You must label each answer with the number of question. Each question must have at least three sentence answers. There is no maximum sentence, use as many as you wish to thoroughly answer the question. All answers must be complete sentences using proper grammar and spelling.

Assume you are opening a furniture store. You have some decisions about how to do the accounting for the business.

1. Which type of inventory system will you use? Explain your reasons.

   • specific, LIFO, FIFO, or weighted average?

   • perpetual or periodic?

2. How often do you plan to do a physical count of inventory on hand? Explain your reason.

3. Inventory costs are rising. Which inventory costing method would have the effect of maximizing net income?

4. Inventory costs are rising. Which inventory costing method would have the effect of minimizing the amount of income tax?

5. What do you think will be the biggest accounting issues you will encounter with running your business?

Gabriela and Johnny are married and filed a joint tax return. They had the following items for 2018:

Gabriela's car was completely destroyed in a hurricane, which had been declared a federal disaster area. At the time of the hurricane, the car had a fair market value of $30,000 and an adjusted basis of $40,000. She used the car 100% of the time for personal use. She received an insurance recovery of $25,000.

1. Provide a detailed calculation of the couple's AGI.

Your Answer must:

(a) explain the rule for § 1244 small business stock and how it applies to the facts;

(b) show a detailed netting capital item;

(c) explains the rule for worthless stock;

(d) explains the rule for the tax treatment of nonbusiness bad debts.

2.(a) What is the rule for calculating the amount of the casualty loss?

(b) Apply the rule to the facts and show a detailed calculation of the loss.

(c) Which schedule does the casualty loss total appear on?

Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands (000's)):

The subsidiary acquired the inventory on August 1, 2016, and the land and building in 2010. It issued the common stock in 2008. During 2017, the following transactions took place:

The U.S dollar ($) exchange rates for 1 NGN are as follows:

1. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2017?

2. Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2017?

The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer and then sold the cars after three years of use. The company’s present fleet of cars is three years old and will be sold very shortly. To provide a replacement fleet, the company is considering two alternatives:

At the end of three years, the fleet could be sold for one-half of the original purchase price.

Riteway Ad Agency’s required rate of return is 17%.

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables.

Required:    

1. What is the net present value of the cash flows associated with the purchase alternative?

2. What is the net present value of the cash flows associated with the lease alternative?

3. Which alternative should the company accept?

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the delivery cycle time for each month.

1-c. Compute the manufacturing cycle efficiency (MCE) for each month.

2. Evaluate the company’s performance over the last four months.

3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

For its three investment centers, Gerrard Company accumulates the following data:

I II III

Sales $1,920,000 $4,013,000 $4,033,000

Controllable margin 833,510 2,486,510 4,083,400

Average operating assets 4,903,000 8,021,000 12,010,000

The centers expect the following changes in the next year: (I) increase sales 14%; (II) decrease controllable fixed costs $404,000; (III) decrease average operating assets $534,000.

Compute the expected return on investment (ROI) for each center. Assume center has a contribution margin percentage of 74%. (Round ROI to 1 decimal place, e.g. 1.5.)

Net Present Value

For discount factors use Exhibit 12B-1 and Exhibit 12B-2.

Talmage Inc. has just completed development of a new printer. The new product is expected to produce annual revenues of $2,700,000. Producing the printer requires an investment in new equipment costing $2,880,000. The printer has a projected life cycle of 5 years. After 5 years, the equipment can be sold for $360,000. Working capital is also expected to decrease by $360,000, which Talmage will recover by the end of the new product’s life cycle. Annual cash operating expenses are estimated at $1,620,000. The required rate of return is 8%.

Required:

1. Prepare a schedule of the projected annual cash flows.

2. Calculate the NPV using only discount factors from Exhibit 12B.1
$

3. Calculate the NPV using discount factors from both Exhibits 12B.1 and 12B.2
$

Weighted Average Method, Separate Materials Cost Janbo Company produces a variety of stationery products. One product, sealing wax sticks, passes through two processes: blending and molding. The weighted average method is used to account for the costs of production. After blending, the resulting product is sent to the molding department, where it is poured into molds and cooled. The following information relates to the blending process for August: a. Work in Process on August 1, had 30,000 pounds, 20% complete. Costs associated with partially completed units were: Materials $220,000 Direct labor 30,000 Overhead applied 20,000 b. Work in Process on August 31, had 50,000 pounds, 40% complete. c. Units completed and transferred out totaled 480,000 pounds. Costs added during the month were (all inputs are added uniformly): Materials $5,800,000 Direct labor 4,250,000 Overhead applied 1,292,500 Required: 1a. Prepare a physical flow schedule. Janbo Company Physical Flow Schedule Units to account for: Units in beginning work in process Units started Total units to account for Units accounted for: Units completed From ending work in process Total units accounted for 1b. Prepare an equivalent unit schedule. Janbo Company Schedule of equivalent units Weighted Average Method Units completed Units in ending work in process Total equivalent units 2. Calculate the unit cost. Round unit cost value to three decimal places. $ 3. Compute the cost of EWIP and the cost of goods transferred out. Ending work in process $ Goods transferred out $ 4. Prepare a cost reconciliation. Janbo Company Cost Reconciliation Costs to account for: Beginning WIP $ August costs Total to account for $ Costs accounted for: Transferred out $ Ending WIP Total costs accounted for $ 5. Suppose that the materials added uniformly in blending are paraffin and pigment and that the manager of the company wants to know how much each of these materials costs per equivalent unit produced. The costs of the materials in BWIP are as follows: Paraffin $120,000 Pigment 100,000 The costs of the materials added during the month are also given: Paraffin $3,250,000 Pigment 2,550,000 Prepare an equivalent unit schedule with cost categories for each material. Paraffin Pigment Units completed Units in ending WIP Total equivalent units Unit cost computation: Costs in BWIP $ $ Costs added Total costs $ $ Calculate the cost per unit for each type of material. Round your answers to the nearest cent. Unit paraffin cost $per unit Unit pigment cost $per unit

compute two different unit cost for each of the cable division products. What managerial objectives are being served

600 metric tonne of raw material, costing RM430,032, were input to a process in a period. Conversion costs totalled RM119,328. Losses, in the form of reject product, are normally 12% of input. Reject product is sold for RM260·00 per metric tonne. 521 metric tonne of finished product passed inspection in the period. The remaining output was sold as reject product. There was no work-in-progress either at the beginning or the end of the period. Required: For the period:

(a) Calculate the cost per unit of normal output. [10 marks]

(b) Prepare the process account, including any abnormal losses/gains. [10 marks]

(c) Explain how the cost of the previous accounting period’s equivalent units is assigned into the work-in-process inventory using the First-In, First-Out [FIFO] process-costing method. [6 marks]

(d) Briefly state a distinctive feature of the FIFO process-costing method when dealing with work done on opening inventory. [4 marks]

Rental receipts for the period July 1, 2013, through June 30, 2014, were collected on June 30, 2013. The effects of these economic events on the 2013 financial statements for unearned revenue and rent revenue are ?

ROI can be compared with the rate of return on opportunities elsewhere, inside or outside the company” Discuss the statement. Similarly, compare and Contrast different methods of Financial Performance Measurement”.

Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.)

Required:

a. Assume that only one product is being sold in each of the four following case situations:

b. Assume that more than one product is being sold in each of the four following case situations:

(For all requirements, Loss amounts should be indicated by a minus sign.)

Complete this question by entering your answers in the tabs below.

• Required A
• Required B

Assume that only one product is being sold in each of the four following case situations:

Windsor Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Windsor and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2021, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $34,970 notes, which are due on June 30, 2021, and September 30, 2021. Another note of $5,970 is due on March 31, 2022, but he expects no difficulty in paying this note on its due date. Brown explained that Windsor’s cash flow problems are due primarily to the company’s desire to finance a $300,080 plant expansion over the next 2 fiscal years through internally generated funds.

The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years.

(a)

Compute the following items for Windsor Corporation. (Round answers to 2 decimal places, e.g. 2.25 or 2.25%.)

Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below:

Required:

1. What is the overall contribution margin (CM) ratio for the company?

2. What is the company's overall break-even point in dollar sales?

3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products.