Minden Company introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. The company’s present selling price is $90 per unit, and variable expenses are $60 per unit. Fixed expenses are $838,800 per year. The present annual sales volume (at the $90 selling price) is 25,300 units.
Required:
1. What is the present yearly net operating income or loss?
2. What is the present break-even point in unit sales and in dollar sales?
3. Assuming that the marketing studies are correct, what is the maximum annual profit that the company can earn? At how many units and at what selling price per unit would the company generate this profit?
4. What would be the break-even point in unit sales and in dollar sales using the selling price you determined in (3) above (e.g., the selling price at the level of maximum profits)?
Brewer 8e Rechecks 2019-08-29
In: Accounting
In: Accounting
Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Larkspur Company. The following information relates to this agreement.
| 1. | The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. | |
| 2. | The fair value of the asset at January 1, 2020, is $66,000. | |
| 3. | The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $5,000, none of which is guaranteed. | |
| 4. | The agreement requires equal annual rental payments of $21,328 to the lessor, beginning on January 1, 2020. | |
| 5. | The lessee’s incremental borrowing rate is 5%. The lessor’s implicit rate is 4% and is unknown to the lessee. | |
| 6. | Larkspur uses the straight-line depreciation method for all equipment. |
Click here to view factor tables.
(For calculation purposes, use 5 decimal places as
displayed in the factor table provided.)
Part 1
New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct.
Prepare an amortization schedule that would be suitable for the lessee for the lease term. (Round answers to 0 decimal places, e.g. 5,265.)
|
LARKSPUR COMPANY (Lessee) |
||||||||
|---|---|---|---|---|---|---|---|---|
|
Date |
Annual Lease |
Interest on |
Reduction of Lease |
Lease Liability |
||||
|
1/1/20 |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
||||
|
1/1/20 |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
||||
|
1/1/21 |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
||||
|
1/1/22 |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
||||
|
$enter a total amount for this column |
$enter a total amount for this column |
$enter a total amount for this column |
||||||
eTextbook and Media
List of Accounts
Part 2
New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct.
Prepare all of the journal entries for the lessee for 2020 and 2021 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee’s annual accounting period ends on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,265. Record journal entries in the order presented in the problem.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
|---|---|---|---|---|
|
choose a transaction date1/1/2012/31/201/1/2112/31/21During 2020During 2021 1/1/2012/31/201/1/2112/31/21During 2020During 2021 |
enter an account title To record the lease |
enter a debit amount |
enter a credit amount |
|
|
enter an account title To record the lease |
enter a debit amount |
enter a credit amount |
||
|
(To record the lease) |
||||
|
choose a transaction date1/1/2012/31/201/1/2112/31/21During 2020During 2021 1/1/2012/31/201/1/2112/31/21During 2020During 2021 |
enter an account title To record lease payment |
enter a debit amount |
enter a credit amount |
|
|
enter an account title To record lease payment |
enter a debit amount |
enter a credit amount |
||
|
(To record lease payment) |
||||
|
choose a transaction date1/1/2012/31/201/1/2112/31/21During 2020During 2021 1/1/2012/31/201/1/2112/31/21During 2020During 2021 |
enter an account title To record interest expense |
enter a debit amount |
enter a credit amount |
|
|
enter an account title To record interest expense |
enter a debit amount |
enter a credit amount |
||
|
(To record interest expense) |
||||
|
choose a transaction date1/1/2012/31/201/1/2112/31/21During 2020During 2021 1/1/2012/31/201/1/2112/31/21During 2020During 2021 |
enter an account title To record amortization of the right-of-use asset |
enter a debit amount |
enter a credit amount |
|
|
enter an account title To record amortization of the right-of-use asset |
enter a debit amount |
enter a credit amount |
||
|
(To record amortization of the right-of-use asset) |
||||
|
choose a transaction date1/1/2012/31/201/1/2112/31/21During 2020During 2021 1/1/2012/31/201/1/2112/31/21During 2020During 2021 |
enter an account title To reverse interest expense |
enter a debit amount |
enter a credit amount |
|
|
enter an account title To reverse interest expense |
enter a debit amount |
enter a credit amount |
||
|
(To reverse interest expense) |
||||
|
enter an account title To record lease payment |
enter a debit amount |
enter a credit amount |
|
|
enter an account title To record lease payment |
enter a debit amount |
enter a credit amount |
||
|
enter an account title To record lease payment |
enter a debit amount |
enter a credit amount |
||
|
(To record lease payment) |
||||
|
choose a transaction date1/1/2012/31/201/1/2112/31/21During 2020During 2021 1/1/2012/31/201/1/2112/31/21During 2020During 2021 |
enter an account title To record interest expense |
enter a debit amount |
enter a credit amount |
|
|
enter an account title To record interest expense |
enter a debit amount |
enter a credit amount |
||
|
(To record interest expense) |
||||
|
choose a transaction date1/1/2012/31/201/1/2112/31/21During 2020During 2021 1/1/2012/31/201/1/2112/31/21During 2020During 2021 |
enter an account title To record amortization of the right-of-use asset |
enter a debit amount |
enter a credit amount |
|
|
enter an account title To record amortization of the right-of-use asset |
enter a debit amount |
enter a credit amount |
||
|
(To record amortization of the right-of-use asset) |
In: Accounting
Besserbrau AG is a German beer producer headquartered in Ergersheim, Bavaria. The company, which was founded in 1842 by brothers Hans and Franz Besser, is publicly traded, with shares listed on the Frankfurt Stock Exchange. Manufactur- ing in strict accordance with the almost 500-year-old German Beer Purity Law, Besserbrau uses only four ingredients in making its products: malt, hops, yeast, and water. While the other ingredients are obtained locally, Besserbrau imports hops from a company located in the Czech Republic. Czech hops are considered to be among the world’s finest. Historically, Besserbrau’s products were marketed exclusively in Germany. To take advantage of a potentially enormous market for its products and expand sales, Besserbrau began making sales in the People’s Republic of China three years ago. The company established a wholly owned sub- sidiary in China (BB Pijio) to handle the distribution of Besserbrau products in that country. In the most recent year, sales to BB Pijio accounted for 20 percent of Besserbrau’s sales, and BB Pijio’s sales to customers in China accounted for 10 per- cent of the Besserbrau Group’s total profits. In fact, sales of Besserbrau products in China have expanded so rapidly and the potential for continued sales growth is so great that the company recently broke ground on the construction of a brewery in Shanghai, China. To finance construction of the new facility, Besserbrau negotiated a listing of its shares on the London Stock Exchange to facilitate an initial public offering of new shares of stock.
Required: Discuss the various international accounting issues confronted by Besserbrau AG.
In: Accounting
In: Accounting
Sales and Production Budgets
Sonic Inc. manufactures two models of speakers, Rumble and Thunder. Based on the following production and sales data for June, prepare (a) a sales budget and (b) a production budget.
| Rumble | Thunder | ||
| Estimated inventory (units), June 1 | 256 | 69 | |
| Desired inventory (units), June 30 | 294 | 60 | |
| Expected sales volume (units): | |||
| East Region | 2,650 | 2,950 | |
| West Region | 5,750 | 5,000 | |
| Unit sales price | $120 | $215 |
a. Prepare a sales budget.
| Sonic Inc. | |||
| Sales Budget | |||
| For the Month Ending June 30 | |||
Product and Area |
Unit Sales Volume |
Unit Selling Price |
Total Sales |
| Model Rumble: | |||
| East Region | $ | $ | |
| West Region | |||
| Total | $ | ||
| Model Thunder: | |||
| East Region | $ | $ | |
| West Region | |||
| Total | $ | ||
| Total revenue from sales | $ | ||
b. Prepare a production budget.
| Sonic Inc. | ||
| Production Budget | ||
| For the Month Ending June 30 | ||
| Units Model Rumble | Units Model Thunder | |
| Expected units to be sold | ||
| Total units required | ||
| Total units to be produced | ||
In: Accounting
Cissi Jean Oliver opened Cleaning Angels, Inc. on March 31, 2019. During April, the following transactions were completed:
|
Apr 1 |
Issued 5,000 shares of Cleaning Angels common stock for $13,000. Each share has a $1.00 par. |
|
1 |
Borrowed $8,000 on a 2-year, 9% note payable. |
|
1 |
Paid $9,020 to purchase used floor and window cleaning equipment from a company going out of business ($4,820 was for the floor equipment and $4,200 for the window equipment). |
|
1 |
Paid $220 for April Internet and phone service. |
|
1 |
Purchased cleaning supplies for $980 on account. |
|
2 |
Hired 4 employees. Each will be paid $480 per 5-day work week (Monday-Friday). Employees will begin working on Monday, April 08. |
|
2 |
Obtained insurance coverage for $9,840 per year. Coverage runs from April 1, 2019, through March 31, 2020. Cissi Jean paid $2,460 cash for the first quarter of coverage. |
|
2 |
Discussions with the insurance agent indicated that providing outside window cleaning services would cost too much to insure. Cissi Jean sold the window cleaning equipment for $4,000 cash. |
|
15 |
Billed customers $3,900 for cleaning services performed through April 12, 2019. |
|
15 |
Received $600 from a customer for 4 weeks of cleaning services to begin on April 22, 2019. |
|
18 |
Paid $300 on amount owed on cleaning supplies. |
|
19 |
Paid $3.25 per share to buy 300 shares of Cleaning Angels, Inc common stock from a shareholder who disagreed with management goals. The shares will be held as treasury stock. |
|
22 |
Billed customers $4,300 for cleaning services performed through April 19. |
|
26 |
Paid cash for employees’ wages for 2 weeks (April 8-12 and 15-19). |
|
26 |
Collected $2,500 cash from customers billed on April 15. |
|
29 |
Paid $220 for Internet and phone services for May. |
|
29 |
Declared and paid a cash dividend of $0.10 per share. |
|
30 |
Received notice that a customer who was billed $200 for services performed April 8 has filed for bankruptcy. Cleaning Angels, Inc does not expect to collect any portion of this outstanding receivable. (Cleaning Angels will follow the GAAP Guidelines for uncollectible accounts.) |
Adjusting Data:
A. Services performed for customers through
April 30, 2019, but unbilled and uncollected were $3,800.
B. Cleaning Angels used the allowance method to
estimate bad debts. Cleaning Angels estimates that 3% of its
month-end receivables will not be collected.
C. Record 1 month of depreciation for the floor
equipment. Use the straight-line method, an estimated life of 4
years, and $500 salvage value.
D. Record 1 month of insurance expense.
E. An inventory count shows $500 of supplies on
hand at April 30.
F. One week of services were performed for the
customer who paid in advance on April 15.
G. Accrue for wages owed through April 30,
2019.
H. Accrue for interest expense for 1 month.
I. Cissi Jean estimates a 20% income tax rate.
(Hint: Prepare an income statement up to “income before taxes” to
help with the income tax calculation.)
Instructions:
Possible account titles to use, please:
|
Accounts Payable |
Loss on Disposal of Equipment |
|
Accounts Receivable |
Notes Payable |
|
Allowance for Doubtful Accounts |
Paid in Capital in Excess of Par/Com |
|
Accumulated Depreciation/Building |
Paid in Capital in Excess of Par/Pref |
|
Accumulated Depreciation/Equip |
Preferred Stock |
|
Bad Debt Expense |
Prepaid Insurance |
|
Bonds Payable |
Prepaid Rent |
|
Building |
Prepaid Utilities |
|
Cash |
Rent Expense |
|
Cash Dividends |
Retained Earnings |
|
Common Stock |
Salaries and Wages Expense |
|
Cost of Goods Sold |
Salaries and Wages Payable |
|
Depreciation Expense |
Sales Discounts |
|
Dividends Payable |
Sales Returns and Allowances |
|
Equipment |
Sales Revenue |
|
Gain on Disposal of Equipment |
Selling Expenses |
|
Income Tax Expense |
Service Revenue |
|
Income Tax Payable |
Supplies |
|
Income Summary |
Supplies Expense |
|
Insurance Expense |
Treasury Stock |
|
Interest Expense |
Unearned Service Revenue |
|
Interest Payable |
Utilities Expense |
|
Inventory |
Utilities Payable |
|
Land |
In: Accounting
Sheridan Inc. reported income from continuing operations before
taxes during 2020 of $804,900. Additional transactions occurring in
2020 but not considered in the $804,900 are as follows.
| 1. | The corporation experienced an uninsured flood loss in the amount of $93,900 during the year. | |
| 2. | At the beginning of 2018, the corporation purchased a machine for $70,200 (salvage value of $11,700) that had a useful life of 6 years. The bookkeeper used straight-line depreciation for 2018, 2019, and 2020, but failed to deduct the salvage value in computing the depreciation base. | |
| 3. | Sale of securities held as a part of its portfolio resulted in a loss of $58,400 (pretax). | |
| 4. | When its president died, the corporation realized $159,600 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $47,530 (the gain is nontaxable). | |
| 5. | The corporation disposed of its recreational division at a loss of $117,100 before taxes. Assume that this transaction meets the criteria for discontinued operations. | |
| 6. | The corporation decided to change its method of inventory pricing from average-cost to the FIFO method. The effect of this change on prior years is to increase 2018 income by $60,600 and decrease 2019 income by $21,510 before taxes. The FIFO method has been used for 2020. The tax rate on these items is 30%. |
Prepare an income statement for the year 2020 starting with income
from continuing operations before taxes. Compute earnings per share
as it should be shown on the face of the income statement. Common
shares outstanding for the year are 108,490 shares. (Assume a tax
rate of 30% on all items, unless indicated otherwise.)
(Round earnings per share to 2 decimal places, e.g.
1.48 and all other answers to 0 decimal places, e.g.
5,275.)
In: Accounting
Based on each of the following scenarios below, draft an effective finding for the Management Letter. Five Components of an effective finding:
Write one paragraph.
scenario:
During an operational audit of a University department, it was discovered that four new vehicles had been purchased in January, but had not yet been insured by the time the audit occurred in April. The vehicles had been driven approximately 3,000 miles during that time.
In: Accounting
Problem 10-1 Acquisition costs [LO10-1, 10-2, 10-3, 10-4]
Tristar Production Company began operations on September 1,
2018. Listed below are a number of transactions that occurred
during its first four months of operations. (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.)
Required:
Prepare journal entries to record each of the above transactions.
(If no entry is required for a transaction/event, select
"No journal entry required" in the first account field. Round final
answers to the nearest whole dollars.)
In: Accounting
Continuing Payroll Problem, 6B, Chapter 6
You have almost completed the Kipley's Company Employee Payroll Register for the pay period ending January 8, 20XX.
Requirements:
Record the deduction for group insurance.
Record the health insurance deduction.
Record the check number assigned to each employee.
Compute and record the net pay for each employee.
Total the input columns on the Employee Payroll register.
On Employer Register, enter total gross earnings.
Prepare the journal entries as of January 12 to record the payroll and the payroll taxes for the week ending January 8. Credit Salaries Payable for the total net pay.
Prepare the journal entry to record the payment of the payroll on January 14 when the paychecks are distributed to all workers.
Employee Benefits
Employee Benefits
The table below lists the employee contributions to Group Insurance and Health Insurance. Also, a check number has been assigned to each employee. Note that some employees are not yet eligible for Group Insurance coverage under the company plan.
| KIPLEY COMPANY, INC. Insurance Deduction Register |
|||||||
| Name | GRP. INS. | HEALTH INS. | CK. NO. | ||||
| Carson, F. | $0.85 | $1.65 | 313 | ||||
| Wilson, W. | 0.85 | 1.65 | 314 | ||||
| Utley, H. | 0.85 | 1.65 | 315 | ||||
| Fife, L. | 0.85 | 1.65 | 316 | ||||
| Smith, L. | 1.65 | 317 | |||||
| Fay, G. | 0.85 | 1.65 | 318 | ||||
| Robey, G. | 0.85 | 1.65 | 319 | ||||
| Schork, T. | 1.65 | 320 | |||||
| Hardy, B. | 0.85 | 1.65 | 321 | ||||
| Kipley, C. | 0.85 | 1.65 | 322 | ||||
Payroll Register
Completing the Payroll Register
The Employee Payroll Register presents all the computations previously performed as it applies to this payroll period.
Complete the following steps (if an field should be blank, leave it blank):
Record the amount to be withheld for group insurance.
Record the amount to be withheld for health insurance.
Each worker is to be paid by check. Assign check numbers provided to the correct employee..
Compute the net pay for each employee.
Total the input columns.
| KIPLEY COMPANY, INC. Payroll Register For Period Ending January 8, 20-- |
|||||||||||||
| EARNINGS | DEDUCTIONS | NET PAY | |||||||||||
| Name | Gross | OASDI | HI | FIT | SIT | SUTA | CIT | SIMPLE | Grp. Ins. | Health Ins. | Ck. No. | Amount | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Carson, F. | $700.00 | $43.40 | $10.15 | $60.00 | $21.49 | $0.42 | $21.00 | $20.00 | $ | $ | $ | ||
| Wilson, W. | 897.04 | 55.62 | 13.01 | 92.00 | 27.54 | 0.54 | 26.91 | 50.00 | |||||
| Utley, H. | 678.75 | 42.08 | 9.84 | 26.00 | 20.84 | 0.41 | 20.36 | 40.00 | |||||
| Fife, L. | 877.10 | 54.38 | 12.72 | 29.00 | 26.93 | 0.53 | 26.31 | 50.00 | |||||
| Smith, L. | 790.00 | 48.98 | 11.46 | 62.00 | 24.25 | 0.47 | 23.70 | 20.00 | |||||
| Fay, G. | 539.15 | 33.43 | 7.82 | 4.00 | 16.55 | 0.32 | 16.17 | 40.00 | |||||
| Robey, G. | 623.08 | 38.63 | 9.03 | --- | 19.13 | 0.37 | 18.69 | 50.00 | |||||
| Schork, T. | 773.08 | 47.93 | 11.21 | 64.00 | 23.73 | 0.46 | 23.19 | 60.00 | |||||
| Hardy, B. | 666.11 | 41.30 | 9.66 | 2.00 | 20.45 | 0.40 | 19.98 | 30.00 | |||||
| Kipley | 1,000.00 | 62.00 | 14.50 | 14.00 | 30.70 | 0.60 | 30.00 | 80.00 | |||||
| Totals | $467.75 | $109.40 | $353.00 | $231.61 | $4.52 | $226.31 | $440.00 | ---- | |||||
Employer Register
Employer Register
Complete the following:
Record the total gross earnings.
| KIPLEY COMPANY, INC. Employer Register Payroll Taxes |
|||||||
| Taxable Earnings | OASDI | HI | FUTA | SUTA | |||
|---|---|---|---|---|---|---|---|
| Totals | $ | $467.75 | $109.40 | $45.27 | $278.31 | ||
Journal Entry: Recording Payroll
Journal Entry: Recording Payroll
Complete the following:
Prepare the journal entries as of January 12 to record the payroll and the payroll taxes for the week ending January 8. Credit Salaries Payable for the total net pay.
| Date | Account | Debit | Credit |
| 20-- Jan. 12 | |||
| To record payroll. | |||
| 20-- Jan. 12 | |||
| To record payroll taxes. |
|
In: Accounting
The following information is related to Skysong Company for
2020.
| Retained earnings balance, January 1, 2020 | $1,372,000 | |
| Sales Revenue | 35,000,000 | |
| Cost of goods sold | 22,400,000 | |
| Interest revenue | 98,000 | |
| Selling and administrative expenses | 6,580,000 | |
| Write-off of goodwill | 1,148,000 | |
| Income taxes for 2020 | 1,741,600 | |
| Gain on the sale of investments | 154,000 | |
| Loss due to flood damage | 546,000 | |
| Loss on the disposition of the wholesale division (net of tax) | 616,000 | |
| Loss on operations of the wholesale division (net of tax) | 126,000 | |
| Dividends declared on common stock | 350,000 | |
| Dividends declared on preferred stock | 112,000 |
Skysong Company decided to discontinue its entire wholesale
operations (considered a discontinued operation) and to retain its
manufacturing operations. On September 15, Skysong sold the
wholesale operations to Rogers Company. During 2020, there were
500,000 shares of common stock outstanding all year.
Prepare a multi step income statement:
In: Accounting
Unlike direct materials, the sum of all the direct labor variances is always equal to the flexible budget variance.
True
False
A negative direct labor efficiency variance is considered favorable.
True
False
For direct labor, if the efficiency and rate variances are both negative, then the flexible budget variance will be unfavorable.
True
False
The total number of hours worked by employees is always directly tied to the total level of production.
True
False
In: Accounting
In recent years, public universities have experienced major budget cuts due to reduced funding from their state governments. These budget cuts usually occur at the most inopportune time—during the school year when contractual commitments with faculty and staff had been signed, programs had been planned, and students were enrolled and taking classes.
Required:
In: Accounting
TASK 1
Chantel Cohen works for ABC retailers and is seeking management’s approval to install an automatic mail-response system. Using the correct proposal format, write to Jamie Oliver, Chantel’s manager requesting a decision to be made with regard to the installation of an automatic mail-response system.
Pay careful attention to the following:
· Audience, register, tone and style
· Choice of words and language structure
· Format
Criteria used for Assessment Marks
Correct format 3
The problem 5
The solution 14
Cost analysis 4
Conclusion 4
Total 30
In: Accounting