Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets

The budget director of Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July is summarized as follows:

a. Estimated sales for July by sales territory:

b. Estimated inventories at July 1:

c. Desired inventories at July 31:

d. Direct materials used in production:

e. Anticipated purchase price for direct materials:

f. Direct labor requirements:

Required:

1. Prepare a sales budget for July.

2. Prepare a production budget for July. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

3. Prepare a direct materials purchases budget for July. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

4. Prepare a direct labor cost budget for July.

Stuart Publications established the following standard price and costs for a hardcover picture book that the company produces.

Stuart planned to make and sell 33,000 copies of the book.

Required:

a. - d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 32,000 and 34,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 34,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)

Equipment costing $540,000 with an expected useful life of 10 years and an expected salvage value of $40,000, was purchased at the beginning of the year.

Calculate the depreciation expense for the first five years using:

(a) Sum-of-the-years' digits method. Do not round until final calculation. Round answers to the nearest whole number.

(b) Double-declining balance method (without straight-line switchover). Do not round until final calculation. Round answers to the nearest whole number.

Date of Acquisition Consolidation Eliminating Entries

Pennant Corporation acquired 80 percent of Saylor Company's common stock for $6,000,000 in cash on January 2, 2013. At that date, Saylor's $3,600,000 of reported net assets were fairly stated, except land was undervalued by $300,000 and unrecorded developed technology was valued at $600,000. The estimated fair value of the noncontrolling interest is $1,200,000 at the acquisition date.

(a) Calculate total goodwill and its allocation to the controlling and noncontrolling interests.

Enter answers using all zeros (do not abbreviate to in thousands or in millions).

(b) Prepare the working paper eliminating entries needed to consolidate Pennant and Saylor on January 2, 2013.

Enter answers using all zeros (do not abbreviate to in thousands or in millions).

Please answer all parts of the question.

During the year, the following selected transactions occurred:

Kingbird Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2016 for $12,400,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2017, new technology was introduced that would accelerate the obsolescence of Kingbird’s equipment. Kingbird’s controller estimates that expected future net cash flows on the equipment will be $7,812,000 and that the fair value of the equipment is $6,944,000. Kingbird intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Kingbird uses straight-line depreciation.

Prepare the journal entry (if any) to record the impairment at December 31, 2017.

Prepare the journal entry for the equipment at December 31, 2018. The fair value of the equipment at December 31, 2018, is estimated to be $7,316,000.

Prepare the journal entry (if any) to record the impairment at December 31, 2017 and for the equipment at December 31, 2018, assuming that Kingbird intends to dispose of the equipment and that it has not been disposed of as of December 31, 2018.

37. Name the stages of the finance cycle ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

38. In auditing the finance cycle, what type of procedures do auditors use more so than testing and relying on controls? Why?   ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

39. Under the new PCAOB reporting standard, what is the auditor now required to disclose regarding its relationship with its client? ____________________________________________________________________________________________________________________________________________________________

40. With long term debt, auditors are most concerned with the assertion of ___________________ because ____________________________________________________________________________________________________________________________________________________________

41. Auditors rely on written management representation letters, in part, because they cannot corroborate ___________________________________________________________________.

42. The standard for auditing and assessing management’s estimates is _____________________________________________________________________________.

imagine if you will, that Ryder Corp has at the end of 2018 an amount of $62,000 in its accrued payroll (aka wages payable) account. During 2019, no changes were made to the accrued payroll account so that it is still $62,000. Whenever, payroll was accounted for in 2019, the payroll department simply debited the payroll expense and credited cash (no journal entry to accrued payroll). No one was concerned about the monthly financial statements or the payroll expense being correct each month. However, it is now the end of 2019 and it is time to make the adjusting entries to make sure that the amount of payroll liability and payroll expense is correct for the year (assume 2018 is correct). You may want to use T accounts to work through what needs to be done.

Your post should explain three things:

1. What information you will need to gather from payroll in order to make the correct adjusting entry (assume payroll is paid weekly on Wednesday for the hours worked the previous week (Mon to Sat, no Sun).

2. How you will use information found in 1 to calculate the amount of the journal entry (you can make up numbers or describe in generic terms)

3. What your adjusting entry will be?

*THIS IS ALL THE INFORMATION THAT WAS PROVIDED*

Discuss the current accounting treatment of internally generated intangible assets under AASB 138. Provide arguments both FOR and AGAINST this accounting treatment. If you were an Accounting Standard Setter, what would your proposal be for the accounting treatment of internally generated intangibles? (Refer to the Accounting Standards and/or Conceptual Framework as appropriate. Maximum 350 words)

13-8A Prepare a statement of cash flows - direct method, and compute free cash flow.

NOSKER COMPANY
Comparative Balance Sheet
December 31

NOSKER COMPANY
Income Statement
For the Year ended December 31, 2017

Additional data:

1. Dividends declared and paid were $20,000.
2. During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale.
3. All depreciation expense, $14,500, is in the operating expenses.
4. All sales and purchases are on account.

Data for Nosker Company is presented above. Further analysis reveals the following.

1. Accounts payable pertain to merchandise suppliers.
2. All operating expenses except for depreciation were paid in cash.

Instructions

(a) Prepare a statement of cash flows using the direct method.
(b) Compute free cash flow.

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

(a)

NOSKER COMPANY
Statement of Cash Flows
For the Year ended December 31, 2017

(b)

1) If you were auditing Accounts Payable at a service firm, which assertion/s would be most at risk of misstatement, and why?

2) Explain how different groups of users of the financial statements may use the audit report for different objectives or purposes?

Jackson Industries employs a standard cost system in which direct materials inventory is carried at standard cost. Jackson has established the following standards for the manufacturing costs of one unit of product, and based on planned production of 20,000 units.

During May, Jackson purchased 125,000 pounds of direct materials at a total cost of $475,000. The total factory wages for May were $364,000, 90% of which were for direct labor. Jackson manufactured 22,000 units of product during May using 108,000 pounds of direct materials and 28,000 direct labor hours. Variable overhead totaled $497,700 for 63,000 machine hours.

Jackson's direct materials price and efficiency variances are:

Jackson's direct labor price and efficiency variances are:

Jackson's variable overhead price and efficiency variances are:

Depending on the level of organization (cost center vs profit center vs investment center), the idea of responsibility accounting defines the techniques used to evaluate the performance of individuals and managers. If you’ve been involved in an organization using performance evaluation techniques, please discuss the system in terms of its design, implementation, and overall effectiveness. Did it provide useful information on performance as well as motivate those subject to the system. What were its strengths and weaknesses, and given all we’ve been studying about planning and control, what changes would you make to the system if you were able?

Question text

Determining the Cost of an Asset
Omar Corporation paid $400,000 for a tract of land that had an old gas station on it. The gas station was demolished at a cost of $20,000 and a new warehouse was constructed on the site at a cost of $640,000.

In addition, several other costs were incurred:

(a) What value should be assigned to the tract of land?

$Answer ?

(b) What value should be assigned to the new warehouse?

$Answer ?

Why do we use incremental cash flows in a replacement decision?

How would international investing affect the calculation of the cash flows?

If the IRS disallowed depreciation how would that affect a firms capital budgeting decisions?