Questions
On January 1, 2017, Thomson Inc. had the following account balances in its shareholders' equity accounts....

On January 1, 2017, Thomson Inc. had the following account balances in its shareholders' equity accounts.

Common stock, $1 par, 350,000 shares issued of

which 20,000 Shares being held as treasury stock $350,000

Paid-in capital excess of par, common   500,000

Preferred stock, $100 par, 10,000 shares outstanding 1,000,000

Paid-in capital excess of par, preferred    100,000

Retained earnings   2,000,000

Treasury stock, at cost, 20,000 shares   60,000

  

During 2017, Thomson Inc. had several transactions relating to common stock.

2/10

Declared a property dividend, payable in Welch company stock. The Welch stock had been purchased early in 2016 for $30,000 and was reported as an asset at a fair value of $35,000 on 12/31/16balance sheet. The market value of Welch stock is $38,000 on 2/10/17.

3/17

Distributed the property dividend.

3/20

Reissued 5,000 shares of treasury stock at $5 per share.

4/17

Declared a 3 for 1 stock split on common stock effective 4/24.

7/18

Declared and distributed a 10% stock dividend on outstanding common stock; market value per share, $7.   

11/1

Declared a $0.5 per share cash dividend on the outstanding common shares.

11/25

Ex-dividend date for the cash dividend

11/29

Date of record for the cash dividend.   

12/20

Paid the cash dividend declared on 11/1.

Required:

Record the above transactions and events in the journal entry format.

In: Accounting

Presented here are statement of income and retained earnings and Comparative Balance Sheets for Madison Garden...

Presented here are statement of income and retained earnings and Comparative Balance Sheets for Madison Garden PTY LTD, which operates a National chain of sporting goods.

Statement of income and Retained Earnings for the year ended 31 December 2016

Net sales R48000   
Cost of goods sold R36000
Gross profit R12000
Selling , General and admin expense R6000
Operating income R6000
Interest expense 280
Income before tax 5720
Income tax expense 2280
Net income 3440
Preference Dividends 100
Income available to ordinary shareholders 3340
Ordinary dividends 500
To Retained Earnings 2840
Retained Earnings 01/01/2016 12000
Retained Earnings by the end of the year 14840
COMPARATIVE BALANCE SHEETS AS AT
DECEMBER 31 2016 2015
Cash 840 2700
Accounts Receivable 12500 9000
Inventory 8000 5500
Prepaid Insurance 100 400
Total Current Assets 21440 17600
Land 4000 4000
Buildings & Equipment 12000 9000
Accumulated Depreciation (3700) (3000)
Total Long Term Assets R12300 R10000
Total Assets R33740 R27600
Accounts payable 7300 5000
Taxes Payable 4600 4200
Notes payable 2400 1600
Current portion of Mortgage bond 200 200

Total Current Liabilities 14500 11000

Mortgage Bond 1400 1600
Total Liabilities 15900 12600
Preference Shares 1000 1000
Ordinary Shares 2000 2000
Retained Earnings 14840 12000
Total 17840 15000
R33 740 R27600

In: Accounting

Kristopher Company has budgeted sales of $300,000 with the following budgeted costs:       Direct materials                    &nb

Kristopher Company has budgeted sales of $300,000 with the following budgeted costs:

      Direct materials                                       $60,000

      Direct manufacturing labor                       40,000

      Factory overhead

            Variable                                               30,000

            Fixed                                                    50,000

      Selling and administrative expenses

            Variable                                               20,000

            Fixed                                                    30,000

      Required (10 points):

           

Compute the average markup percentage for setting prices as a percentage of:

                       

  1. The full cost of the product
  2. The variable cost of the product
  3. Variable manufacturing costs
  4. Total manufacturing costs

In: Accounting

1. Computers R US took out a 9 month, 4.25, $17,000 note on August 1, 2019...

1. Computers R US took out a 9 month, 4.25, $17,000 note on August 1, 2019 with interest and principal to be paid on maturity.

2. On October 1, 2019, Computers R US rented some storage space at a rate of $450 per month. On that date, Computers R US recorded Rent Expense for six months rent paid in advance.

3. Computers R US purchased $4,780 of office supplies during the year and the asset office supplies account was increased A count of the supplies on hand Dec 31, 2019, indicates a balance of $485.

4. $16,500 of store supplies were purchased during the year and were immediately expensed. A count of the store supplies on hand December 31, 2019, indicates a balance of $1.275.

5. On June 1, 2019 an 18-month insurance policy was purchased for $9,000.

6. On Dec 1, 2019, Computers R US collected $32,000 for consulting services to be performed from Dec. 1, 2019 to Feb. 28, 2020. The company credited the revenue account when paid.

7. On October 1, 2019, Computers R Us issued a 5-month note receivable to Morerams Inc. at an annual interest rate of 5%. Principle and interest will be paid at the end of the 5-months. The note was recorded in Notes Receivable and is the only note outstanding.

8. The company rented idle office space to Bytes and Bits on June 1, 2019, at a rate of $1500 per month. On this date Computers R Us credited Unearned Rent Revenue for one year of rent received in advance.

9. Computers R Us is open seven days a week and has a daily payroll of $5,430. Employees are paid every Friday, December 31 is a Monday. 40% of the payroll is for office employees, 60% of payroll is for sales employees.

10.  Depreciation for store equipment is based on the following: • Straight Line Depreciation • Store equipment – Assets were held for the entire year; Residual Value = $8,200; Service life is estimated to be 6 years.

11. Depreciation for office equipment is based on the following: • Double-Declining Method • Office equipment – Assets were purchased July 1; Residual Value = $4,000; Service life is estimated to be 4 years.

12. At 12/31/2019, based on the aging method, Computers R US determines that uncollectible accounts are $13,850.

13. Utilities expense of $3,700 remained unpaid. 40% of the utilities expense is for office and 60% of utilities expense is for the store.

Based on the following information,

a. Prepare a worksheet (Show formulas and use an "IF" statement)

b. Prepare the adjusting journal entries

c. Prepare a multiple step income statement

d. Prepare a statement of retained earnings

e. Prepare a balance sheet

f. Prepare the closing entries

In: Accounting

Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as...

Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement, which follows: Sales $ 1,645,000 Variable expenses 549,100 Contribution margin 1,095,900 Fixed expenses 1,205,000 Net operating income (loss) $ (109,100) In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 395,000 $ 670,000 $ 580,000 Variable expenses as a percentage of sales 52 % 21 % 35 % Traceable fixed expenses $ 255,000 $ 336,000 $ 191,000 Required: 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. 2-a. As a result of a marketing study, the president believes that sales in the West Division could be increased by 15% if monthly advertising in that division were increased by $25,000. Calculate the incremental net operating income. 2-b. Would you recommend the increased advertising? Yes No rev: 07_08_2014_QC_50927

In: Accounting

TRUE OR FALSE? ** IF YOU CAN'T ANSWER THEM ALL, PLEASE DON'T ANSWER ANY** When a...

TRUE OR FALSE?

** IF YOU CAN'T ANSWER THEM ALL, PLEASE DON'T ANSWER ANY**

  1. When a company declares of cash dividends retained earnings is reduced.
  2. Authorized stock is the total number of shares outstanding.
  3. The asset turnover ratio measures how efficiently a company uses its assets to generate sales.
  4. Pro forma income usually excludes items that the company thinks are unusual or nonrecurring.
  5. Sales minus operating expenses equals gross profit.
  6. Freight terms of FOB Destination means that the seller pays the freight costs.
  7. Sales revenues are recognized during the period cash is collected from the buyer.
  8. Under the lower-of-cost-or-market basis, market is defined as current replacement cost.
  9. The safeguarding of assets is an objective of a company's system of internal control.
  10. The custodian of the petty cash fund has the responsibility of recording a journal entry every time cash is used from the fund.
  11. Both accounts receivable and notes receivable represent claims that expected to be paid in cash.

In: Accounting

Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales...

Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions

Date Activities Units Acquired at Cost Units Sold at Retail
Jan. 1 Beginning inventory 600 units @ $40 per unit
Feb. 10 Purchase 360 units @ $37 per unit
Mar. 13 Purchase 150 units @ $25 per unit
Mar. 15 Sales 765 units @ $80 per unit
Aug. 21 Purchase 200 units @ $45 per unit
Sept. 5 Purchase 580 units @ $42 per unit
Sept. 10 Sales 780 units @ $80 per unit
Totals 1,890 units 1,545 units

Compute the cost assigned to ending inventory using weighted average. (Round your average cost per unit to 2 decimal places.)

Compute the cost assigned to ending inventory using weighted average. (Round your average cost per unit to 2 decimal places.)


Compute the cost assigned to ending inventory using specific identification. For specific identification, units sold consist of 600 units from beginning inventory, 260 from the February 10 purchase, 150 from the March 13 purchase, 150 from the August 21 purchase, and 385 from the September 5 purchase. (Round your average cost per unit to 2 decimal places.)


In: Accounting

10. The Nolan Corporation finds it is necessary to determine its marginal cost of capital. Nolan’s...

10. The Nolan Corporation finds it is necessary to determine its marginal cost of capital. Nolan’s current capital structure calls for 30 percent debt, 30 percent preferred stock, and 40 percent common equity. Initially, common equity will be in the form of retained earnings (Ke) and then new common stock (Kn). The costs of the various sources of financing are as follows: debt, 8.5 percent; preferred stock, 6 percent; retained earnings, 12 percent; and new common stock, 13.2 percent.

a. What is the initial weighted average cost of capital? (Include debt, preferred stock, and common equity in the form of retained earnings, Ke.) (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)

Weighted Cost
Debt %
Preferred stock
Common equity
Weighted average cost of capital 0.00 %

b. If the firm has $18 million in retained earnings, at what size capital structure will the firm run out of retained earnings? (Enter your answer in millions of dollars (e.g., $10 million should be entered as "10").)

c. What will the marginal cost of capital be immediately after that point? (Equity will remain at 40 percent of the capital structure, but will all be in the form of new common stock, Kn.) (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

d. The 8.5 percent cost of debt referred to earlier applies only to the first $24 million of debt. After that, the cost of debt will be 10.5 percent. At what size capital structure will there be a change in the cost of debt? (Enter your answer in millions of dollars (e.g., $10 million should be entered as "10").)

e. What will the marginal cost of capital be immediately after that point? (Consider the facts in both parts c and d.) (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

In: Accounting

Problem 16-3A Weighted Average: Process cost summary; equivalent units LO C2, C3, P4 Fast Co. produces...

Problem 16-3A Weighted Average: Process cost summary; equivalent units LO C2, C3, P4

Fast Co. produces its product through a single processing department. Direct materials are added at the start of production, and conversion costs are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process costing system. The Work in Process Inventory account has a balance of $104,300 as of October 1, which consists of $23,100 of direct materials and $81,200 of conversion costs.

During the month the company incurred the following costs:

Direct materials $ 146,900
Conversion 888,800


During October, the company started 160,000 units and transferred 170,000 units to finished goods. At the end of the month, the work in process inventory consisted of 30,000 units that were 80% complete with respect to conversion costs.

Required:
1. Prepare the company’s process cost summary for October using the weighted-average method.
2. Prepare the journal entry dated October 31 to transfer the cost of the completed units to finished goods inventory.

Prepare the company’s process cost summary for October using the weighted-average method. (Round "Cost per EUP" to 2 decimal places.)

Total costs to account for:
Total costs to account for: $0
Total costs accounted for
Difference due to rounding cost/unit $0
Unit reconciliation:
Units to account for:
Total units to account for
Total units accounted for:
Total units accounted for
Equivalent units of production (EUP)- weighted average method
Units % Materials EUP- Materials % Conversion EUP-Conversion
Total units
Cost per equivalent unit of production Materials Conversion
Total costs Costs Costs
÷ Equivalent units of production EUP EUP
Cost per equivalent unit of production (rounded to 2 decimals) 0 0
Total costs accounted for:
Cost of units transferred out: EUP Cost per EUP Total cost
Direct materials
Conversion
Total costs transferred out
Costs of ending work in process EUP Cost per EUP Total cost
Direct materials $0.00 $0
Conversion $0.00 0
Total cost of ending work in process
Total costs accounted for
  • Record the transfer of goods to finished goods inventory.
Date General Journal Debit Credit
Oct 31      

In: Accounting

Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of...

Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given below: Minden Company Balance Sheet April 30 Assets Cash $ 10,500 Accounts receivable 57,000 Inventory 42,500 Buildings and equipment, net of depreciation 236,000 Total assets $ 346,000 Liabilities and Stockholders’ Equity Accounts payable $ 72,750 Note payable 21,200 Common stock 180,000 Retained earnings 72,050 Total liabilities and stockholders’ equity $ 346,000 The company is in the process of preparing a budget for May and has assembled the following data: Sales are budgeted at $296,000 for May. Of these sales, $88,800 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. Purchases of inventory are expected to total $192,000 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. The May 31 inventory balance is budgeted at $51,500. Selling and administrative expenses for May are budgeted at $98,700, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2,150 for the month. The note payable on the April 30 balance sheet will be paid during May, with $220 in interest. (All of the interest relates to May.) New refrigerating equipment costing $6,800 will be purchased for cash during May. During May, the company will borrow $23,200 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 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.

In: Accounting

Ernest Real Estate Appraisal Adjusted Trial Balance June 30, 2018 Balance Account Title Debit Credit Cash...

Ernest Real Estate Appraisal

Adjusted Trial Balance

June 30, 2018

Balance

Account Title

Debit

Credit

Cash

$5,000

Accounts Receivable

5,500

Office Supplies

2,400

Prepaid Insurance

2,700

Land

13,200

Building

79,000

Accumulated Depreciation—Building

$25,300

Accounts Payable

19,400

Interest Payable

8,000

Salaries Payable

1,700

Unearned Revenue

700

Notes Payable (long-term)

45,000

Common Stock

6,000

Retained Earnings

35,000

Dividends

26,000

Service Revenue

47,800

Insurance Expense

3,900

Salaries Expense

32,600

Supplies Expense

900

Interest Expense

8,000

Utilities Expense

1,800

Depreciation Expense—Building

7,900

Total

$188,900

$188,900

1.

Prepare the company's income statement for the year ended

June 30 comma 2018June 30, 2018.

2.

Prepare the company's statement of retained earnings for the year ended

June 30 comma 2018June 30, 2018.

3.

Prepare the company's classified balance sheet in report form at

June 30, 2018.

4.

Journalize the closing entries.

5.

T-accounts have been opened using the balances from the adjusted trial balance. Post the closing entries to the T-accounts.

6.

Prepare the company's post-closing trial balance at

JJune 30, 2018.



In: Accounting

XY Pte Ltd is finalising its financial statements for the year ended 31 December 20X1. The...

XY Pte Ltd is finalising its financial statements for the year ended 31 December 20X1. The date of authorisation of financial statements for issue was 14 March 20X2 and the annual general meeting is scheduled on 23 April 20X2. The following events occurred as follows: (a) Inventory held by XY Pte Ltd was recorded at its cost of $1,104,000 at 31 December 20X1 in the statement of financial position. The whole inventory was damaged by flood water in December 20X1. The entity sold 80% of the inventory for $616,000 on 7 February 20X2. (b) On 9 August 20X1, the company invested $3 million in a promising high technology company ABX Ltd. The value of the investment rose to $3.5 million as at 31 December 20X1. However, on 14 January 20X2, a major earthquake struck the region where the factory of ABX was located, causing its share price to plummet. The value of the investment dropped to $1.5 million the next day

Illustrate the appropriate accounting treatment of the events in the financial statements of XY Pte Ltd for the year ended 31 December 20X1. Prepare the necessary journal entries, if necessary.

In: Accounting

• What should auditor do when risk of fraud with regards to cash is increased? •...

• What should auditor do when risk of fraud with regards to cash is increased?
• What are the aspects of control that auditors are most concerned about for sales and collection cycle?
• What are the significant factors about cutoff for sales/collection cycle?





In: Accounting

Davis, Inc., had the following quality costs for the years ended December 31, 20x4 and 20x5:...

Davis, Inc., had the following quality costs for the years ended December 31, 20x4 and 20x5:

20x4 20x5
Prevention costs:
    Quality audits $71,000        $106,500       
    Vendor certification 123,500        185,250       
Appraisal costs:
    Product acceptance $90,000        $135,000       
    Process acceptance 85,000        107,500       
Internal failure costs:
    Retesting $104,000        $98,000       
    Rework 200,000        173,000       
External failure costs:
    Recalls $127,500        $102,000       
    Warranty 305,000        298,000       

At the end of 20x4, management decided to increase its investment in control costs by 50 percent for each category’s items with the expectation that failure costs would decrease by 20 percent for each item of the failure categories. Sales were $12,500,000 for both 20x4 and 20x5.

Required:

1. Calculate the budgeted costs for 20x5.

$

Prepare an interim quality performance report. Enter all answers as positive amounts. If there is no variance enter "0" for your answer. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table, select "Favorable" if it is favorable, or No effect if there is no change. Round percentage answers to two decimal places. For example, 5.789% would be entered as "5.79".

Davis, Inc.
Interim Standard Performance Report: Quality Costs
For the Year Ended December 31, 20x5
Actual Costs Budgeted Costs Variance Unfavorable, Favorable or No effect
Prevention costs:
$ $
Total prevention costs $ $
Appraisal costs:
$ $
$
Total appraisal costs $ $ $
Internal failure costs:
$ $ $
Total internal failure costs $ $ $
External failure costs:
$ $
Total external failure costs $ $ $
Total quality costs $ $ $
Percentage of sales % % %

2. What can be inferred from the report regarding the progress Davis has made?

3. What if sales were $12,500,000 for 20x4 and $15,625,000 for 20x5? What adjustment to budgeted rework costs would be made? (Note: Quality auditing is a discretionary cost and its budget is not affected by the change in sales revenue in 20x5.)

New total budgeted rework costs: $

In: Accounting

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two...

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 61 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:

Fixed Cost per Month Cost per Course Cost per
Student
Instructor wages $ 2,940
Classroom supplies $ 270
Utilities $ 1,200 $ 80
Campus rent $ 4,800
Insurance $ 2,100
Administrative expenses $ 3,900 $ 42 $ 4

For example, administrative expenses should be $3,900 per month plus $42 per course plus $4 per student. The company’s sales should average $880 per student.

The company planned to run four courses with a total of 61 students; however, it actually ran four courses with a total of only 57 students. The actual operating results for September appear below:

Actual
Revenue $ 50,780
Instructor wages $ 11,040
Classroom supplies $ 16,320
Utilities $ 1,930
Campus rent $ 4,800
Insurance $ 2,240
Administrative expenses $ 3,738

Required:

Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

In: Accounting