At the end of the year, a company offered to buy 4,690 units of a product from X Company for a special price of $12.00 each instead of the company's regular price of $19.00 each. The following information relates to the 67,200 units of the product that X Company made and sold to its regular customers during the year:

Fixed cost of goods sold for the year were $130,368, and fixed period costs were $73,920. Variable period costs include selling commissions equal to 2% of revenue.

6. Profit on the special order is

7. Assume the following two changes for the special order: 1) variable cost of goods sold will increase by $0.90 per unit, and 2) there will be no selling commissions. What would be the effect of these two changes on the special order profit?

8. There is concern that regular customers will find out about the special order, and X Company's regular sales will fall by 500 units. As a result of these lost sales, X Company's profits would fall by

2. Loki Corporation acquired 80 percent ownership of Goose Company on January 1, 20X6, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Goose Company. Consolidated balance sheets at January 1, 20X8, and December 31, 20X8, are as follows:

The consolidated income statement for 20X8 contained the following amounts:

Loki and Goose paid dividends of $25,000 and $15,000, respectively, in 20X8.

Required:

1) Prepare a worksheet to develop a consolidated statement of cash flows for 20X8 using the indirect method of computing cash flows from operations. (8 points)

2) Prepare a consolidated statement of cash flows for 20X8. (12 points)

XYZ uses a normal job-order costing system. Currently, a plantwide overhead rate based on machine hours is used. Lola Katz, the plant manager, has heard that departmental overhead rates can offer significantly better cost assignments than a plantwide rate can offer. Some jobs spend most of their time in Department A, while others spend most of their time in Department B. XYZ has the following data for its two departments for the coming year:

ABC is a job-order costing manufacturer that uses a plantwide overhead rate based on machine hours. Estimations for the year include $2,000,000 in overhead and 1,000,000 machine hours. ABC produced four products in March. Data are as follows:

By March 31, Jobs 89, 90, and 91 were completed and sold. The rest of the jobs remained in process.

Rogers Corporation prepared a budget last period that called for sales of 20,000 units at a price of $30 each. The production costs per unit were estimated to amount to $14.00 variable and $6.00 fixed. All selling and administrative costs were fixed at $50,000. During the period, production was 22,000 units. The actual selling price was $33.00 per unit. Actual variable costs were $16.00 per unit and actual fixed production costs totaled $66,000. Selling and administrative costs were 10% higher than the budgeted amounts.

Required:

a. Show operating statements for the actual output, as well as a static budget and a flexible budget.

b. Explain what is indicated when comparing the operating statements

Describe job cost flows and determine the cost of jobs. please explain

Company A acquired 100% of Company B's voting stock on January 1, 2018 by issuing 10,000 shares of its $10 par value common stock. Company A's common stock had a fair value of $14 per share at that time. Company B's stockholder's equity was $105,000 at date of acquisition. The trademark was undervalued by $10,000. It has an indefinite life. Equipment (with a 5 year life) was undervalued by $5,000. A customer list that had been created internally had an estimated useful life of 20 years was valued at $20,000.

Below are the financial statements for the two companies for the year ending December 31, 2018. Credit balances are indicated by (parentheses). Complete the trial balance of A Company (calculate income of sub and investment in sub) by using the three different investing accounting methods; Equity, Intial Value, and Partial Equity. Then, continue by preparing a consolidated worksheet for year ended Dec. 31, 2018. Include your consolidation and elimination entries in journal form.

Winslow Manufacturing Company has the following unit data:

Sales price                                                       $600.00

Direct materials                                                   250.00

Direct labor                                                         150.00

Variable overhead                                                 35.00

Fixed overhead (based on 8,000 units)                 30.00        

Marketing and administrative costs:              

Variable                                                                 25.00

Fixed (based on 8,000 units)                                15.00

8,000 units were produced. There were no units in beginning Finished Goods Inventory and 1,500 units in ending Finished Goods Inventory.

Required:

1. Compute the unit product using absorption costing and variable costing.
2. Prepare an income statement using variable costing.
3. Prepare an income statement using absorption costing.
4. Explain the difference in operating income for the absorption and variable costing approaches.

REQUIREMENT: Create THE MASTER BUDGET (Please Include Operating Budget and Financial Budget, please do not include Budget Statement of Cash Flows) for the year ended December 31, 2016 for Fabulous Accessories Inc. ( Please show the calculations)

Estimated Sales:

Wallets: East Region Sales Volume 287,000. West Region Sales Volume 241,000. Unit Selling Price $12.

Handbags: East Region Sales Volume 156,400. West Region Sales Volume 123,600. Unit Selling Price $25.

Estimated Inventory, January 1,2016: Wallet 88,000. Handbags 48,000.

Desired Inventory , December 31, 2016: Wallets 80,000. Handbags 60,000.

Estimated direct material quantity and price for each unit:

Wallet : Leather 0.30 sq. yd.per unit. Lining: 0.10 sq. yd. per unit.

Handbag: Leather 1.25 sq. yd. per unit. Lining: .050 sq.yd. per unit.

Estimated Direct Materials Inventory, January 1, 2016: Leather 18,000 sq. yds. Lining 15,000 sq. yds.

Desired Direct Materials Inventory, December 31, 2016: Leather 20,000 sq. yds. Lining 12,000 sq. yds.

Estimated price per square yard of leather and lining during 2016: Leather $4.50. Lining $1.20

Estimated Direct Labor Quantity and Rate:

Wallet: Cutting Department: 0.10 hr. per unit. Sewing Department: 0.25 hr. per unit

Handbag: Cutting Department: 0.15 hr. per unit. Sewing Department: 0.40 hr. per unit

Hourly rate: Cutting Department $12. Sewing Department $15

Factory Overhead Budget for the year ending December 31, 2016 are as follow:

Indirect factory wages $732,800

Supervisor Salaries: $360,000

Power and light $306,000

Depreciation of plant and equipment $288,000

Indirect materials $182,800

Maintenance $140,280

Insurance and property taxes $79,200. Total factory overhead cost $2,089,080

Estimated Inventory January 1, 2016:

Direct materials: Leather $81,000(18,000 sq. yds. x $4.50)

Lining $18,000(15,000 sq. yds. x $1.20)

Total direct materials $99,000

Work in process $ 214,000. Finished goods $1,095,600

Desired Inventory December 31, 2016:

Direct materials: Leather $90,000(20,000 sq. yds. x $4.50)

Lining $14,400(12,000 sq. yds. x $1.20)

Total direct materials $104,400

Work in process $220,000. Finished goods $1,565,000

Selling and Administrative Expense Budget for the year 2016:

Selling Expenses: Sales salaries expenses $715,000

Advertising expense 360,000

Travel expense 115,000

Total selling expense $1,190,000

Administrative expense: Officers' salaries expense $360,000

Office salaries expense 258,000

Office rent expense 34,500

Office supplies expense 17,500

Miscellaneous administrative expenses 25,000

Total administrative expenses $695,000

Total selling and administrative expenses $1,885,000

Capital Expenditure Budget for the five years ending December 31, 2020:

Machinery-Cutting Department: 2016:$400,000. 2019:$280,000. 2020:$360,000

Machinery-Sewing Department: 2016:$274,000. 2017: $260,000. 2018: $560,000. 2019:$200,000

Office equipment:2017: $90,000. 2020: $60,000

Total: 2016: $674,000. 2017: $350,000. 2018: $560,000. 2019: $480,000. 2020: $420,000

Cutting Machine-to be purchased in January 2016

Cutting Machine-to be purchased in April 2016

Cash Budget:

Estimated cash receipts: receipts from sales on account: From prior month's sales on account 40% - From current month's sales on account 60%

Estimated cash payments: payments of manufacturing costs on account: From prior month's manufacturing costs 25%- From current month's manufacturing costs 75%

Budget Balance Sheet: December 31, 2015:

Current Assets: Cash $225,000. Account Receivable $480,000. Direct Materials Inventory $99,000. Work in Process Inventory $214,400. Finished Goods Inventory $1,095,600. Land $1,000,000. Building and Equipment 1,000,000. Accumulated depreciation -400,000. Total $3,714,000.

Liabilities and Stockholders' Equity: Current Liabilities: Account Payable 190,000. Income Taxes Payable 150,000

Stockholders' Equity : Common Stock, 100,000 shares outstanding $10-par $1,000,000. Retained earnings $2,374,000. Total $3,714,000

Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2017 with three assets: cash of 23,600 dinars, accounts receivable of 81,100 dinars, and land that cost 211,000 dinars when acquired on April 1, 2016. On January 1, 2017, Zugar has a 161,000 dinar note payable, and no other liabilities. On May 1, 2017, Zugar renders services to a customer for 131,000 dinars, which was immediately paid in cash. On June 1, 2017, Zugar incurred a 111,000 dinar operating expense, which was immediately paid in cash. No other transactions occurred during the year. Currency exchange rates for 1 dinar follow:

1. Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume also that the dinar is the subsidiary’s functional currency. What is the translation adjustment for this subsidiary for the year 2017?

2. Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume also that the U.S. dollar is the subsidiary’s functional currency. What is the remeasurement gain or loss for 2017?

3. Assume that Zugar is a foreign subsidiary of a U.S. multinational company. On the December 31, 2017, balance sheet, what is the translated value of the Land account? On the December 31, 2017, balance sheet, what is the remeasured value of the Land account?

A friend of yours is working toward a master of business administration (MBA) degree. He e-mails you the following note:

"Hey! How are things going? I need your help! We are studying income taxes in my Financial Accounting class and just finished talking about deferred taxes. I think the professor said something about adjusting the value of deferred taxes when it's an asset but not when it's a liability. When I looked at my homework problem, the balance sheet shows both a deferred tax asset and a deferred tax liability. Shouldn't it be one or the other? And why would one need the value adjusted for one, but not the other? Help!"

You want to help your friend, but you remember having some questions yourself:

• Analyze why FASB requires companies to report both deferred tax assets and deferred tax liabilities instead of netting them.
• Examine why the FASB requires valuation adjustments for deferred tax assets but does not for deferred tax liabilities.

INSTRUCTIONS:

1. The maximum number of pages is TEN (10), excluding references and the cover page.
2. The minimum number of references is FIVE (5) (including textbooks, journal articles, and other sources)

QUESTION

The Zambian economy has been facing significant macroeconomic challenges as reflected in low growth, high fiscal deficits; rising inflation and debt service obligations as well as low international reserves. The outbreak of Coronavirus (COVID-19) pandemic has compounded the situation, resulting in unprecedented global public health and economic crises. Although the full impact of the COVID-19 shock on public health and the economy cannot be determined at the moment, indications are that it will be unprecedented. The Bank of Zambia has introduced a number of measures to address the impact of the pandemic on the economy.

The Monetary Policy Committee (MPC), at its May 18 -20, 2020 meeting, decided to lower the policy rate by 225 basis points to 9.25%. The Bank has also introduced a K10 billion stimulus package to give the economy a boost.

Required: Critically analyse the performance of the downward revision of monetary policy in May 2020 and the Targeted Medium-term Refinancing Facility on the Zambian financial markets.

1) Use the following information to prepare adjusting entries for Gilbert Holdings

2) Then make an adjusted trial balance, income statement & balance sheet for the information

a. On April 1, 2019, Gilbert Holdings signed a 4.30% bank loan due in 4 years. This is the only outstanding note payable.

b. Prepaid insurance represents a 4-month insurance policy purchased on December 1.

c. On Oct 1, 2019, Gilbert Holdings paid $11,880 for a 9-month lease for office space.

d. Unearned revenue represents a 12-month contract for consulting services. The payment was received on July 1, 2019.

e. Supplies on hand total $10,480.

f. Equipment is depreciated on a straight-line basis; residual value is estimated to be $15,000 with an estimated service life of 10 years. The assets were held the entire year.

g. On Nov 1, Gilbert Holdings issued Monroe Supplies an 3-month note receivable at a 8.2% annual interest rate.

h. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The aging schedule of accounts receivable must be completed to determine management's desired balance for 2019.

i. Accrued wages totaling $35,838 were unpaid and unrecorded at December 31, 2019.

j. Utility costs incurred but unrecorded for the month of December were estimated to be $2,561.

Problem 6-20 CVP Applications: Break-Even Analysis; Cost Structure; Target Sales [LO6-1, LO6-3, LO6-4, LO6-5, LO6-6, LO6-8]

Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost.

Last year, the company sold 30,500 of these balls, with the following results:

Required:

1. Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level.

2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls?

3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $98,000, as last year?

4. Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price per ball must it charge next year to cover the increased labor costs?

5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company’s new CM ratio and new break-even point in balls?

6. Refer to the data in (5) above.

a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $98,000, as last year?

b. Assume the new plant is built and that next year the company manufactures and sells 30,500 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage.

Graham Potato Company has projected sales of $14,400 in September, $17,000 in October, $24,400 in November, and $20,400 in December. Of the company's sales, 25 percent are paid for by cash and 75 percent are sold on credit. Experience shows that 40 percent of accounts receivable are paid in the month after the sale, while the remaining 60 percent are paid two months after. Determine collections for November and December.
  
Also assume Graham’s cash payments for November and December are $20,500 and $13,000, respectively. The beginning cash balance in November is $5,000, which is the desired minimum balance.

a. Prepare a cash receipts schedule for November and December.

b. Prepare a cash budget with borrowing needed or repayments for November and December. (Negative amounts should be indicated by a minus sign. Assume the November beginning loan balance is $0.)