On December 1, 2021, Liang Chemical provides services to a customer for $86,000. In payment for the services, the customer signs a three-year, 12% note. The face amount is due at the end of the third year, while annual interest is due each December 1.

Required:

1. Record the acceptance of the note on December 1, 2021.
2. Record the interest collected on December 1 for 2022 and 2023, and the adjustment for interest revenue on December 31 for 2021, 2022, and 2023.
3. Record the cash collection on December 1, 2024.

Prepare the journal entries for the above transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Problem 8-19 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10]

Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given below:

The company is in the process of preparing a budget for May and has assembled the following data:

1. Sales are budgeted at $200,000 for May. Of these sales, $60,000 will be for cash; the remainder will be credit sales. One-half of a month’s credit sales are collected in the month the sales are made, and the remainder is collected in the following month. All of the April 30 accounts receivable will be collected in May.

2. Purchases of inventory are expected to total $120,000 during May. These purchases will all be on account. Forty percent of all purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the April 30 accounts payable to suppliers will be paid during May.

3. The May 31 inventory balance is budgeted at $40,000.

4. Selling and administrative expenses for May are budgeted at $72,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2,000 for the month.

5. The note payable on the April 30 balance sheet will be paid during May, with $100 in interest. (All of the interest relates to May.)

6. New refrigerating equipment costing $6,500 will be purchased for cash during May.

7. During May, the company will borrow $20,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.

Required:

1. Calculate the expected cash collections from customers for May.

2. Calculate the expected cash disbursements for merchandise purchases for May.

3. Prepare a cash budget for May.

4. Prepare a budgeted income statement for May.

5. Prepare a budgeted balance sheet as of May 31.

Cyclops Company has its own research department. However, the company purchases patents from time to time. The following is a summary of transactions involving patents now owned by the company.

• During 2014 and 2015, Cyclops spent a total of P459,000 in developing a new process that was patented (Patent A) on April 1, 2016; additional legal and other costs of P50,000 were incurred.

• A patent (Patent B) developed by Nanette Inventor, an inventor, was purchased for P187,500 on December 1, 2017, on which date it had an estimated useful life of 12 ½ years.

• During 2016, 2017 and 2018, research and development activities cost P510,000. No additional patents resulted from these activities.

• A patent infringement suit brought by the company against a competitor because of the manufacture of articles infringing on Patent B was successfully prosecuted at a cost of P42,600. A decision in the case was rendered in June 2018.

• On July 1, 2019, Patent C was purchased for P172,800. This patent had 16 years yet to run.

• During 2020, Cyclops experienced P180,000 on patent development. However, the company is still undecided as to how the patent, if approved by the Bureau of Patents, will generate probable future economic benefits.

Assume that the legal life of each patent is also its useful life.

Required:

1. Prepare the journal entries for the above transactions and related amortization from 2014 to 2020.
2. Determine the following:

1. Patent A’s carrying amount on December 31, 2020
2. Patent B’s carrying amount on December 31, 2020
3. Patent C’s carrying amount on December 31, 2020

Total amortization expense for the year ended December 31, 2020

these are all the information given.

AOCI 703

APIC 40,570

Change in foreign currency translation net of tax 566

Change in unrealized gain/loss on available for sale investments net (90)

Common Stock 14

Cost of revenue 5,454

Dividends 3,614

General and administrative 2,517

Interest and other income (expense), net 391

Marketing and sales 4,725

Net income attributable to noncontrolling int 14

Provision for income taxes 4,660

Research and development 7,754

Retained Earnings 21,670

Revenue $ 40,653

Weighted average shares used to compute earnings per share attributable to common stockholders: 2,901

Requirement 1 Using the partial trial balance (will not balance) given above, create an income statement, statement of comprehensive income and statement of changes stockholders equity

Requirement 2 Please describe what would change on the statements you prepared if there was an unrealized loss on an available for sale security that was discovered and not included in the trial balance given. Please explain all the changes that will be needed to correct the financial statements prepared.

SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area. The company is implementing an activity-based costing system that has four activity cost pools: Travel, Pickup and Delivery, Customer Service, and Other. The activity measures are miles for the Travel cost pool, number of pickups and deliveries for the Pickup and Delivery cost pool, and number of customers for the Customer Service cost pool. The Other cost pool has no activity measure because it is an organization-sustaining activity. The following costs will be assigned using the activity-based costing system:

The distribution of resource consumption across the activity cost pools is as follows:

Required:

Complete the first stage allocations of costs to activity cost pools.

In your own words, give your personal experience (in details) about the following:

Topic: Payroll Management

Explanation of Learning Venue: personal experience (in details)

Description of the Learning Principle: personal experience (in details)

Application of Principle Outside Venue of Experience: personal experience (in details)

A company has two products: standard and deluxe. The company expects to produce 38,763 Standard units and 36,637 Deluxe units. It uses activity-based costing and has prepared the following analysis showing budgeted cost and cost driver activity for each of its three activity cost pools.

Required:

Make a Job Cost Sheet for the Standard Units. Use the following Direct Materials and Direct Labor information.

- Direct Materials $5,987

- Direct Labor $7,821

For Overhead, computer overhead rates for each of the three activities. Hint, you will divide each activity's budgeted cost by the TOTAL amount of that activity's cost driver. So you will need to add Purchases for Standard and Deluxe to get the total denominator for that activity. (Round activity rate and cost per unit answers to 2 decimal places.)

Your Job Cost Sheet will include:

Direct Materials

+ Direct Labor

+ Overhead for Purchasing

+ Overhead for Designing

+ Overhead for Shipping

= Total Job Cost

/ Units Produced

= Per Unit Cost

The answer you type in will be the Per Unit Cost of the Standard Units. Round your answer to the nearest 2 decimal places

Subject = Managerial Accounting

ABC = Activity Based Costing

1.) Which of the following statements is true?

A.) ABC allocates overhead based on a product's usage of resources.

B.) ABC is always a better way to find product costs than other methods.

C.) There should be 3 activity pools for ABC.

2.) Please select all of the answers that are considered disadvantages of ABC:

A.) Cost to implement ABC

B.) Cost Distortion can still exist, even with ABC

C.) ABC can provide more accurate overhead cost allocation

Sales (7,000 safety checks) $560,000

Production costs (7,010 safety checks)

Direct labor 392,560

Shop overhead

Variable 89,728

Fixed 56,080

Operating expenses

Variable 16,824

Fixed 12,800

c. Assume that you must decide quickly whether to accept a special one-time order for 20 safety checks on local police cars for $64 per safety check. Which income statement presents the most relevant data? Answer Determine the apparent profit or loss on the special order based solely on these data. Use a negative sign with your answer if the special order creates an apparent loss. Round answer to the nearest whole number.

Sara’s Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family Style for home use. Salsa is prepared in department 1 and packaged in department 2. The activities, overhead costs, and drivers associated with these two manufacturing processes and the company’s production support activities follow.

Additional production information about its two product lines follows.

Required:
1. Using a plantwide overhead rate based on cases, compute the overhead cost that is assigned to each case of Extra Fine Salsa and each case of Family Style Salsa. PLANT OVERHEAD RATE ? $___ PER CASE
2. Using the plantwide overhead rate, determine the total cost per case for the two products if the direct materials and direct labor cost is $6 per case of Extra Fine and $5 per case of Family Style. EXTRA FINE ___ PER UNIT.. FAMILY STYLE ___PER UNIT
3.a. If the market price of Extra Fine Salsa is $17 per case and the market price of Family Style Salsa is $8 per case, determine the gross profit per case for each product. EXTRA FINE ____ FAMILY STYLE ____
3.b. What might management conclude about the Family Style Salsa product line?

5. If the market price is $17 per case of Extra Fine and $8 per case of Family Style, determine the gross profit per case for each product. (Round your intermediate calculations and final answers to 2 decimal places.

Lindon Company is the exclusive distributor for an automotive product that sells for $48.00 per unit and has a CM ratio of 30%. The company’s fixed expenses are $324,000 per year. The company plans to sell 26,500 units this year.

A. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4.80 per unit. What is the company’s new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $180,000?

Thornton Medical Clinic has budgeted the following cash flows:

Thornton Medical had a cash balance of $16,000 on January 1. The company desires to maintain a cash cushion of $9,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 2 percent per month. Repayments may be made in any amount available. Thornton pays its vendors on the last day of the month also. The company had a monthly $40,000 beginning balance in its line of credit liability account from this year’s quarterly results.

Required

Prepare a cash budget. (Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/shortage should be indicated with a minus sign. )

Question 2

Julia Tang has been a financial planner for ten years. She specializes in insurance planning. Sam Jones, Julia’s client, has learned some knowledge about insurance from his friends, and he considers that he understands this industry reasonably well. During their meeting, Sam made the following statements. Help Julia to correct her client’s misunderstanding.