Turner, Roth, and Lowe are partners who share income and loss in a 2:3:5 ratio (in percents: Turner, 20%; Roth, 30%; and Lowe, 50%). The partners decide to liquidate the partnership. Immediately before liquidation, the partnership balance sheet shows total assets, $133,200; total liabilities, $84,000; Turner, Capital, $3,100; Roth, Capital, $14,300; and Lowe, Capital, $31,800. Cash received from selling the assets was sufficient to repay all but $31,000 to the creditors. Required: a. Calculate the loss from selling the assets. b. Allocate the loss from part a to the partners. c. Determine how much each partner should contribute to the partnership to cover any remaining capital deficiency.

Sales price P15 per unit

Variable costs:

SG&A P2 per unit

Production P4 per unit

Fixed costs (total cost incurred for the

year):

SG&A P14,000

Production P20,000

During the first year, Sherrill Corporation manufactured 5,000 units and sold 3,800. There was no beginning or ending work-in-process inventory.

1. How much income before income taxes would be reported if Stanley uses absorption costing?

2. How much income before income taxes would be reported if variable costing was used?

3. Show why the two costing methods give different income amounts

4. Bonds Issued between Interest Dates

D Company planned on Issuing bonds $2000,000 on January 1, 2018 but due to slowdowns

the bonds were not sold until April 1, 2018. These 8 year bonds pay 6% interest annually

each December 31st and were sold to yield 5.5%.

Prepare and amortization table for these bonds and the entry to record their issuance and the

first payment on December 31, 2018.

internal Control of Cash Payments Abbe Co. is a small merchandising company with a manual accounting system. An investigation revealed that in spite of a sufficient bank balance, a significant amount of available cash discounts had been lost because of failure to make timely payments. In addition, it was discovered that the invoices for several purchases had been paid twice. Indicate whether the procedures listed below for the payment of vendors' invoices would reduce the possibility of losing available cash discounts and of paying an invoice a second time.

True/false

1- The fair market value of property or services received in bartering must be included in gross income.

2- Mr. Barley an accountant, accepted a painting for his office from his client in lieu of payment of his customary fee of $400 for preparation of a tax return. He must include the $400 income.

3- An ordinary expenditure is one which is commonly incurred by other businesses.

4- Rent and royalty expenses are deductible from adjusted gross income.

5- Federal income taxes paid by a taxpayer in connection with her business are not deductible in computing the business federal taxable income.

6- A necessary expense is one that is appropriate to helpful to the continuation of the taxpayer' business; ordinary refers to an expense that is customary and acceptable in the taxpayer's type of business.

7- If debt becomes worthless, the amount allowed as bad deduction is the adjusted basis of the debt.

8- Independent contractor is self-employed individuals who perform services for another individual or business entity and are considered employees of the persons or business that hire them.

9- The portion of an employee's salary deemed ''unreasonable'' may be considered a dividend distribution to an employee that is also a shareholder of the corporation.

10- taxpayers cannot deduct the costs of tickets to any entertainment actively or facility whether or not the taxpayer's attendance at the activity is related to business.

Define knowledge management and how it has evolved.

1. Evaluating IMPACT (Level 5 – Evaluating)

As patients continue their recovery, post-acute care (PAC) safely transitions them out of the acute-care hospital. There are four PAC settings: skilled nursing facilities (SNF), long-term care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), home health agencies (HHAs).

Patients in these settings have similar conditions, such as strokes and hip replacements. However, Medicare pays different prices depending upon the setting (Medicare Payment Advisory Commission 2014, 171). For a patient’s continued recovery and optimal outcome, does the choice of PAC setting matter? Two sets of researchers investigated this question. One set investigated the functional recovery for patients who had had a stroke (Chan et al. 2013).   Another set investigated the functional recovery for patients who had had a hip fracture repaired (Mallinson et al. 2014).

Chan and colleagues performed a long-term study on 222 patients who had had a stroke. The patients had received care from four different acute care hospitals in one integrated delivery system (IDS). The patients also received their postacute care from settings in the IDS. The IDS offered three types of PAC settings: SNF, IRF, and HHA. In addition, patients could receive out-patient care in the IDS. The researchers used a standardized instrument, the Activity Measure for Post Acute Care (AM-PAC), to determine the patients’ functional status. The researchers scored the patients functional status twice: first immediately upon discharge from the acute care hospital and second six months after discharge and after receiving postacute care. The researchers’ results showed:

• Patients who received their postacute care in an IRF had at least eight-point higher improvements in mobility, self-care, and cognition, than patients who received their postacute care in a SNF.
• Patients who received their postacute care in an IRF also had statistically significant improvements in Applied Cognition compared to those patients who only received home health combined with outpatient services.

Chan and colleagues concluded that “patients with a stroke may make more functional gains if they receive some of their postacute care in an IRF compared to other sites” (Chan et al. 2013, 629). Deutsch’s commentary on the research of Chan and colleagues noted that comparing outcomes across postacute care is difficult because the PAC sites use different data sets (2013, 631-632).

            Mallinson and colleagues investigated the outcomes of patients after hip fracture repair. Facilities from three types of PAC settings participated in the research. Eventually, the researchers reviewed the care of 181 patients at 18 PAC providers. These PAC providers were four IRFs, six SNFs, and eight HHAs. After being trained on the data collection instrument, nurses at each site collected data using the IF functional independence measure (FIM). The researchers’ results showed, controlling for patients’ characteristics, severity, comorbidities, and services:

• IRF and HHA patients had lower self-care function at discharge relative to SNF patients
• HHA patients had, on average, a two-week longer length of stay than SNF patients
• SNF patients had, on average, a nine-day longer length of stay and IRF patients

Mallinson and colleagues concluded that outcomes varied among settings “depending upon whether self-care or mobility was the outcome of focus” (Mallinson et al. 2014, 209).

DeJong’s commentary on the research of Mallinson and colleagues noted that the absence of a common PAC patient assessment instrument requires workarounds (2014). Researchers can use a site-neutral instrument, such as the AM-PAC or they can use an existing PAC-site-specific instrument. Both workarounds require training on the instrument for all or some of the data collectors and require special data collection outside of routine procedures.

Questions

1.  List the data collection instrument for PAC settings discussed in the case

2.   What PAC setting is missing from the previously described research investigations? What is that setting’s data collection instrument?

3.   Both Deutsch and DeJong note problems caused by the lack of a common data set across PAC settings. How has Congress addressed this problem?

4.   Workarounds require special training and special data collection outside routine procedures. Why are these workarounds a problem for researchers? Does Congress’ solution address this problem?

5.   How could you or your family benefit from a common data collection instrument across PAC settings?

Debate It"  Please respond to the following:

• Absorption costing and other methods make it possible to manipulate operating income raising some serious ethical concerns. Construct an argument either for or against the use of absorption costing (or similar methods) in terms of its ethical ramifications.

The balances in the accounts of Maybe Ltd at 30 June 2019 and 30 June 2020 are:

Other information:

Share capital is increased by the bonus issue of 24 000 shares for $1.00 each out of retained earnings. Plant is acquired during the period at a cost of $36 000, while plant with a carrying amount of $nil (cost of $24 000, accumulated depreciation of $24 000) is scrapped.

Required:

a)      Reconstruct the allowance for doubtful debts and accounts receivable.

b)      Reconstruct inventory and accounts payable

c)      Reconstruct accrued salaries

d)      Reconstruct property, plant and equipment and accumulated depreciation

e) Present a statement of cash flow for Maybe Ltd for the year ended 30 june 2020

The following balance sheet is for a local partnership in which the partners have become very unhappy with each other. Cash $ 51,000 Liabilities $ 41,000 Land 185,000 Adams, capital 118,000 Building 175,000 Baker, capital 42,000 Carvil, capital 82,000 Dobbs, capital 128,000 Total assets $ 411,000 Total liabilities and capital $ 411,000 To avoid more conflict, the partners have decided to cease operations and sell all assets. Using this information, answer the following questions. Each question should be viewed as an independent situation related to the partnership’s liquidation. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 2:3:3:2 basis, respectively, how will the $10,000 be divided? The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated on a 2:2:3:3 basis, respectively, how will the $10,000 be divided? The building is immediately sold for $96,000 to give total cash of $147,000. The liabilities are then paid, leaving a cash balance of $106,000. This cash is to be distributed to the partners. How much of this money will each partner receive if profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:3:3 basis, respectively? (Do not round intermediate calculations.) Assume that profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:4:2 basis, respectively. How much money must the firm receive from selling the land and building to ensure that Carvil receives a portion?

Alberta Gauge Company, Ltd., a small manufacturing company in Calgary, Alberta, manufactures three types of electrical gauges used in a variety of machinery. For many years the company has been profitable and has operated at capacity. However, in the last two years, prices on all gauges were reduced and selling expenses increased to meet competition and keep the plant operating at capacity. Second-quarter results for the current year, which follow, typify recent experience.

Alice Carlo, the company’s president, is concerned about the results of the pricing, selling, and production prices. After reviewing the second-quarter results, she asked her management staff to consider the following three suggestions:

• Discontinue the R-gauge line immediately. R-gauges would not be returned to the product line unless the problems with the gauge can be identified and resolved.
• Increase quarterly sales promotion by $420,000 on the Q-gauge product line in order to increase sales volume by 15 percent.
• Cut production on the E-gauge line by 50 percent, and cut the traceable advertising and promotion for this line to $120,000 each quarter.

Jason Sperry, the controller, suggested a more careful study of the financial relationships to determine the possible effects on the company’s operating results of the president’s proposed course of action. The president agreed and assigned JoAnn Brower, the assistant controller, to prepare an analysis. Brower has gathered the following information.

• All three gauges are manufactured with common equipment and facilities.
• The selling and administrative expense is allocated to the three gauge lines based on average sales volume over the past three years.
• Special selling expenses (primarily advertising, promotion, and shipping) are incurred for each gauge as follows:

• The unit manufacturing costs for the three products are as follows:

• The unit sales prices for the three products are as follows:

• The company is manufacturing at capacity and is selling all the gauges it produces.

Required:

1. 2. Use the operating data presented for Alberta Gauge Company and assume that the president’s proposed course of action had been implemented at the beginning of the second quarter.

2. a. Calculate the net impact on income before taxes for each of the three suggestions.

3. b-1. Calculate contribution margin for R-gauge

4. b-2. Was the president correct in proposing that the R-gauge line be eliminated?

5. c-1. Calculate the contribution per direct-labor dollar for Q-gauge and E-gauge.

6. c-2. Was the president correct in promoting the Q-gauge line rather than the E-gauge line?

Your dog, Peyton, has severe allergies and cannot have the usual store-bought dog treats. You have been making homemade treats for him that are allnatural and hypoallergenic. Over the past year, you have been making and selling these treats out of your home, and you have been quite successful. You now have an opportunity to open your own dog treat bakery. You have decided on a corporate form of business and have named your company “Peyton Approved.” To complete Milestone One, use accepted accounting principles to follow and record your business transactions for a three-month period. You will find the provided data for your workbook in the appendix at the end of this document. The data have been separated from the prompt so that you can more easily view the full scope of the assignment. Links have been provided to help you locate the information you need as you move through each step. Specifically, the following critical elements must be addressed: I. Record financial data that accurately captures business transactions according to accepted accounting principles. A. Step One: Complete the “July Journal Entries” tab in your workbook using the Step One data in the appendix. B. Step Two: Complete the “August Journal Entries” tab in your workbook using the Step Two data in the appendix. C. Step Three: Complete the “September Journal Entries” tab in your workbook using the Step Three data and updated scenario information in the appendix. Note that there was an additional line of products added this month, so you must first complete the “Inventory Valuation” tab in your workbook and then copy the journal entries from the inventory evaluation page into your journal for this month to ensure the impact of merchandising is reflected in your reporting.The following events occur in July, 2018: July 1: You take $10,000 from your personal savings account and buy common stock in Peyton Approved. July 1: Purchase $6,500 in baking supplies from vendor, on account. July 3: Your parents lend the company $10,000 cash in exchange for a two-year, 6% note payable. Interest and the principal are repayable at maturity. July 7: Enter into a lease agreement for bakery space. The agreement is for 1 year. The rent is $1,500 per month, and the last month’s rent payment of $1,500 is required at time of lease agreement. The payment was made in cash. Lease period is effective July 1, 2018, through June 30, 2019. July 10: Pay $375 to the county for a business license. July 11: Purchase a cash register for $250 (deemed to be not material enough to qualify as depreciable equipment—use misc. exp.). July 13: You have baking equipment, including an oven and mixer, which you have been using for your home-based business and will now start using in the bakery. You estimate that the equipment is currently worth $6,000, and you transfer the equipment into the business in exchange for additional common stock. The equipment has a 5-year useful life. July 13: Pay $200 for business cards/flyers/posters/ads to use for advertising. July 14: Pay $300 for office supplies. July 15: Hire part-time helper to be paid $12 per hour. Pay periods are the 1st through the 15th and 16th through the end of the month, with paydays being the 20th for the first pay period and the 5th of the following month for the second pay period. (No entry is required on this date; it is here for informational purposes only.) July 30: Received telephone bill for July in amount of $75. Payment is due on August 10. July 31: Pay $2,400 for a 12-month insurance policy. Policy effective dates are August 1, 2018, through July 31, 2019. July 31: Accrue wages earned for employee for period of 16th through 31st of July (Wage calculations table provided below). July 31: Total July bakery sales were $15,000. $5,000 of these sales are on accounts receivable. Step Two Data (Click on the link to return to the prompt.) The following events occur in August, 2018: August 5: Paid employee for period ending 7/31. August 8: Receive payments from customers towards accounts receivable in amount of $3,800. August 10: Paid July telephone bill. August 15: Purchase additional baking supplies in amount of $5,000 from vendor, on account. August 15: Accrue wages earned for employee from period of 1st through 15th of August (Wage calculations table provided below). August 15: Pay rent on bakery space. August 18: Receive payments from customers towards accounts receivable in amount of $3,000. August 20: Paid $8,500 toward baking supplies vendor payable. August 20: Pay employee for period ending 8/15. August 22: $300 in office supplies purchased. August 31: Received telephone bill for August in amount of $75. Payment is due on September 10. August 31: Accrue wages earned for employee for period of August 16th through August 31st (Wage calculations table provided below). August 31: August bakery sales total $20,000. $7,500 of this total is on accounts receivable. Step Three (Click on the link to return to the prompt.) Updated Scenario: Many customers have been asking for more hypoallergenic products, so in September you start carrying a line of hypoallergenic shampoos on a trial basis. The following information relates to the purchase and sales of the shampoo:  You use the perpetual inventory method. Although you could use the following valuation methods —FIFO, LIFO, or weighted average, you choose to use the FIFO method. Data: The following events occur in September, 2018: September 1: Paid dividends to self in amount of $10,000. September 5: Pay employee for period ending 8/31. September 7: Purchase merchandise for resale. See “Inventory Valuation” tab for details. September 8: Receive payments from customers toward accounts receivable in amount of $4,000. September 10: Pay August telephone bill. September 11: Purchase baking supplies in amount of $7,000 from vendor on account. September 13: Paid on supplies vendor account in amount of $5,000. September 15: Accrue employee wages for period of September 1 through September 15. September 15: Pay rent on bakery space: $1,500. September 15: Record merchandise sales transaction. See “Inventory Valuation” tab for details. September 15: Record impact of sales transaction on COGS and the inventory asset. See “Inventory Valuation” tab for details. September 20: Pay employee for period ending 9/15. September 20: Purchase merchandise inventory for resale to customers. See “Inventory Valuation” tab for details. September 24: Record sales of merchandise to customers. See “Inventory Valuation” tab for details. September 24: Record impact of sales transaction on COGS and the inventory asset. See “Inventory Valuation” tab for details. September 30: Purchase merchandise inventory for resale to customers. See “Inventory Valuation” tab for details. September 30: Accrue employee wages for period of September 16th through September 30th September 30: Total September bakery sales are $20,000. $6,000 of these sales are on accounts receivable. Wage calculation data: Month Hours Rate Pay 31 Jul. 10 12 120 15 Aug. 40 12 480 31 Aug. 35 12 420 15 Sep. 38 12 456 30 Sep. 40 12 480

The following information pertains to the first year of operation for Crystal Cold Coolers Inc.:

Required:
Prepare Crystal Cold’s full absorption costing income statement and variable costing income statement for the year. (Do not leave any numeric cells blank, enter a zero wherever required.)