“In my opinion, we ought to stop making our own drums and accept that outside supplier’s offer,” said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. “At a price of $21 per drum, we would be paying $4.85 less than it costs us to manufacture the drums in our own plant. Since we use 50,000 drums a year, that would be an annual cost savings of $242,500.” Antilles Refining’s current cost to manufacture one drum is given below (based on 50,000 drums per year):

A decision about whether to make or buy the drums is especially important at this time because the equipment being used to make the drums is completely worn out and must be replaced. The choices facing the company are:

Alternative 1: Rent new equipment and continue to make the drums. The equipment would be rented for $157,500 per year.

Alternative 2: Purchase the drums from an outside supplier at $21 per drum.

The new equipment would be more efficient than the equipment that Antilles Refining has been using and, according to the manufacturer, would reduce direct labor and variable overhead costs by 20%. The old equipment has no resale value. Supervision cost ($52,500 per year) and direct materials cost per drum would not be affected by the new equipment. The new equipment’s capacity would be 105,000 drums per year.

The company’s total general company overhead would be unaffected by this decision.

Required:

1. Assuming that 50,000 drums are needed each year, what is the financial advantage (disadvantage) of buying the drums from an outside supplier?

2. Assuming that 75,000 drums are needed each year, what is the financial advantage (disadvantage) of buying the drums from an outside supplier?

3. Assuming that 105,000 drums are needed each year, what is the financial advantage (disadvantage) of buying the drums from an outside supplier?

On 1/1/2016, XYZ Corporation purchased 75% of the outstanding voting stock of Sally Corporation for $2,400,000 paid in cash.  On the date of the acquisition, Sally’s shareholders’ equity consisted of the following:

Common stock, $10 par                 $1,000,000

APIC                                                   600,000

Retained Earnings                               800,000

Total SE                                         $2,400,000

The excess fair value of the net assets acquired was assigned 10% to undervalued Inventory (sold in 2016), 40% to undervalued PPE assets with a remaining useful life of 8 years, and 50% to Goodwill.

Comparative trial balances of XYZ Corporation and Sally Corporation at December 31, 2020, are as follows:

Required:

Determine the amounts that would appear in the consolidated financial statements of XYZ Corporation and its subsidiary for each of the following items:

1. Goodwill at December 31, 2020. (2 points)
2. Income to Non-controlling interest for 2020. (3 points)
3. Consolidated retained earnings at December 31, 2019. (2 points)
4. Consolidated retained earnings at December 31, 2020. (2 points)
5. Controlling share of consolidated Net Income for 2020. (3 points)
6. Non-controlling interest at December 31, 2020. (3 points)

Question 1

The Kingsmill Furniture Company sells its products, offering 30 days’ credit to its customers. Uncollectible amounts are estimated to be equal to 2% of credit sales. At the end of the year, the allowance for doubtful accounts is adjusted based on an aging of accounts receivable. The company began 2017 with the following balances in its accounts:

Accounts receivable                $305,000

Allowance for doubtful accounts        (25,500)

During 2017, sales on credit were $1,300,000, cash collections from customers were $1,250,000 and actual write-offs of accounts were $25,000. An aging of accounts receivable at the end of 2017 indicates a required allowance of $30,000.

Required:

1. Determine the balances in accounts receivable and allowance for doubtful accounts at the end of 2017.

2. Determine the bad debt expense for 2017.

3. Prepare journal entries to accrue bad debts, write-off the receivables, and the year-end adjusting entry required to adjust the allowance for doubtful accounts to the required allowance of $30,000. Include explanations for each journal entry.

Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month:

The Production Department planned to work 4,200 labor-hours in March; however, it actually worked 4,000 labor-hours during the month. Its actual costs incurred in March are listed below:

Required:

1. Prepare the Production Department’s planning budget for the month.

2. Prepare the Production Department’s flexible budget for the month.

3. Prepare the Production Department’s flexible budget performance report for March, including both the spending and activity variances.

1) Prepare the Production Department’s planning budget for the month.

2) Prepare the Production Department’s flexible budget for the month.

3) Prepare the Production Department’s flexible budget performance report for March, including both the spending and activity variances. (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.)

Presented below is the trial balance of Windsor Corporation at December 31, 2017.

Prepare a balance sheet at December 31, 2017, for Windsor Corporation. (Ignore income taxes). (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Building and Equipment. Enter account name only and do not provide the descriptive information provided in the question.)

In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows:

Westgate recognizes revenue over time according to percentage of completion.

1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.

2021 2022 2023

Revenue ______ _______ ________

Gross P _______ _______ ________

2-a. In the journal below, complete the necessary journal entries for the year 2021 (credit "Various accounts" for construction costs incurred).
2-b. In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred).
2-c. In the journal below, complete the necessary journal entries for the year 2023 (credit "Various accounts" for construction costs incurred).

3. Complete the information required below to prepare a partial balance sheet for 2021 and 2022 showing any items related to the contract.

4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

2021 2022 2023

Revenue ______ _______ ________

Gross P _______ _______ ________

5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

2021 2022 2023

Revenue ______ _______ ________

Gross P _______ _______ ________

Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash $ 139,000 $ 127,000 Accounts receivable 343,000 485,000 Inventory 565,000 485,000 Plant and equipment, net 863,000 853,000 Investment in Buisson, S.A. 395,000 434,000 Land (undeveloped) 253,000 252,000 Total assets $ 2,558,000 $ 2,636,000 Liabilities and Stockholders' Equity Accounts payable $ 378,000 $ 338,000 Long-term debt 967,000 967,000 Stockholders' equity 1,213,000 1,331,000 Total liabilities and stockholders' equity $ 2,558,000 $ 2,636,000 Joel de Paris, Inc. Income Statement Sales $ 4,439,000 Operating expenses 3,861,930 Net operating income 577,070 Interest and taxes: Interest expense $ 114,000 Tax expense 196,000 310,000 Net income $ 267,070 The company paid dividends of $149,070 last year. The “Investment in Buisson, S.A.,” on the balance sheet represents an investment in the stock of another company. The company's minimum required rate of return of 15%. Required: 1. Compute the company's average operating assets for last year. 2. Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.) 3. What was the company’s residual income last year?

You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below.

The company sells many styles of earrings, but all are sold for the same price—$19 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings):

The concentration of sales before and during May is due to Mother’s Day. Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month.

Suppliers are paid $5.50 for a pair of earrings. One-half of a month’s purchases is paid for in the month of purchase; the other half is paid for in the following month. All sales are on credit. Only 20% of a month’s sales are collected in the month of sale. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible.

Monthly operating expenses for the company are given below:

Insurance is paid on an annual basis, in November of each year.

The company plans to purchase $23,500 in new equipment during May and $55,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $26,250 each quarter, payable in the first month of the following quarter.

The company’s balance sheet as of March 31 is given below:

The company maintains a minimum cash balance of $65,000. All borrowing is done at the beginning of a month; any repayments are made at the end of a month.

The company has an agreement with a bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $1,000), while still retaining at least $65,000 in cash.

Required:

Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules:

1. a. A sales budget, by month and in total.

    b. A schedule of expected cash collections, by month and in total.

    c. A merchandise purchases budget in units and in dollars. Show the budget by month and in total.

    d. A schedule of expected cash disbursements for merchandise purchases, by month and in total.

2. A cash budget. Show the budget by month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $65,000.

3. A budgeted income statement for the three-month period ending June 30. Use the contribution approach.

4. A budgeted balance sheet as of June 30.

Contribution Margin

Harry Company sells 35,000 units at $26 per unit. Variable costs are $17.42 per unit, and fixed costs are $126,100.

Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations.

1. Choose a country that has adopted IFRSs (i.e. global accounting standards) for at least 3 or more years, as revealed in the accounting literature, and discuss the following: I. In what year did the country adopt IFRSs? II. Were the IFRSs introduced all together (at once), or gradually into the local accounting standards of your chosen country? Explain the possible reason. III. Discuss the benefits and challenges reported in the literature about the adoption of IFRSs in your chosen country.

2. Below is operating information of Weber Light Aircraft, a company that produces light recreational aircraft.

a. Compute the unit product cost using variable costing method.

b. Prepare an income statement for January, February and March using variable costing method.

c. Compute the unit product cost using absorption costing method.

d. Prepare an income statement for January, February and March using absorption costing method

e. Explain why both variable and absorption costing generate same income in a particular month, whereas in another month they generate different incomes.

You were asked to investigate extreme high, unexplained merchandise shortages at a department store chain. You found the following:

1. The receiving department supervisor owns and operates a boutique carrying many of the same labels as the chain store. The general manager is unaware of the ownership interest.
2. The receiving supervisor signs receiving reports showing that the total quantity shipped by a supplier was received and then diverts 5% to 10 % of each shipment to the boutique.
3. The store is unaware of the short shipments because the receiving report accompanying the merchandise to the sales areas shows that everything was received.
4. Accounts Payable paid vendors for the total quantity shown on the receiving report.
5. Based on the receiving department supervisor’s instructions, quantities on the receiving reports were not counted by sales personnel.

Required:

Classify each of the five situations as a fraudulent act, a fraud symptom, an internal control weakness, or an event unrelated to the investigation. Justify your answers. (CIA Examination, adapted)

The manufacturing overhead costs are applied to products on the basis of machine time. Unfortunately, due to system glitch, several numbers and labels have been omitted from the analysis of fixed overhead below. Supply the missing numbers and labels to help out:

1) Assume 6 minutes of machine time is standard per unit of production. How many units were actually produced in this situation?

Provide an example of how your organization uses managerial accounting. Discuss why this application of managerial accounting contributes the organization's success

Hello, so for a project in management accounting we were assigned a fake kayak selling/renting company that opporates in new england. The project gave us 1,000 to invest in expansion and the locations we chose are newburyport MA, new London County CT, Pawtucket RI, and South Portland ME. We decided to invest the million on propertys in these locations however our professor wants us to calculate the ROI on these investments somehow with only using internet sources so I don;t actually know how to do that.

Please tell me what the potential revenue could be and the ROI based on data about kayak sales found anywhere on the internet. Thank you.