Problem 24-3A Departmental income statements; forecasts LO P3

Williams Company began operations in January 2017 with two operating (selling) departments and one service (office) department. Its departmental income statements follow.

Williams plans to open a third department in January 2018 that will sell paintings. Management predicts that the new department will generate $56,000 in sales with a 65% gross profit margin and will require the following direct expenses: sales salaries, $8,500; advertising, $1,100; store supplies, $1,000; and equipment depreciation, $900. It will fit the new department into the current rented space by taking some square footage from the other two departments. When opened, the new painting department will fill one-fifth of the space presently used by the clock department and one-fourth used by the mirror department. Management does not predict any increase in utilities costs, which are allocated to the departments in proportion to occupied space (or rent expense). The company allocates office department expenses to the operating departments in proportion to their sales. It expects the painting department to increase total office department expenses by $7,500. Since the painting department will bring new customers into the store, management expects sales in both the clock and mirror departments to increase by 11%. No changes for those departments’ gross profit percents or their direct expenses are expected except for store supplies used, which will increase in proportion to sales.

Required:
Prepare departmental income statements that show the company’s predicted results of operations for calendar-year 2018 for the three operating (selling) departments and their combined totals. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.

Bug-Off Exterminators provides pest control services and sells extermination products manufactured by other companies. Following is the company's unadjusted trial balance as of December 31, 2017.

The following information in a through h applies to the company at the end of the current year.

a. The bank reconciliation as of December 31, 2017, includes the following facts.

Reported on the bank statement is a canceled check that the company failed to record. (Information from the bank reconciliation allows you to determine the amount of this check, which is a payment on an account payable.)

b. An examination of customers’ accounts shows that accounts totaling $679 should be written off as uncollectible. Using an aging of receivables, the company determines that the ending balance of the Allowance for Doubtful Accounts should be $700.

c. A truck is purchased and placed in service on January 1, 2017. Its cost is being depreciated with the straight-line method using the following facts and estimates.

d. Two items of equipment (a sprayer and an injector) were purchased and put into service in early January 2015. They are being depreciated with the straight-line method using these facts and estimates.

e. On August 1, 2017, the company is paid $3,840 cash in advance to provide monthly service for an apartment complex for one year. The company began providing the services in August. When the cash was received, the full amount was credited to the Extermination Services Revenue account.

f. The company offers a warranty for the services it sells. The expected cost of providing warranty service is 2.5% of the extermination services revenue of $57,760 for 2017. No warranty expense has been recorded for 2017. All costs of servicing warranties in 2017 were properly debited to the Estimated Warranty Liability account.

g. The $15,000 long-term note is an 8%, five-year, interest-bearing note with interest payable annually on December 31. The note was signed with First National Bank on December 31, 2017.

h. The ending inventory of merchandise is counted and determined to have a cost of $11,700. Bug-Off uses a perpetual inventory system.

Required:
1. Determine amounts for the following items:  

1. Correct (reconciled) ending balance of Cash, and the omitted check amount.
2. Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts.
3. Depreciation expense for the truck used during year 2017.
4. Depreciation expense for the two items of equipment used during year 2017.
5. The adjusted 2017 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts.
6. The adjusted 2017 ending balances of the accounts for Warranty Expense and Estimated Warranty Liability.
7. The adjusted 2017 ending balances of the accounts for Interest Expense and Interest Payable.

2. Use the results of part 1 to complete the six-column table by first entering the appropriate adjustments for items a through g and then completing the adjusted trial balance columns. (Hint: Item b requires two adjustments.)
3. Prepare journal entries to record the adjustments entered on the six-column table. Assume Bug-Off’s adjusted balance for Merchandise Inventory matches the year-end physical count.
4a. Prepare a single-step income statement for year 2017.
4b. Prepare a statement of owner’s equity (cash withdrawals during 2017 were $10,000) for year 2017 and there were no investments by the owner in the current year.
4c. Prepare a classified balance sheet as at 2017.

For the fiscal year ended December 31, 2019, Nicholas Corporation reported net income of $600,000 and had 900,000 common shares outstanding from the beginning to the end of the year. On May 1, 2019, Nicholas issued 5% convertible bonds. Each $1,000 bond is convertible into 120 common shares. The total proceeds were $1,000,000 at par and were recognized in the liability and equity components using the residual value method, measuring the liability component first, at the present value of the bonds, all discounted at 8%, (the interest rate that applies to similar straight bonds). At the time of issuance, the present value of the bond was $922,685. Calculate Nicholas Corporation’s basic and diluted Earnings per share, assuming the corporation experiences a 30% tax rate. Round your answer to two decimal places.

QUESTION 5 Explain how either accounting or financial planning can be considered a ‘profession’.

Apart from direct quotes, all answers should be in your own words.

[This topic relates to 'attributes of profession' in business ethics]

[requires comprehensive response]

Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor-hours. Its predetermined overhead rate was based on a cost formula that estimated $372,000 of manufacturing overhead for an estimated allocation base of 1,200 direct labor-hours. The following transactions took place during the year:

Raw materials purchased on account, $240,000.

Raw materials used in production (all direct materials), $225,000.

Utility bills incurred on account, $67,000 (95% related to factory operations, and the remainder related to selling and administrative activities).

Accrued salary and wage costs: Direct labor (1,275 hours) $ 270,000

Indirect labor $ 98,000 Selling and administrative salaries $ 150,000

Maintenance costs incurred on account in the factory, $62,000

Advertising costs incurred on account, $144,000.

Depreciation was recorded for the year, $80,000 (85% related to factory equipment, and the remainder related to selling and administrative equipment).

Rental cost incurred on account, $105,000 (90% related to factory facilities, and the remainder related to selling and administrative facilities).

Manufacturing overhead cost was applied to jobs, $ ? .

Cost of goods manufactured for the year, $850,000.

Sales for the year (all on account) totaled $1,600,000. These goods cost $880,000 according to their job cost sheets.

The balances in the inventory accounts at the beginning of the year were:

Raw Materials $ 38,000

Work in Process $ 29,000

Finished Goods $ 68,000

Required:

1. Prepare journal entries to record the preceding transactions.

2. Post your entries to T-accounts. (Don’t forget to enter the beginning inventory balances above.)

3. Prepare a schedule of cost of goods manufactured.

4A. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. 4B. Prepare a schedule of cost of goods sold.

5. Prepare an income statement for the year.

1.) If a donor endows a professorial chair at a school, he or she gives a gift and indicates that the earnings from the gift must be used by a specific professor. Would the initial gift be recorded in a fund with donor restrictions or a fund without donor restrictions? Would the earnings be recorded in a fund with donor restrictions or a fund without donor restrictions?

2.) A board sets aside resources to earn investment income to support general operations. Would the resources set aside be recorded in a fund with donor restrictions or a fund without donor restrictions? Would the earnings be recorded in a fund with donor restrictions or a fund without donor restrictions?

3.)The Abby Arboretum (AA) is a not-for-profit organization that has several programs, including gardening, grade-school education, environmental efforts, and a reforestation program. It draws many volunteers for its efforts. Indicate which, if any, of the following activities should be recorded as donated services.

An architect drew up blueprints for a new greenhouse free of charge. AA would have hired an architect otherwise.

The architect makes phone calls to past clients and investors to raise contributions on behalf of AA for a capital campaign to finance the greenhouse.

After the greenhouse is built, the architect spends several days planting vegetables and flowers.

4.) Indicate whether each of the following actions would result in a change in net assets without donor restrictions or net assets with donor restrictions this year:

A donor gives the organization a cash contribution to be used for expanding the organization’s food pantry program.

The organization earns an unrealized gain on its permanent endowment. A donor pledges money to the organization but has not paid it yet.

The donor does not indicate how the money is to be used.

The organization sells goods from its online bookstore.

A donor gives the organization cash and specifies that the money is to be used in 4 years.

A donor gives 1,000 shares of Apple stock and stipulates the proceeds of the stock are not to be spent but held in perpetuity.

On October 30, 2018, Rashid Company Factored receivables with a carrying amount of $300000 to Mohammed company. Mohammed company assesses a finance charge of 4% of the receivable and retains 6% of the receivables. Relative to this transaction you are to determine the amount of loss on the sale to be reported in the income statement of Rashid Company for February A. Assume that Rashid factors the receivable on a without recourse basis. The journal entry is B. Assume that Rashid factors the receivables on a with recourse basis. The recourse obligations have a fair value of 2500. The journal entry for Rashid

Equipment is purchased on July 1, 2011 for $250,000. The estimated salvage value and useful life are $25,000 and 5 years, respectively. What is the depreciation expense for 2012 under: (1) straight-line method, (2) sum-of-years-digits method, and (3) double-declining balance method

The answer is  S-L: 45,000 DDB: 80,000SYD:67,500

Can you please explain step by step solution.

Taylor, age 16, is claimed as a dependent by her parents. For 2019, she has the following income: $5,600 wages from a summer job, $1,495 interest from a money market account, and $2,100 interest from City of Boston bonds.

If required, round your answers to the nearest dollar. If an amount is zero, enter "0".

a. Taylor's standard deduction for 2019 is $.

Taylor's taxable income for 2019 is $

b. Compute Taylor's "net unearned income" for the purpose of the kiddie tax.
$

Compute Taylor's tax liability.
$.

Assigned (3 PAGES) to write by my own word about Activity-based accounting (ABC): its concept, how to implement it, its advantages and disadvantages.( no Plagiarism).

John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. In 2018, John worked as a computer technician at a local university earning a salary of $152,000, and Sandy worked part-time as a receptionist for a law firm earning a salary of $29,000. John also does some Web design work on the side and reported revenues of $4,000 and associated expenses of $750. The Fergusons received $800 in qualified dividends and a $200 refund of their state income taxes. The Fergusons always itemize their deductions and their itemized deductions were well over the standard deduction amount last year. The Fergusons had qualifying insurance for purposes of the Affordable Care Act (ACA). Use Exhibit 8-9, Tax Rate Schedule, Dividends and Capital Gains Tax Rates for reference.

The Fergusons reported making the following payments during the year:

• State income taxes of $4,400. Federal tax withholding of $21,000.
• Alimony payments to John’s former wife of $10,000 (divorced in 2014).
• Child support payments for John’s child with his former wife of $4,100.
• $12,200 of real property taxes.
• Sandy was reimbursed $600 for employee business expenses she incurred. She was required to provide documentation for her expenses to her employer.
• $3,600 to Kid Care day care center for Samantha’s care while John and Sandy worked.
• $14,000 interest on their home mortgage ($400,000 acquisition debt).
• $3,000 interest on a $40,000 home-equity loan. They used the loan to pay for a family vacation and new car.
• $15,000 cash charitable contributions to qualified charities.
• Donation of used furniture to Goodwill. The furniture had a fair market value of $400 and cost $2,000.

a. What is the Fergusons' 2018 federal income taxes payable or refund, including any self-employment tax and AMT, if applicable? (Round your intermediate computations to the nearest whole dollar amount.)

Tax Refund ________________?

A Corp. owns 80% of B Corp. The Consolidated Financial Statements of A Corp. for 2018 and 2019 are shown below:

A Corp.

Consolidated Balance Sheet, December 31, 2019

A Corp.

Consolidated Income Statement, For the year ended December 31, 2019

Other Information:

A purchased its interest in B on January 1, 2015 for $360,000 when the company's net assets were valued at $300,000. The acquisition differential was allocated equally between goodwill and equipment, which was estimated to have a remaining useful life of ten years from the acquisition date.

B reported a net income of $75,000 and paid dividends of $5,000 during 2019.

A issued $300,000 in bonds during the year. A reported an equity method net Income of $300,000 and paid $70,000 in dividends to its shareholders.

Required:

Prepare a Consolidated Statement of Cash Flows for A Corp. for 2019.

The Ramirez Company uses standard costing in its manufacturing plant for auto parts. The standard cost of a particular auto​ part, based on a denominator level of 4,200 output units per​ year, included 5 ​machine-hours of variable manufacturing overhead at $9 per hour and 5 ​machine-hours of fixed manufacturing overhead at $17 per hour. Actual output produced was 4,600 units. Variable manufacturing overhead incurred was $260,000. Fixed manufacturing overhead incurred was $375,000. Actual ​machine-hours were 27,500.

Requirements

Requirement 1. Prepare an analysis of all variable manufacturing overhead and fixed manufacturing overhead​ variances, using the​ 4-variance analysis. Begin by calculating the following amounts for the variable overhead.

Now complete the table below for the fixed manufacturing overhead.

Now complete the​ 4-variance analysis using the amounts you calculated above. ​(If no variance​ exists, leave the dollar value blank. Label the variance as favorable​ (F), unfavorable​ (U) or never a variance​ (N).)

Requirement 2. Prepare journal entries using the​ 4-variance analysis. Record the actual variable

manufacturing overhead incurred. ​(Record debits​ first, then credits. Exclude explanations from any journal​ entries.)

As the controller of a medium-sized financial services company, you take pride in the accounting and internal control systems you have developed for the company. You and your staff have kept up with changes in the accounting industry and been diligent in updating the systems to meet new accounting standards. Your outside auditor, which has been reviewing the company’s books for 15 years, routinely complimented you on your thorough procedures. The passage of the Sarbanes-Oxley Act, with its emphasis on testing internal control systems, initiated several changes. You have studied the law and made adjustments to ensure you comply with the regulations, even though it has created additional work. Your auditors, however, have chosen to interpret SOX very aggressively—too much so, in your opinion. The auditors have recommended that you make costly improvements to your systems and also enlarged the scope of the audit process, raising their fees. When you question the partner in charge, he explains that the complexity of the law means that it is open to interpretation and it is better to err on the side of caution than risk noncompliance. You are not pleased with this answer, as you believe that your company is in compliance with SOX, and consider changing auditors. Using a web search tool, locate articles about this topic and then write responses to the following questions. Be sure to support your arguments and cite your sources.

Ethical Dilemma: Should you change auditors because your current one is too stringent in applying the Sarbanes-Oxley Act? What other steps could you take to resolve this situation?

nb s john