Carr Company has the following ledger accounts and adjusted balances as of December 31, 2019. All accounts have normal balances. Carr’s income tax rate is 20%. Carr has 300,000 shares of Common Stock authorized, 100,000 shares of Common Stock issued, and 95,000 shares of Common Stock outstanding.

         Accounts Payable…………………………….   58,500

         Accounts Receivable………………………… 405,000

         Accumulated Depreciation-Building………… 112,500

         Accumulated Depreciation-Equipment………. 90,000

         Administrative Expenses…………………….    90,000

         Allowance for Doubtful Accounts……………   45,000

         Bonds Payable……………………………….. 400,000

         Building……………………………………..1,125,000

         Cash………………………………………….   58,500

         Common Stock……………………………… 600,000

         Cost of Goods Sold…………………………. 855,000

         Discount on Bonds Payable…………………    10,000

         Dividends……………………………………   30,000

         Equipment…………………………………… 435,000

         Income from Operations of Division X……..    90,000

         (Division X is a component of Carr Company)

         Interest Revenue……………………………..   60,000

         Inventory……………………………………...630,000

         Land (held for future use)...…………………. 450,000

         Land (used for building)…………………….. 247,500

         Loss from Sale of Division X...........................180,000

         (Division X is a component of Carr Company)

         Loss on Sale of Investments.……………….. .. 22,500

         Mortgage Payable …………..………………. 562,500*

         Paid-In Capital in Excess of Par……………...396,000

         Prepaid Rent…………………………………. 22,500**

         Retained Earnings, January 1, 2019………… 562,500

         Sales Discounts………………………………. 45,000

         Sales Returns and Allowances……………….. 75,000

         Sales Revenue……………………………...2,302,500

         Selling Expenses……………………………. 292,500

         Trademark…………………………………… 67,500

         Treasury Stock………………………………. 60,000

*$40,000 of the principal comes due in 2019.

**Two years rent on offsite document storage paid in advance.

Instructions:

Use this information to prepare a multiple-step income statement, a retained earnings statement, and a classified balance sheet.

The following are transactions of Samantha Payapag Advertising Company for the month of July 2013

Prepare Journal Entries, Ledger, T- Accounts, Trial Balance, Income Statement, and Balance Sheet

July 3 Samantha Payapag invested 500,000 in the business.

July 5 Bought for cash, advertising supplies costing 80,000. Paid rental of the office, 7,300

July 9 Bought delivery truck from MJ Idos Trading, 350,000 on credit

July 12 Received 43,000 cash as advertising income

July 13 Bought furniture & fixtures, 32,000 in cash

July 17 Took 3,200 cash for personal purposes

July 18 Billed Bernalyn Galvez for the advertising service rendered to promote her product to the market, 10,000

July 23 Paid salaries of the employees, 15,000. Billed Zaldy Co. for the advertising service rendered, 4,000

July 24 Collected 1/2 of the amount Bernalyn Galvez owed to the company

July 26 Purchased another truck amounting to 120,000 from Edwina Motor, Inc. on credit

July 27 Paid MJ Idos Trading 230,000 as partial settlement of the account

July 30 Paid utility expense for the month

Cash Budget

The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:

The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $9,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.

Current assets as of September 1 include cash of $35,000, marketable securities of $49,000, and accounts receivable of $101,900 ($80,000 from July sales and $21,900 from August sales). Sales on account for July and August were $73,000 and $80,000, respectively. Current liabilities as of September 1 include $9,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $14,000 will be made in October. Bridgeport’s regular quarterly dividend of $9,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of $34,000.

Required:

1. Prepare a monthly cash budget and supporting schedules for September, October, and November. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign. Assume 360 days per year for interest calculations.

2. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?

The budget indicates that the minimum cash balance   be maintained in November. This situation can be corrected by   and/or by the   of the marketable securities, if they are held for such purposes. At the end of September and October, the cash balance will   the minimum desired balance.

Charles deposited $12,000 in the bank. He withdrew $5000 from his account after one year. If he receives a total amount of $9340 after 3 years, find the rate of simple interest.

The stockholders’ equity section of Stellar Inc. at the beginning of the current year appears below. Common stock, $10 par value, authorized 1,043,000 shares, 321,000 shares issued and outstanding $3,210,000 Paid-in capital in excess of par—common stock 562,000 Retained earnings 624,000 During the current year, the following transactions occurred.

1. The company issued to the stockholders 109,000 rights. Ten rights are needed to buy one share of stock at $30. The rights were void after 30 days. The market price of the stock at this time was $32 per share.

2. The company sold to the public a $204,000, 10% bond issue at 104. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common stock at $28 per share. Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $8.

3. All but 5,450 of the rights issued in (1) were exercised in 30 days.

4. At the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good standing.

5. During the current year, the company granted stock options for 10,800 shares of common stock to company executives. The company, using a fair value option-pricing model, determines that each option is worth $10. The option price is $28. The options were to expire at year-end and were considered compensation for the current year.

6. All but 1,080 shares related to the stock-option plan were exercised by year-end. The expiration resulted because one of the executives failed to fulfill an obligation related to the employment contract.

Prepare general journal entries for the current year to record the transactions listed above.

Why might some organizations push employees to behave in a dishonest or corrupt manner? Are there personal benefits to corruption that organizational culture can counteract?

Drs. Glenn Feltham and David Ambrose began operations of their physical therapy clinic, called Northland Physical Therapy, on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, was as follows (the amounts are rounded to thousands of dollars to simplify):

Transactions during 2018 (summarized in thousands of dollars) follow:

1. Borrowed $27 cash on July 1, 2018, signing a six-month note payable.
2. Purchased equipment for $30 cash on July 2, 2018.
3. Issued additional shares of common stock for $4 on July 3.
4. Purchased software on July 4, $4 cash.
5. Purchased supplies on July 5 on account for future use, $6.
6. Recorded revenues on December 6 of $62, including $10 on credit and $52 received in cash.
7. Recognized salaries and wages expense on December 7 of $35; paid in cash.
8. Collected accounts receivable on December 8, $7.
9. Paid accounts payable on December 9, $8.
10. Received a $4 cash deposit on December 10 from a hospital for a contract to start January 5, 2019.

Data for adjusting journal entries on December 31:

11. Amortization for 2018, $1.
12. Supplies of $4 were counted on December 31, 2018.
13. Depreciation for 2018, $2.
14. Accrued interest of $1 on notes payable.
15. Salaries and wages incurred but not yet paid or recorded, $2.
16. Income tax expense for 2018 was $5 and will be paid in 2019.

8. Post the closing entry from requirement 7 and prepare a post-closing trial balance.

Single Plantwide Factory Overhead Rate

Salty Sensations Snacks Company manufactures three types of snack foods: tortilla chips, potato chips, and pretzels. The company has budgeted the following costs for the upcoming period:

Factory overhead is allocated to the three products on the basis of processing hours. The products had the following production budget and processing hours per case:

If required, round all per-case answers to the nearest cent.

a. Determine the single plantwide factory overhead rate.
$ per processing hour

b. Use the factory overhead rate in (a) to determine the amount of total and per-case factory overhead allocated to each of the three products under generally accepted accounting principles.

It is preferable for shareholders to own preference shares instead of ordinary shares.

On February 1, 2018, Strauss-Lombardi issued 8% bonds, dated February 1, with a face amount of $630,000. The bonds sold for $572,036 and mature on January 31, 2038 (20 years). The market yield for bonds of similar risk and maturity was 9%. Interest is paid semiannually on July 31 and January 31. Strauss-Lombardi’s fiscal year ends December 31.

Required:
1. to 4. Prepare the journal entry to record their issuance by Strauss-Lombardi on February 1, 2018, interest on July 31, 2018 (at the effective rate), adjusting entry to accrue interest on December 31, 2018 and interest on January 31, 2019. (Do not round your intermediate calculations and round your final answers to nearest whole dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Factor Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $540,000 cost with an expected four-year life and a $26,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional information includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round PV factor value to 4 decimal places.)

Required:
1. Compute straight-line depreciation for each year of this new machine’s life.
2. Determine expected net income and net cash flow for each year of this machine’s life.
3. Compute this machine’s payback period, assuming that cash flows occur evenly throughout each year.
4. Compute this machine’s accounting rate of return, assuming that income is earned evenly throughout each year.
5. Compute the net present value for this machine using a discount rate of 6% and assuming that cash flows occur at each year-end. (Hint: Salvage value is a cash inflow at the end of the asset’s life.)

1. Aquella Company produces towels for hotels. The following standards to produce a large towel have been established:

During the year, 72 000 kilograms of material were purchased and used for manufacturing 30 000 large towels, with the following actual prime costs:

Required:

i. Compute the material and labor price and efficiency variances. Indicate if the variance is favorable (F) or unfavorable (U).

2. Prepare the journal entry for the purchase of raw materials.
3. Prepare the journal entry for the issuance of raw materials.
4. Prepare the journal entry for the closing of material variances to Cost of Goods Sold.

Is the issue of airbus discovering discrepancies in its disclosures about middlemen used to win commercial export deals, have to do with accounting? If so can someone please explain how?

ABC Company manufactures and sells a single product. The following information is available concerning the operations for 1999.

a. The company's single product sells for $60 per unit. Budgeted sales in units for the next four quarters are:

1999   Quarter 1       3,000 Budgeted sales in units

1999   Quarter 2       3,500 Budgeted sales in units

1999   Quarter 3       4,000 Budgeted sales in units

1999   Quarter 4       4,500 Budgeted sales in units

2000   Quarter 1       5,000 Budgeted sales in units

b. Sales are collected in the following pattern: 80% in the quarter in which the sale is made, 19% in the following quarter. On January 1, 1999, the company's balance sheet showed $60,000 in account receivables, all of which will be collected in the first quarter of the year 1999. Bad debts are projected at 1% of quarterly sales. There is a -0- balance in the AFDA account.

c. The company requires an ending inventory of finished units on hand at the end of each quarter equal to 20% of the budgeted sales for the next quarter. This requirement was met on December 31, 19x8.  (The company had 600 units on hand to start the new-year).

d. Two pounds (2lbs) of raw materials are required to complete one unit of product. The company requires an ending inventory of raw materials on hand at the end of each quarter equal to 10% of the production needs of the following quarter. This requirement was met on December 31, 19x8.  (The company had 620 lbs of raw materials on hand to start the new-year). Quarter 1 of the next year (year 2000) is estimated at 10,200 lbs needed for production.

e. The raw material costs $4.00 per pound. Purchases of raw material are paid for in the following pattern: 50% paid in the quarter in which the purchase was made, and the remaining 50% is paid in the following quarter. On January 1, 1999, the company's balance sheet showed $10,600 in accounts payable for raw material purchases.  All of which will be paid for in the first quarter of the year 1999.

f. Manufacturing overhead and selling & administrative expenses are paid in the quarter incurred.  The only exception is depreciation.

g. The manufacturing overhead budget distinguishes between variable and fixed overhead costs. Variable costs fluctuate with production volume on the basis of the following rates per direct labor hour: indirect materials $1.00, indirect labor $1.40, utilities $0.40, and maintenance $0.20. Fixed costs per quarter are: Supervisory Salaries $20,000, Depreciation $3,800, Property Taxes & Insurance $9,000 and Maintenance $5,700. Overhead is applied to production on the basis of direct labor hours. The annual rate is $8 per hour. (Hint: Total Manufacturing Overhead for 1999 $246,400 / Direct Labor hours 30,800 hours = $8/direct labor hour).

h. Selling & administrative expense budget distinguishes between variable and fixed overhead costs.  Variable costs are Sales Commissions of $3.00 and Freight-Out $1.00. Variable expenses per quarter are based on the unit sales projected in the sales budget. Fixed costs, per quarter, are:  Advertising $5,000, Sales Salaries $15,000, Office Salaries $7,500 Depreciation $1,000 and Property Taxes & Insurance $1,500.

i. January 1, 1999, cash balance is expected to be $38,000.

j. Marketable securities are expected to be sold for $2,000 cash in the first quarter.

k. 2 hours of direct labor are required to produce each unit of finished goods and the anticipated hourly wage rate is $10. Direct Labor is paid 100% in the quarter incurred.

l. Management plans to purchase new factory equipment in the second quarter for $50,000.

m. Management plans to purchase new office computers in the third quarter for $12,000.

n. Assume depreciation on new purchases is accounted for quarterly budgeted depreciation amounts.

o. Management plans to sell old equipment at the end of the fourth quarter for $3,000. Purchase price is $20,000, on January 1, 1996. Depreciation is calculated using the straight-line method, useful life estimated at five years, with no residual value.

p. The company makes equal quarterly payments of its estimated annual income taxes in the amount of $3,000 per quarter.

q. Loans are repaid in the first subsequent quarter in which there is sufficient cash (incurring 8% interest if funds are borrowed.)

r. A minimum cash balance of $20,000 is maintained per quarter.

s. Budgeted balance sheet information as of December 31, 1998 were: Building & Equipment $ 182,000, Common Stock $ 225,000, Accumulated Depreciation$ 28,800 and Retained Earnings of $ 46,480.

Requirements:

You must follow the posted lecture on Budgets that I authored.

UsingExceland the information above, prepare the following budgets and schedules for the year 1999, showing both quarterly and the year total figures:
1. Sales budget & schedule of cash collections from customers
2. Production budget
3. Direct materials budget & schedule of expected payments for direct materials
4. Direct labor budget
5. Manufacturing overhead budget
6. Selling & administrative expense budget
7. Cash budget
In addition, complete the following:

A. Finished goods inventory budget (Schedule)
B. Budgeted income statement (Budgeted financial statement)
C. Budgeted balance sheet (Budgeted financial statement)

The Little Theatre is a nonprofit organization devoted to staging plays for children. The theatre has a very small full-time professional administrative staff. Through a special arrangement with the actors’ union, actors and directors rehearse without pay and are paid only for actual performances.

The costs from the current year’s planning budget appear below. The Little Theatre had tentatively planned to put on five different productions with a total of 60 performances. For example, one of the productions was Peter Rabbit, which had a six-week run with three performances on each weekend.

Some of the costs vary with the number of productions, some with the number of performances, and some are fixed and depend on neither the number of productions nor the number of performances. The costs of scenery, costumes, props, and publicity vary with the number of productions. It doesn’t make any difference how many times Peter Rabbit is performed, the cost of the scenery is the same. Likewise, the cost of publicizing a play with posters and radio commercials is the same whether there are 10, 20, or 30 performances of the play. On the other hand, the wages of the actors, directors, stagehands, ticket booth personnel, and ushers vary with the number of performances. The greater the number of performances, the higher the wage costs will be. Similarly, the costs of renting the hall and printing the programs will vary with the number of performances. Administrative expenses are more difficult to pin down, but the best estimate is that approximately 75% of the budgeted costs are fixed, 15% depend on the number of productions staged, and the remaining 10% depend on the number of performances.

After the beginning of the year, the board of directors of the theatre authorized expanding the theatre’s program to four productions and a total of 64 performances. Not surprisingly, actual costs were considerably higher than the costs from the planning budget. (Grants from donors and ticket sales were also correspondingly higher, but are not shown here.) Data concerning the actual costs appear below:

Required:

1. Complete the flexible budget for The Little Theatre based on the actual activity of the year.

2. Complete the flexible budget performance report for the year that shows both activity variances and spending 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.)