South Airlines purchased a 747 aircraft on January 1, 2019, at a cost of $35,000,000. The estimated useful life of the aircraft is 20 years, with an estimated salvage value of $5,000,000. Instructions

(a) Compute the depreciation for 2019 and 2020 using the straight-line method and the double-declining-balance method.

(b) under each method, what is the book value after two years on December 31, 2020?

Thermal Rising, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with the following activity cost pools and activity rates:

Activity Cost Pool Activity Rate

Supporting direct labor ....................... $26 per direct labor-hour

Order processing ................................ $284 per order

Custom design processing ................. $186 per custom design

Customer service ............................... $379 per customer

Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months:

The company’s direct labor rate is $19.50 per hour.

Required:

Using the company’s activity-based costing system, compute the total direct material.

Measures of liquidity, Solvency, and Profitability

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 62 on December 31, 20Y2.

Required:

Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.

Problem 1-25 Traditional and Contribution Format Income Statements [LO1-6] Milden Company is a merchandiser that plans to sell 31,000 units during the next quarter at a selling price of $58 per unit. The company also gathered the following cost estimates for the next quarter: Cost Cost Formula Cost of good sold $28 per unit sold Advertising expense $178,000 per quarter Sales commissions 5% of sales Shipping expense $48,000 per quarter + $5.00 per unit sold Administrative salaries $88,000 per quarter Insurance expense $9,800 per quarter Depreciation expense $58,000 per quarter Required: 1. Prepare a contribution format income statement for the next quarter. 2. Prepare a traditional format income statement for the next quarter.

Tax Year 2019

This year Jack intends to file a married-joint return. Jack received $173,400 of salary and paid $8,600 of interest on loans used to pay qualified tuition costs for his dependent daughter, Deb. This year Jack has also paid moving expenses of $4,550 and $30,055 of alimony to his ex-wife, Diane, who divorced him in 2012. (Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.)

a. What is Jack’s adjusted gross income?

TG manufactures Product Z. Its standard selling price is $55. The production and sales budget for the quarter ended 31 March 20X3 was 7,500 units. The standard specification per unit of Product Z comprises: Direct labour 4 standard hours at $6/hour Direct material 1.2 kg at $10/kg Standard variable overhead 4 standard hours at $1/hour Budgeted fixed overhead $75,000 At the end of the quarter the management accounts showed the following:

Production and sales of product Z in units: 7700

Actual sales revenue: $424270

Actual direct labour (31,750): $192577

Actual direct material (8855 kg) :    $89436

Actual fixed overhead: $72400

(a) Prepare a statement reconciling budgeted and actual profit in the quarter, using absorption costing.

(b) Prepare a statement reconciling budgeted and actual profit in the quarter, using marginal costing.

An acquirer made the following entry to report an acquisition:

Six months after the acquisition, the customer lists are determined to be worthless.

Using a T-account template:

• Document the acquisition entry
• Prepare the entry to recognize that the customer lists are deemed worthless

Westerville Company reported the following results from last year’s operations:

At the beginning of this year, the company has a $350,000 investment opportunity with the following cost and revenue characteristics:

The company’s minimum required rate of return is 15%.

1. What is the ROI related to this year’s investment opportunity?

2. If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year?

3. If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year?

4. If the company pursues the investment opportunity and otherwise performs the same as last year, what ROI will it earn this year?

5. What is last year’s residual income?

6. What is the residual income of this year’s investment opportunity?

Cloud Productivity Inc. uses flexible budgets that are based on the following data: Sales commissions 15% of sales Advertising expense 18% of sales Miscellaneous administrative expense $8,500 per month plus 12% of sales Office salaries expense $30,000 per month Customer support expenses $13,000 per month plus 20% of sales Research and development expense $32,000 per month Prepare a flexible selling and administrative expenses budget for March for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.) Cloud Productivity Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending March 31 Total sales $400000 $500000 $600000 Variable cost: Sales commissions $ $ $ Advertising expense Miscellaneous administrative expense Customer support expenses Total variable cost $ $ $ Fixed cost: Miscellaneous administrative expense $ $ $ Office salaries expense Customer support expenses Research and development expense Total fixed cost $ $ $ Total selling and administrative expenses $ $ $

Respond to the following in a minimum of 175 words:

As the full-time bookkeeper, your job is to make any corrections to the general ledger accounts. Each correction needs the reason for the change and the effect on each account, whether it is an increase or decrease.

For the third time this month, a co-worker has recorded a cash receipt twice and wants you to record a correcting entry that will reverse the mistakes. The correcting entry will record a credit to the Cash account and a debit to the Sales account. Your co-worker has offered to buy you dinner for fixing this mistake.

What should you investigate before making a decision about the correcting entry? What is happening to the Cash account? Would you accept a dinner offer from your co-worker for fixing the mistake?

JC Penny produces high quality formal dresses. In January 2019 they produced 17,000 dresses. For the month of January, the following standard and actual cost data are available. The normal monthly capacity of the company is 30,000 direct labor hours. All material purchased in January was used in January production.

Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs are $102,000 per month and budgeted variable overhead costs are $63,000 per month.

Required

1. Which of the variances should be investigated if management considers a variance of more than 5% from standard to be significant?
2. Provide a discussion of the tradeoffs that are most likely to exist between the direct material and direct labor variances.

Marvel Parts, Inc., manufactures auto accessories. One of the company’s products is a set of seat covers that can be adjusted to fit nearly any small car. The company has a standard cost system in use for all of its products. According to the standards that have been set for the seat covers, the factory should work 995 hours each month to produce 1,990 sets of covers. The standard costs associated with this level of production are:

During August, the factory worked only 1,000 direct labor-hours and produced 2,300 sets of covers. The following actual costs were recorded during the month:

At standard, each set of covers should require 3.5 yards of material. All of the materials purchased during the month were used in production.

Required:

1. Compute the materials price and quantity variances for August.

2. Compute the labor rate and efficiency variances for August.

3. Compute the variable overhead rate and efficiency variances for August.

(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Recent legislation requires CEOs of public corporations to sign an affidavit, a sworn statement, stating that all accountings put forth by the company are accurate and not misleading; not to the best of their knowledge, but that they are accurate and not misleading. Obviously, the CEO of most public corporations can't personally perform all aspects of these accountings. Instead, they must rely on the accuracy of employees assigned to perform such tasks at various levels. The legislation makes the CEO PERSONALLY liable, even criminally liable, for inaccurate accountings. Considering this, is it fair or equitable to find a CEO liable if a subordinate has committed fraud or a mistake in the preparation of the accounting?

Shadee Corp. expects to sell 620 sun visors in May and 430 in June. Each visor sells for $16. Shadee’s beginning and ending finished goods inventories for May are 65 and 45 units, respectively. Ending finished goods inventory for June will be 70 units.

Required information

Required:
1. Determine Shadee's budgeted total sales for May and June.



2. Determine Shadee's budgeted production in units for May and June.

Each visor requires a total of $4.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.00 each. Shadee wants to have 26 closures on hand on May 1, 21 closures on May 31, and 22 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,200 per month, and variable manufacturing overhead is $2.75 per unit produced.

Required:
1. Determine Shadee's budgeted cost of closures purchased for May and June. (Round your answers to 2 decimal places.)



2. Determine Shadee's budget manufacturing overhead for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.)

Suppose that each visor takes 0.20 direct labor hours to produce and Shadee pays its workers $8 per hour.

Required:
Determine Shadee's budgeted direct labor cost for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.)

Bridgeport Company had the following stockholders’ equity as of January 1, 2017.

During 2017, the following transactions occurred.

Prepare the journal entries to record the treasury stock transactions in 2017, assuming Bridgeport uses the cost method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Prepare the stockholders’ equity section as of April 30, 2017. Net income for the first 4 months of 2017 was $126,200. (Enter account name only and do not provide descriptive information.)