|
Nordway Corporation acquired 90 percent of Olman Company’s voting shares of stock in 20X1. During 20X4, Nordway purchased 54,000 Playday doghouses for $28 each and sold 39,000 of them to Olman for $35 each. Olman sold 32,000 of the doghouses to retail establishments prior to December 31, 20X4, for $50 each. Both companies use perpetual inventory systems. |
| Required: | |
| a. |
Prepare all journal entries Nordway recorded for the purchase of inventory and resale to Olman Company in 20X4. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. Record the purchase of inventory on account. 2. Record the sales of the Playday doghouses. 3. Record the cost of goods sold. |
| b. |
Prepare the journal entries Olman recorded for the purchase of inventory and resale to retail establishments in 20X4. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. Record the purchase of inventory on account. 2. Record the sales of the Playday doghouses. 3. Record the cost of goods sold. |
| c. |
Prepare the worksheet consolidation entry(ies) needed in preparing consolidated financial statements for 20X4 to remove the effects of the intercompany sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. Record the consolidation entry. |
In: Accounting
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 65 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 | $ | 2,910 | |||||
| Classroom supplies | $ | 270 | |||||
| Utilities | $ | 1,240 | $ | 70 | |||
| Campus rent | $ | 4,900 | |||||
| Insurance | $ | 2,200 | |||||
| Administrative expenses | $ | 3,500 | $ | 45 | $ | 6 | |
For example, administrative expenses should be $3,500 per month plus $45 per course plus $6 per student. The company’s sales should average $850 per student.
The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 61 students. The actual operating results for September appear below:
| Actual | ||
| Revenue | $ | 52,350 |
| Instructor wages | $ | 10,920 |
| Classroom supplies | $ | 17,400 |
| Utilities | $ | 1,930 |
| Campus rent | $ | 4,900 |
| Insurance | $ | 2,340 |
| Administrative expenses | $ | 3,496 |
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
Two-Stage ABC for Manufacturing
Assume Sherwin-Williams Company, a large paint manufacturer, has
determined the following activity cost pools and cost driver levels
for the latest period:
| Activity Cost Pool | Activity Cost | Activity Cost Driver | |
|---|---|---|---|
| Machine setup | $990,000 | 3,000 | setup hours |
| Material handling | 840,000 | 6,000 | material moves |
| Machine operation | 200,000 | 25,000 | machine hours |
The following data are for the production of single batches of two
products, Mirlite and Subdue:
| Mirlite | Subdue | |
|---|---|---|
| Gallons produced | 30,000 | 20,000 |
| Direct labor hours | 300 | 150 |
| Machine hours | 650 | 200 |
| Direct labor cost | $ 12,300 | $ 9,500 |
| Direct materials cost | $240,000 | $ 110,000 |
| Setup hours | 12 | 10 |
| Material moves | 40 | 25 |
Determine the batch and unit costs per gallon of Mirlite and Subdue
using ABC. (Round your answers to the nearest cent.)
In: Accounting
Laws for Accountants
How will a state and /or federally mandated requirement for late payments not to be considered late impact the bankruptcy laws? What about the many businesses that have been required to close-should there be some consideration given to that fact when many of these business file for bankruptcy? What about those who lose their jobs because their businesses are required to close? What does this do to their lenders and their banks?
In: Accounting
List the benefits of budgeting in a business. Also list and describe the components of a Master Budget.
In: Accounting
1. What is Financial Statement Analysis (FSA)?
2. How is FSA related to AND different from financial accounting
and auditing?
3. What is a typical day in the life of a financial analyst?
4. How do you become a financial analyst? What professional
licenses or education do you need or can you get?
In: Accounting
Marte Company manufactures bicycles and tricycles. For both products, materials are added at the beginning of the production process, and conversion costs are incurred uniformly. Production and cost data for the month of May are as follows.
|
Production Data—Bicycles |
Units |
Percent |
|
Work in process units, May 1 |
500 |
80% |
|
Units started in production |
1,500 |
|
|
Work in process units, May 31 |
800 |
25% |
|
Cost Data—Bicycles |
||
|
Work in process, May 1 |
||
|
Materials |
$15,000 |
|
|
Conversion costs |
18,000 |
$ 33,000 |
|
Direct materials |
50,000 |
|
|
Direct labor |
18,320 |
|
|
Manufacturing overhead |
33,680 |
Instructions
(a) Calculate the following.
(1) The equivalent units of production for materials and conversion.
(2) The unit costs of production for materials and conversion costs.
(3) The assignment of costs to units transferred out and in process at the end of the accounting period.
(b) Prepare a production cost report for the month of May for the bicycles.
In: Accounting
|
Johnston Enterprises |
|
Balance Sheet and Income Statement Data |
|
December 31, |
|
2017 |
2016 |
||
|
Accounts Payable |
187,000 |
102,000 |
|
|
Accounts Receivable |
238,000 |
306,000 |
|
|
Accumulated Depreciation |
476,000 |
442,000 |
|
|
Bonds Payable |
340,000 |
391,000 |
|
|
Cash |
153,000 |
119,000 |
|
|
Common Stock |
510,000 |
467,500 |
|
|
Cost of Goods Sold |
751,000 |
731,000 |
|
|
Depreciation Expense |
153,000 |
136,000 |
|
|
Income Tax Expense |
110,000 |
102,000 |
|
|
Income Taxes Payable |
85,000 |
76,500 |
|
|
Interest Expense |
34,000 |
34,000 |
|
|
Inventory |
391,000 |
340,000 |
|
|
Loss on Sale of Equipment |
12,000 |
0 |
|
|
Notes Payable (current) |
51,000 |
68,000 |
|
|
Property, Plant, and Equipment |
1,241,000 |
1,122,000 |
|
|
Retained Earnings |
? |
340,000 |
|
|
Salaries and Wages Expense |
391,000 |
357,000 |
|
|
Sales Revenue |
1,615,000 |
1,513,000 |
Additional Information:
During the year, Johnston paid dividend of $130,000; sold equipment with an original cost of $153,000 and accumulated depreciation of $119,000; and purchased new equipment for $272,000.
Instruction
In: Accounting
Problem 24-1: Compute gross pay.
Using the information given for Archway Company, compute the employees' gross pay for the payroll week ending July 14 and the year-to-date gross pay as of July 14. Employees receive time-and-a-half for overtime hours (fill in the shaded areas).
|
Employee Number |
Hours Worked |
Pay per Hour |
Gross Pay |
Year-to-Date Gross Pay |
||
|
Regular |
Overtime |
As of July 7 |
As of July 14 |
|||
|
1 |
38 |
0 |
$16.80 |
$23,200.80 |
||
|
2 |
40 |
0 |
22.40 |
29,269.60 |
||
|
3 |
40 |
2 |
19.20 |
24,735.60 |
||
|
4 |
40 |
3 |
24.80 |
33,665.20 |
||
|
5 |
40 |
8 |
21.20 |
28,826.40 |
||
|
6 |
40 |
4 |
14.80 |
16,540.60 |
||
In: Accounting
Jordan Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Jordan’s policy is to maintain an ending inventory balance equal to 15 percent of the following month’s cost of goods sold. April’s budgeted cost of goods sold is $76,000. Complete the inventory purchases budget by filling in the missing amounts.
Complete the inventory purchases budget by filling in the missing amounts.
|
|||||||||||||||||||||||||||||
b. Cost of goods sold
c. Ending inventory
In: Accounting
Describe common situations a company will use to choose between using the current rate method and the temporal method of foreign currency translation/remeasurement for foreign subsidiaries.
In: Accounting
CHAPTER 15(13.)
On January 1, 2018, Nath-Langstrom Services, Inc., a computer
software training firm, leased several computers under a two-year
operating lease agreement from ComputerWorld Leasing, which
routinely finances equipment for other firms at an annual interest
rate of 4%. The contract calls for four rent payments of $15,500
each, payable semiannually on June 30 and December 31 each year.
The computers were acquired by ComputerWorld at a cost of $101,000
and were expected to have a useful life of Five years with no
residual value. Both firms record amortization and depreciation
semi-annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of
$1 and PVAD of $1) (Use appropriate factor(s) from the
tables provided.)
Required:
Prepare the appropriate entries for both the lessee and the lessor
from the beginning of the lease through the end of 2018.
(If no entry is required for a transaction/event, select
"No journal entry required" in the first account field. Round your
intermediate calculations to the nearest whole dollar
amount.)
In: Accounting
Cassi Cronin is the Women’s head varsity hockey coach at USGB University. She has enjoyed considerable success over the years and is considering starting a summer hockey camp. USGB University would charge Coach for rooms, meals and ice-rink time for participants, plus a 10% commission based upon the price charged to campers. Coach Cassi has heard of the CVP experts in Acct 2220 and is asking for your help (and she is willing to pay!). You state that some of the important factors in analyzing such an opportunity involve setting fees, predicting enrollments and estimating the behavior of costs. Accordingly, planning ahead involves estimates and assumptions. Coach has provided estimates as follows:
|
Expected/Planned enrollments each week |
90 campers |
|
Average price to be charged for one-week of camp |
$225 per camper |
|
Estimated Costs: |
|
|
Asst coaches’ salaries |
$550 per coach per week |
|
Campus food/dining for campers |
$40 per camper |
|
Health insurance and fancy USGB T-shirts |
$15 per camper |
|
Room rent charged by university |
$28 per camper |
|
Ice Arena & locker room charge (by University) |
$2,000/week, plus 10% of camper fee |
|
Admin, marketing brochures, mailings, etc. |
$2,700 for each week |
Coach Cassi states that other camps have typically employed one assistant coach for each 15 campers, excluding the director (Cassi in this case). One problem is that you need to hire the coaches before you know the enrollments, although it is usually possible to find one or two at the last minute. It is, however, important to hire most of the assistant coaches early so you can use their names in the marketing brochures. Further, while the enrollment and prices given are averages, variations exist, with enrollments generally ranging from 60 to 110 and weekly camper fees ranging from $160 to $330. As might be expected, the better-known camps have higher enrollments at higher prices, but they also pay more for more well-known coaches. Coach Cassi will keep any profits (or suffer any losses), so she wants to be fairly confident before proceeding with this venture.
Required: Use the CVP Equation Method (& template) to Analyze:
In: Accounting
Equity Method for Stock Investment
On January 4, Year 1, Ferguson Company purchased 160,000 shares of Silva Company directly from one of the founders for a price of $44 per share. Silva has 400,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $432,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $1,494,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva.
a. Provide the Ferguson Company journal entries for the transactions involving its investment in Silva Company during Year 1.
| Year 1, Jan. 4 | Investment in Silva Company Stock | ||
| Cash | |||
| Year 1, July 2 | Cash | ||
| Investment in Silva Company Stock | |||
| Year 1, Dec. 31 | Investment in Silva Company Stock | ||
| Investment in Silva Company Stock |
Feedback
a.
Jan 4: Record the investment at cost.
July 2: Calculate the ownership percentage. Under the equity method of accounting for investments, the dividends earned affect the investment account.
Dec. 31: Calculate the ownership percentage. Under the equity method of accounting for investments, the share of income affects the investment account.
b. Determine the December 31, Year 1, balance
of Investment in Silva Company Stock.
$
Feedback
b. Set up a T account for the Investment account and calculate the ending investment using your answers from requirement (a).
Feedback
Partially correct
Check My Work1 more Check My Work uses remaining.
In: Accounting
What is Cost-Volume-Profit analysis and how might it be used?
Explain Margin of Safety and how it is calculated.
Compute the Contribution Margin and describe what it reveals about a company’s cost structure.
What is Operating Leverage and how is it used to analyze changes in sales and profitability?
In: Accounting