Cash Disbursement
Timber Company is in the process of preparing its budget for next year. Cost of goods sold has been estimated at 70 percent of sales. Lumber purchases and payments are to be made during the month preceding the month of sale. Wages are estimated at 15 percent of sales and are paid during the month of sale. Other operating costs amounting to 10 percent of sales are to be paid in the month following the month of sale. Additionally, a monthly lease payment of $14,000 is paid for computer services. Sales revenue is forecast as follows

Required
Prepare a schedule of cash disbursements for April, May, and June.
Do not use a negative sign with your answers.

LIFO Perpetual Inventory

The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31 are as follows:

1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Goods Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column. Round unit cost to two decimal places, if necessary.

Josh worked for the Johnson Boat Works Company as a maintenance welder for 15 years. At the beginning of each five years of employment, Josh signed a five-year work agreement with the company. Soon after Josh had signed a new five-year agreement, Josh was fired by the new owner of the company. At the time of his firing, Josh was making $25 an hour and his employer-paid benefit package, which included health care and other government mandated items, was worth about 20% of his wages. Although Josh started looking for a new similar job right away, it was eight months before he got a new job. The new job pays $22 per hour, but it is on a contract that pays no benefits other than his wages. On advice from his attorney he recently filed a wrongful discharge case against Johnson Boat Works.

Assume that the Johnson Boat Works Company is found liable for the firing of Josh. Also assume a 40-hour work week and a 52-week work year. Josh worked for 13 weeks during the first year at the new job. Assume that he continued to work at his new job for all of years two and three, and that during the fourth and fifth years, Josh lost his contract job and had to work a minimum wage job at $15,000 a year with employer paid benefits that amounted to 10% of his wages. Using only the information above, what is the total amount of damages suffered by Josh during the entire five-year contract period? [Provide one total dollar amount for the damages.]

Show clearly labeled and organized computations below. Do not adjust for present value.

On October 29, 2017, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $15 and its retail selling price is $80 in both 2017 and 2018. The manufacturer has advised the company to expect warranty costs to equal 6% of dollar sales. The following transactions and events occurred.

2017

2018

Problem 9-4A Part 1

1a. Prepare journal entries to record above transactions and adjustments for 2017.
1b. Prepare journal entries to record above transactions and adjustments for 2018.

2. How much warranty expense is reported for November 2017 and for December 2017?

3. How much warranty expense is reported for January 2018?

4. What is the balance of the Estimated Warranty Liability account as of December 31, 2017?
5. What is the balance of the Estimated Warranty Liability account as of January 31, 2018?

The cash account for American Medical Co. at April 30 indicated a balance of $13,140. The bank statement indicated a balance of $15,360 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

A. Checks outstanding totaled $5,530.

B. A deposit of $5,760, representing receipts of April 30, had been made too late to appear on the bank statement.

C. The bank collected $3,000 on a $2,840 note, including interest of $160.

D. A check for $550 returned with the statement had been incorrectly recorded by American Medical Co. as $500. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account.

E. A check drawn for $50 had been erroneously charged by the bank as $500.

F. Bank service charges for April amounted to $50.

1)Prepare a Bank Reconciliation

2) Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound transaction, if an amount box does not require an entry, leave it blank.

3) If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash?

Dividends

Keener Company has had 800 shares of 7%, $100 par preferred stock and 44,000 shares of $5 stated value common stock outstanding for the last 3 years. During that period, dividends paid totaled $4,600, $27,700, and $31,800 for each year, respectively.

Required:

Compute the amount of dividends that Keener must have paid to preferred shareholders and common shareholders in each of the 3 years, given the following 3 independent assumptions:
If an amount is zero, enter "0".

3. Preferred stock is fully participating and cumulative.

Job order cost accounting for a service company

The law firm of Furlan and Benson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during July:

a. Provide the journal entries for each of these transactions.

b. How much office overhead is over- or underapplied? Enter your answer as a positive number.
$  

c. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.
$

Please match appropriate letters and number with definition.

A. Account Analysis B. Contribution Margin C. Contribution Margin ratio  D. Constraint   E. High-Low Method  F. Margin of safety  G. Profit Equation H. Relevant Range

I. Semi variable   J. Step Cost    K. "what if" analysis   L. Break even point M. Contribution margin per unit N. Contribution margin per unit of constraint O. Discretionary fixed cost

P. Fixed cost     Q. Mixed Cost   R. Operating leverage X. Regression analysis Y. Scatter graph Z. Variable Cost   0 Weighted average contribution margin per unit

____Where sales and total costs are equal

____The cost per unit varies inversely to changes in activity

____the total cost varies in direct proportion to changes in activity

____pertains to the relationship between fixed and variable costs

____Fixed costs that management can easily change in the short run

____contains both a fixed and a variable cost

____used in the denominator of the break even point when multiproduct exists

____unit contribution margin divided by amount of scarce resource per unit

____provides the most accurate cost equation of a mixed cost

____used to determine a mixed cost equation by visually fitting a line to sample data points.

____the difference between the sales and variable costs

____profit = SP (x) - VC (x) - FC

____another name for mixed cost

____the difference between actual sales and break-even sales

____a scarce resource

____a cost that is fixed within a range of activity but increases to higher level when the upper limit of the range is exceeded

____determining that will happen if a particular action is taken

____the span of activity for which estimates and predictions are likely to be accurate

____contribution margin divided by sales

used to estimate the fixed and variable components of a mixed cost based on only two data points

Texas Building Services provides cleaning services for a variety of clients. The company has two producing​ departments, residential and​ commercial, and two service​departments, personnel and administrative. The company has decided to allocate all service department costs to the producing​ departments' personnel on the basis of number of employees and administrative on the basis of direct department costs. The budget for 20X2 shows the​ following:

Requirement 1. Allocate service department costs using the direct method. ​(Use parentheses or a minus sign when decreasing departments by allocating costs. For amounts with a​ $0 balance, make sure to enter​ "0" in the appropriate​ cell.)

Requirement 2. Allocate service department costs using the​ step-down method. Personnel costs should be allocated first. ​(Use parentheses or a minus sign when decreasing departments by allocating costs. For amounts with a​ $0 balance, make sure to enter​ "0" in the appropriate​ cell.)

Requirement 3. Suppose the company prices by the hour in the residential department and by the square foot cleaned in commercial. Using the results of the​step-down allocations in number​ 2, (a) compute the cost of providing 1​ direct-labor hour of service in the residential department and​ (b) compute the cost of cleaning one square foot of space in the commercial department.

​(a) First determine the​ formula, then compute the cost of providing 1​ direct-labor hour of service in the residential department. ​(Round your answer to the nearest​ cent.)

​(b) Next, determine the​ formula, then compute the cost of cleaning one square foot of space in the commercial department. ​(Round your answer to the nearest​ cent.)

Requirement 4. For each type of cost assignment made in number 2 using the​ step-down method, indicate the assignment type using the framework for cost accounting system

Allocations from the personnel to the administrative departments are__________ allocations. Allocations from the administrative to the residential and commercial operating departments are allocations.

Classify each of the following items as an (O) operating activity, (I) investing activity, or (F) financing activity

____Purchase of a building

____issuance of capital stock

____receipt of interest revenue

____cash receipts from customers

____paid cash dividend to stockholders

____ paid inventory suppliers

____ collection of long term note

____ issuance of a long-term note payable

____ paid interest expense

____ purchased the stock of another company

Activity-Based Costing and Conventional Costs Compared
Chef Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month.

Manufacturing overhead follows:

Rounding instructions: Do not round until your final answers. Round total cost answers to the nearest dollar and per unit answers to the nearest cent.

(a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars.

HINT: Use 8.4708 for overhead rate calculations.

(b) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing.

Big Sky Mining Company must install $1.5 million of new machinery in its Nevada mine. It can obtain a bank loan for 100% of the purchase price, or it can lease the machinery. Assume that the following facts apply:

1. The machinery falls into the MACRS 3-year class. (The depreciation rates for Year 1 through Year 4 are equal to 0.3333, 0.4445, 0.1481, and 0.0741.)
2. Under either the lease or the purchase, Big Sky must pay for insurance, property taxes, and maintenance.
3. The firm's tax rate is 25%.
4. The loan would have an interest rate of 12%. It would be non amortizing, with only interest paid at the end of each year for four years and the principal repaid at Year 4.
5. The lease terms call for $400,000 payments at the end of each of the next 4 years.
6. Big Sky Mining has no use for the machine beyond the expiration of the lease, and the machine has an estimated residual value of $200,000 at the end of the 4th year.

1. What is the cost of owning? Enter your answer as a positive value. Do not round intermediate calculations. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.

   $   ?????

2. What is the cost of leasing? Enter your answer as a positive value. Do not round intermediate calculations. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.

   $   ?????

3. What is the NAL of the lease? Do not round intermediate calculations. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.

   $ ????

Why would businesses decide to conduct their operations as a partnership? What are the advantages and disadvantages of partnerships? Are there better alternatives?

34. Yummy Jams Company produces a line of jams. Yummy's estimated production of jars of jam for the fourth quarter of the year is as follows:

​

​

Each jar requires half a pound of berries. Yummy prefers to buy the freshest berries, so its policy is to have just 3% of the following month's production needs in ending inventory. On October 1, the company had 1,125 pounds of berries in inventory. Yummy's pays $0.60 per pound of berries. It buys all berries on account and typically pays 40% of a month's purchases in that month, and the remaining 60% the following month. How much cash is paid in November for berry purchases (rounded to the nearest dollar)?

Note: This problem is for the 2018 tax year.

Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. She is a tax accountant with Mesa Manufacturing Company, 1203 Western Avenue, Mesa, AZ 85201 (employer identification number 11-1111111). She also writes computer software programs for tax practitioners and has a part-time tax practice. Beth is single and has no dependents. Beth's birthday is July 4, 1972, and her Social Security number is 123-45-6785. She wants to contribute $3 to the Presidential Election Campaign Fund.

The following information is shown on Beth's Wage and Tax Statement (Form W–2) for 2018.

During the year, Beth received interest of $1,300 from Arizona Federal Savings and Loan and $400 from Arizona State Bank. Each financial institution reported the interest income on a Form 1099–INT. She received qualified dividends of $800 from Blue Corporation, $750 from Green Corporation, and $650 from Orange Corporation. Each corporation reported Beth's dividend payments on a Form 1099–DIV.

Beth received a $1,100 income tax refund from the state of Arizona on April 29, 2018. On her 2017 Federal income tax return, she reported total itemized deductions of $8,200, which included $2,200 of state income tax withheld by her employer.

Fees earned from her part-time tax practice in 2018 totaled $3,800. She paid $600 to have the tax returns processed by a computerized tax return service.

On February 8, 2018, Beth bought 500 shares of Gray Corporation common stock for $17.60 a share. On September 12, 2018, Beth sold the stock for $14 a share.

Beth bought a used sport utility vehicle for $6,000 on June 5, 2018. She purchased the vehicle from her brother-in-law, who was unemployed and was in need of cash. On November 2, 2018, she sold the vehicle to a friend for $6,500.

On January 2, 2018, Beth acquired 100 shares of Blue Corporation common stock for $30 a share. She sold the stock on December 19, 2018, for $55 a share. Both stock transactions were reported to Beth on Form 1099–B; basis was not reported to the IRS.

During the year, Beth records revenues of $16,000 from the sale of a software program she developed. Beth incurred the following expenses in connection with her software development business.

Beth elected to expense the maximum portion of the cost of the computer, printer, and furniture allowed under the provisions of § 179. These items were placed in service on January 15, 2018, and used 100% in her business.

Although her employer suggested that Beth attend a convention on current developments in corporate taxation, Beth was not reimbursed for the travel expenses of $1,420 she incurred in attending the convention. The $1,420 included $200 for the cost of meals.

During the year, Beth paid $300 for prescription medicines and $2,875 for doctor interest to credit card bills and hospital bills. Medical insurance premiums were paid for her by her employer. Beth paid real property taxes of $1,766 on her home. Interest on her home mortgage (Valley National Bank) was $3,845, and interest to credit card companies was $320. Beth contributed $2,080 to various qualifying charities during the year. Professional dues and subscriptions totaled $350.

Beth paid estimated taxes of $1,000.

Required:

Compute the net tax payable or refund due for Beth R. Jordan for 2018. You will need Form 1040, (and its Schedules 1, 4, 5, B, C, D, and SE) and Forms 4562 and 8949 and the Qualified Dividends and Capital Gain Tax Worksheet.

• Make realistic assumptions about any missing data.
• If an amount box does not require an entry or the answer is zero, enter "0".
• Enter all amounts as positive numbers, unless instructed otherwise.
• It may be necessary to complete the tax schedules before completing Form 1040.
• When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.
• Use the 2018 Tax Rate Schedule provided. Do not use the Tax Table