List the steps of the Accounting Cycle. Identify the effects of various business transactions. Compare internal accounting methods.

Please answer the following questions with supporting examples and full explanations. For each of the learning objectives, provide an analysis of how the course supported each objective. Explain how the material learned in this course, based upon the objectives, will be applicable to the professional application.

roblem 5-3A Record transactions related to accounts receivable (LO5-3, 5-5) [The following information applies to the questions displayed below.] The following events occur for The Underwood Corporation during 2018 and 2019, its first two years of operations. June 12, 2018 Provide services to customers on account for $41,000. September 17, 2018 Receive $25,000 from customers on account. December 31, 2018 Estimate that 45% of accounts receivable at the end of the year will not be received. March 4, 2019 Provide services to customers on account for $56,000. May 20, 2019 Receive $10,000 from customers for services provided in 2018. July 2, 2019 Write off the remaining amounts owed from services provided in 2018. October 19, 2019 Receive $45,000 from customers for services provided in 2019. December 31, 2019 Estimate that 45% of accounts receivable at the end of the year will not be received. References Section BreakProblem 5-3A Record transactions related to accounts receivable (LO5-3, 5-5) 11.value: 0.27 pointsRequired information Problem 5-3A Part 1 Required: 1. Record transactions for each date

Gear Company records $2,000 of depr

eciation under the sum-of-ye

ars’-digits method in

2019, the company’s first year

of operations. In 2020, the comp

any decides to change to the

straight-line method f

or accounting purposes. If the straight-l

ine method were used in 2019,

depreciation would have b

een $1,500. Depreciation in 2020 under

the straight-line method is

$1,800 (depreciated based on the

book value on January 1, 2020)

. The tax rate is 25%.

Income from continuing operati

ons before tax and before deducti

ng depreciation in 2020 is

$12,000.

REQUIRED:

Provide the 2020 entry to record t

his change and calculate 2020

net income.

Larry company is considering the purchase of an investment that has a positive net present value based on a discount rate of 12%. The internal rate of return would be: a. zero b. 12% c. greater than 12% d. Less than 12%?

Suppose you can afford $11,700 per year to invest into a savings annuity. Write this value down, as you'll be using it throughout this entire problem. We are going to explore various options and how these options will impact the interest you are making.

Payment Frequency

Monthly

If you deposit your available money on a monthly basis, how much are you depositing per month? $

If you are earning 6.4% annual interest, what is the total value of the annuity at the end of 30 years? $

How much interest is earned at the end of 30 years? $

Weekly

If you deposit your available money on a weekly basis, how much are you depositing per week (52 weeks per year)? $

If you are earning 6.4% annual interest, what is the total value of the annuity at the end of 30 years? $

How much interest is earned at the end of 30 years? $

Rate

r = 6.4%

If you are making monthly deposits from your available funds, what is the total value in your annuity at the end of 30 years, given the rate is 6.4%? $

How much interest did you earn? $

r = 6.9%

If you are making monthly deposits from your available funds, what is the total value in your annuity at the end of 30 years, given the rate is 6.9%? $

How much interest did you earn? $

r = 7.4%

If you are making monthly deposits from your available funds, what is the total value in your annuity at the end of 30 years, given the rate is 7.4%? $

How much interest did you earn? $

Time

25 years

If you make monthly deposits at an annual rate of 6.4%, what is the total value in the account after 25 years? $

How much interest did you earn? $

30 years

If you make monthly deposits at an annual rate of 6.4%, what is the total value in the account after 30 years? $

How much interest did you earn? $

35 years

If you make monthly deposits at an annual rate of 6.4%, what is the total value in the account after 35 years? $

How much interest did you earn? $

40 years

If you make monthly deposits at an annual rate of 6.4%, what is the total value in the account after 40 years? $

How much interest did you earn? $

Conclusion

Which factor had the greatest impact on the amount of interest that you earned? Select an answer Payment Frequency? Rate? Time?

Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company’s income statement showed the following results from selling 80,000 units of product: net sales $1,600,000; total costs and expenses $1,824,800; and net loss $224,800. Costs and expenses consisted of the following.

Management is considering the following independent alternatives for 2020.

(a) Compute the break-even point in dollars for 2019. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answer to 0 decimal places, e.g. 2,510.)

(b) Compute the break-even point in dollars under each of the alternative courses of action for 2020. (Round contribution margin ratio to 3 decimal places e.g. 0.251 and final answers to 0 decimal places, e.g. 2,510.)

Catherine is a U.S. citizen who is employed by DSC, Inc., a global company. Beginning on August 1, 2018, Catherine began working in Augsburg, Germany. She worked for 153 days of 2018. She worked there until March 31, 2019, when she transferred to Kamnik, Slovenia. She worked in Kamnik for the remainder of 2019. Her salary for the first seven months of 2018 was $225,000, and it was earned in the United States. Her salary for the remainder of 2018 was $165,000, and it was earned in Augsburg. Catherine's 2019 salary from DSC was $425,000, with part being earned in Augsburg and part being earned in Kamnik.

Assume the 2019 indexed statutory amount is the same as the 2018 indexed amount. Assume a 365-day year.

When required, round any fractions out to four decimal places. Round final answers to the nearest dollar.

a. Is Catherine eligible for the foreign income exclusion for 2018? Yes

b. Catherine may exclude $ ? from her gross income for 2018.

c. Is Catherine eligible for the foreign income exclusion for 2019? Yes

d. Catherine may exclude $ 103,900 from her gross income for 2019.

Pareto Chart and Cost of Quality Report for a Manufacturing Company The president of Mission Inc. has been concerned about the growth in costs over the last several years. The president asked the controller to perform an activity analysis to gain a better insight into these costs. The result of the activity analysis is summarized as follows: Required: 1. Classify the activities into prevention, appraisal, internal failure, external failure, and not costs of quality (producing product). Classify the activities into value-added and non-value added activities. Activity Activity Cost Cost of Quality Classification VA/NVA Correcting invoice errors $22,600 External failure Non-value-added Disposing of incoming materials with poor quality 18,080 Internal failure Non-value-added Disposing of scrap 54,240 Internal failure Non-value-added Expediting late production 45,200 Internal failure Non-value-added Final inspection 40,680 Appraisal Value-added Inspecting incoming materials 9,040 Appraisal Value-added Inspecting work in process 40,680 Appraisal Value-added Preventive machine maintenance 31,640 Prevention Value-added Producing product 162,720 Not a quality cost Value-added Responding to customer quality complaints 27,120 External failure Non-value-added Total $452,000 2. On paper or in a spreadsheet program, prepare a Pareto chart for each of the activities listed above. Answer the following: What type of chart is a Pareto chart? Bar chart Which activity appears first, in order from left to right? Producing product 3. Use the activity cost information to determine the percentages of total department costs that are prevention, appraisal, internal failure, external failure, and not costs of quality. If required, round percentages to one decimal place. Quality Cost Classification Activity Cost Percent of Total Department Cost Prevention $ % Appraisal % Internal failure % External failure % Not a cost of quality % Total $ % 4. Determine the percentages of total department costs that are value-added and non-value-added. If required, round percentages to one decimal place. Activity Cost Percent of Total Department Cost Value-added $ % Non-value-added % Total $ % 5. The department has 37% of its total costs as non-value-added . Internal failure costs represent 26% of the total costs. This means there is significant opportunity for cost savings. External failure costs represent 11% of the total department costs.

Two items are omitted from each of the following summaries of balance sheet and income statement data for two corporations for the year 2019, Blue Spruce Corp. and Ayayai Enterprises.

Determine the missing amounts.

Many companies make annual reports available on their corporate website, often under an Investors tab. Annual reports also can be accessed through the SEC's EDGAR system at www.sec.gov (under Filings, click Company Filings Search, type in Company Name, and under Filing Type, search for 10-K).

Access the most recent annual report for the following U.S.-based multinational corporations to complete the requirements:

International Business Machines Corporation

Intel Corporation

Required:

a. Identify the location(s) in the annual report that provides disclosures related to foreign currency translation and foreign currency hedging.

b. Determine whether the company's foreign operations have a predominant functional currency.

c. Determine the amount of translation adjustment, if any, reported in other comprehensive income in each of the three most recent years. Explain the sign (positive or negative) of the translation adjustment in each of the three most recent years. Compare the relative magnitude of these translations adjustments for the two companies.

d. Determine whether each company hedges net investments in foreign operations. If so, determine the type(s) of hedging instruments used.

EMD Corporation manufactures two products, Product S and Product W. Product W is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product W. Product W is the more complex of the two products, requiring 3 hours of direct labor time per unit to manufacture compared to 2 hour of direct labor time for Product S. Product W is produced on an automated production line.

Overhead is currently assigned to the products on the basis of direct-labor-hours. The company estimated it would incur $912,811 in manufacturing overhead costs and produce 19,000 units of Product W and 76,000 units of Product S during the current year. Unit cost for materials and direct labor are:

Required:

a-1. Compute the predetermined overhead rate under the current method of allocation.

a-2. Determine the unit product cost of each product for the current year.

b. The company's overhead costs can be attributed to four major activities. These activities and the amount of overhead cost attributable to each for the current year are given below:

Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year.

Complete this question by entering your answers in the tabs below.

• Req A1
• Req A2
• Req B

Compute the predetermined overhead rate under the current method of allocation. (Round your answer to 2 decimal places.)

Req A1

Determine the unit product cost of each product for the current year. (Round your answers to 2 decimal places.)

Req A2

Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year. (Round your answer to 2 decimal places.)

Req B

A meteorite landed in Lindsay’s back yard. She sold it to a science museum for $10,000. Which of the following investments has the higher effective rate, assuming that Lindsay is investing the money for one year: a certificate of deposit (CD) with a 3.00% stated interest rate compounded monthly, or a money market fund that pays 3.25% simple interest?

Campbell Soup Company estimates that 240,000 direct labor hours will be worked during 2018 in the Mixing Department. On this basis, the following budgeted manufacturing overhead data are computed:

It is estimated that direct labor hours worked each month will range from 5,000 to 20,000 hours. During June, 15,000 direct labor hours were worked and the following overhead costs were incurred (shown in the chart below):

Instructions:

1. Prepare a monthly flexible manufacturing overhead budget for the Mixing Department for each increment of 5,000 direct labor hours over the relevant range for the year ending December 31, 2018.
2. Prepare a manufacturing overhead budget report for June.

Assume that Wal-Mart Stores, Inc. has decided to surface and maintain for 10 years a vacant lot next to one of its stores to serve as a parking lot for customers. Management is considering the following bids involving two different qualities of surfacing for a parking area of 11,600 square yards.

Bid A: A surface that costs $6.25 per square yard to install. This surface will have to be replaced at the end of 5 years. The annual maintenance cost on this surface is estimated at 25 cents per square yard for each year except the last year of its service. The replacement surface will be similar to the initial surface.

Bid B: A surface that costs $10.25 per square yard to install. This surface has a probable useful life of 10 years and will require annual maintenance in each year except the last year, at an estimated cost of 11 cents per square yard.

Click here to view factor tables

Compute present value of the bids. You may assume that the cost of capital is 11%, that the annual maintenance expenditures are incurred at the end of each year, and that prices are not expected to change during the next 10 years. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Which bid should be accepted by Wal-Mart.

NAME OF ACCOUNTS Dr. Balance £ Cr. Balance £ Opening stock 8,000 Buildings 15,000 Debtors 4,000 Purchases 22,000 Salaries 1,200 Sales 36,000 Discounts 800 Sales returns 1,000 Furniture 3,000 Office expense 300 Wages 600 Purchase returns 600 Interest 500 Travelling expenses 400 Insurance 600 Machinery 8,000 Carriage on purchases 800 Commission 600 Cash in hand 1,400 Rent and rates 2,400 Capital 25,000 Creditors 8,000 70,100 70,100 Following adjustments need to be made: a) Closing stock was valued at £ 9,000 b) Office expenses: £ 2,000 and wages: 300 are outstanding c) Depreciate building by 2%, machinery by 10% and furniture by 20% d) Prepaid Insurance: £ 100 Required: 1) Prepare Trading & Profit and Loss account for the year ended 31 December 2017 2) Prepare Balance Sheet as on 31 December 2017