Raintree Cosmetic Company sells its products to customers on a
credit basis. An adjusting entry for bad debt expense is recorded
only at December 31, the company’s fiscal year-end. The 2017
balance sheet disclosed the following:
Current assets: | ||
Receivables, net of allowance for uncollectible accounts of $42,000 | $ | 492,000 |
During 2018, credit sales were $1,810,000, cash collections from customers $1,890,000, and $51,000 in accounts receivable were written off. In addition, $4,200 was collected from a customer whose account was written off in 2017. An aging of accounts receivable at December 31, 2018, reveals the following:
Percentage of Year-End | Percent | |||
Age Group | Receivables in Group | Uncollectible | ||
0–60 days | 70 | % | 5 | % |
61–90 days | 20 | 15 | ||
91–120 days | 5 | 20 | ||
Over 120 days | 5 | 40 | ||
Required:
1. Prepare summary journal entries to account
for the 2018 write-offs and the collection of the receivable
previously written off.
2. Prepare the year-end adjusting entry for bad
debts according to each of the following situations:
3. For situations (a)–(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2018 balance sheet?
In: Accounting
(on the following question please show the formula for the steps and from were you get the numbers)
Cost-volume-profit
analysis
Di & Co. has the following budgeted information for a contract:
-
Fixed costs $ 270,000
Variable cost per unit
$ 20
Selling price per unit
$ 40
Budgeted output /
sales units
15,000
Required:
(a) Compute the number of units that must be sold to
breakeven.
(b) How many units must be sold to earn $80,000 target profit?
(c) What selling price
would have to be charged to give a profit of $80,000?
(d) How many additional units must be sold to cover an extra fixed
cost of $12,000? (assuming selling price and variable cost per unit
are constant)
(e) What is the profit-volume
ratio?
(f) Referring to part (e) above, if total sales revenue is
$550,000, what is the total contribution and hence what is the net
profit?
(g) Referring to part
(a), what is the margin of
safety?
(h) What does the term relevant range
mean?
In: Accounting
( show the formula in every step and from were the number come from)
standard Costing & Variance Analysis
Delic plc. is a manufacturer of cakes that makes a wide range of cakes. It operates a standard marginal cost accounting system. Given below, is information relating to one of its products, i.e. birthday cakes, which are made in one of the company departments:
Birthday cakes |
Standard marginal product cost per unit ($) |
Direct material (6 kgs at $4 per kg) |
24 |
Direct labour (1 hour at $7 per hour) |
7 |
Variable production overhead |
3 |
total |
34 |
Additional information
Actual production and costs for one of the months were as follows: - Units of birthday cakes produced 18,500 units
|
$
Direct materials purchased and used, 113,500kg 442,650
Direct labour, 17,800 hours 129,940
Variable production overhead incurred 58,800
Fixed production overhead incurred 104,000
total 735,390
Required:
(iii) Wage rate variance
vi) Variable overhead efficiency variance
In: Accounting
Part A
Gedolf Ltd and Spike Ltd each hold 50% of the shares in Butch Ltd. All companies are involved in the artificial intelligence industry. Gedolf Ltd agrees that Spike Ltd should provide the management of Butch Ltd because of the expertise provided by its managing director, Rob Gedolf. Spike Ltd receives a management fee for providing its expertise.
Required:
Determine whether a parent–subsidiary relationship exists and which entity, if any, is a parent required to prepare consolidated financial statements under AASB 10.
In: Accounting
Coca-Cola Amatil (CCA) is one of the largest manufacturers of
soft drinks in the Asia-Pacific
region and operates in six countries – Australia, New Zealand,
Indonesia, Papua New Guinea,
Fiji and Samoa. CCA is also listed on the Australian Stock Exchange
since 1970. Your task is
to download CCA’s 2017 Annual Report and answer the following
questions.
1. What is the average annual dividend growth rate for CCA between
2013 and 2017?
Hint-use information provided on page 135.
2. Do you think CCA will maintain this recent growth rate forever?
Justify your answer
and if you disagree then also suggest a new dividend growth rate
range. Hint-start by
reading pages 8-9.
3. Suppose the annual dividend growth rate is 5 percent, which will
continue into the
foreseeable future. What is the intrinsic value of CCA’s share at
31st December 2018,
if you require an annual return of 10 percent?
4. What was CCA’s share price on 31st December 2018?
5. Should you invest in CCA’s shares based on 3 and 4 above? Why or
why not?
In: Accounting
how do state estate tax payments or state death tax
payments affect the estate tax return
In: Accounting
In: Accounting
On November 1, 2017, Sandhill Company adopted a stock-option
plan that granted options to key executives to purchase 28,500
shares of the company’s $10 par value common stock. The options
were granted on January 2, 2018, and were exercisable 2 years after
the date of grant if the grantee was still an employee of the
company. The options expired 6 years from date of grant. The option
price was set at $30, and the fair value option-pricing model
determines the total compensation expense to be $427,500.
All of the options were exercised during the year 2020: 19,000 on
January 3 when the market price was $67, and 9,500 on May 1 when
the market price was $77 a share.
Prepare journal entries relating to the stock option plan for the
years 2018, 2019, and 2020. Assume that the employee performs
services equally in 2018 and 2019.
In: Accounting
At the end of last month, Ajax Inc. had the following balances in its accounts: Cash $ 5,000 Inventory $10,000 Equipment $ 3,000 Land $10,000 Owe Jones $10,000 Common Stock $10,000 Retained Earnings $ 8,000 Set up the initial Balance Sheet for this month, make the appropriate entries for this month using the Accounting Equation, and show the ending Balance Sheet for this month. The following should be included for this month: a. Buy inventory from Jones on credit for $10,000 b. Sell goods for $4,000 c. Sell common stock for $1,000 d. Pay wages of $2,000 e. Pay tax of $1,000 f. Sell goods to Smith on credit for $15,000 g. Pay rent of $100 h. Pay Jones $2,000 i. Depreciate equipment $200 j. Inventory at the end of the month is worth $7,000
In: Accounting
Case: Monica’s Designer Handbags: Creative Marketing Decision-Making
QUESTIONS FOR STUDENTS TO ANSWER
In: Accounting
What kind of international pricing strategy would be used for CVS Health when it enters Turkey? Why?
In: Accounting
"The Cost of Complexity"
In: Accounting
Briefly describe (not just list) two filings that a public company is required to file with the SEC.
In: Accounting
Assume that the audit for National Australia Bank Limited (NAB), a financial institution, will be coming up for tender. You and your colleagues are required to prepare a client evaluation report based on your research for the senior members of your auditing firm. Your report should provide preliminary information as to whether the auditing firm should consider tendering for the audit of NAB. You should conduct extensive research and perform an analysis of the annual report of National Australia Bank Limited together with its controlled entities for the year ended 30 June 2018 and any other relevant information (Hint: Company’s website and Business news) that you have obtained.
1.. Identify and explain THREE business risks that could have an impact on the audit of NAB.
2.The recent Royal Commission highlighted a number of internal control deficiencies and fraud perpetuated on NAB clients for an extended period of time. These findings have serious ramifications for NAB. How will these findings affect your tendering decision?
In: Accounting
July 1 The company decided that 1,500,000 ordinary shares were to be offered to the public at an issue price of $3, payable as follows:
$1.50 on application (due 1 August)
$0.50 on allotment (due 30 August)
$1 on future calls
August 1 Applications had been received for 1,750,000 shares of which applicants for 300,000 shares forwarded the full $3 per share, the remainder paying only the application money.
August 5 At the directors’ meeting it was decided to allot ordinary shares in full to the applicants who paid the full amount and proportionally to all remaining applicants. According to the company’s constitution, all surplus money from application can be transferred to Allotment and Call accounts.
August 30 All outstanding allotment money was received.
November 1 The final call on was made, with payment due by 28 November.
November 28 All money was received on the due date except for the holders of 60,000 shares who failed to meet the call.
Required: Prepare General Journal Entries with narrations and full working out
In: Accounting