"The Statement of Cash Flow is more important than the Income Statement and the Balance Sheet."  Do you agree or disagree? Please state your opinion and explain your position by giving specific examples.

Nautical Accessories, Inc., manufactures women's boating hats. Manufacturing overhead is assigned to production on a machine-hour basis. For 2016, it was estimated that manufacturing overhead would total $357,180 and that 25,010 machine hours would be used.

Required:

a. Calculate the predetermined overhead application rate that will be used for absorption costing purposes during 2016. (Round your answer to 2 decimal places.)

b. During April, 3,300 hats were made. Raw materials costing $6,930 were used, and direct labor costs totaled $9,110. A total of 780 machine hours were worked during the month of April. Calculate the cost per hat made during April. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c. At the end of April, 1,280 hats were in ending inventory. Calculate the cost of the ending inventory and the cost of the hats sold during April. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Ratio Analysis of Comparative Financial Statements

Amounts from the comparative income statement and balance sheet of Miller Electronics Corporation for the last two years are as follows:

Required:

Calculate the following ratios and amounts for 20-1 and 20-2. Round all calculations to two decimal places. Use 365 days when computing the accounts receivable and merchandise inventory turnover.

Background Information  

Recently, there has been talk amongst the partners regarding the expansion of the business  into the home construction business.  Charles, Bob and Jane support the idea but Mary is totally  opposed.      Charles, Bob and Jane decide to buy out Mary for $25,000.  Charles and Jane are each  contributing $10,000 to the buyout and Bob is contributing $5,000.  They intend to implement  their expansion plans by purchasing a tract of land and building a small subdivision. A financial  analysis has indicated that although such a project is risky and will require another $500,000 in  capital, it has the potential of generating substantial profits because of the improving real  estate market.      Before proceeding, however, their accountant has recommended that they form a corporation  and sell the partnership assets now worth $200,000 to the new corporation.  They have all  agreed to this suggestion but have made it clear that they all wish to have a say in corporate  decision‐making and to take an active role in the day to day operations of the corporation.   They also insist that their shareholdings in the new corporation must reflect each of their  present financial interests in the partnership.      

Assignment Question: (2 marks each)  

1. Why would incorporating the business be better than continuing as a general  partnership?      

2. Why would issuing Common Shares to each partner be the best way to distribute  ownership upon incorporation?    

3. After the corporation was formed, Bob was delegated the task of finding a suitable piece  of property for the development.  Within a few days, he learned of a farmer who was  considering selling his farm.  On investigation, it turned out to be such a good deal that Bob  decided not to tell the others about the property and to purchase it for himself as an  investment.  Several weeks later, he recommended to his fellow directors a property owned
by his recently deceased uncle that was being sold to settle the estate in which Bob was a  beneficiary.  Bob did not tell the others about his connection to the property.  Did Bob act  properly? (Explain your answer)

4. Disappointed by Bob’s conduct, Jane and Charles have decided that they want Bob out of  the business. What legal right does Bob have if Jane and Charles gang up on him?   (Explain your answer)

5. What should Jane, Charles and Bob have done when they formed the corporation to avoid  the problems they are experiencing? (Explain your answer)   

Required information

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

The following information pertains to Trenton Glass Works for the year just ended.

Budgeted direct-labor cost: 70,000 hours (practical capacity) at $16 per hour

Actual direct-labor cost: 80,000 hours at $17.50 per hour

Budgeted manufacturing overhead: $997,500

Actual selling and administrative expenses: 434,000

3. Prepare a journal entry to close out the Manufacturing Overhead account into Cost of Goods Sold. (Round intermediate calculations to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Required information

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

The following information pertains to Trenton Glass Works for the year just ended.

Budgeted direct-labor cost: 70,000 hours (practical capacity) at $16 per hour

Actual direct-labor cost: 80,000 hours at $17.50 per hour

Budgeted manufacturing overhead: $997,500

Actual selling and administrative expenses: 434,000

2. Calculate the overapplied or underapplied overhead for the year. (Round your intermediate calculations to 2 decimal places.)

this is the first part of the question

1. Jabieb corporation issued 3,000 convertible bonds on January 1, 2018. The bonds have a 3-year life and are issued at par with a face value of $1,000 per bond, giving total proceedings of $3,000,000. Interest is payable annually at 6%. Each bond is convertible into 200 ordinary shares (par value $1). The market rate of interest on similar non-convertible debt is 8%.

a)Compute the liability and equity component of the convertible bond on January 1, 2018.

b) Assume the bond is converted on January 1, 2019, compute the carrying value of the bond payable on

January 1 2019.

b) Prepare the journal entry to record the conversion on January 1, 2019. .

c)      Assume that the bonds were repurchased on January 1, 2019 for $2,900,000 cash instead of being

converted. The net present value of the bonds on January 1, 2019 is $2,850,000. Prepare the journal entry

to show the repurchase on January 1, 2019.

Prepare a journal entry for the purchase of a truck on April 4 for $73,000, paying $5,000 cash and the remainder on account.

If an amount box does not require an entry, leave it blank.

April 4

OPTIONS, theres a drop down selection in the actual question

Case Study #1 Each question refers to the same initial data. Treat each Part individually. Ignore income taxes. Assume no beginning or ending inventories. Calculations and backup should be completed and submitted in Excel. Use proper Contribution Income Statement formatting – example below. Analysis can either be typed into cells in Excel (formatted to be easily legible) or typed into a text box in Excel. Contribution Margin Format Example: Data for all questions: Panalon produces cast iron dutch ovens (a deep pot with a lid that can be used on a stovetop or in the oven). Their pots are sold at many local department stores. The cost of manufacturing and marketing their pots, at their normal factory volume of 15,000 pots per month, is shown in the table below. These pots sell for $60 each. Panalon is making a small profit, but would prefer to increase profitability. Hint: Fixed costs are shown on a per-unit basis in the table based on normal volume. However, fixed costs as a total do not change when volume changes, so you will need to determine total fixed costs first. Data for all Questions:

Part 4: (16 points) Panalon is thinking of cutting costs by using a different raw material supplier. Their variable material costs would decrease by 25%. The quality of the metal is lower, so Panalon estimates that their additional fixed scrap costs related to the metal quality would be $20,000 per month. They would not change the pricing of their pots. Note: Use the initial data provided for all questions. Ignore the colored pots and special sale data from other questions. A) Prepare a revised Contribution Margin Income Statement to include the costs and benefits of the different raw material supplier. B) If the sales decrease because of the change in quality, how much of a reduction in sales (dollars and units) could Panalon handle and still keep their net operating income the same as before the supplier change? Show your data in a Contribution Margin Income Statement. C) Write a memo to the CFO that presents the pros and cons of the potential supplier change. Include the potential impacts on revenue costs and net operating income, as well as any other factors or consequences of this decision. Be sure to include quantitative evidence and backup as well as any qualitative analysis.

Part 4b: The analysis is expected to be thorough. Expect to present approximately 400 words, and support your analysis with data (either given or calculated). Remember that this is a letter to the CFO, so proper grammar is expected.

unit manufacturing cost Per unit per unit Variable Material $12.00 variable Labor $ 14.00 Variable Overhead $7.00 Fixed Overhead $9.00 total unit manufacturing costs $42.00 Unit Marketing Costs: Variable Marketing Costs $3.00 Fixed Marketing Cost $10.00 Total Unit Marketing Costs $13.00

Sugar Corp has a selling price of $28, variable costs of $18 per unit, and fixed costs of $22,000. Maple expects profit of $308,000 at its anticipated level of production. If Sugar sells 5,800 units more than expected, how much higher will its profits be?  

$58,000

$162,400

$308,000

$250,000

At December 31, 2017, Hyasaki Corporation has the following account balances: Bonds payable, due January 1, 2026 $2000000 Discount on bonds payable 88000 Interest payable 80000 Show how the above accounts should be presented on the December 31, 2017, balance sheet, including the proper classifications.

On January 2, 2019, Twilight Hospital purchased a $100,000 special radiology scanner from Bella Inc. The scanner had a useful life of 4 years and was estimated to have no disposal value at the end of its useful life. The straight-line method of depreciation is used on this scanner. Annual operating costs with this scanner are $105,000.

Approximately one year later, the hospital is approached by Dyno Technology salesperson, Jacob Cullen, who indicated that purchasing the scanner in 2019 from Bella Inc. was a mistake. He points out that Dyno has a scanner that will save Twilight Hospital $25,000 a year in operating expenses over its 3-year useful life. Jacob notes that the new scanner will cost $110,000 and has the same capabilities as the scanner purchased last year. The hospital agrees that both scanners are of equal quality. The new scanner will have no disposal value. Jacob agrees to buy the old scanner from Twilight Hospital for $50,000.

Your answer is correct.

If Twilight Hospital sells its old scanner on January 2, 2020, compute the gain or loss on the sale.

Gain on saleLoss on sale

$

SHOW SOLUTION

LINK TO TEXT

Your answer is partially correct. Try again.

Prepare an incremental analysis of Twilight Hospital. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Retain
ScannerReplace
ScannerNet Income
Increase
(Decrease)

Annual operating costs$$$

New scanner cost

Old scanner salvage

   Total$$$

Should Twilight Hospital purchase the new scanner on January 2, 2020?

How do I fill out form 1040, schedule 1, schedule D, form 8949, schedule e, and form 8582?

Comprehensive Problem 4-2B

In 2018, Professor Patricia (Patty) Pâté retired from the Palm Springs Culinary Arts Academy (PSCAA). She is a single taxpayer and is 62 years old. Patty lives at 98 Colander Street, Apt. 206D, Henderson, NV 89052. Professor Pâté's Social Security number is 565-66-9378. In 2018, Patty had just a few months of salary from her previous job:

Patty owns a rental condo located at 392 Spatula Way, Mount Charleston, NV 89124. The condo rented for 60 days of 2018 for $850 a month but a mold problem was discovered in the condo, her renters moved out, and she was unable to rent the apartment after the repairs (although she vigorously pursued new tenants). Patty actively manages the property herself. The following are the related expenses for the rental house:

The condo was purchased on August 31, 1979. Professor Pâté handles all rental activities (e.g., rent collection, finding tenants, etc.) herself.

In 2018, Patty sold her beloved home for almost 30 years for $380,000 on February 27, 2018. Her basis in the home was $120,000 and she acquired the home sometime in July of 1988 (she could not remember the day).

Required:
Complete Form 1040 and the schedules and forms provided for Patty.

• The taxpayer had health coverage for the entire year.
• The taxpayer does not want to make a contribution to the presidential election campaign.
• Do not complete Form 4562 for reporting depreciation.
• Make realistic assumptions about any missing data.
• If an amount box does not require an entry or the answer is zero, enter "0".
• If required, round amounts to the nearest dollar.
• Enter all amounts as positive numbers except for the following special instructions: If required, on Form 1040, line 17 and on Schedule E, on lines 21, 25, and 26, use the minus sign to indicate a loss. On Form 8582, if required, use the minus sign to enter a "loss" as a negative number on the lines 1d and 4. However, per the instructions on the tax return, enter all numbers in Part II as positive amounts.

Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.

Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter.

At this point, Ms. Tyler is manufacturing only one product—a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow:

Required:

1. Complete the following:

a. Compute the unit product cost under absorption costing.

b. What is the company’s absorption costing net operating income (loss) for the quarter?

c. Reconcile the variable and absorption costing net operating income (loss) figures.

3. During the second quarter of operations, the company again produced 33,050 units but sold 38,050 units. (Assume no change in total fixed costs.)

a. What is the company’s variable costing net operating income (loss) for the second quarter?

b. What is the company’s absorption costing net operating income (loss) for the second quarter?

c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter.

When are sellers from online auction sites required to pay income tax? Please provide and discuss an example.