by not attempted per unit

• Determine the impact (increase, decrease, or no effect) of the following operating changes.

  	a. Effect of an increase in direct material costs on the break-even point. not attempted b. Effect of an increase in fixed administrative costs on the unit contribution margin. not attempted c. Effect of an increase in the unit contribution margin on net income. not attempted d. Effect of a decrease in the number of units sold on the break-even point. not attempted

Is the 2018 IASB Framework useful in its present form?

Accounting standards and regulations should aim to state how all situations should be dealt with. Discuss.

If you were to develop an accounting conceptual framework from scratch, where would you start and how would you structure it?

Early in its fiscal year ending December 31, 2018, San Antonio Outfitters finalized plans to expand operations. The first stage was completed on March 28 with the purchase of a tract of land on the outskirts of the city. The land and existing building were purchased for $820,000. San Antonio paid $210,000 and signed a noninterest-bearing note requiring the company to pay the remaining $610,000 on March 28, 2020. An interest rate of 6% properly reflects the time value of money for this type of loan agreement. Title search, insurance, and other closing costs totaling $21,000 were paid at closing.
   
During April, the old building was demolished at a cost of $71,000, and an additional $51,000 was paid to clear and grade the land. Construction of a new building began on May 1 and was completed on October 29. Construction expenditures were as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

San Antonio borrowed $3,000,000 at 6% on May 1 to help finance construction. This loan, plus interest, will be paid in 2019. The company also had the following debt outstanding throughout 2018:

In November, the company purchased 10 identical pieces of equipment and office furniture and fixtures for a lump-sum price of $610,000. The fair values of the equipment and the furniture and fixtures were $426,000 and $284,000, respectively. In December, San Antonio paid a contractor $290,000 for the construction of parking lots and for landscaping.
  
Required:
1. Determine the initial values of the various assets that San Antonio acquired or constructed during 2018. The company uses the specific interest method to determine the amount of interest capitalized on the building construction.
2. How much interest expense will San Antonio report in its 2018 income statement?

The following selected data were taken from the accounting records of Metcalf Manufacturing. The company uses direct-labor hours as its cost driver for overhead costs.

March’s costs consisted of machine supplies ($296,400), depreciation ($32,500), and plant maintenance ($570,100). These costs exhibit the following respective behavior: variable, fixed, and semivariable.

The manufacturing overhead figures presented in the preceding table do not include Metcalf’s supervisory labor cost, which is step-fixed in nature. For volume levels of less than 15,000 hours, supervisory labor amounts to $77,500. The cost is $155,000 from 15,000–29,999 hours and $232,500 when activity reaches 30,000 hours or more.

Required:

1. Determine the machine supplies cost and depreciation for January.

2. Using the high-low method, analyze Metcalf’s plant maintenance cost and calculate the monthly fixed portion and the variable cost per direct-labor hour.

3. Assume that present cost behavior patterns continue into the latter half of the year. Estimate the total amount of manufacturing overhead the company can expect in November if 29,900 direct-labor hours are worked.

1-

Determine the machine supplies cost and depreciation for January.

• Using the high-low method, analyze Metcalf’s plant maintenance cost and calculate the monthly fixed portion and the variable cost per direct-labor hour. (Round your "Variable cost per hour" answer to 2 decimal places.)

  	Variable cost per hour Fixed cost per month

• Assume that present cost behavior patterns continue into the latter half of the year. Estimate the total amount of manufacturing overhead the company can expect in November if 29,900 direct-labor hours are worked.

  	Manufacturing overhead cost

Compute the following ratios for 2015:

(a) Current ratio=

Working Capital=

(b) Acid-test ratio=

(c)Accounts receivable turnover=

Average Collection Period (Average Days to Collect)=

(d) Inventory turnover=

Days in inventory (Average Days to Sell)=

Operating Cycle = Average Days to Sell + Average Days to Collect

'(e ) Profit Margin =

(f) Asset turnover =

(g) Return on Assets =

Background Information Note the following:

• Acme Corporation is a publicly listed company

• ACME’s Fiscal year end is December 31

• In addition to the cash account being reconcile here; ACME has a separate Revolving Credit account.

  This is a revolving credit facility where interest is accrued on the average balance outstanding during the month. The interest amount is required to be paid on a monthly basis. The correct is amount calculated and taken from the account automatically by the bank.

• The facility has an annual interest rate of 4%

• Management has set-out in the Financial Statements that the average balance outstanding in this

  revolving credit facility is normally at around $ 150,000.

• The Audit Committee has also informed the Partner that the CRA audited ACME in the previous year

  and levied a penalty of $50,000 and has informed the Board that they plan continue their audit in the new year.

  Required

  Part 1

1. a) From the information provided in EXHIBIT A, perform and document a Bank Reconciliation. - 20 marks

2. b) From the Background info. provided above, identify potential errors and disclosure requirements - 5 marks

Part 2

1. a) Identify the financial assertions relating to the Cash account addressed by the Bank Reconciliation and explain how. – 5 marks

2. b) Identify what type of activity the Bank Reconciliation is. – 5 marks

3. c) Identify the 6 possible characteristics (of the activity above) and which apply to the Bank Rec. – 5 marks

BONUS
How would the Auditor test the identified characteristics. – 4 marks

EXHIBIT A