Based on the following data and using a 365-day year:

a. Compute the accounts receivable turnover. Round your answer to two decimal places.

b. Compute the number of days' sales in receivables for year 2. Round your answer to two decimal places.
days

c. The industry average turnover is 20 times during the year, and the number of days' sales in receivables averages 25. How does this situation compare to the industry average?

Is it slightly better or slightly worse than the average?

The level of assurance provided by an external audit is absolute. Is this statement true or false? Explain?

Use the information below to answer the following question.

The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the FIFO inventory cost method.

a.$120

b.$180

c.$144

d.$136

The unadjusted trial balance as of December 31, 2021, for the Bagley Consulting Company appears below. December 31 is the company’s reporting year-end.

Information necessary to prepare the year-end adjusting entries appears below.

1. The buildings have an estimated useful life of 50 years with no salvage value. The company uses the straight-line depreciation method.
2. The office equipment is depreciated at 10 percent of original cost per year.
3. Prepaid insurance expired during the year, $1,600.
4. Accrued salaries at year-end, $1,250.
5. Deferred rent revenue at year-end should be $800.

Required:
1. From the trial balance and information given, prepare adjusting entries.
2. Post the beginning balances and adjusting entries into the appropriate T-accounts.
3. Prepare an adjusted trial balance.
4. Prepare closing entries.
5. Prepare a post-closing trial balance.

On May 31, 2016, Sandals report purchased a truck at a cost of $160,000. before placing the truck into service, The company spend $2,500 painting it, $500 replacing tires, and $5,000 overhauling the engine. The truck should remain in service for 5 years and have a residual value of $7,500. The truck’s annual mileage is expected to be 15,000 in each of the first two years and 10,000 miles in the next three years. In deciding which depreciation method to use, the general manager request depreciation schedule for each of the depreciation methods (straight line, unit-of production, and double – declining-balance). work out each depreciation in the depreciation schedule. pass all transaction in the journal entry. journal entry must be included. show working out for each depreciation

On July 1, 2018 a full year’s insurance premium of $2,400, covering the period July 1, 2018,to June 30, 2019 was paid and debited to insurance expense. Assume the following:



The company has a calendar fiscal year.



January 1, 2018, retained earnings balance is $20,000.



2018 reported net income (assuming the error is not discovered)is $22,800.



2019 net income (assuming the error is not discovered) is $30,000.



2020 net income is $40,000. Ignore taxes

REQUIRED:

a.

List the effects of the error on affected accounts and on net income in 2018 and 2019,assuming no adjusting entry is made on December 31, 2018.

b.

Prepare the entry to record the error if discovered in 2018.

c.

Prepare the entry to record the error if discovered in 2019, and the 2018 and 2019 retained earnings sections of the statement of stockholders’ equity.

d.

Prepare the entry (if needed) to record the error if discovered in 2020, and the 2019 and 2020 retained earnings sections of the statement of stockholders’ equity.

The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $35 million and having a four-year expected life, after which the assets can be salvaged for $7 million. In addition, the division has $35 million in assets that are not depreciable. After four years, the division will have $35 million available from these nondepreciable assets. This means that the division has invested $70 million in assets with a salvage value of $42 million. Annual depreciation is $7 million. Annual operating cash flows are $27.5 million. In computing ROI, this division uses end-of-year asset values in the denominator. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Assume that all cash flows increase 10 percent at the end of each year. This has the following effect on the assets’ replacement cost and annual cash flows.

Depreciation is as follows.

Note that "accumulated" depreciation is 10 percent of the gross book value of depreciable assets after one year, 20 percent after two years, and so forth.

Required:

a. & b. Compute ROI using historical cost, net book value and gross book value.

c. & d. Compute ROI using current cost, net book value and gross book value.

Compute ROI using current cost, net book value and gross book value. (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).)

Whirlwind Cycles is owned 100% by Daniel, a single taxpayer. Both Whirlwind Cycles

and Daniel use the cash method of accounting for tax purposes. The business incurred the

following items of income and expense in Year 2:

Cash Sales $225,000

Interest received from City of Flint Bonds

(this is a municipal bond) 3,000

Cost of Goods Sold (assume cash

paid in Year 2) 45,000

Cash payments for Year 2 utilities 3,500

Cash payments for Year 2 rent 18,000

Tax depreciation 40,000

Cash contribution to the Democratic party

(not deductible for tax purposes) 1,000

On 1/1, Year 1, Whirlwind Cycles purchased a 60-month zero coupon bond with a 5%

yield and a $20,000 maturity value for $15,670 (compounded annually).

Daniel’s taxable income is $100,000 before any profits from the business are considered.

Daniel files as a single tax payer.

Whirl Cycles is organized as a C Corporation and the corporation pays all of its after-tax

cash flows to Daniel as a dividend.

(a) How much interest income does Whirlwind cycles need to recognize from the zero

coupon bond in Year 2? (5 pts)

(b) What is the taxable income of Whirlwind Cycles in Year 2? (5 pts)

(c) What is the after-tax cash flow of Whirlwind Cycles in Year 2? (5 pts)

Hint: the total tax due in Year 2 of Whirlwind Cycles is 25,058.

(d) Calculate Daniel’s Year 2 after-tax cash flows from the Whirlwind Cycles. (5 pts)

Part 1) Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $6.00 per Ib.) $ 24.00 Direct labor (1.8 hrs. @ $11.00 per hr.) 19.80 Overhead (1.8 hrs. @ $18.50 per hr.) 33.30 Total standard cost $ 77.10 The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factory’s capacity of 20,000 units per month. Following are the company’s budgeted overhead costs per month at the 75% capacity level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costs $ 135,000 Fixed overhead costs Depreciation—Building 24,000 Depreciation—Machinery 70,000 Taxes and insurance 17,000 Supervision 253,500 Total fixed overhead costs 364,500 Total overhead costs $ 499,500 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (61,000 Ibs. @ $6.20 per lb.) $ 378,200 Direct labor (21,000 hrs. @ $11.30 per hr.) 237,300 Overhead costs Indirect materials $ 41,750 Indirect labor 176,200 Power 17,250 Repairs and maintenance 34,500 Depreciation—Building 24,000 Depreciation—Machinery 94,500 Taxes and insurance 15,300 Supervision 253,500 657,000 Total costs $ 1,272,500 Required: 1&2. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels and classify all items listed in the fixed budget as variable or fixed.

Part 2) Compute the direct materials cost variance, including its price and quantity variances. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price

Part 3) Compute the direct labor cost variance, including its rate and efficiency variances. AH = Actual Hours SH = Standard Hours AR = Actual Rate SR = Standard Rate

Part 4) Prepare a detailed overhead variance report that shows the variances for individual items of overhead.

The primary emphasis in statutory accounting is supposedly on financial conservatism. However, some statutory techniques violate this principle. Discuss three ways in which statutory accounting is ultraconservative and two areas where the principle of conservatism is violated.

Rodriguez Company pays $320,000 for real estate plus $16,960 in closing costs. The real estate consists of land appraised at $207,000; land improvements appraised at $69,000; and a building appraised at $184,000.

Required:
1. Allocate the total cost among the three purchased assets.
2. Prepare the journal entry to record the purchase.

Allocate the total cost among the three purchased assets. (Round your "Apportioned Cost" answers to 2 decimal places.)

• Record the costs of lump-sum purchase.

Note: Enter debits before credits.

1. what control best prevents the receipt of items in the warehouse that are not ordered?

a. reconciliation of PO's to Receiving report

b. Bar-code scanners

c. receiving should have approved purchase order before receiving inventory\

2. what control prevents paying the same invoice twice?

a. only treasury should do cash disbursements

b. only pay original invoices

c. reconcile vender invoices to vendor payments

3. what control best prevents paying for items ordered, but yet received?

a. all receiving reports should be prenumbered

b. reconcile PO to Receiving report before making payment

c. all PO's should be prenumbered

Shamrock Leasing Company signs a lease agreement on January 1, 2017, to lease electronic equipment to Pharoah Company. The term of the non-cancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement:

1. Pharoah has the option to purchase the equipment for $17,500 upon termination of the lease. It is not reasonably certain that Pharoah will exercise this option.

2. The equipment has a cost of $150,000 and fair value of $199,000 to Shamrock Leasing. The useful economic life is 2 years, with a residual value of $17,500.

3. Shamrock Leasing desires to earn a return of 5% on its investment. 4. Collectibility of the payments by Shamrock Leasing is probable.

Prepare the journal entries on the books of Shamrock Leasing to reflect the payments received under the lease and to recognize income for the years 2017 and 2018.

The following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2021:

Note: Parentheses indicate a credit balance.

On January 1, 2021, Penske acquired all of Stanza’s outstanding stock for $929,000 fair value in cash and common stock. Penske also paid $10,000 in stock issuance costs. At the date of acquisition, copyrights (with a six-year remaining life) have a $616,000 book value but a fair value of $706,000.

1. As of December 31, 2021, what is the consolidated copyrights balance?

2. For the year ending December 31, 2021, what is consolidated net income?

3. As of December 31, 2021, what is the consolidated retained earnings balance?

4. As of December 31, 2021, what is the consolidated balance to be reported for goodwill?

1)         On October 1, 20X1, Kelly Company leased a boat from Grant Company. The lease is noncancelable and requires five equal annual payments of $50,000 each. The lease payments are due each October 1, beginning October 1, 20X1. The boat is recorded on Grant’s books at $207,542, which is equal to its fair value. Grant expects that the boat’s residual value at the end of the lease term will be $10,000, but it is not guaranteed by Kelly. However, Kelly has an option to purchase the boat for $10,000 at the end of the lease term. At the inception of the lease, the boat has a remaining economic life of six years with a $2,500 estimated salvage value at the end of its life. Both firms use the straight-line method of amortization and have December 31 year-ends for financial reporting purposes. The interest rate used by Grant Company to calculate the annual lease payment is 12%, and known by Kelly. Collection of the lease payments is reasonably predictable by Grant.  

Required:

Complete the following table for Grant’s and Kelly’s December 31, 20X1 income statements:

Be sure to show and clearly label all calculations.