The management of Furrow Corporation is considering dropping product L07E. Data from the company’s budget for the upcoming year appear below:

In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $249,000 of the fixed manufacturing expenses and $210,000 of the fixed selling and administrative expenses are avoidable if product L07E is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be:

Multiple Choice

• $(82,000)

• $95,000

• $82,000

• $(95,000)

Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials $ 31,000 Indirect materials included in manufacturing overhead $ 4,510 Direct labor $ 58,800 Manufacturing overhead applied to work in process $ 87,100 Underapplied overhead $ 4,040 Inventories Beginning Ending Raw materials $ 11,300 $ 19,100 Work in process $ 54,500 $ 67,800 Finished goods $ 33,500 $ 43,400 Required: 1. Prepare a schedule of cost of goods manufactured for the month. 2. Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.

1. Which of the following is generally false when a consolidation occurs?

           (a) The consolidated entity assumes the debts of the original corporations.

           (b) The consolidated entity takes on the rights of the original companies.

           (c) The consolidated entity obtains the original corporations’ assets.

           (d) The new corporation has independent legal status.

           (e) The original corporations continue to exist legally.

2. Which of the following is true regarding the type of intangible item that may constitute an asset?

          (a) A company name is a type of intangible item that may constitute an asset, but goodwill and a company logo are not.

          (b) Goodwill, a company name, and a company logo all constitute types of intangible items that may constitute assets.

          (c) Goodwill is a type of intangible item that may constitute an asset, but a company name and a company logo are not.

          (d) Goodwill and a company name are types of intangible items that may constitute assets, but a company logo is not.

          (e) A company name and a company logo are types of intangible items that may constitute assets, but goodwill is not.

3.

What key piece of information does an aggressor generally need in order to gain control of a target corporation through proxies?

               (a) The income statements of the target.

               (b) The list of members of the board of directors of the target.

               (c) A list of target shareholders.

               (d) A list of target officers.

               (e) The balance sheet of the target.

4.

In a consolidation, which of the following is true regarding the property of the original corporations?

                 (a) It must be held in trust for at least one year to satisfy claims of creditors.

                 (b) It is acquired by the new corporation.

                 (c) It must be sold and distributed to the respective shareholders.

                 (d) It must be placed within the jurisdiction of the secretary of state for at least one year in order to satisfy the claims of creditors.

                 (e) It must be held in trust for at least six months to satisfy claims of creditors.

5. In a consolidation, which of the following is true regarding the property of the original corporations?.

(a) It must be held in trust for at least one year to satisfy claims of creditors.

(b) It is acquired by the new corporation.

(c) It must be sold and distributed to the respective shareholders.

(d) It must be placed within the jurisdiction of the secretary of state for at least one year in order to satisfy claims of creditors.

(e) It must be held in trust for at least six months to satisfy claims of creditors.

Several years ago, Westmont Corporation developed a comprehensive budgeting system for planning and control purposes. While departmental supervisors have been happy with the system, the factory manager has expressed considerable dissatisfaction with the information being generated by the system.

A report for the company's Assembly Department for the month of March follows:

After receiving a copy of this cost report, the supervisor of the Assembly Department stated, “These reports are super. It makes me feel really good to see how well things are going in my department. I can’t understand why those people upstairs complain so much about the reports.”

For the last several years, the company’s marketing department has chronically failed to meet the sales goals expressed in the company’s monthly budgets.

Required:

1. The company’s president is uneasy about the cost reports, identify at least two reasons.

2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs?

3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach.

4. Were costs well controlled in March?

The company’s president is uneasy about the cost reports, identify at least two reasons. (Select "X" if the item is one of the reasons.)

What changes, if any, should be made in the reports to give better insight into how well departmental supervisors are controlling costs?

prepare a new performance report for the quarter, (Do not round your intermediate calculations. 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.)

How well were costs controlled in the Assembly Department in March?

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company’s costing system and “do what you can to help us get better control of our manufacturing overhead costs.” You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control.

After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:

During March, the company worked 20,000 machine-hours and produced 14,000 units. The company had originally planned to work 22,000 machine-hours during March.

Required:

1. Calculate the activity variances for March.

2. Calculate the spending variances for March.

Calculate the activity variances for March. (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.)

Calculate the spending variances for March. (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.)

[The following information applies to the questions displayed below.]

On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $66,500 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $20,078 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $30,590 cash per year.

Problem 7-30 Part b

2. Organize the information in accounts under an accounting equation. (Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles / Retained Earnings, leave the cell blank.)

3. BROWN CO. Effect of Events on the Accounting Equation 2018, 2019, 2020 and 2021 Event Assets = Liabilities + Stockholders' Equity Accounts Titles / Retained Earnings Cash + Land = Notes Payable + Retained Earnings 2018 1/1 + = + 1/1 + = + 12/31 + = + 12/31 + = + Bal. 0 + 0 = 0 + 0 2019 Beg. bal. + = + 12/31 + = + 12/31 + = + End. bal. 0 + 0 = 0 + 0 2020 Beg. bal. + = + 12/31 + = + 12/31 + = + End. bal. 0 + 0 = 0 + 0 2021 Beg. bal. + = + 12/31 + = + 12/31 + = + End. bal. 0 + 0 = 0 + 0

Exercise 11-7

Rinehart Corporation purchased from its stockholders 5,300 shares of its own previously issued stock for $265,000. It later resold 1,600 shares for $53 per share, then 1,600 more shares for $48 per share, and finally 2,100 shares for $42 per share.

Prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock.

Assignment Topic:

How should an organization treat its employees during a pandemic? – Discuss from both organization and employees’ perspectives.
In our discussion forums, we have discussed employees are the most valuable assets of an organization, even though they are not listed in the Balance Sheet. Without employees, an organization is nothing.

Here, I use the word “organization” instead of “company/firm” because I do not want to limit your thinking on certain well-structured companies/firms (e.g. listed firms), it can be any organizations, no matter big or small, private or listed, profit-oriented or public benefit organizations.

REQUIRED:

1. Explain the main reasons why employees are valuable assets, and why the organization should treat them well. [You could look for journal articles on what benefits employees can bring for the organization, and the Social Responsibilities of an organization towards employees.]

2. Describe what employees expect from the organization and why. [You could get some hints from why people decide (not) to change jobs or resign.]

3. Discuss how the pandemic affects the above two points. Compare what the organization can do and what employees need during a pandemic. [You could read news and organizations’ disclosures; you could discuss the experience from your family, friends, or someone your know.]

4. Provide your suggestions on how to help employees (including those who lost jobs) in Fiji go through the difficult time. [You could talk about anything that you think is helpful, no matter whether or not it is available in Fiji.]

You are the new accountant for ABC, Co. ABC, Co. is a plumbing supply and installation company.

Your boss is the President, Mr. Bigg.

As the accountant, it is your job to explain to Mr. Bigg the following accounting terms.

1. What is a chart of accounts?

2. What are adjusting journal entries?

3. What is an income statement?

Based on your course work of accounting and information systems course (ACC 4310) at your University, what would you recommend to Mr. Bigg to improve his business in regards to the following situations?

1. Accounts Receivables are billed and due at 30 days from invoice, however, most customers tend to pay up to 45 days. The company needs to improve cash flows.

2. Several customers have bounced checks and this causes issues, especially the $25.00 fee charged from the bank?

3. The company needs capital for expansion, to purchase materials, and new equipment. Why would you suggest to Mr. Bigg.

identify three countries from this group that are likely to have different reasons for not permitting the use of IFRS by domestic listed companies. describe those reasons

The Bobo Company leased equipment from Bolinger Industries on January 1, 2018. Bolinger purchased the equipment at a cost of $270,000.

Other information:

Required:

Round your answers to the nearest whole dollar amounts.

1. Calculate the amount of selling profit that Bolinger would recognize in this sales-type lease. Round to nearest dollar. Show calculations.

2. Prepare the appropriate journal entries for Bolinger on January 1, 2018. Round to nearest dollar. Show calculations.

The following CVP income statements are available for Blanc Company and Noir Company.

Calculate Contribution margin ratio. (Round answers to 2 decimal places, e.g. 0.32.)

Compute break-even point in dollars for each company. (Round answers to 0 decimal places, e.g. 1,225.)

Compute margin of safety ratio for each company. (Round answers to 3 decimal places, e.g. 0.321.)

Compute the degree of operating leverage for each company. (Round answers to 1 decimal place, e.g. 1.5.)

Assuming that sales revenue increases by 20%, prepare a CVP income statement for each company. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round answers to 0 decimal places, e.g. 1,225.)

Assuming that sales revenue decreases by 20%, prepare a CVP income statement for each company. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round answers to 0 decimal places, e.g. 1,225.)

Sales Forecast and Flexible Budget

Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,560 for the Sleepeze, 11,960 for the Plushette, and 5,150 for the Ultima. Gene Dixon, vice president of sales, has provided the following information:

1. Salaries for his office (including himself at $66,950, a marketing research assistant at $44,850, and an administrative assistant at $26,000) are budgeted for $137,800 next year.
2. Depreciation on the offices and equipment is $17,450 per year.
3. Office supplies and other expenses total $20,800 per year.
4. Advertising has been steady at $18,400 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 20 percent of first-year Ultima sales for a print and television campaign.
5. Commissions on the Sleepeze and Plushette lines are 6 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores.
6. Last year, shipping for the Sleepeze and Plushette lines averaged $55 per unit sold. Gene expects the Ultima line to ship for $75 per unit sold since this model features a larger mattress.

Required:

1. Suppose that Gene is considering three sales scenarios as follows:

Prepare a revenue budget for the Sales Division for the coming year for each scenario.

2. Prepare a flexible expense budget for the Sales Division for the three scenarios above. If required, round answers to the nearest dollar.

Holly Springs, Inc. contracted with Coldwater Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2018. Holly Springs paid for the lathe by issuing a $220,000 note due in three years. Interest, specified at 2%, was payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions for which 6% was a reasonable rate of interest. Holly Springs uses the effective interest method of amortization. (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. Round your intermediate and final answers to the nearest whole dollar.) Required: 1. Prepare the journal entry on January 1, 2018, for Holly Springs’ purchase of the lathe. 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity.

The management of Quest Media Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows:

The radio station requires an investment of $970,700, while the TV station requires an investment of $1,579,290. No residual value is expected from either project.

Required:

1a. Compute the net present value for each project. Use a rate of 10% and the present value of an annuity of $1 in the table above. If required, use the minus sign to indicate a negative net present value. If required, round to the nearest whole dollar.

1b. Compute a present value index for each project. If required, round your answers to two decimal places.

2. Determine the internal rate of return for each project by (a) computing a present value factor for an annuity of $1 and (b) using the present value of an annuity of $1 in the table above. If required, round your present value factor answers to three decimal places and internal rate of return to the nearest whole percent.

3. The net present value, present value index, and internal rate of return all indicate that the   is a better financial opportunity compared to the  , although both investments meet the minimum return criterion of 10%.